3 ms·

They fail by pursuing marketshare instead of profitability.

• chii 7y ago
  Because the existing unicorns all have massive market share, and use that to dominate their field. VCs don't want slowly profitable companies. They want massive unicorns they can flip at IPO and get out before taking on long term business risk. It kinda sucks, because I say it's healthier to have a large number of small, competing businesses than a winner-takes-all scenario.
  • api 7y ago
    Yes and no. There is one benefit to huge winners: they have the cash to invest in R&D. I doubt Google would be building quantum chips if they didn't have a massive cash cow or two to feed that. Generally only governments and massive cash cow monopolies or near monopolies can afford to invest in basic research. That's because on any time scale shorter than a decade basic research is just setting fire to money. You need money to burn to do it.
• api 7y ago
  To understand why, think about the exponential function. Small differences early on can have ludicrously large effects later.