13 ms·
Running a startup in a low margin business is one of those things that seems like a bad idea till it's not. In this case the definitive counterexample happened
by pg 13y ago
Running a startup in a low margin business is one of those things that seems like a bad idea till it's not. In this case the definitive counterexample happened 19 years ago: Amazon.
- 7Figures2Commas 13y agoPulling out the survivorship bias argument may be convenient for online discussion and debate, but it's rarely very compelling. I could point out all of the fundamental operational and financial differences between a low margin service business like Homejoy and a low margin online retailer like Amazon, but you already know them.
- the_watcher 13y agoIf your margins are low, and you can still grow, aren't you still in a substantially better place than many revenue free companies that have received huge amounts of VC (based on the OP's criteria for VC investment). Hell, Twitter's margins are negative right now (as long as I am not mangling the use of "margin") and that hasn't stopped investors.
- madebylaw 13y agoThe main difference to me is that Amazon has a massive moat (in the Buffet sense) to prevent other competition from building an identical service. What's to stop someone from building a HomeJoy clone and undercutting them even further?
- pg 13y agoAs a retailer they do, but they don't as AWS, so a moat may not be necessary. It would still be nice of course. I can think of some possible ideas, but I should save that convo to have with Adora.