I am glad people are finally calling out the VC-startup-consumer culture for what it is.
There are many startups out there, solving real world problems in a manner where customers will pay them much more than it costs these startups to serve these customers. Most of the good ones I know are in the B2B space.
And then there are consumer companies that spend more on acquiring customers than the lifetime value of the customers. It's all about behaviour change, apparently.
Years ago, when the consumer behaviour change boom started, I thought I was simply jealous. How could a simple product like Uber be valued more than complex engineering products such as processor designs? I assumed that I, an engineer, was simply jealous. After all, the business application development space, occupied by outsourcing firms such as Infosys and Wipro, also appears simple from the outside; but large scale business software has its own complexities.
We are now seeing the reality - consumers are fickle. They may love Netflix ardently, but the moment their favourite show leaves Netflix for another streaming service, they move with it. There is very little that beholdens a consumer to Uber versus Ola. There is more fierce loyalty when it comes to your favourite brunch place in town, which you might only visit once a month, than there is to cab services that you might use more than twice a day.
The question no one wants to answer is - how does changing consumer behaviour help, when your own entry barrier is non existent? I have been a DriveU customer for many years. I can't seem to afford or retain a full time driver, so DriveU worked well for me - till they rubbed me the wrong way. Almost immediately, I directly started making bookings with one of the many drivers DriveU had connected me with. It's the gig economy - if the mediator isn't adding value, speak directly to the service provider.
The only good thing I see coming out of this, is the amount of money that is getting transferred from fat cat hyper capitalists to their VCs, and from there on to struggling service providers and their consumers. Redistribution of wealth for the win!
There are many startups out there, solving real world problems in a manner where customers will pay them much more than it costs these startups to serve these customers. Most of the good ones I know are in the B2B space.
And then there are consumer companies that spend more on acquiring customers than the lifetime value of the customers. It's all about behaviour change, apparently.
Years ago, when the consumer behaviour change boom started, I thought I was simply jealous. How could a simple product like Uber be valued more than complex engineering products such as processor designs? I assumed that I, an engineer, was simply jealous. After all, the business application development space, occupied by outsourcing firms such as Infosys and Wipro, also appears simple from the outside; but large scale business software has its own complexities.
We are now seeing the reality - consumers are fickle. They may love Netflix ardently, but the moment their favourite show leaves Netflix for another streaming service, they move with it. There is very little that beholdens a consumer to Uber versus Ola. There is more fierce loyalty when it comes to your favourite brunch place in town, which you might only visit once a month, than there is to cab services that you might use more than twice a day.
The question no one wants to answer is - how does changing consumer behaviour help, when your own entry barrier is non existent? I have been a DriveU customer for many years. I can't seem to afford or retain a full time driver, so DriveU worked well for me - till they rubbed me the wrong way. Almost immediately, I directly started making bookings with one of the many drivers DriveU had connected me with. It's the gig economy - if the mediator isn't adding value, speak directly to the service provider.
The only good thing I see coming out of this, is the amount of money that is getting transferred from fat cat hyper capitalists to their VCs, and from there on to struggling service providers and their consumers. Redistribution of wealth for the win!