There is also: 5% of a high growth, negative profit, thriving company that can rather trivially raise additional capital to keep pushing growth faster.
Hundreds of start-up companies have fit that model over the last 10-20 years.
See: Facebook, Airbnb, Zoom, Twilio, Square, Stripe, DigitalOcean, Cloudflare, Fastly, DocuSign, Teladoc, Datadog, Coinbase, Etsy, Lyft, Uber, DoorDash, Pinterest, Twitter, Snapchat, Okta, Zscaler, Hubspot, CrowdStrike, Palo Alto Networks, Splunk, Workday, ServiceNow, The Trade Desk, Snowflake, Roku, Unity Software, MongoDB, Robinhood, Palantir, Roblox, Veeva Systems, Wayfair, Peloton, UiPath (Romania originally), Anaplan, Qualtrics, Asana, RingCentral, Zendesk, Dropbox, Appian, Bumble, Smartsheet, Stitch Fix, C3 AI, Affirm, JFrog, Box, BigCommerce, Sumo Logic, FireEye, Qualys.
Along with dozens of other prominent and smaller companies. And although not US companies, Shopify, Atlassian, Elastic, Wix, MercadoLibre and Spotify are also in that same bucket (and were funded by US venture capital). China also has a ton of thriving companies funded in a similar model (Alibaba, Pinduoduo, ByteDance, Didi, JD, Tencent, etc).
These are significant companies that all followed that model - to one degree or another - and have IPO'd in the past decade (even Tesla's IPO was just 11 years ago, they exist courtesy of the same model).
Salesforce lost money for a very long time. They were founded in 1999, and didn't reliably turn an operating profit until just a few years ago. In a few years they'll be larger than SAP.
Not saying that is a good way to run a business or the one I would personally prefer.
Utterly bizarre, they weren't listening to a word I said yet wanted me to lead one of their companies?!
Have they finished displacing Medium yet? Who in turn only appeared a few years ago?
Have any normal people even heard of these companies?
Medium went for a bottom-up approach, trying to monetize the content of the crowd. Substack is going for a top-down approach, grabbing writers with an existing large following and paying them top rates, which are justified by the conversion rates for their well-known creators.
Normal people might not have heard of these companies, but niche audiences certainly follow some of the specific authors/columnists/influencers and are following them onto substack with paid subscriptions.
Is that a moat, or will they jump to the next platform? A few have been poached by the NYT and other venues, so maybe the moat isn't that big.
If you think Google was a fast follower you are incorrect. There are patterns to how these types of company crop up and they are about revolutions in how a field is done rather than "copy AltaVista" and see if you can catch them. Nobody succeeds at copying a company that has a genuine mission to accomplish.
I'm not saying it's impossible to build a company that happens to do the same thing as say Substack but you have to build it for the correct reasons and fast followers are generally always compromised in some way.
Your glib suggestion that Google, a once per decade company, is a follower of AltaVista really doesn't do any of what Google accomplished justice.
I.e. facebook cannot even copy snapchat and they have INFINTE resources, and 2B users.
Also, Markets today are so huge, nobody dominating anything.
These people are in the business of making money, which means growth at all costs and at a huge ROI, especially since insane valuations and going public is creating crazy returns for investors.
Pay back the loan whilst increasing revenue and keep the entire company to yourself/team. The additional revenue can offset the expenses which were taken care of by the loan.