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This is a misconception that kind of bugs me. At the top schools they give a tremendous amount of need-based grants (i.e. money that never needs to be paid back). Elite institution grads are not the ones who have debt they can't pay back. Its people at middle of the road private institutions and many other scenarios that have this issue. You are confusing the sticker price with what the bulk of non-rich students actually pay which is far lower. This narrative bugs me because it is just incorrect and focuses on the wrong places as sources of a very real issue.
Its not always being just informed. Its the difference between knowledge and wisdom. You may know all these things up front and make the same decision to take VC because of other factors, prestige, the easy money, thinking you will be the billion dollar company. Then things don't go as planned, the rubber meets the road, and the cool sound of telling people you raised VC wears off. Then you realize why all of these articles are written and write one yourself.
I see. It's just so easy to get to a few million dollars of wealth over time if somebody's good enough to get to a big company and invest with a healthy diversification.
I really don't understand why people are risking that to be a billionaire with a small probability, when the difference in the lifestyle that that money allows is probably not that big.
I'm sure it's cool to be a billionaire for some time, but also it probably wears out quite fast when you get back to work.
Cannot agree with this more, thanks for articulating this so well. I definitely learned this lesson over time. In the beginning I just thought my lawyer would tell me what I should do. Then I realized that I should figure out what we should do and how I thought it should be structured and then use my lawyer to give advice, figure out how to accomplish what we wanted to do, and make it happen. It made the whole process more fun since it was nice to feel comfortable reading legal documents and thinking through the issues and everyone ended up better off.
Because a few teachers are instagram influences doesn't mean that "Teachers" as a profession are doing this widely. You could pretty much replace the word teachers with any profession and this would probably hold true.
I'm glad people are finally catching on to this fashionable narrative-generation tactic. When a reporter writes "X people are doing Y", all that means is that at least two X people each did Y at least one time. That's it. It doesn't mean Y is common or ascendant among X or the typical X does Y or even that any X is at the present moment continuing to do Y. This kind of headline sure sounds like a broader claim though!
Reporters and editors are people with a knack for language. They understand that for this phrase, the gap between denotation and connotation is a chasm. That we see this particular phrasing constantly anyway suggests a certain malfeasance.
I'm really tired of having to read my news adversarially.
"Xu said the company became “contribution margin positive” in the last year, which means that it’s profitable on a per-order basis. In fact, DoorDash has become profitable in its earliest markets."
Its funny this is a milestone for a company at this stage. Congrats you aren't losing money on every order!
> Congrats you aren't losing money on every order!
I think this misunderstands how marketplaces are built. Traditional economics would agree with you and say that selling $1 at $0.90 is insanity. Traditional economics have been slow to catch up with marketplace economics although there have been some recent papers that start explaining a better framework.
If you know that a marketplace has strong network efforts and improved performance at scale. The right strategy is to understand the trade-off between time and $ required to get to scale in your marketplace.
The optimal strategy often means subsidizing a market at a price below your actual cost for early markets. The fact that Door Dash talks about their business in terms of early vs. late markets with different economics means that they are using this playbook.
There are of course many companies that think they are building a marketplace with a network effect when they are actually just losing money. I don't know DoorDash specifically.
I'm not sure I even understand what the network effects are here. I guess there are some potential efficiencies with having a single delivery company that handles deliveries rather than individual restaurants but it seems like a stretch. People I know who live in cities tend to just have a stack of take-out pizza/Chinese food/etc. menus for places that deliver (or not). Maybe I'm missing something but it doesn't really seem like an area that's crying out for "disruption."
Using DoorDash or UberEats as your delivery service instead of building your delivery staff in-house is like using AWS or DO instead of building your own in-house ops team. Since most delivery workflows are pretty much identical (go to restaurant, pick up food, deliver food), it seems like any restaurant other than a "typical delivery" place would benefit from using someone else's infrastructure.
Except that "building your delivery staff in-house" more or less consists of hiring some teenagers to work for tips. It's not exactly architecting a datacenter. Furthermore, delivery is going to inherently be a local business even if you're a nationwide company.
I actually do think that there's something to be said for having a standardized service that a restaurant already offering take out can just sign up for. Maybe delivery is something they just never got around to offering. It just seems like a service that's hard to do well at a price people are willing to pay.
Maybe its where you live? I live in Las Vegas, and with the 24 lifestyle that often includes drinking, these services have absolutely blown up out here. Granted its a pretty special case in terms of city density coupled with a larger than normal group of restaurants that are open late or 24 hours. That and the 215 beltway makes it so even if someone wants something from across town its not much of a hassle (lest its during rush hours obviously). I always wondered if it was the same in other cities, I just don't see it as sustainable without the 24 hour life style and the city density.
It's fair that there's been an increased expectation of near-immediate gratification. As a result, although a fair number of restaurants in cities have long offered delivery, it's not clear that ad hoc delivery on a restaurant-by-restaurant basis necessarily scales to this new world.
It will probably vary by location though. I live about 40 miles out of Boston and adjacent to a couple smaller cities. I have basically no food delivery options.
I'll see your anecdote and call with mine: I live in Atlanta and I can't think of a single person that doesn't use some app to order delivery anymore. Do you live in a city or just know people who live in cities.
Yeah that's the problem here its really hard to tell the difference between the two. Sometimes it feels like a "new economy" excuse.
Question, what is a good example of a market place that is now highly profitable where the unit economics/contribution margin were negative for a very long time.
Amazon is not an example, I guarantee they were making contribution margin on every book sold fairly early on.
Investors found that particular religion with Google. Losing money hand over fist till they put in adwords. They had to fight investors to put in one of the most profitable models on the planet. Ever since then, the game has changed. Investors now believe fervently, and founders realized investors may not know everything. Everyone else who came after drafted in Google's wake (I'm looking at you Zuck)
Yeah but thats different. Theres a difference between charging zero to get a network and losing money as a business vs selling a product and losing money on every single unit of that product being sold.
Thankfully, the world is afloat with cash looking for a home, and so we can continue with this game for a while. At least, I think the portal will stay open till the round closes. Which is enough mostly.
BTW, traditional economics can well model this using advanced options equations, but the answers won't come close to justifying the valuation they got.
Company is either GAAP profitable, pro-forma profitable, EBITDA profitable, cashflow profitable, cashflow neutral or money losing. All other metrics are creative accounting that put lipstick on a pig masking money losing status.
Not sure why you think they don't pay their drivers. The exact amount is unclear, but according to this FAQ [0], it is "at least $1" per order, and at least a variable "guaranteed amount" that door dash will pay up to, regardless of customer tips.
Definitely. At least, though, it means there's a path to profitability just by increasing volume, right? Like, if every new order brings it more than it marginally costs, with enough eventually you'd cover your fixed costs, so it seems like at least a rough validation of the business model (assuming their total addressable market is as big as they think it is). Vs, say, Uber, which is as far as I know still losing money on every ride and has no path out aside from not at all certain, majorly disruptive technical innovation.
I don't like when titles obscure the actual findings. It should be Alcohol abuse largest risk factor for dementia. Its not just drinking alcohol, its drinking alcohol problematically.
I feel like journalists are just trying every way possible to create an anti-tech sentiment. Crazy how fast things can change from all hail the tech titans to oh these tech companies are creating a dystopia. Theres way too much noise in every aspect of information these days to help society focus on the problems that actually matter.
You say that journalists are "just trying every way possible to create an anti-tech sentiment". You are implying motive here, it appears. On what basis?
I view it from this lens: journalists have both a professional code and a desire to have people read what they write. As a result, many journalists want to surprise and even shock people. It doesn't mean what they write is pleasant or what you want to read.
There are many other factors in play. For example, cities across the US are scrambling to offer (quite dubious, in my opinion) incentives to Amazon. I really value different perspectives that show the kinds of jobs that Amazon creates.
Lastly, I read your last sentence as getting it backwards. It is precisely because of noise that we have to focus on what matters. What you call noise may be someone else's signal. Noise makes it harder to sort through information, that's nothing new. Asking for less journalism in order to get less noise seems backwards. Journalism, to the degree to which it investigates, analyzes, interviews, helps offer different ways of viewing the world. To do so is hardly what I would call noise; rather, good journalism shows researched, sometimes novel perspectives on reality.
Public sentiment has turned at this point. Tech companies are no longer the intrepid, utopic little guy fighting the good fight -- they are the incumbents.
I would bet serious money that one of the hallmarks of the next presidential election is regulation of big tech. The backlash is building. That wave will have some mainstream politicians calling to break up big tech.
> from all hail the tech titans to oh these tech companies are creating a dystopia
Uber's sexual harassmentpalooza together with Twitter and Facebook's arrogant performances at their respective Congressional hearings did most of the work.
No one reads "everything is okay" stories. Journalists need people to click through to their stories and view their advertisements. It's how they get paid.
You're saying this like the tech companies aren't actually doing these things. Like they're somehow misunderstood; that they're not really eroding worker protections or anything like that.
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