Re:On-Demand Startups Are Hemorrhaging Tens of Billions a Year
by skybrian on Wednesday April 03, 2019 @12:37PM
(#19564808)
I'm not sure the crowding-out effect is real? It seems hard to argue that this is a bad time for startups to raise money.
Compare with a boom-bust cyclical model where boom times make raising money easier for everyone. Under this model, overly enthusiastic investors eventually get discouraged after losing a lot of money, so the amount of investment money available changes a lot and thinking of it as zero-sum doesn't really work.
That in turn may incentivize some businesses to "pivot" to an on-demand model purely to get their foot in the door with some investors, regardless of whether it makes business sense. Remember Kodak's stock skyrocketing in 2017 when they released KodakCoin? [1].
My opinion is that it is worrying that the line of thinking is that "the profits will come once they're a monopoly". The actions you take to be profitable are different from the ones you take to be a monopoly. Uber and Airbnb have used their millions to circumvent local laws and lobby for their interests. Microsoft in the 90s used their OS monopoly to prevent OEMs from bundling rival's software on their machines.
Monopolies might be great for shareholders but they're not good for consumers and they don't incentivize innovation. And here, I'm not talking about "natural monopolies" like utility companies and telecom network infrastructure.
[1]: https://www.nytimes.com/2018/01/30/technology/kodak-blockcha...