Who Loses When Tech Unicorns Don’t Make a Profit?

Gig workers shouldn’t have to suffer in the quest for more market share

James Stanier
OneZero

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Harouna Kaba, who drives for both Uber and Lyft, protests during a rally to call on the New York City Taxi and Limousine Commission to force Uber and Lyft to hold union elections, September 27, 2016. Photo: Drew Angerer/Getty Images

HHow about this: You and I are going to have a competition to see who is the best salesperson. The winner takes home their day’s revenue in cash. Sound good?

Okay, you’re in. First, we each need to pick an item to sell. It can be anything you want. Then we are going to go out on the streets and offload as many of them as we can.

I guarantee I am going to win. Why? Because I am selling $10 bills for just $5. I hit the street, and after some initial disbelief, I start selling. Word gets out, and people are flocking to me in droves. I sell out before I’ve caught my breath.

Let’s see how I did: Units shipped? 10,000. Revenue? $50,000. That’ll do nicely, thank you. What about profit, though? Oh, I lost $50,000 — but does it matter? My revenue and growth are wonderful, and my happy customers keep coming back again and again.

Something doesn’t seem quite right, does it? Well, despite the absurdity of this situation, it isn’t too far from the truth for the world of tech unicorns.

Who cares about profit?

Growth is everything in the world of tech startups. The industry’s obsession with…

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James Stanier
OneZero

Writing things that interest me. Hopefully they'll interest you as well.