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Venture Predation

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Re: Venture Predation

#111

Post by kneebonian »

JumpinJack_Cash wrote: post #76
abigail95 wrote: post #71

Earlier quoted context omitted.

Classic zero sum thinking with no evidence or even an overarching thesis on the neutrality of money. You need to back this up with some serious economic citations

> > Classic zero sum thinking All the stuff that gives the most satisfaction is zero sum. Only one team wins the Super Bowl, only one NBA team wins the Finals and only one franchise gets to claim the World Series. You can see it when you look at investors, even the notorious ones, they are rich but mentally they are not stoked or feeling as powerful as athletes who won such trophies.

Like having children or helping another person.

Totally 0 sum.

Re: Venture Predation

#112

Post by spaceman_2020 »

I'm so jaded by modern startups and venture industry. There are people who've built entire careers building unprofitable companies that only sell products to other unprofitable startups and eventually get acquired by other unprofitable startups.

It's a gigantic game of hot potato that swallows up a gigantic pool of human talent, all for producing stuff that really adds little to no positive to the world.

If they're not disrupting (read: destroying) local economies, they're breaking all local rules and regulations. And despite playing fast and loose with any sense of ethics or legal compliance, they still can't be profitable.

Just end this ponzi.

Re: Venture Predation

#113

Post by TuringNYC »

conjecTech wrote: post #43
brookst wrote: post #32

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…

>> Things like Uber are a typical dumping cases. For years, they charged below their COGS and eventual profitability depended on driving out competition and raising prices.

Even these things get played. Sometimes driver/rider subsidies get classified as "Marketing expense" rather than cost of goods sold.

Re: Venture Predation

#114

Post by tomatocracy »

HDThoreaun wrote: post #108
anonu wrote: post #101

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…

Uber's moat is its network. Can't get any drivers if there are no riders and can't get riders if there are no drivers. This means you need to start by offering drivers more money than you make in order for them to use the app. An open source solution wouldn't be able to get off the gorund.

The direct fix for this (which I believe has happened in some countries) is to ban them from asking drivers to enter into exclusivity or minimum volume agreements with them. Then drivers can work for multiple networks.

Re: Venture Predation

#115

Post by huitzitziltzin »

The response from regulators should be: Let VCs waste their money.

This is an extremely weak analysis from an economics point of view. The regulator has several options to deal with monopolists if and when they emerge.

If consumers realize benefits in the meantime in the form of cheap products subsidized by VC money that’s a good thing.

Re: Venture Predation

#116

Post by mdgrech23 »

spaceman_2020 wrote: post #112

I'm so jaded by modern startups and venture industry. There are people who've built entire careers building unprofitable companies that only sell products to other unprofitable startups and eventually get acquired by other unprofitable startups. It's a gigantic game of hot potato that swallows up a gigantic pool of human talent, all for producing stuff that really adds little to no positive to the world. If they're n…

This is our world right now. My wifes father was a plumber. She said as actual plumber, you know someone who provides water and ensures your shity is sanitarily drained away he didn't make really good money. He got a job working for the auto industry running pipes for hydraulics to the machines on the factory floor and made way more money. How is that worth more to our society?

Re: Venture Predation

#117

Post by mdgrech23 »

NumberWangMan wrote: post #85

This feels related to the idea in "Billionaires, Surplus, and Replaceability" (1) Basically, if, say, Jeff Bezos never existed, it seems likely that someone else would have created Amazon, perhaps a few years later, and maybe not quite as good. "Big online retailer" is sort of a natural niche, with a bit of a natural monopoly. So while the classic argument for letting people keep most of their wealth gained in the fr…

seems more of a problem that we let monopoloies exist. hell even oligopolies. we do have laws but we all know they don't do shit.

Re: Venture Predation

#118

Post by refulgentis »

maxk42 wrote: post #99

Funny to see nobody's mentioned Cloudflare yet. They're not making any money: This is presumably their exact plan: Offer CDN services and other web infrastructure services at a loss for a prolonged period of time until the competition is destroyed, then jack up rates and eat the market.

+1, they really made my eyebrows raise recently. They're absurdly overaggressive on flagging requests as scraping...and will sell you a CORS proxy for scraping, with a big fat "I'm a scraper" tag on it. They get two customers and the web-as-commons and the scraper are both worse off.

Re: Venture Predation

#119

Post by CTmystery »

nathan_compton wrote: post #38
brookst wrote: post #32

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…

"even bootstrapped garage efforts" this doesn't seem to follow. Bootstrapped efforts don't have the funding to absorb a lot of loss to get market share. They have to make a product people will pay for, typically.

Your parent is confused. There's a difference between absorbing losses to stay alive while you try to get a product to market and deliberately losing money per sale because you want to drive the competitor out of business. No squinting required.

Re: Venture Predation

#120

Post by guywithahat »

brookst wrote: post #32
nico wrote: post #20

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... .

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…

I agree, I think dumping makes more sense when a government is helping and industry produce temporarily low priced goods to kill competitors, as would sometimes happen with China. Even a big company like Amazon has a much more finite amount of resources than a government
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