Why Uber Won
Investors love to spout this stuff. Unfortunately, it really isn't true (even though as a founder who generally prefers to bootstrap, I wish it was.)FTA:
> If the cost of customer acquisition (CAC) is greater than the lifetime value (LTV), a startup can grow itself to death.Oh, you mean like Salesforce? No, wait, they had an IPO and they still only rarely show a profit. And they hold their LTV very close to their chest, so we still have no idea if CAC is lower or higher than LTV.> When investors talk about growth, we’re talking about sustainable growth.No, you're not, because you continually fund companies that do the opposite. Salesforce, Webvan, Pets.com from the first boom. Instacart, Uber, Lyft, WeWork, HubSpot from the latest.> The period of cheap capital and billion dollar checks has ended.Same thing we heard in 2001 and 2007.> In this capital constrained market, buying scale is no longer going to be a credible lever for the next generation of startups. ... Companies can no longer look to money as a performance enhancing drug for scale-up.Until it is again. It wasn't OK to "buy scale" in 2001 or 2007, but it was in 1997-1999 and 2012-2014. And now in 2016, it's fallen out of fashion again.Either we're going to have a raging depression, or the bubble will inflate again. Hypothetically, both of those scenarios could actually happen--a depression followed by bubble inflation yet again.This is why I suggest that founders tune out the idiocy and focus on building a sustainable business. You probably won't build an Uber as quickly as Uber did. But you'll be hugely protected against the inevitable downfall, and won't find yourself cash-strapped and forced to switch gears quickly (notice Uber now singing the "we plan to be profitable in most U.S. cities this year" tune.) And, more importantly, you'll have built a life for yourself, your employees, and their families that are depending on you.