[mtts]

“ The problem with tech today isn’t so much that software failed to eat the world, but that the most celebrated unicorns weren’t actually software companies. They have struggled to achieve liftoff because their feet are stuck in the mud of the physical world”

This sums it up nicely.

Investors got deluded enough to think that if they threw enough money at a non-software company it would magically start making software company levels of profits.

Hopefully the real economy won’t be affected too much when this bubble finally bursts.

[corporateslave5]

The thing is I don’t think investors got deluded, I think investors new exactly what they’re doing. They were hoping some greater fool would take the investment off their hands

[matwood]

The greater fools in the case of We being the public market. The rejection of the We IPO was a win against this ridiculousness.

[chii]

in which case, how many other companies have "fooled" the public, but just skirted the line enough to not trigger this level of checking?

[PopeDotNinja]

I remember VCs investing in Cash4Gold when that was being hyped, presumably because it was growing stupid fast. [1] I think that qualifies as a we-are-a-tech-cuz-website company. What VCs mostly look for is growth. Some silo themselves into niches (e.g. enterprise software), but I reckon that any company with high growth potential would be fair game.

[1] http://www.nagellen.com/2009/12/high-tech-venture-capital-fi...

[ivanche]

That's not investing, that's speculation.

[fooker]

"Venture"

[mdorazio]

Welcome to Venture Capital.

[matthewaveryusa]

Yeah. Software's marginal cost can theoretically be zero, and in practice is is pretty close to that. Thinking of marginal cost for real estate I don't think there are economies of scale to be had beyond traditional merging of horizontals. Is tenant experience really the real estate largest cost? I don't think so -- land and construction is where you want to focus your efforts. That being said I have no idea what I'm talking out, this is just layman intuition.

[janoc]

Sorry but if someone thinks that throwing money at a software company with equally poor business fundamentals would work then they are completely deluded too.

Even software companies fail and don't make much profit to speak of. Just look at all that cryptocurrency/blockchain nonsense.

If your business is losing money and, worse, has no meaningful way to stop losing money, it makes no difference whether you are selling software, services or renting office space or running a taxi business. It will fail.

[rubicon33]

Correct me if I'm wrong but... Instagram & Twitter were both unprofitable for a REALLY long time.

Instagram got bought by Facebook and eventually became an ad network.

Twitter eventually, after nearly a decade of not making a profit, made a profit.