
The worrying tale of how my business made $515m more than Snapchat last year - apapli
http://image-store.slidesharecdn.com/356a81d5-dcba-4657-8b72-adbe3fab8119-original.jpeg
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vladd
Uber is showing huge growth by expanding in a lot of new markets (in Europe
and Asia). Market formation is expensive; they initially support a critical
mass of drivers with minimum guaranteed earnings before mass adoption in that
region happens. As long as they can prove profitability in established regions
such as New York City, I don't see a problem with them temporarily losing
money on expansion.

At the end of the day, Uber is still a private company. There's very few data
flying around, and key metrics are shared just with the original investor
group. It's hard to judge if they made a correct capital allocation decision
or not. And, ultimately, it's their money and their decision to make. Who are
we to judge?

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zzalpha
Uber has a clear business model with clear revenue and cost centers. In this
way they're similar to Amazon, spending to establish themselves. Their biggest
challenge (beyond regulatory hurdles) is the race to the bottom, as their
primary cost centers are their drivers, and there's only so far that they can
drive down wages.

But there's a whole range of Valley businesses out there with the same basic
model: attract lots of users (preferably by being "social"), and then monetize
them... Somehow. Where that somehow is almost inevitably advertising.

How many of those really justify billion dollar valuations?

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grzm
Link to article online: [http://www.cityam.com/258991/worrying-tale-my-
business-made-...](http://www.cityam.com/258991/worrying-tale-my-business-
made-515m-more-than-snapchat-last)

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mooted1
This kind of analysis nearly always fails to account for _why_ these
businesses aren't able to recoup expenses. While many startups are will never
find a large enough market to be profitable, many others choose to invest
earnings and take on debt in order to improve their product further and
acquire market share.

Could Uber or Lyft be profitable if they slashed incentive spending, cut R&D
efforts (self driving cars, improved matched algorithms, etc), closed up shop
in cities too small to be profitable, and fired everyone that wasn't critical
to keeping the business running?

Maybe. But this guy certainly doesn't know enough to tell.

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Blizzardofid
What a cheap attempt at fame. Must take a PR guy to do it. Even if you were a
beggar who made no money at all, you would still be mathematically more
profitable than start-ups that declared losses, $1Bn+, $515Mn, and $450Mn for
Uber, Snapchat, and Twitter, respectively. About as hollow as they come.
Regardless of your views about an internet venture armageddon, Don't give the
article the airtime he's looking for.

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minimaxir
Huh, print newspapers are running clickbait now. If you can't beat them, join
them.

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WalterSear
Sleaze merchant is jealous of more successful sleaze merchants, warns of sky
falling due to people not playing by the set of rules he understands.

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zzalpha
If you care to attack the premise of the article, I'd love to hear your
reasoning.

Vacuous ad hominems, however, add nothing to the discourse.

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WalterSear
Vacuous ad hominems like, "tech-nerds who could tell you the square root of a
banana, but wouldn't have a clue how to sell you one?"

(Clearly, these tech-nerds have sold something to someone, or vast sums of
money wouldn't have changed hands.)

Given that:

* sometimes people make large bets and don't expect immediate returns.

* sometimes people make large bets, and they are wrong.

* markets can get overheated

There's no premise to discourse here - just sour grapes.

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grzm
Pointing out someone else's bad behavior doesn't excuse one's own. If you
think the submission is content-free or otherwise inappropriate for HN, flag
it and move on. If you have something interesting and substantive to say, by
all means, please do.

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nom
lol, he pinned his article on twitter.. and has also invested in Facebook.

Go figure.

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Grue3
Sounds like a smart investment to me. The dumb thing would be to invest in
Twitter (or Snapchat for that matter).

