That alternative only works in the absence of competitors who raise capital to pursue more rapid growth. It is an arms race to an extent, but if you don't play the game then you may get locked out.
Particularly when that rapid growth involves price dumping. I've bootstrapped businesses before. It's really difficult to compete with free offerings when you have to pay the bills. Your competitors can burn a pile of cash to flush out the competition. They don't even need a better product... people love getting stuff for free. Invariably, those services either go bust or don't remain free since it's often unsustainable. But, it means in the short-term you often need to raise money if you're competing with a VC-backed business.