[mattlondon]

As others have pointed out it is obvious at the outset what ads cost, and you can set budgets. None of this should have come as a surprise or a "opps we spend 150K in one day" kinda thing.

I am assuming their line of thought was:

1 - make some sales

2 - spend income from step 1 on more ads to drive traffic to site

3 - go to 1

Kinda like they put themselves into their own recursive ad-pyramid-scheme or something.

Condolences for the customers who go burnt by this.

[braythwayt]

Another possibility is that their reasoning was:

1. Raise some money.

2. Spend it on sales, even if their COS exceeds the margin on each scooter.

3. Rack up some "engagement" and "traction."

4. Raise another round.

That's basically what WeWork was doing: Spend so much on commissions that they were losing money acquiring tenants, but raise money based on various BS "metrics."

[nugget]

Digital advertising can be as addictive (and dangerous) as heroin. You give FB some money and customers start to show up - it feels like you suddenly have a real business. If your analytics are off or you don’t even have the right KPIs to start with, you can kill a business very fast, even while the intoxication of traffic distracts an inexperienced team until the very end.