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> Let's assume self-driving cars take off in <5 years. That means that this isn't "winner take all". It means its a commodity that's going to be driven down to

> Let's assume self-driving cars take off in <5 years. That means that this isn't "winner take all". It means its a commodity that's going to be driven down to razor thin margins. In that case, neither Lyft nor Uber have much of a business, and VCs are better off burning their money in a barrel. Possibly. But Uber raised 1B at the same time. So that suggests that the VC world still believes in the Uber model (or that they think Uber comes out as one of the winners in self driving cars). The fact that Lyft failed to get any traditional investors suggests that those investors believe there is a significant difference.

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vonklaus 11y ago
Lyft and uber are competing in 2 completely different spaces. Uber is most similar to a company like the nasdaq and lyft is pretty similar to a cable company that existed in a liquid market. Uber is an information arbitrageur. They make markets and have high velocity. By this I mean they are well capitalized and all of their money is spent on people and developing software. Google collects and organizes the worlds information, uber it's movements. Lyft, like fed x, runs ligistics and information analytics but largely inside of its own narrow domain here being last mile transportation. Lyft focuses on comfort and style and is modeled on something like virgin airlines. It will continue to make money (i have reversed my thinking here) but not a lot as the industry becomes commoditized. Uber will pivot into something like a CDN in a few years doing end to end delivery or will become software vendors of autopilot technology. Obviously, I dont know what each company will do, but they are super different
- johnloeber 11y ago
  This is wrong. The analogies you make are tenuous. They're doing business in the exact same space. One is much bigger than the other. Their differences are due to their relative positioning in the market, i.e. due to the opportunities they have as a consequence of their relative scale.
enraged_camel 11y ago
>>Possibly. But Uber raised 1B at the same time. So that suggests that the VC world still believes in the Uber model No, it simply suggests that VCs behave as a herd, and one well-known VC firm investing in a company suddenly makes the others want to invest in it too due to FOMO (fear of missing out).
- viscanti 11y ago
  That answers why a second VC might join a round. It doesn't explain how rounds work in general though. I'm not convinced we can hand-wave over the first VC joining. They still have criteria they're using, and they seem willing to take on a lot of long-shots. The fact that none of them picked up Lyft's latest round still says something.

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vonklaus 11y ago

Lyft and uber are competing in 2 completely different spaces. Uber is most similar to a company like the nasdaq and lyft is pretty similar to a cable company that existed in a liquid market. Uber is an information arbitrageur. They make markets and have high velocity. By this I mean they are well capitalized and all of their money is spent on people and developing software. Google collects and organizes the worlds information, uber it's movements. Lyft, like fed x, runs ligistics and information analytics but largely inside of its own narrow domain here being last mile transportation. Lyft focuses on comfort and style and is modeled on something like virgin airlines. It will continue to make money (i have reversed my thinking here) but not a lot as the industry becomes commoditized. Uber will pivot into something like a CDN in a few years doing end to end delivery or will become software vendors of autopilot technology. Obviously, I dont know what each company will do, but they are super different

johnloeber 11y ago
This is wrong. The analogies you make are tenuous. They're doing business in the exact same space. One is much bigger than the other. Their differences are due to their relative positioning in the market, i.e. due to the opportunities they have as a consequence of their relative scale.

enraged_camel 11y ago

>>Possibly. But Uber raised 1B at the same time. So that suggests that the VC world still believes in the Uber model No, it simply suggests that VCs behave as a herd, and one well-known VC firm investing in a company suddenly makes the others want to invest in it too due to FOMO (fear of missing out).

viscanti 11y ago
That answers why a second VC might join a round. It doesn't explain how rounds work in general though. I'm not convinced we can hand-wave over the first VC joining. They still have criteria they're using, and they seem willing to take on a lot of long-shots. The fact that none of them picked up Lyft's latest round still says something.