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What i don't get it is what the Uber moat is? Why does this need to be centrally planned and controlled? Would an open source and free platform work where drivers got near 100 percent of the sale instead of the 75% they get today.
In international trade this is called “dumping”, and it’s often considered illegal and most definitely unfair It’s usually used as a reason for regulating imports/exports https://www.investopedia.com/terms/d/dumping.asp#:~:text=Dum... .
"In 1905, German bromide producers began dumping bromides at low cost in the U.S. in an effort to prevent Dow from expanding its sales of bromides in Europe. Instead of competing directly for market share with the German producers, Dow bought the cheap German-made bromides and shipped them back to Europe."
Earlier quoted context omitted.
Eh, there is alot more nuance here. Dumping is typically when an established company attacks a competitor with temporarily low prices. If you squint right, sure, VC backed low costs could be seen as dumping. But the problem is that also means virtually every startup is dumping, even bootstrapped garage efforts. And I guess any company that reports a quarterly loss is also dumping. So I think it probably makes sense t…
No, there isn't much nuance here. Accounting has notions of fixed costs and marginal costs. The startups you are referring almost all lose money on fixed costs, but sell things at per-unit economics which make sense at scale because they are below marginal cost/COGS. Things like Uber are a typical dumping cases. For years, they charged below their COGS and eventual profitability depended on driving out competition an…
I'm part of the problem. I always suspected my Uber ride was financed with venture money. So i always went with Uber. But i didn't think ahead to the fact that it would kill off the competition. What i don't get it is what the Uber moat is? Why does this need to be centrally planned and controlled? Would an open source and free platform work where drivers got near 100 percent of the sale instead of the 75% they get t…
I'm part of the problem. I always suspected my Uber ride was financed with venture money. So i always went with Uber. But i didn't think ahead to the fact that it would kill off the competition. What i don't get it is what the Uber moat is? Why does this need to be centrally planned and controlled? Would an open source and free platform work where drivers got near 100 percent of the sale instead of the 75% they get t…
Earlier quoted context omitted.
It's the playbook of any well funded organization trying to break into a new market. This is the entire premise of loss leaders, and they're effectively risking their entire capital.
That’s a bit of an exaggeration right? Facebook sold their headsets at a loss and seem to be doing fine, Uber and doordash entered into markets without charging fees and look to doing fine, OpenAI is currently doing that with ChatGPT and we will see how it goes for them. Surely, selling at a loss is a risky endeavor, but we see it time and time again that companies selling at a loss get more funding due to their infl…
These companies are not profitable. They are still in the loss-making market share acquisition phase. They might be profitable at some point, but that would likely be by increasing pricing to something far less desirable to consumers, negatively impacting growth. AirBnb recently turned a profit but is now more expensive than hotels with often worse service, and they're being regulated out of some markets, so we'll see how it works out for them. Would DoorDash with a minimum $15 delivery fee survive? Uber if it's more expensive than a cab?
Don't get me wrong, I'm happy living large off of VC fund's money. But I'm not brand loyal to any of this stuff.
I'm part of the problem. I always suspected my Uber ride was financed with venture money. So i always went with Uber. But i didn't think ahead to the fact that it would kill off the competition. What i don't get it is what the Uber moat is? Why does this need to be centrally planned and controlled? Would an open source and free platform work where drivers got near 100 percent of the sale instead of the 75% they get t…
I'm part of the problem. I always suspected my Uber ride was financed with venture money. So i always went with Uber. But i didn't think ahead to the fact that it would kill off the competition. What i don't get it is what the Uber moat is? Why does this need to be centrally planned and controlled? Would an open source and free platform work where drivers got near 100 percent of the sale instead of the 75% they get t…
Easy to criticize but to be consistent you'd also have to consider non-VC-backed products dumped at below price by regular companies too, and that would get uncomfortable real fast: - Chrome - VS Code - LetsEncrypt - Everything open source etc. Sometimes I wonder how much this practice distorts the software industry, preventing new innovations from happening. The industry settled on this approach without being forced…
Recovering your costs through advertising isn't really dumping. Chrome definitely makes Google way more money than they put into it.
Easy to criticize but to be consistent you'd also have to consider non-VC-backed products dumped at below price by regular companies too, and that would get uncomfortable real fast: - Chrome - VS Code - LetsEncrypt - Everything open source etc. Sometimes I wonder how much this practice distorts the software industry, preventing new innovations from happening. The industry settled on this approach without being forced…