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inc.com
Like everything else, this concept is being tested brutally by the Covid-19 pandemic. Rent the Runway, the fashion rental service, has had to rethink its plans as fewer Americans commute to offices or attend fancy events. Joymode, which rented out thousands of products, from electronics to margarita machines, closed. Uber rides — which were suppose... See more
Dan Frommer • Would you subscribe to these shoes?
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SoftBank brashly poured billions of dollars into “tech-enabled businesses” with large CapEx requirements, like WeWork and a dog walking company, Wag, and pushed them to grow fast. That’s how we found ourselves in the situation we did at Breather, faced with a competitor that pursued growth to the exclusion of unit economics.
Packy McCormick • Masa Madness
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The subscription model Soho House has been perfecting for a quarter of a century has suddenly become one of the hottest trends on Wall Street, due to the success of companies from Netflix to Dollar Shave Club.
Marker • A Global Pandemic Could Be the Best Thing That Ever Happened to Soho House
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WebVan in particular was uniquely insane. With just $500K in gross revenues, no profits, and millions in annual burn, their IPO hit an $8 Billion valuation on day one.
Chris Rempel • PART 1: THE INTERNET IS HAVING A KODAK MOMENT
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Companies with poor unit economics found themselves propelled by aggressive venture dollars (which themselves were propelled by a low-interest-rate environment). Those companies then turned those dollars into aggressive customer acquisition. Until recently, the market rewarded growth at all costs.
Digital Native • Revisiting Lifetime Value and Customer Acquisition
Timour Kosters added
WeWork had explored a revenue-sharing model with landlords much like the one employed by hotel chains. While the company might bring in less revenue with such a strategy, it would also have to shoulder much less risk. But Masa had not invested $4.4 billion to pursue moderate growth.
Reeves Wiedeman • Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork
The tech industry is built on the venture capital model where hockey stick growth and selling to a larger company or going public are markers of success. But the traditional VC model does not leave much room for startups that might not be the next unicorn but still generate revenue — just not the type of returns investors are looking for.
Techcrunch • Instead of IPOs and acquisitions, exiting to community is one alternative
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Once the immediate adjustments are made, there will be winners and losers. Absent extensive bankruptcies (and missed rent payments), traditional commercial landlords may take the lightest hit as companies still need office space, but the WeWorks of the world are in for tough times as struggling startups and small businesses look for cheaper (or fre... See more
Techcrunch • Leading VCs discuss how COVID-19 is impacting real estate & proptech
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