1. New company comes in with VC funding 2. Uses funding to operate at a loss and undercut and outperform existing players 3. Growth slows because there are on

1. New company comes in with VC funding 2. Uses funding to operate at a loss and undercut and outperform existing players 3. Growth slows because there are only a couple billion internet users out there. Raises prices or decreases value to try to find a profit. 4. See step 1 It's hard to see this as an efficient method for finding the best product in a free market.