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Comment by ukulele | Hacker News Reader

Squandered is a bit harsh. I don't have skin in the game either way, but I wouldn't be surprised if there is a profitable business to be built once the dust settles. It can be hard to know in advance just how big that market would be, and how defensible.

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Here is an example of squandering:

https://www.theatlantic.com/photo/2018/03/bike-share-oversup...

If they're going to make that many bikes, why not just give them away? Why have them be "shared" and made to be returned to a pile?

It would at least eradicate theft. Most people would have the same model. You could get a handout instead of having it stolen, and if it was stolen, then that person could get the handout. And the only people claiming them would be the ones using them.

Because capitalism and accountants prevent you from giving stuff away.

That's in China. "Capitalism" isn't preventing any of that there.

In practice, China is highly capitalistic as an economy. It's authoritarian capitalism, not communism, even though it has a "communist party".

This phenomenon of bikes piling up is literally venture capitalists throwing money at startups (in return for equity) to deploy more and more bikes to outnumber competitors in a hopeless race to monopolize bike sharing. It's literally an exhibit of one of the failure modes of extreme capitalism.

Giving them away, as GGGP suggests, would actually be a departure from capitalism, and perhaps a good one.

Astounding. They do everything on an epic scale, even squandering.

An example of US VCs squandering on scooter startups is bike sharing in China?

That is wild!

Profitable is not enough. This is an extremely competitive business space. Employees joined these companies and were granted equity at multi billion dollar valuations and investors invested in these companies at multi billion dollar valuations. What is the addressable market here? What do margins look like? I would be surprised if the companies that win this market are going to be worth more than $2 billion dollars.

> Employees joined these companies and were granted equity at multi billion dollar valuations and investors invested in these companies at multi billion dollar valuations

Hubris and a lack of pragmatism has a cost. Of course the equity is worthless! If you do small things that don’t scale and poop aren’t profitable, and then scale and still aren’t profitable, there’s nowhere else to go.

These investments of time and fiat never seem to ask, “walk me through the milestones you’ll accomplish to corner the market.” Same with Uber (from their S-1): “We include all passenger vehicle miles and all public transportation miles in all countries globally in our TAM, including those we have yet to enter” eye roll

TLDR The koolaid has a bitter aftertaste.

(tangentially, Uber has spent almost $28B and still isn’t profitable)

s/poop/products. Regretful typo.

VCs aren't in the business of creating profitable companies. Their LPs aren't going to be happy with a negative return on their investment, regardless of whether they helped to create a nice, sustainable small business along the way.

I wonder if there is a path to profitability if they have to deal with all the scooter-litter described in the article. That'd probably mean having someone continually going around town moving scooters into racks or something like that.

Well a start would be educating riders on how to safely park the damned thing when their trip is done, instead of literally dumping it on a sidewalk/pathway, and collect fines for bad stewardship.

You could have motion/orientation sensors to complement the GPS to see if they are moved after the rider parks it. It's far from unsolvable its just that nobody cares or is motivated.

Lyft/Divvy does this in Chicago. If you lock the scooter at a docking station, there’s no additional charge, but if you leave it somewhere else, there’s a small fine of $1

At the very least, Lime and Scoot now require a picture of the properly parked scooter upon ride end. I wouldn't be surprised if the other apps are the same.

Squandered isn't harsh at all. The deployment of capital was disproportionate to the size of the profitable business that will result. It could have been better spent elsewhere... or saved.

Though if it takes $2.9 billion in funding to make a business with ultimately, let's say $10m/yr net profit, I'd still call that squandered.

Especially if part of that move to profitability ends up needing to be like european city bike hire schemes where they need docks to avoid theft, reducing availability and adding infrastructure costs.

My reading is that "squandered" doesn't refer to the potential market for scooter-sharing services itself, but to the poor strategy of pumping an insane amount of money into a new/untested category in a very short amount of time.

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