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Comment by fotbr | Hacker News Reader

I'm outside the VC arena, so take this with a grain of salt.

It appears to me that part of the reason the Silicon-Valley-Tech-VC model involves explosive growth is because a large number of the businesses are chasing what really amount to fads, and the only chance they have of being successful is to take the entire market before the uers move on to the next big thing, so that after the initial "wow" wears off, anyone that remains stays on their platform/program/app/service/etc.

Obviously, that's not entirely a bad thing. It's made a lot of money for a lot of people, and there are people who genuinely thrive on the churn and burn involved.

It's not a model that I personally like, preferring instead a slow and steady growth based around a lasting quality product. It might not lead to billion-dollar businesses, but I think it leads to better businesses.

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Are you suggesting Snapchat isn't making a meaningful, long-term contribution to society?

I agree, but there are some things that really only do make sense at scale. A friend is in SEA and used Uber Eats a lot. They took over then quickly pulled out, investing in Grab to hedge.

Anecdotally, Uber was much better than Grab is. Grab is more of local, pared down version of Uber and the service suffers for it. I've heard that Uber is a horrible company, but they really got food delivery right.

It's very hard to replicate that without massive scale. On one side of it it takes a lot of expertise and resources and on the other side it's not very profitable. I guess it didn't work for Uber in the end but their global, winner take all model worked from a consumer standpoint.

Anyway, not all of it is a throwaway fad. Some of things coming out of that monster make a meaningful contribution.

> It appears to me that part of the reason the Silicon-Valley-Tech-VC model involves explosive growth is because a large number of the businesses are chasing what really amount to fads

This may be the case now but originally the desire for growth was that extreme economies of scale were the primary value driver in electronic commerce/advertising-driven models, thus, achieving that scale was paramount.

Over time, the low hanging fruit was eaten and the newer things didn't have such scale, but the desire to invest in a company that succeeded in that way remained, so more and more companies were "forced" to adopt a high-growth model or get left behind by a competitor who did, even if it made no sense.

That's how you get Uber being forced to grow at all cost despite having nearly zero economies of scale above the MSA-level. If they got to the self-driving taxi, then they might be able to start realizing that scale, but in the past you had to already be realizing it to get funded.

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