6 ms·

If that's the problem, it should eventually autocorrect when the investors give up permanently and local businesses return.

by arbuge 13y ago

wffurr 13y ago
That word "autocorrect" masks quite a lot of suffering on the part of local business owners who close up and lose their livelihood and investors (including pension funds, retirement accounts, etc.) which lose their money. Sure, in the long run it all works out, but in the short term there's quite a lot of turmoil.
- smacktoward 13y ago
  As John Maynard Keynes put it, "in the long run we are all dead."
notahacker 13y ago
Even if that invariably happens it's not much consolation to the local business owners bankrupted because their skinny margins couldn't compete with the "disruptive" idea of running at a massive loss for two years. Venture capitalists make a loss inducing formerly marginally profitable businesses to make a loss represents a deadweight loss to society overall even if the service gap gets filled. That said, most of the named business lines are those particularly easily replaced even if the threat of other VC-backed businesses coming into the market still exists: those inclined to open sandwich shops or market themselves as handymen aren't likely to be too worried about more online threats emerging in future, and the savvier ones are instead figuring out how to get profitless startups to provide them with low cost marketing.
hagbardgroup 13y ago
Not impossible. Private equity is itself young. Venture capital is even younger. It may be an artifact of our particular time, place, set of tax policies, and financial system.
bowlofpetunias 13y ago
You do realize that those local business are run by people with families to feed, and that "eventually autocorrect" does not "autocorrect" the ruining of their lives?
001sky 13y ago
The purpose of predatory pricing is remove the auto-corrective components of the ecosystem. It follows that it should eventually autocorrect is wholly speculative: b/c The markets can remain irrational--longer than you can remain solvent

If that's the problem, it should eventually autocorrect when the investors give up permanently and local businesses return.

by arbuge 13y ago

If that's the problem, it should eventually autocorrect when the investors give up permanently and local businesses return.

wffurr 13y ago

That word "autocorrect" masks quite a lot of suffering on the part of local business owners who close up and lose their livelihood and investors (including pension funds, retirement accounts, etc.) which lose their money. Sure, in the long run it all works out, but in the short term there's quite a lot of turmoil.

smacktoward 13y ago
As John Maynard Keynes put it, "in the long run we are all dead."

notahacker 13y ago

Even if that invariably happens it's not much consolation to the local business owners bankrupted because their skinny margins couldn't compete with the "disruptive" idea of running at a massive loss for two years. Venture capitalists make a loss inducing formerly marginally profitable businesses to make a loss represents a deadweight loss to society overall even if the service gap gets filled. That said, most of the named business lines are those particularly easily replaced even if the threat of other VC-backed businesses coming into the market still exists: those inclined to open sandwich shops or market themselves as handymen aren't likely to be too worried about more online threats emerging in future, and the savvier ones are instead figuring out how to get profitless startups to provide them with low cost marketing.

hagbardgroup 13y ago

Not impossible. Private equity is itself young. Venture capital is even younger. It may be an artifact of our particular time, place, set of tax policies, and financial system.

bowlofpetunias 13y ago

You do realize that those local business are run by people with families to feed, and that "eventually autocorrect" does not "autocorrect" the ruining of their lives?

001sky 13y ago

The purpose of predatory pricing is remove the auto-corrective components of the ecosystem. It follows that it should eventually autocorrect is wholly speculative: b/c The markets can remain irrational--longer than you can remain solvent