Yeah that's the problem here its really hard to tell the difference between the two. Sometimes it feels like a "new economy" excuse.
Question, what is a good example of a market place that is now highly profitable where the unit economics/contribution margin were negative for a very long time.
Amazon is not an example, I guarantee they were making contribution margin on every book sold fairly early on.
Investors found that particular religion with Google. Losing money hand over fist till they put in adwords. They had to fight investors to put in one of the most profitable models on the planet. Ever since then, the game has changed. Investors now believe fervently, and founders realized investors may not know everything. Everyone else who came after drafted in Google's wake (I'm looking at you Zuck)
Yeah but thats different. Theres a difference between charging zero to get a network and losing money as a business vs selling a product and losing money on every single unit of that product being sold.
Question, what is a good example of a market place that is now highly profitable where the unit economics/contribution margin were negative for a very long time.
Amazon is not an example, I guarantee they were making contribution margin on every book sold fairly early on.