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I'm not an economist, but I'll give it a shot: the vast influx of VC money allows for the creation of unsustainable businesses designed to "disrupt" (read: elim
by justanotherbot 9y ago
I'm not an economist, but I'll give it a shot: the vast influx of VC money allows for the creation of unsustainable businesses designed to "disrupt" (read: eliminate) traditional players. Buyers are happy to participate because they are getting a "deal" in the short term. Those who have been "disrupted" out of a job are often left to work for those same companies.
Meanwhile, the startup is trying to capture enough market share so that it can then raise rates and lower wages with less competition down the road. In other words, the traditional free trade model can be distorted by the effects of VCs who can operate with extraordinary scale of time and geography.
- banku_brougham 9y agoThis is interesting. Anti-trust laws prevent dominant market players from tanking prices until competitors fold and are aquired. However these SV funding models allow new players to perform the same role on behalf of the owners of capital. My question: "is it the same owners, or different ones?" I'll posit: the answer tells us whether we live in a competetive marketplace or monopolistic hell-zone.
- eli_gottlieb 9y agoWell the government mostly hasn't been enforcing competition laws for a few decades now, so yeah, VCs can fund startup companies to play loss-leader for a monopoly position. Hell, Peter Thiel put that strategy in his book.
- deleted 9y ago[deleted]