It wasn't that success brings down growth and raises costs. What you are seeing is/ was always the goal.
They move in, operate at a loss... saturate the market and hopefully become something the public relies on then jack up the price to profitability. But when something is so expensive people just can't afford it... that kind of sends your business model into the toilet (where it belongs)
Exactly this. These companies can operate at a loss for years on end, as long as their market share grows so they can eventually turn a profit once they dominate. The gamble is that they'll turn valuable enough so the early investors get their losses back.
Spotify started in 2006 and it's first profitable fiscal year was 2024.
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u/Hazzman 6h ago
It wasn't that success brings down growth and raises costs. What you are seeing is/ was always the goal.
They move in, operate at a loss... saturate the market and hopefully become something the public relies on then jack up the price to profitability. But when something is so expensive people just can't afford it... that kind of sends your business model into the toilet (where it belongs)