>The unit economics of most of these companies just don't add up.
VCs have been playing the loss leader game...thats why the metrics always go to growth. Hey we grew x% this week/month/year, they never mention how the "growth" simultaneously leads to bigger losses. Instead its always, we can turn off the growth whenever we want and then is pure profit.
It seems like it makes no sense and this could never work, but they don't need to make a profit, they just need big growth numbers, a cult like buy in of the brand, and then unload it on the public while cashing out.
VCs have been playing the loss leader game...thats why the metrics always go to growth. Hey we grew x% this week/month/year, they never mention how the "growth" simultaneously leads to bigger losses. Instead its always, we can turn off the growth whenever we want and then is pure profit.
It seems like it makes no sense and this could never work, but they don't need to make a profit, they just need big growth numbers, a cult like buy in of the brand, and then unload it on the public while cashing out.