Millennials May Have to Get Used to More Expensive Stuff
Traditional companies are realizing the futility of competing with venture-funded startups. That’s a bad sign for consumers.
End of the road?
Photographer: Daniel Leal-Olivas/AFP
There’s a school of thought that says the dominant business model for tech startups isn’t B2B (business-to-business) or D2C (direct-to-consumer). It’s really V2C: venture-capital-to-consumer.
In other words, piles of venture capital are being directed into the pockets of consumers — often tech-savvy millennials — in the form of discounted services provided by startups prioritizing growth over profit. The fact that your ride-hailing app, co-working space or food-delivery service is so cheap isn’t necessarily because anyone has found a wondrous new business model that reduces costs. It’s because the firms are heavily subsidized by investors.