"Step 3: Profit!"

I’ve come across this construction quite a bit on these boards, most recently on the Amero thread, used to question scams or other dodgy ideas:

Step 1: [Do whatever it is we’re discussing]

Step 2: ???

Step 3: Profit!

Where does this come from?

South Park.

There is an episode where gnomes steal people’s underpants as their way to riches. Their business plan is:
Step 1: Steal underpants
Step 2: ???
Step 3: Profit!

Anytime anyone in the episode asks “What’s step 2?” The response is “Step 3 is profit!”

South Park.
This was the business model for the Underwear Gnomes.
They were in their stage one, where they acquired lots and lots of stolen underwear.

As I recall, it was a dig at some of the more dubious internet business plans out there.

Yep, specifically at the “dot com” businesses that were raging at the time (this was before the “dot bomb” bust).

  1. Give your Second Life avatar a virtual store.

  2. Sell a lot of ???

  3. Virtual Profit!

Thanks. It appears the correct terminology is “Phase 1”, and so on, which fits better with the dotcom parody I suppose…

I don’t think it was specifically a dot-com parody. I think the point was that people who criticize big, successful businesses just because of their bigness have no idea what really makes a business profitable, while those big businessfolk do.

The context of the episode was that a Starbuck’s was coming to South Park, and this was going to run the owner of the one small coffee shop in South Park out of business. The owner of that shop, Mr. Tweek, got people to protest against the Starbuck’s and boycott it just because “big corporations are bad.” The episode ends with people actually discovering that they like Starbuck’s coffee, and that Starbuck became big in the first place by offering a better product - a lesson in capitalism that the underpants gnomes are contrasted against.

Yeah, that’s what I’d always assumed. Then again, I don’t know anything about the dot com bust. I just looked at it as a general, “People are stupid/don’t knw much about business.” And within the context that you summarized, of small business owner Mr. Tweek knowing little about actually making coffee and running his business, it makes a lot of sense. Mom 'n Pop businesses may be cute and small, but they may not be business savvy, and thus boycotting Starbucks because it’s Starbucks is counterproductive.


In the episode, Mr. Tweek was not portrayed as being bad at running his business (though his coffee was said to taste like moldy diarrhea). It’s just that he was playing on people’s sentimentality in a David vs Goliath battle, and getting people to (until the climax of the episode) ignore the fact that maybe there was a reason (i.e., good-tasting coffee) why Goliath grew so big.

YouTube link.

The irony of the episode was that even though the underpants gnomes were sage about the relationship between a good service and commercial success, they were rather foolish about their own business model. A lot of things can be explained, or at least labeled as Underpants Gnome Economics. Like, the trickle-down theory:

  1. Give big tax breaks to the rich.
  2. ???
  3. Everybody profits!

Of course, I know the rationalization usually given. Yet, wherefore the growing wealth gap?

I’d count “coffee tastes like mouldy diarrhea” as “being bad at running a business,” particularly if your business is making coffee.

But getting people to fork over money for mouldy diarrhea is pretty impressive!

Nitpick: Trickle-down is intended to aid in innovation, not income.

It also sounds like a newspaper comic (I think it was Non Sequitur) I read many years ago. It depicted a man running a seminar on how to Get Rich Quick, and on the blackboard he had outlined his 3-step plan:

Step 1: Create software

Step 2: Convince Microsoft that you are a competitor

Step 3: Accept their buyout offer

But what does trickle-down have to do with mouldy diarrhea?

As well the Far Side comic of years ago with scientists around a chalkboard with many zany equations to the left, the solution on the right, and in the center: “Then a miracle occurs”.

That’s not a Gary Larson/Farside cartoon, it’s a Sydney Harris cartoon. link. More of Harris’ cartoons

It was also a plot on “The Simpsons.” Except the buyout offer was…not so nice.