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I'm not saying that the VC-backed company is intentionally or maliciously poisoning the healthy profit of the competition. I'm saying that it's an unintentiona

I'm not saying that the VC-backed company is intentionally or maliciously poisoning the healthy profit of the competition. I'm saying that it's an unintentional byproduct of the otherwise naturally healthy approach to "grow first, profit later". Just like, I'm about to release a free game in the app market, no IAP, no cost, as I'm generous. But, that can & does have unintended consequences in the ecosystem to make it harder for those who do need to profit from their similar work.

opendais 12y ago
Fair enough but by bringing it up in a thread about someone with a botnet screwing people over...its pretty reasonable to conclude that is what you meant.
- notahacker 12y ago
  Whilst most VCs aren't doing anything anywhere near as patently unethical as funding a Clickfraud-as-a-Service app, if they're "disrupting" competition through little more than willingness to make negative profit margins on each sale, that competition ends up just as screwed if their pockets aren't as deep. Either if way they're spending money on making you poorer rather than themselves richer in the short term it's not unreasonable to point fingers. Admittedly, incumbent monopolists are usually far more cynical in this regard, but they're also more likely to get slapped by regulators for this kind of behaviour.
  - johnvschmitt 12y ago
    Good points & over all, I really appreciate the rational, yet learning/confrontational discussions here. I was just trying to spread the word to other startups that the auction-based paid advertising model might work initially, but gets really tough to sustain as it naturally evolves. In a non-auction based method, the evolution to "zero margin" may be a slower process. Yet those non-auction methods of paid advertising (billboards, magazine, TV) are just horrible for tracking & closing the loop as to be obsolete, and are often too expensive for startups to even enter anyway. The best advertising is to realize that your customer service/support function is not an cost, but rather an investment in word-of-mouth advertising. Investing in great customer service is often the best modern marketing.
  - zo1 12y ago
    As an aside, I'd like to add this bit of information: People get up in arms when a large "corporation" or "well-established player" in the market throws their capital weight around to bud out budding investors by selling at a loss. But, as you can see in this thread, they turnaround and have a completely different take on the matter when it's a "VC-backed startup" using its newly-acquired capital to drown out competition while it's slowly losing money.
    - spacemanmatt 12y ago
      This is why we need anti-trust law. There are cases where throwing your capital around is appropriate, and there are cases where it is anti-competitive.
      - opendais 12y ago
        Pretty much this ;)
      - zo1 12y ago
        "There are cases where throwing your capital around is appropriate" I'm curious where you think this is the case? Remember, your arbitrary definition of appropriate might not be the same as others'. I probably won't go either way, as I think anti-trust laws in general are not appropriate, but that's a different discussion. Moreover, may I ask what your moral argument is for such laws? From the looks of it, most people would say: "If you have a lot of money, then you're not allowed to use it to your advantage if we perceive it as predatory". With such vague terms (unless you can make it more explicit), and it will most certainly end up having a favoritist bureaucracy grow around it.

opendais 12y ago

Fair enough but by bringing it up in a thread about someone with a botnet screwing people over...its pretty reasonable to conclude that is what you meant.

notahacker 12y ago
Whilst most VCs aren't doing anything anywhere near as patently unethical as funding a Clickfraud-as-a-Service app, if they're "disrupting" competition through little more than willingness to make negative profit margins on each sale, that competition ends up just as screwed if their pockets aren't as deep. Either if way they're spending money on making you poorer rather than themselves richer in the short term it's not unreasonable to point fingers. Admittedly, incumbent monopolists are usually far more cynical in this regard, but they're also more likely to get slapped by regulators for this kind of behaviour.
- johnvschmitt 12y ago
  Good points & over all, I really appreciate the rational, yet learning/confrontational discussions here. I was just trying to spread the word to other startups that the auction-based paid advertising model might work initially, but gets really tough to sustain as it naturally evolves. In a non-auction based method, the evolution to "zero margin" may be a slower process. Yet those non-auction methods of paid advertising (billboards, magazine, TV) are just horrible for tracking & closing the loop as to be obsolete, and are often too expensive for startups to even enter anyway. The best advertising is to realize that your customer service/support function is not an cost, but rather an investment in word-of-mouth advertising. Investing in great customer service is often the best modern marketing.
- zo1 12y ago
  As an aside, I'd like to add this bit of information: People get up in arms when a large "corporation" or "well-established player" in the market throws their capital weight around to bud out budding investors by selling at a loss. But, as you can see in this thread, they turnaround and have a completely different take on the matter when it's a "VC-backed startup" using its newly-acquired capital to drown out competition while it's slowly losing money.
  - spacemanmatt 12y ago
    This is why we need anti-trust law. There are cases where throwing your capital around is appropriate, and there are cases where it is anti-competitive.
    - opendais 12y ago
      Pretty much this ;)
    - zo1 12y ago
      "There are cases where throwing your capital around is appropriate" I'm curious where you think this is the case? Remember, your arbitrary definition of appropriate might not be the same as others'. I probably won't go either way, as I think anti-trust laws in general are not appropriate, but that's a different discussion. Moreover, may I ask what your moral argument is for such laws? From the looks of it, most people would say: "If you have a lot of money, then you're not allowed to use it to your advantage if we perceive it as predatory". With such vague terms (unless you can make it more explicit), and it will most certainly end up having a favoritist bureaucracy grow around it.