The End of the Millennial Lifestyle Subsidy | Hacker News Reader

The End of the Millennial Lifestyle Subsidy

theatlantic.com

26 pointsimartin2k4 comments

The big thing missing from Uber, Lyft, WeWork, Peloton, Postmates, BlueApron, and all the rest, was the right price structure to make this profitable when it got big. If almost all of your costs are in up-front development (e.g. software, pharmaceuticals) then this works; go big early, and once you achieve large scale your revenue goes up much faster than your expenses. None of these businesses were like that.

> "It was as if Silicon Valley had made a secret pact to subsidize the lifestyles of urban Millennials. As I pointed out three years ago, if you woke up on a Casper mattress, worked out with a Peloton, Ubered to a WeWork, ordered on DoorDash for lunch, took a Lyft home, and ordered dinner through Postmates only to realize your partner had already started on a Blue Apron meal, your household had, in one day, interacted with eight unprofitable companies that collectively lost about $15 billion in one year."

Well yeah, and they lost 15 billion because they offered the subsidies to Millennials and Gen Z a group that was always aware of the subsidies and were more than happy to take advantage of stupidly low pricing and then bail.

Literally I’ve probably gotten thousands of dollars of value from companies who are salivating over customer acquisition and then knowingly stabbing them in the back by leaving when the free money dries up. It’s practically a badge of pride at this point to a customer of one of these companies with a negative net profit.

So they can’t really act all surprised pikachu that once they’re not selling dollars for 80¢ the people who knew they were doing that all along will bail and laugh.

Half our economy is just thinly veiled wealth transfers to the rich, zero shame in separating stupid VCs from their money.

I'm not sure if this is the right conclusion. All companies on the list went on a hiring sprees with the VC money. It is still not clear if they are not profitable because of the business model or the because of the hiring practices and the extra projects which they tried (Uber's self driving cars is one example).

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