It gets worse as I stated in the article that new startups in the same area are raising behemoth amount of funding. The funds were used to attract and subsidized sellers and buyers.
You understand the goal of any business, especially an internet business, is to become a monopoly right?
Look at Amazon, Google, FB, etc. They only became profitable once they became monopolies, and thus could set their own prices based on whatever metrics they chose.
The reason startups take outside funding is so that they can become a monopoly in a given market, and then charge customers whatever they want.
Don't fall for the marketing hype. Startups don't save the world. Scientists, doctors and inventors do. Startups just make a few people very, very rich at the expense of their customers by selling them mostly crap they don't need or want, using psychological manipulation (i.e. marketing).
Once you understand that this isn't some noble quest, you can finally begin to understand how to play the game (of thrones).
This is laughably false for at least two of the examples (Amazon, Google) you've mentioned in your own post.
Millions of people use these services everyday to make their lives better. Thousands of employees work for good pay at these companies. Is it all scam? Of course not.
There are lots of examples of successful business out there who did not monopoly the market.
I'd also have to disagree that startups sell mostly crap they don't need or want. Uber & AirBnB definitely provides something valuable that most humans would appreciate of.
If you're talking about products such as Snapchat or Instagram, that's a different genre of product. It's a vitamin type of product not a pain killer.
> There are lots of examples of successful business out there who did not monopoly the market.
Such as? If you cannot eliminate competition within your given market, marginal profit will eventually be driven to zero. The internet amplifies this challenge because it is not geographically constrained (minimal transaction costs) and software amplifies this challenge because of zero marginal cost (creating massive economies of scale).
You can find more on this in the works of Michael Porter (http://amzn.com/0684841487, http://amzn.com/0684841460) and Peter Thiel (http://amzn.com/0804139296). Zero to One discusses how many seemingly successful non-monopolies are actually either monopolies pretending not to be one or non-monopolies that are not as successful as they portray themselves to be.
You were also trying to fix the wrong problem. Focusing on the user experience is the right call, but your mistake was saying "fuck this, the distributor model is so fucked we can't do it". Ok, if the supply chain of a specific industry is super-expensive, your business model should be to streamline it by going direct and undercutting everyone else (this is what Uber did).
You needed to build a new distribution model. It's fair to say "I'm a college student and don't have time to fix this big problem" -- which is fair, supply chain problems like this are usually best left to people with experience in them or at least a passion for solving them.
Which I also mentioned the way to solve it is to cut down the market size, so that only first hand suppliers are the ones majority selling
The real problem is when you have a bunch of producers trying to sell direct to customers and drop ship is that it's a very inconsistent consumer experience. If your selling point is a compelling customer experience, you need consistency in how packages are shipped and changes communicated. All of that leads to inventory, shipping, logistics, and something that looks much more like a traditional e-commerce store.
Once you lose control of the customer experience in this way, it can no longer be your competitive advantage. So you either need another competitive advantage, or you need to fold up shop.