Re:Are “Better” Ideas More Likely to Succeed? An Analysis of...
by danieltillett on Tuesday August 18, 2015 @02:21AM
(#10077821)
Sometimes I am a bit too subtle :)
I suspect the real business model for most of these high-growth-without-a-plan-to-make-a-profit businesses is really eyeball exhaustion. The big players like google and facebook can monetize eyeballs, but they can only do this if they have people on their platforms. A loss making business can grab enough eyeballs that they will significantly affect the bottom line of the large players. The large players have to respond by buying up these startups and shutting them down.
As long as the VCs don’t back too many of these types of startups then it should be quite an effective way to shakedown the large players.
I suspect the real business model for most of these high-growth-without-a-plan-to-make-a-profit businesses is really eyeball exhaustion. The big players like google and facebook can monetize eyeballs, but they can only do this if they have people on their platforms. A loss making business can grab enough eyeballs that they will significantly affect the bottom line of the large players. The large players have to respond by buying up these startups and shutting them down.
As long as the VCs don’t back too many of these types of startups then it should be quite an effective way to shakedown the large players.