In today's environment, it's better to be one of the "hot" companies with presumably poor unit economics.
Otherwise, your competition will out-market and out-sell you every month simply by spending more money.
Otherwise, your competition will out-market and out-sell you every month simply by spending more money.
Isn't that essentially playing the market? You might be waiting until the bubble bursts - which puts you in the same position as everyone else trying to short this bubble thats supposed to pop any day now.
And even if you are profitable now, the effects of a bubble doesn't mean you will be profitable afterwards.
If you're playing anyone, it's your competitors. Understanding your competitors is much easier than understanding the market. Actually running a business in the space makes you much more familiar with the unit economics of it. If the market fails, that is, if people decide they no longer wants the service you're both offering, then you're both hosed.
If you feel there's a bubble, that is, if you feel that demand for a product / service is going to eventually collapse, then the rational response is to get out of that market, assuming your position is liquid enough to do that, and invest in asset classes that will do well if and when the market collapses. You don't start taking short positions unless you have specific reason to believe a specific company isn't looking good. Otherwise volatility could cause you to lose a lot of money in a very short period of time. Also, you can't short a whole market, you can only bet against it.