The problem is the externalities. It's the same as with spam. Emailing 1000 recipients is free, and there might be 1% that actually appreciates the email. Howev

The problem is the externalities. It's the same as with spam. Emailing 1000 recipients is free, and there might be 1% that actually appreciates the email. However, there are 990 recipients to whom it is an annoyance. The net effect is that the startup causes more annoyance than value, but it does not need to bear the costs.