[DenisM]

Not being in YC, I can only imagine that it's different strokes for different folks.

For example, if you're doing a land-grab in a newly discovered market, such as Uber, you have to prioritize growth above all.

On the other hand, if your market is well-established and your plan to win by superior polish of your offering, you're better off growing slowly, using revenue both as a funding source and as a guide for making a superior product.

In any case, the competitive situation will dictate if you have to grow fast at all costs (by raising large rounds), or if you can grow slowly by using your own revenue.

[danieltillett]

Is Uber an example of a land-grab? Regulation arbitrage and long term domination of a market are not really compatible outcomes. Sure they need to focus on growth over all to beat their competition, but the end result will just mean that they end up as regulated as the current taxi industry once they actually achieve domination.

[eru]

And that's great for them! As a big company they can afford the lawyers to deal with regulations, and the scrappy upstart competitors can't.

[danieltillett]

Yes but once they reach a certain size they will need to transition from regulator arbitrage to a model similar to the one the current taxi system. Once this happen they will be as vulnerable to the next scrappy upstart as the taxi industry is. Either domination or regulatory arbitrage has to give.

[eru]

They'll change from arbitrage on the current regulation, to having a say in the next regulation and living cosily in it.

Side question: why do the new regulations have to be similar to the current taxi system? Uber doesn't need eg a medallion system, they'd be happy with onerous legal (eg reporting) requirements to keep upstarts out.

[danieltillett]

Sure Uber might be able to help write the new regulations to their advantage, but at that point they will be open to attack from upstarts who choose to ignore the regulations. They need not only write the regulations and then be able to get them enforced to keep the upstarts out.

The new system does not need to the same as the current medallion system, but unless the new system is providing them with a competitive a means of keeping upstarts out the market will become one of perfect competition where profits all end up with the consumer.