French quantum-computing company Pasqal made a dramatic Wall Street debut on August 28, with its shares surging as much as 73% during their first day of Nasdaq trading before finishing roughly 40% higher. The company entered the public market through a merger with Bleichroeder Acquisition Corp. II that valued Pasqal at around $2 billion and provided approximately $360 million in cash to help expand its technology and commercial operations. The excitement is remarkable considering Pasqal generated only €16.5 million in revenue in 2025. Investors are not paying billions because quantum computing is already a massive business. They are paying because they believe it could eventually become one.

Quantum computing is difficult to explain because it operates very differently from the computers people use every day. Traditional computers process information using bits represented as either zeros or ones. Quantum computers use quantum bits, or qubits, which can behave in more complex ways and potentially evaluate certain types of problems far faster than traditional machines. Pasqal specializes in a method known as neutral-atom quantum computing, using lasers to trap and manipulate individual atoms. The company hopes this technology will eventually help solve extremely complex problems involving drug discovery, financial modeling, materials science, energy and other industries.

The important word, however, is eventually. Quantum computing remains an emerging industry with major technical challenges, particularly around errors, reliability and scaling machines enough to outperform conventional computers on commercially valuable problems. Pasqal already has commercial customers and working quantum systems, but today’s quantum-computing market remains tiny compared with industries such as cloud computing, semiconductors or artificial intelligence. That means investors buying the stock today are making a very different type of bet. They are not simply analyzing current earnings. They are trying to estimate what the entire industry might look like five, ten or twenty years from now.

History contains many examples of investors making similar bets long before technologies became mainstream. Investors financed railroads before most towns had stations. Money flooded into internet companies when relatively few households were online. Biotechnology companies attracted billions while many of their products were still experimental. More recently, investors poured enormous amounts of capital into artificial intelligence before anyone could predict exactly which companies or business models would eventually dominate. In each case, early investors were buying something more difficult to measure than revenue: possibility.

That possibility can produce enormous returns when the technology eventually succeeds, but it also creates enormous risk. When investors value a young company primarily on what its industry could become, relatively small changes in expectations can dramatically change what the company appears to be worth. A technical breakthrough can send valuations soaring. A delay, unsuccessful product or better technology from a competitor can have the opposite effect. The further investors look into the future, the more assumptions they must make about customers, competition, pricing, technology and demand.

Pasqal illustrates this tension particularly well. The company has real technology, commercial relationships and prominent scientific credentials. It was co-founded by physicist Alain Aspect, who shared the 2022 Nobel Prize in Physics for groundbreaking work involving quantum entanglement. Pasqal says it now works with more than 40 clients and partners and intends to use its new capital to increase quantum-system production, expand cloud access and continue developing fault-tolerant quantum computers capable of operating more reliably at much larger scale.

But scientific credibility and a promising market do not guarantee commercial success. The history of emerging technology is filled with companies that correctly predicted the future but still failed to become the businesses that ultimately dominated it. The internet changed the world, but many early internet companies disappeared. Electric vehicles became mainstream, but countless EV startups failed. Artificial intelligence may transform almost every industry, but that does not mean every AI company will become valuable. Investors must therefore answer two separate questions: Will this technology matter? And will this particular company be one of the winners?

Pasqal’s 73% opening-day surge demonstrates why emerging technologies can become so exciting to investors. When the potential market is enormous and the current market is still small, almost anything seems possible. But possibility is also much harder to value than an established business with predictable customers and profits. The earlier investors arrive in a new industry, the less they are buying proven economics and the more they are buying a vision of what the future might become. Sometimes that is where extraordinary fortunes are made. It is also where some of the biggest mistakes happen.

Food delivery apps spent years training customers to chase the cheapest order. One platform offered 30% off, another offered free delivery, and customers learned to switch between apps depending on whichever coupon appeared first. That strategy helped companies grow quickly, but it created a difficult problem: a customer acquired through a discount can often be stolen just as easily by the next discount. Delivery Hero is now trying to move away from that endless cycle by expanding subscription programs designed to make customers stay. The company says competition in important markets such as South Korea and Saudi Arabia has become “brutal,” yet subscriptions are helping improve loyalty and reduce customer churn.

The numbers show how important that strategy has become. Delivery Hero says roughly half of its customers in South Korea and around 60% in Saudi Arabia are now subscribers. Instead of repeatedly spending marketing dollars trying to convince the same person to place another order, the company can give subscribers ongoing benefits that make returning to the platform feel more valuable. Delivery Hero also raised its 2026 financial outlook, forecasting gross merchandise value growth of 9% to 11%, while adjusted EBITDA reached €427 million in the first half of the year, beating analyst expectations.

The basic psychology of a subscription is very different from a coupon. A discount says, “Use us because we are cheaper today.” A membership says, “Use us more often because you have already paid to be here.” Once a customer pays for free delivery, reduced service fees, exclusive offers or other benefits, every additional order helps justify the membership. Ordering from a competing app can suddenly feel like wasting something the customer has already purchased. That creates a subtle but powerful incentive to consolidate behavior onto one platform.

This is one reason subscription models have become so valuable across many industries. Amazon Prime makes customers think about Amazon first because shipping benefits are already included. Warehouse clubs such as Costco and BJ’s benefit when members want to maximize the value of an annual fee they have already paid. Streaming companies use subscriptions to turn occasional entertainment purchases into recurring relationships. Food delivery companies are now applying the same logic to a category where customers historically had very little reason to remain loyal.

Discounting creates the opposite problem when it becomes too aggressive. If every platform offers constant promotions, customers begin viewing the discounted price as the normal price. Companies then have to keep spending money simply to maintain the same level of demand. The customer becomes loyal to the bargain rather than the brand. When the coupon disappears, the order often disappears with it. Worse, competitors can copy a discount almost immediately, making price one of the easiest advantages to erase.

Subscriptions are not a guaranteed solution. Customers will still cancel if the service is unreliable, restaurant choices are poor, delivery times are slow or the savings do not justify the membership fee. The subscription only works when it reinforces an experience people already value. But when it does work, it changes the economics of the relationship. Instead of asking how much a company must spend to convince a customer to order tonight, the business can begin asking how valuable that customer might become over an entire year.

Delivery Hero’s strategy is especially important as the company approaches a potential takeover by Uber. Uber has already built a broad ecosystem across ride-hailing, food delivery and membership through Uber One. Combining multiple services under one subscription can make the membership even harder to replace because the customer receives value from several different activities rather than only food delivery. Delivery Hero’s growing subscriber base could therefore become one of its most strategically valuable assets as competition consolidates across the industry.

The larger business lesson extends far beyond delivery apps. Discounts can be useful for introducing customers to a product, but they rarely create lasting loyalty on their own. If the primary reason someone chooses your company is that you charged less today, another company can probably take that customer tomorrow by charging even less. Strong recurring-revenue models try to create a different relationship. They give customers a reason to stay, return and concentrate more of their spending in one place. Discounts buy transactions. Memberships, when designed correctly, can build habits.

Retailers often blame the economy when sales weaken. Higher food prices, expensive gasoline, cautious consumers and weaker sentiment can absolutely reduce discretionary spending. But those explanations become less convincing when two companies selling clothing to many of the same American consumers produce dramatically different results. Kohl’s just reported its 18th consecutive quarter of declining comparable sales, with second-quarter revenue of $3.32 billion coming in below Wall Street expectations. On the same day, Abercrombie & Fitch raised its full-year outlook after stronger-than-expected results, sending its shares more than 22% higher in early trading. The economy is the same. The results are not.

Kohl’s comparable sales declined 0.9% during the quarter, following a 4.2% drop a year earlier. The company pointed to financial pressure on low- and middle-income customers, particularly as households continue paying more for necessities such as food and fuel. Kohl’s has responded by emphasizing value, expanding coupon-eligible brands and promoting back-to-school products priced below $25. Those efforts make sense, but analysts remain concerned that the retailer is still losing market share and has not become a destination customers immediately think of when they decide to shop. That is an important distinction. A company can offer low prices without necessarily giving customers a strong reason to choose it.

Abercrombie is operating under the same consumer pressures, yet its story looks very different. The company raised its expected full-year sales growth to 5% and increased its earnings forecast after quarterly revenue reached $1.27 billion, slightly ahead of expectations. Its earnings per share of $4.17 were more than double what analysts had projected. Management pointed to continued momentum at Hollister during the important back-to-school season, while analysts said Abercrombie’s namesake brand benefited from stronger spending by core customers and a product assortment that continues to resonate.

This is where the broader business lesson begins. Economic conditions affect every company, but they do not affect every company equally. When consumers become cautious, they usually do not stop buying everything. They become more selective. A shopper who once bought from five retailers may narrow that list to two. Someone who previously experimented with unfamiliar brands may return to the company they trust most. Customers may buy fewer items overall while still spending on products they believe are worth the money. In that environment, stronger brands can sometimes take market share precisely because weaker competitors are struggling.

The difference is often relevance. Abercrombie has spent years repositioning itself from the logo-heavy teenage brand many shoppers remember from the early 2000s into a broader fashion business targeting young adults, professionals and teenagers through both Abercrombie and Hollister. The company has focused on updated styles, more inclusive sizing, social-media visibility and a clearer sense of who its customer is. Kohl’s, by comparison, competes across a much wider department-store assortment and faces competition from Amazon, off-price chains, specialty retailers and brands that increasingly sell directly to consumers. When customers have endless options, simply carrying merchandise is no longer enough. A retailer needs a reason to exist in the customer’s mind.

This also explains why cutting prices cannot solve every retail problem. Discounts can generate traffic, but they cannot automatically create desire. A customer may recognize that a shirt is inexpensive and still decide they do not want it. Strong merchandising works in the opposite direction: customers sometimes pay full price because they genuinely like the product, trust the brand or believe it fits their identity. That is especially important when margins are under pressure. A business that continually needs promotions to convince customers to purchase may eventually train those customers to wait for the next discount.

The same principle applies far beyond clothing. Restaurants can blame inflation, software companies can blame shrinking corporate budgets and home-improvement companies can blame interest rates. Sometimes those explanations are correct. But leaders should always compare their performance with competitors serving the same customer. If the entire industry is declining, the environment may be the primary problem. If competitors are gaining customers while your company is losing them, the more uncomfortable explanation may also be the more useful one: something about the product, positioning, customer experience or brand has stopped working.

Kohl’s may still improve its performance, and one strong Abercrombie quarter does not guarantee permanent success. But the contrast between the two retailers offers an important reminder about difficult economies. Weak conditions do not simply reduce demand. They force customers to make choices, and those choices reveal which businesses they value most. A difficult economy can certainly hurt a strong company, but it can also expose weaknesses that were easier to hide when everyone was spending freely. Sometimes the economy does not create the business problem. It simply makes the problem impossible to ignore.

Lego just delivered the kind of growth most mature consumer brands would love to see. In the first half of 2026, the company’s revenue jumped 21% to a record 41.9 billion Danish crowns, or about $6.5 billion, while consumer sales increased 22% and net profit climbed 32%. Lego also gained market share in a global toy industry that was growing much more slowly. The interesting part is not simply that more people bought Lego sets. It is how many different reasons the company has created for people to buy them.

Lego is no longer just competing for a child’s toy budget. Its product lineup now reaches sports fans, car enthusiasts, movie lovers, collectors, nostalgic adults and people who want elaborate display pieces for their homes. During the first half of the year, the company launched more than 330 new products. Bestselling themes included Speed Champions, Botanicals, Technic, Icons and Star Wars, while partnerships involving Formula 1, the FIFA World Cup and entertainment franchises helped bring the brand into conversations that might have had nothing to do with traditional toys.

That strategy dramatically expands the number of moments when a customer might decide to buy something from Lego. A Formula 1 fan may purchase a race car set because they follow motorsports. A soccer fan may want a World Cup-themed product. Someone who grew up watching a television show can buy a Lego version decades later because it triggers nostalgia. Lego recently released an X-Files set specifically aimed at adult fans, while its Formula 1 line includes detailed models marketed toward grown-up enthusiasts. The basic product remains plastic bricks, but the emotional reason for purchasing those bricks can be completely different from one customer to the next.

This is an important business lesson because companies often assume growth requires finding an entirely new customer. Sometimes it does. But another path is giving existing and adjacent customers more reasons to interact with the brand. Lego can sell the same person a Star Wars set because they love the movie, a Formula 1 model because they follow racing and a Botanicals set because they want something decorative for their home. Instead of asking only, “Who else can we sell to?” the company appears to be answering a second question: “What else does our customer already care about?”

Partnerships make that strategy even more powerful because Lego can attach itself to cultural moments it did not have to create. The company did not need to build Formula 1, create the World Cup or invent Star Wars. It can participate in the excitement those properties already generate and translate that enthusiasm into a physical Lego product. During the 2026 World Cup, Lego even constructed an enormous replica of the trophy using more than 1.36 million bricks as part of its FIFA partnership. That turns Lego from a product sitting on a store shelf into part of the event itself.

There is also an important difference between extending a brand and simply putting a logo on everything. Lego’s partnerships generally still revolve around the same core behavior that made the company successful: building. The subject changes, but the experience remains familiar. A customer may build a race car, a flower arrangement, a movie scene or a famous landmark, but the underlying product still feels unmistakably Lego. That allows the company to expand into new interests without abandoning the identity customers already trust.

Lego’s results show how powerful that combination can become. A company does not always need to reinvent its core product to continue growing. It may simply need to understand the different interests, identities and experiences surrounding the people who already like it. Lego has taken one of the simplest product concepts imaginable small plastic bricks that connect together and continually found new cultural reasons for people to care about them.

The broader lesson applies to almost any business. Growth does not always come from finding more customers. Sometimes it comes from becoming relevant to the same customer in more parts of their life. The more legitimate reasons someone has to return to a brand, the less dependent that company becomes on a single buying occasion. Lego’s 21% growth suggests that one of the smartest ways to expand a mature business may not be changing what you sell. It may be expanding the reasons people want to buy it.

Low-cost airlines transformed travel by convincing millions of passengers that flying did not need to be expensive. Strip away free meals, premium cabins and other extras, operate aircraft efficiently, keep planes full and sell the basic seat at the lowest possible price. That formula helped budget carriers expand rapidly across Southeast Asia, where companies such as AirAsia, Scoot and Cebu Pacific made air travel accessible to a growing middle class. But 2026 has exposed one of the weaknesses hidden inside that model: when one of your largest expenses suddenly explodes, there may be very little room left to absorb it.

Southeast Asia’s budget airlines are now dealing with the aftermath of a major fuel-price shock caused largely by the conflict in the Middle East. AirAsia and Cebu Pacific recently reported net losses, while Scoot’s operating loss nearly doubled. Cebu Pacific said its fuel expense more than doubled from a year earlier, while AirAsia reported average jet-fuel prices of about $183 per barrel during the second quarter. The pressure has been worsened by weaker regional currencies because airlines generally pay for fuel and aircraft leases in U.S. dollars.

Fuel is already one of the airline industry’s largest expenses. The International Air Transport Association estimates that jet fuel will account for about 31.4% of total airline operating expenses in 2026, up from 25.4% last year. IATA expects airlines globally to spend roughly $350 billion on fuel this year as average jet-fuel prices run nearly 70% above 2025 levels. The industry’s expected net profit margin has consequently fallen from 4.2% last year to only around 2% this year. A business operating on margins that thin does not need many things to go wrong before profitability disappears.

Budget airlines face an especially difficult problem because the easiest solution raising ticket prices can undermine the reason customers chose them in the first place. A traveler paying $80 for a short flight may be extremely sensitive to a $20 increase. A business-class passenger paying thousands for an international trip may barely notice the same percentage increase. Full-service airlines also have other ways to generate revenue through premium cabins, loyalty programs, cargo operations and other services. Budget carriers tend to depend much more heavily on filling a large number of inexpensive seats. That makes their customers highly attractive during good times and potentially difficult to monetize when costs suddenly rise.

The pressure is already forcing airlines to make difficult choices. AirAsia plans to cut third-quarter seat capacity by roughly 20% to 25% compared with last year and return 25 older aircraft to lessors during 2026. Scoot continued adding capacity because passenger demand remained strong, but its passenger unit costs rose 21.7%. Its break-even load factor reached 100%, meaning it theoretically would have needed every available seat filled simply to cover passenger operating costs, while its actual load factor was 90.6%. These are not signs that people suddenly stopped wanting inexpensive flights. They show what happens when a low-cost business loses control of one of the costs it cannot eliminate.

The lesson applies far beyond airlines. Low-cost business models can be extraordinarily powerful because they attract customers who care deeply about price. Discount retailers, budget hotels, inexpensive restaurants, low-cost manufacturers and subscription services can all gain enormous market share by operating more efficiently than competitors. But low prices often come with an important tradeoff: there is less financial cushioning when something unexpected happens. If a company makes $3 on a $30 transaction and one major expense increases by $4, management cannot simply absorb the difference forever. It must increase prices, cut another expense or accept a loss.

This is why a business can be extremely efficient and still be financially fragile. Cutting every unnecessary cost improves profitability when conditions are predictable. But the same lean structure can leave little spare capacity when fuel prices surge, currencies fall, suppliers raise prices or demand weakens. Airlines can hedge some fuel purchases to protect themselves temporarily, but hedging cannot permanently eliminate higher energy prices. IATA estimates airlines globally have hedged roughly one-third of their expected 2026 fuel consumption, providing some short-term protection while still leaving much of the industry exposed.

Southeast Asia’s budget airlines are hoping fuel costs ease and travel demand strengthens later this year, but household finances create another challenge. If families are already feeling squeezed, airlines cannot simply pass every additional dollar of fuel expense onto passengers. That is the central tension of the low-cost model: the customer came because the price was low, while the company remains profitable only if it can keep its own costs even lower. When something as fundamental as fuel suddenly becomes dramatically more expensive, both sides of that equation come under pressure at the same time. The broader business lesson is simple. Thin margins can create enormous growth when everything goes according to plan. They also leave very little room when the plan meets reality.