The Unicorns Fell into a Ditch
The first .com implosion was broadly marked by companies that lacked revenue getting crazy valuations.The current “.com” implosion is broadly being marked by companies that do have “revenue” but only by using VC cash to create “fake markets.”The whole story of buying pizzas from a normal pizza shop for $20 and selling them for $18 through your “app” is the stereotypical example of the current .com implosion. Anyone can sell $2 bills for $1, but that’s not a business and no you can’t “make it up on volume” because the only reason people are using your app is because you’re selling something for a crazy low unsustainable price.The take home lesson from the current unfolding implosion is that a great product does not magically just equal a great business.