[tlb]

It'd be great for investors if they could just anoint winners. But in practice, consumers decide and investors follow.

[minimaxir]

One of the tenets of competitive advantage is the ability of a business's competitors to enter the market. Running a Bitcoin startups has extremely high fixed costs that cannot be mitigated (contrast with typical startups with mostly variable costs); if VCs aren't giving them funding, as is apparently the case with Buttercoin, then there's no way they can even create a reasonable Bitcoin service, especially one that could compete against Coinbase and its mountain of funding.

[tim333]

It's hard to compete with a similar company if they have a load more money than you. Take Uber. Maybe you build a better taxi app but they have $5bn raised and you don't. Then they can subsidise, run at a loss, spend loads on ads and so on.

[JohnTHaller]

... make fake orders to competitors and try to steal their drivers, etc.

[s73v3r]

And in reality, for a capital intensive business like this, those that the consumers get to choose from are decided by the investors.