This is not a new startup strategy. VA Linux Systems, which had the dubious honor of having the largest "pop" on its IPO day, and signalling the end of the do

This is not a new startup strategy. VA Linux Systems, which had the dubious honor of having the largest "pop" on its IPO day, and signalling the end of the dot.com boom, was selling x86 Linux servers to its customers (including companies like Akamai) for $50 dollars under the BOM (Bill of Materials) cost. So it was losing money for every server before taking into account assembly, shipping, or R&D costs, but it made it up in volume. The revenue numbers were "up and to the right!". VA Linux systems was "successful" in that it IPO'ed and the Vulture Capitalists had a very successful exit. Unfortunately, it didn't do so well a year or two later... VA Linux Systems had its IPO on December 9th, 1999. So 20 years later, people still haven't learned, and Venture Capitalists are still happily funding this model. Sometimes they appear to have been able to successfully exit, but sometimes not. For all that humans are smart enough to go to the Moon, humans are also really, REALLY dumb!