Comment by Aurornis
3 hours ago
Most new markets are funded by initial investment capital. Early entrants operate at a loss as they grow.
This isn’t as unusual as some people are trying to make it sound. This has been happening since the dawn of finance.
I thought this would be less foreign to everyone since we just went through this whole conversation for a decade with Uber and Lyft. Their demise was predicted from the start from everyone who thought that it was going to collapse as soon as they couldn’t subsidize your rides with promos. There was much wailing and gnashing of teeth as their prices changed to feel out the market. Then they found profitability and the critics went silent.
Arguably we'd be much better off if none of those would be subsidized by investments, at least not to the "run unprofitable for decade+" level.
Because that just absolutely murders any competition that manages to not get that level of free money. You're not pouring money in to make it happen at all at that point, you are pouring money in so nobody else can get the part of the pie.
Which is great for investors, bad for everyone else
If the pie is valuable enough then competition can get money. We have competition in AI. You can't build big things without investment.
What would be the alternative? You’ve got the government funds absolutely everybody on one end of the scale. Where do we find a reasonable alternative?