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The bigger problem I see is that all the service oriented startups are getting into a market that can't work. Yes, there obviously is demand for cheap services.
by jakobegger 11y ago
The bigger problem I see is that all the service oriented startups are getting into a market that can't work. Yes, there obviously is demand for cheap services. But there is no way to provide cheap services at scale and turn a profit. The costs of providing a service don't go down as you get bigger. At some point you just can't drop wages anymore.
At the same time, you can't just increase prices, since that would immediately kill demand. There is demand for cheap services. There is no demand for reasonably priced services. The problem is not that raising prices would allow the competition to undercut them. If they raise prices, people would just clean their homes themselves etc.
- tedmiston 11y ago> But there is no way to provide cheap services at scale and turn a profit. The costs of providing a service don't go down as you get bigger. Unless you automate it. Maybe Uber's plan at scale is to replace all humans with self-driving cars (http://www.theverge.com/2014/5/28/5758734/uber-will-eventually-replace-all-its-drivers-with-self-driving-cars http://www.theverge.com/2014/5/28/5758734/uber-will-eventual...). Maybe SpoonRocket's plan at scale is to effectively be mobile vending machines for hot food. Obviously I'm speculating, but the general principle applies to a lot of what startups do already as they grow.