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How does losing money on a larger scale lead to profit?
by andrei_says_ 7y ago
How does losing money on a larger scale lead to profit?
- knur 7y agoI don't know, man. Ask Uber, lol
- serf 7y agobecause it's an indicator of future profit stemming from growth that may be the cause of the spending. it doesn't always work out that way, but it has sometimes in the past for big payouts, so it's a common strategy and economic forecast indicator.
- broknbottle 7y agoyou gotta burn cash to grow. Maybe this will lead to bird developing Bird Web Services and eventually making a ton of money each quarter. It worked for Amazon :)
- braythwayt 7y agoBurning cash to grow worked for Amazon because distribution/logistics is a business that has a fundamental relationship between scale and costs. Bird, Scoot, Uber, Lyft and everybody else has yet to demonstrate that by scaling dramatically that they lower their costs enough to break even, much less generate SaaS margins. Until then... They are highly speculative businesses.
- golemiprague 7y agoWell, the app development and operations is scaling and obviously cheaper the more people use it but I don't know how much it is of the overall cost.
- schrodinger 7y agoThat’s totally different. Amazon could have been profitable any time they wanted; they chose to reinvest for growth instead. Not all losing money is the same!