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Is it any surprise that a vc funded business is short sighted? They are interested in getting to an ipo, not building a sustainable business where their reputat
by ashelmire 8y ago
Is it any surprise that a vc funded business is short sighted? They are interested in getting to an ipo, not building a sustainable business where their reputation matters.
I actually think there’s a strong case that cultivated reviews (which are then displayed prominently next to product ads and sales pages) violates truth in advertising laws[1]. This is effectively the default in tech though; every company removes bad reviews because it’s in their financial interest in the short term.
1. https://www.ftc.gov/news-events/media-resources/truth-advertising https://www.ftc.gov/news-events/media-resources/truth-advert...
- alkonaut 8y agoBut why is beneficial even for short term and valuation? Being the company known for fraud listings, lots of customers demanding refunds and so on can’t be better for growth and a future IPO than it would be if these (presumably quite rare) listings and their landlords were simply removed after refunding the renter?
- ashelmire 8y agoPresumably because it's systemic and extremely costly to fix, so doing something about it would seriously damage their reported revenue and income, thus reducing their value at IPO. Somebody did the math and determined the damaged reputation would hurt them less than lower revenue for now.