41–50 of 156 posts
Earlier quoted context omitted.
Be gentle please, I understand and agree that these industries got complacent but these are people. I think our societies should integrate this 'kick' phases to make them smoother and more respectable rather than have toxic competitors attack them.
yes, state sponsored 'economic efficiency' purges. what could possibly go wrong?
Earlier quoted context omitted.
SpaceX is real. Uber, AirBnB, WeWork and all the other 'lawbreaking as a service' and 'subsidizing transactions with massive VC' companies are not.
I think the word 'subsidy' is kinda questionable here. (This writer's previous article used the same word to discover many companies[1]) If a company is not losing money on gross margins--if they are losing money in total 'unit economics' because the customer acquisition cost is high--does it really mean they are subsidizing usage? An example is Casper, the mattress company. They are still selling mattresses to consu…
A brand subsidy is when your brand is enhanced by a third party either by direct or indirect but it doesn't have to include money.
Think taking a photo with a star at your dinner and putting it on the wall.
The VC subsidies for some of these companies are so high that they are basically selling $2 for $1 in some cases (WeWork was basically losing nearly $1 for every $1 of revenue!)
Ride share companies grew fast when they sold VC subsidized rides but have struggled to maintain that market share dominance without subsidies (lots of other players quickly move in). MoviePass sold lots of subsidized movie tickets until the money ran out.
Thus the fallacy of the whole “it’s ok that we’re unprofitable because look at how fast we’re growing” is that in many cases these companies were only growing BECAUSE they were grossly unprofitable in the form of their investors massively subsidizing purchases.
Earlier quoted context omitted.
Taxi and hotel businesses deserved a little punch in the gut.
Why hotel businesses? There are many different hotel brands to choose from, pricing is transparent, photos/reviews are available on many websites, customer service at the chains take care of complaints pretty well, and there has been a ton of new hotel room supply added.
I was staying by myself, but I've heard from traveling families that hotels are a big hassle for them because they lack a kitchen. Imagine feeding a couple kids while staying for a week. That cost will really add up if you're eating out 3 times a day.
The standard hotel practice of giving you ice but nothing else, so you spend on expensive drinks and water, is pretty obnoxious in my book.
The little fridges stocked with $5 bags of chips are also obnoxious.
Another reason is that I'm not limited to "airport-hotel" land, which feels the same in every city. (Admittedly, this is something hotels can't easily fix.)
Also, the prices for AirBNB's were significantly more varied. At the low end, you could get one room in an apartment occupied by others, etc.
It's an incredible mix of hubris (on the startup's part) and delusion (on the investors part) to call some of these "tech companies". Like WeWork. It's a real estate company that should be valued like a real estate company. But somehow everyone concurred that it is, indeed, a tech company. How or why, no one bothered to ask.
Earlier quoted context omitted.
SpaceX is real. Uber, AirBnB, WeWork and all the other 'lawbreaking as a service' and 'subsidizing transactions with massive VC' companies are not.
I think the word 'subsidy' is kinda questionable here. (This writer's previous article used the same word to discover many companies[1]) If a company is not losing money on gross margins--if they are losing money in total 'unit economics' because the customer acquisition cost is high--does it really mean they are subsidizing usage? An example is Casper, the mattress company. They are still selling mattresses to consu…
Suppose you have a small software company, Reinvest Software with big margins and lots of opportunities to expand. You can take home that profit and pay taxes. Or you can invest in growth. That investment in growth is an investment in intangible assets with insanely good tax treatment. But it looks bad on the financial statements.
Suppose an investor, Smart Capital, sees your business potential and invests even though your GAAP income is low or negative. Smart Capital does very well for itself.
Suppose another investor, Sucker Capital, sees Smart Capital doing well, decides that profits don't matter and invests in Negative Margin Software, which never has hope of making money.
I think a lot of people can't distinguish between Negative Margin Software and Reinvestment Software. For many years, I didn't realize that they were separate things and I thought tech was mostly a Ponzi scheme.
At first glance, I see more Reinvestment Software vs Negative Margin Software compared to the dot-com era.
Earlier quoted context omitted.
SpaceX is real. Uber, AirBnB, WeWork and all the other 'lawbreaking as a service' and 'subsidizing transactions with massive VC' companies are not.
I think the word 'subsidy' is kinda questionable here. (This writer's previous article used the same word to discover many companies[1]) If a company is not losing money on gross margins--if they are losing money in total 'unit economics' because the customer acquisition cost is high--does it really mean they are subsidizing usage? An example is Casper, the mattress company. They are still selling mattresses to consu…
"You might not have heard about these “real tech” companies—like Zscaler, Anaplan, and Smartsheet—because they mostly sell business-to-business software or cloud services. But all of them are trading more than 100 percent above their listed IPO price." All of those are also down significantly from their all time high though.
But it turned out the charts were right, and Zscaler is now profitable, although they still aren't making as much as investors at the all-time high expected.