Five Bananas Won’t Pay the Rent
Bilt, fast-track indexes, Kalshi insider trading and Bitcoin’s slide.
A helpful rule of thumb is: “You always find product market fit when your product is giving away money.”1 We talked last month about “the MoviePass economy,” the glorious period in the 2010s when venture capitalists subsidized money-losing consumer businesses so they could grow as fast as possible. The theory was that if a company — Uber or WeWork or even MoviePass — could sell its product below cost, a lot of people would use it and it would quickly become popular. And then one of four things would happen:
WeWork and MoviePass ended up in the last category, but this was not a bad theory; Uber is big and profitable now. It is just a tricky theory. If you have rapid user growth and enthusiastic reviews and are giving away money, how do you know that people like the underlying product? How do you know they’re not just in it for the free money? If you turn off the free money, will they stop using the product?