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Nah, this isn't like Theranos. In reality, it is a very good product with slim margins. The reason it is losing so much money is because it is expanding quickl
by tempsy 7y ago
Nah, this isn't like Theranos.
In reality, it is a very good product with slim margins. The reason it is losing so much money is because it is expanding quickly to show that it is a "high growth" Unicorn company.
It isn't that it's a scam, it just puts it is a non-tech/non-SaaS category. Every founder/CEO wants to tell a huge growth story. If private investors are buying that then it's just that they miscalculated, but not defrauded.
- bhouston 7y agoSlim margins means it isn't a great product, at least by standard business definitions. A product with slim margins is one that you divest from so you can focus on the products with good margins.
- tempsy 7y agoI was referring to the quality of the product from the customer POV.
- purple_ducks 7y agoThey rent office space.
- AlexandrB 7y agoMoviePass was an amazing product from the customer POV. Not a viable business though.
- smacktoward 7y agoFrom the customer's POV, selling dollar bills for fifty cents each is also a high-quality product.
- tempsy 7y agoNo not really. Again, they lose billions right now because it costs a lot to build out new buildings. Then as a building matures they recoup these costs through the memberships. The more mature offices are profitable. It just isn’t necessarily tech/VC level profits.
- throwaway2048 7y agoThey aren't building out anything, they lease existing office space.
- the_watcher 7y agoThere are lots of good businesses that operate on thin margins. They're good businesses, which is why you can divest them to investors who want to run a good business. What they're not are businesses that should trade at anything close to software revenue multiples.
- tyingq 7y agoIt's also losing money because the CEO is converting it to personal wealth.