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HBS people were right. Amazon was successful because Bezos had access to investor money and was able to make losses for years and years, building up market shar

by est31 6y ago

HBS people were right. Amazon was successful because Bezos had access to investor money and was able to make losses for years and years, building up market share in the process. Most of the times, people don't have such access.

ObserverNeutral 6y ago
Maybe you are mistaking Amazon for Tesla. Amazon was all about re-investing the extra revenues over costs. Bezos wasn't very popular on Wall St. for this strategy...or at least less popular than he'd have otherwise been.
- est31 6y ago
  Yeah it was sold as re-investing but had they not done it, maybe a competitor that did it would have won instead. As for not being popular on Wall St... he got outside money so he couldn't be that unpopular.
jariel 6y ago
During the 1990's that would have been uncommon, but not today. Just the opposite, the amount of money chasing 'money losing operations' is extraordinary. Most high flying startups today that have working capital needs (like 'food delivery') run at a loss in perpetuity with the backing of entities like SoftBank picking up where public markets used to. I wouldn't dismiss how hard it is to get something like that off of the ground, but once it is, it's almost comical how badly you can screw up and still get money. 'Sonder' formerly 'Flatbook' spent years screwing everything up, they continue to screw up, but because they had a basis of a critical mass and some basis of operations, they've continually been able to get investors to hand over to a net money losing operation that doesn't look like it will have the scale to work. So this issue is relevant to the overall 'Coinbase' picture because we're living in an era of tremendous liquidity, never really before seen in human history, and due to COVID, basically government/central-bank backed guarantees of money and credit. There's no real precedent for what we're doing right now.
- thathndude 6y ago
  Except Coinbase is a cash cow. Hence the direct listing and not IPO.

by est31 6y ago

ObserverNeutral 6y ago

Maybe you are mistaking Amazon for Tesla. Amazon was all about re-investing the extra revenues over costs. Bezos wasn't very popular on Wall St. for this strategy...or at least less popular than he'd have otherwise been.

est31 6y ago
Yeah it was sold as re-investing but had they not done it, maybe a competitor that did it would have won instead. As for not being popular on Wall St... he got outside money so he couldn't be that unpopular.

jariel 6y ago

During the 1990's that would have been uncommon, but not today. Just the opposite, the amount of money chasing 'money losing operations' is extraordinary. Most high flying startups today that have working capital needs (like 'food delivery') run at a loss in perpetuity with the backing of entities like SoftBank picking up where public markets used to. I wouldn't dismiss how hard it is to get something like that off of the ground, but once it is, it's almost comical how badly you can screw up and still get money. 'Sonder' formerly 'Flatbook' spent years screwing everything up, they continue to screw up, but because they had a basis of a critical mass and some basis of operations, they've continually been able to get investors to hand over to a net money losing operation that doesn't look like it will have the scale to work. So this issue is relevant to the overall 'Coinbase' picture because we're living in an era of tremendous liquidity, never really before seen in human history, and due to COVID, basically government/central-bank backed guarantees of money and credit. There's no real precedent for what we're doing right now.

thathndude 6y ago
Except Coinbase is a cash cow. Hence the direct listing and not IPO.