[khwhahn]

The article is leaving out a key fact. You have to build something people want. You can throw as much VC money onto a bad product (and business model) and it still won't work. Figuring out a new product and viable business model is hard. That is the reason why so many startups fail.

What the article is basically saying is that "monopolies are bad". I think everyone agrees on that and there are many examples in the tech industry, but then again monopolies are easier to achieve today with digital products.

What the article should have written was: Be more active in breaking up tech monopolies.

[beej71]

I'm not sure that's the main thrust of the article. The idea here is that VCs can profit regardless of whether or not the product is viable. The rationality or irrationality of the company itself is not relevant. You can have a completely non-viable company disrupt an industry where ultimately everyone loses except the VCs, and the VCs' incentives are not necessarily aligned with what consumers would consider to be success.

[deckar01]

Not only might consumers favor an inferior product that simply undercuts market pricing, even a higher quality product that has been subsidized to grow market share may be degraded for profitability. I believe this paper is saying that the momentum of market share provides a window for VC to extract profit and exit regardless of the quality of the product.