3 ms·

> I hope this gets rid of the "out-raise your competitors and spend ridiculous amounts of money on ridiculous money sinks" strategy forever. Why? If you're a s

by mbesto 6y ago

> I hope this gets rid of the "out-raise your competitors and spend ridiculous amounts of money on ridiculous money sinks" strategy forever. Why? If you're a startup and a competitor does this and it leads to them losing value, isn't that a good thing for you? The only people who lose in this equation are the ones who accepted those risks. The market will eventually correct itself.

vertex-four 6y ago
There's a piece of investment wisdom that says "the market can remain irrational longer than you can remain solvent" - or, applied here, Uber's going to take a while longer to die than your startup.
- mbesto 6y ago
  > or, applied here, Uber's going to take a while longer to die than your startup. So what? I'm so confused by this. This is exactly the point of "taking more money than you need". If Uber has a huge warchest of cash it means it can pivot as it pleases. Isn't this good investment advice then?
  - vertex-four 6y ago
    If Uber dies before making any money, and some other company would've made money but Uber killed it, then the investment in Uber was a bad investment (no return) and in addition prevented what might have been a good investment from working out. Or in words that matter to me as a consumer - Uber, an unsustainable company, killed an industry that will not immediately recover when Uber dies.
TeMPOraL 6y ago
> The only people who lose in this equation are the ones who accepted those risks. And, more importantly, also the people who are collateral damage of this. I.e. the people in your or mine neighbourhood. The local restaurants, the local drivers, the local renters. All this money raised isn't just sitting there doing nothing, it's disrupting markets - the way a disruptor wielded by a Klingon or Romulan would disrupt your body. By the time the disruption ends, your body won't work. These markets won't work either.
- mbesto 6y ago
  > The local restaurants, the local drivers, the local renters 1) Restaurants are making extra money they wouldn't have made otherwise, with zero upfront risk of hiring additional employees, capital equipment, etc. 2) Drivers are making extra money on capital equipment they've already purchased and time they would have otherwise not used to be compensated for. 3) Buyers are spending more money on food as a result. > These markets won't work either. But no one is forcing people to buy food using food delivery apps. They're actively choosing to do so. I recently ordered a value meal from Wendy's via Doordash. It was nearly twice as much as I would have paid if I walked into the restaurant (because of fees, etc). But I chose to spend that much. At some point, that's unsustainable and I won't be able to afford doing that for much longer. The only people at a loss here are sharedholders. I'm desperately confused why so many people think this is a bad thing for the common person.
  - vertex-four 6y ago
    Uhh, you realise food delivery was a thing before all these startups, right? The startups built an app, they didn't invent the concept nor the demand of food delivery.
  - TeMPOraL 6y ago
    > I'm desperately confused why so many people think this is a bad thing for the common person. Because it's not sustainable. It's the food market equivalent of stripmining. At some point, the restaurants will collapse or quit offering delivery this way, and you'll be left with less restaurants and more expensive delivery (if any at all), and Doordash will implode. Longer-term, the owners of the company are the only ones benefitting here (worth remembering that when startups talk about an exit, it usually means the top employees dumping the company and getting away with riches; the company is going to eventually die, as intended to).

by mbesto 6y ago

vertex-four 6y ago

There's a piece of investment wisdom that says "the market can remain irrational longer than you can remain solvent" - or, applied here, Uber's going to take a while longer to die than your startup.

mbesto 6y ago
> or, applied here, Uber's going to take a while longer to die than your startup. So what? I'm so confused by this. This is exactly the point of "taking more money than you need". If Uber has a huge warchest of cash it means it can pivot as it pleases. Isn't this good investment advice then?
- vertex-four 6y ago
  If Uber dies before making any money, and some other company would've made money but Uber killed it, then the investment in Uber was a bad investment (no return) and in addition prevented what might have been a good investment from working out. Or in words that matter to me as a consumer - Uber, an unsustainable company, killed an industry that will not immediately recover when Uber dies.

TeMPOraL 6y ago

> The only people who lose in this equation are the ones who accepted those risks. And, more importantly, also the people who are collateral damage of this. I.e. the people in your or mine neighbourhood. The local restaurants, the local drivers, the local renters. All this money raised isn't just sitting there doing nothing, it's disrupting markets - the way a disruptor wielded by a Klingon or Romulan would disrupt your body. By the time the disruption ends, your body won't work. These markets won't work either.

mbesto 6y ago
> The local restaurants, the local drivers, the local renters 1) Restaurants are making extra money they wouldn't have made otherwise, with zero upfront risk of hiring additional employees, capital equipment, etc. 2) Drivers are making extra money on capital equipment they've already purchased and time they would have otherwise not used to be compensated for. 3) Buyers are spending more money on food as a result. > These markets won't work either. But no one is forcing people to buy food using food delivery apps. They're actively choosing to do so. I recently ordered a value meal from Wendy's via Doordash. It was nearly twice as much as I would have paid if I walked into the restaurant (because of fees, etc). But I chose to spend that much. At some point, that's unsustainable and I won't be able to afford doing that for much longer. The only people at a loss here are sharedholders. I'm desperately confused why so many people think this is a bad thing for the common person.
- vertex-four 6y ago
  Uhh, you realise food delivery was a thing before all these startups, right? The startups built an app, they didn't invent the concept nor the demand of food delivery.
- TeMPOraL 6y ago
  > I'm desperately confused why so many people think this is a bad thing for the common person. Because it's not sustainable. It's the food market equivalent of stripmining. At some point, the restaurants will collapse or quit offering delivery this way, and you'll be left with less restaurants and more expensive delivery (if any at all), and Doordash will implode. Longer-term, the owners of the company are the only ones benefitting here (worth remembering that when startups talk about an exit, it usually means the top employees dumping the company and getting away with riches; the company is going to eventually die, as intended to).