3 ms·
This interview resonantes with something I have been thinking for a while. Essentially the whole VC fueled hypescaling in a race to become the next unicorn es
by cycomanic 6y ago
This interview resonantes with something I have been thinking for a while.
Essentially the whole VC fueled hypescaling in a race to become the next unicorn especially in the "sharing economy" seems like a giant pyramid scheme. Like it's all about scaling so the value increases so that in the next round the VC of that previous round can cash in on the next VCs who hope to do the same thing in the next and so on, with the end goal of finding gullible regular investors once it comes to the IPO. All that without a sustainable business model, look at all the bike hire companies a couple of years ago, the scooter companies now etc.. Even Uber might never be profitable.
All that is done on the back of society leaving burned soil in the wake. And yes it's an instrument for the wealthy, because they have the means to be among the early investors.
- realtalk_sp 6y agoWhen there's more capital available (and there's been an abundance of it in the last decade plus), the time it takes to make a new market/industry competitive enough to shred margins goes down a by lot. In recent history, this has happened before such companies can float shares in the public equities market. Great examples are ridesharing, online food delivery, and meal kits. In an environment flush with capital chasing returns, any company without a true monopolistic moat will ultimately be forced to operate at or below cost, yielding no meaningful profit. Many of these tech unicorns thought they would be monopolistic but ended up looking more like airlines.
- Gibbon1 6y agoI keep coming back to Block Buster. Their model was borrow money to open stores and drive smaller mom and pop rental places out of business. I'm not sure but I think when you add everything up they never made a positive return doing that. They just ended up leaving banks holding the bag when they went bankrupt. Lot of VC unicorns feel like that times 100.
- jdxcode 6y agoWhat? Blockbuster operated under a franchise model. They didn't borrow money to open stores—it was local "mom and pops" doing that.
- dragonwriter 6y ago> Blockbuster operated under a franchise model. Blockbuster had franchises but for most of it's dominant phase also had a large number of corporate stores (some of which originated with one of the several competing chains that it bought outright.)
- Gibbon1 6y agoI could misremember but that's what I remembered seeing. They took on debt to expand but never reaped enough monopoly benefits to pay of the rolling short term debt they accrued.
- RockIslandLine 6y ago"Even Uber might never be profitable." Uber will never be profitable, they can't pay their labor. What sucks is that their failure will destroy the business model for someone who might have been willing to give it an honest effort.
- mgamache 6y agoI think they even admitted that self-driving cars are required to succeed. That's why they acquired <wink> waymo tech.