Remember VisiCalc, the world’s first spreadsheet? Today’s tech giants do, and that is why they buy up and invest in potential competitive threats.
It was the first killer app, the spark for Apple’s early success and a trigger for the broader PC boom that vaulted Microsoft to its central position in business computing. And within a few years, it was tech-industry roadkill.
Many silicon valley startups basically have only one purpose these days: flaunt their ideas in front of the tech giants, and hope VC funding doesn’t run dry before one of them buys them. They’re not building sustainable businesses; they’re building a corporate advertorials.
A startup may not sustainable in itself but it can be bought by one of the big players and become sustainable (see YouTube).
Can you imagine if the YouTube founders had said “we are never going to raise enough money to cover our streaming costs and be sustainable so we are not doing it”. We ‘d had missed much intelligent discourse in the comments, and nobody would know what Dollar Shave Club is.
Although I get your argument, I see the same scenario differently. I see the purchase of YouTube as the death knell of innovation in that area. Because each of these start ups arnt self sustaining, the moment one is purchased (for billions despite never making Any money), the competition collapses around it and we (the consumer) are left with a monopoly. And as all good capitalists agree, for a market to be effective, it needs competition! 🙂