>But lets say they go bankrupt in 1 year, couldn't they just switch to "profit mode"? Well that they might have to try and do now. But usually it is hard to mo

>But lets say they go bankrupt in 1 year, couldn't they just switch to "profit mode"? Well that they might have to try and do now. But usually it is hard to move to 'profit mode' - you upset your customers when you start to charge double. The idea is that before you do that you have either killed of the competition or your competition 'moat' is so big that everyone wants to keep using you because of $reason and so you can charge what you like. >If there is no "profit mode" ... then why are people investing in the first place? Nobody is ever sure if any startup will get to 'profit mode' you simply look at their market / numbers etc and if you decide to invest then you hope the startup can figure it out. This is the investing gamble.