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> As it stands they're on the verge of bankruptcy. Good? The only reason these companies exist is because a bunch of VCs subsidized them with the hope that th
by bsder 3y ago
> As it stands they're on the verge of bankruptcy.
Good?
The only reason these companies exist is because a bunch of VCs subsidized them with the hope that there would be network effect lockins that could then be leveraged into an exploitable monopoly position.
Now that money isn't free, the VCs are yanking the subsidy and the market will return to where it should be without the distortion of a bunch of sloshing VC money.
- bagacrap 3y agoCharitably I think it exists because VCs assume that economies of scale are more profitable and there is a difficult scaling problem here (connecting N customers to M service providers where N vacillates wildly based on time of week, weather, etc). Money is still pretty close to free as real rates are close to zero. As soon as inflation subsides I expect rates to come down again. But anyway I think the connection between interest rates and app economies is tenuous at best. We've never had a period with high real rates as well as high smartphone penetration so we don't know for sure, but I think technology will continue marching on and people with money will keep trying to develop new ways to tackle old problems.