<story><title>A classic Silicon Valley tactic – losing money to crush rivals – under scrutiny</title><url>https://www.washingtonpost.com/technology/2021/07/06/facebook-bulletin-antitrust/</url></story><parent_chain><item><author>DougN7</author><text>Isn’t that what Amazon did early on?  If so, looks like it worked.</text></item><item><author>lostcolony</author><text>Debt to scale up is one thing; operating for years operating&amp;#x2F;selling at a loss leading to ever increasing debt to choke out competitors and maintain a monopoly, fueling it with the expectation of a market valuation that will offset those losses, itself fueled by choking out those competitors, and all reliant on either getting out before it comes crashing down, or jacking up prices to profitable levels once there are no competitors left, is something else.</text></item><item><author>barrkel</author><text>This is one of SV&amp;#x27;s main competitive advantages vs not just the rest of the US, but the rest of the world: the amount of available financial capital to pour into scaling up quickly, which of course happens at a loss - sales generally lag costs and especially fixed costs.&lt;p&gt;If you include human capital, it&amp;#x27;s almost all of SV&amp;#x27;s competitive advantage: co-location of the people and the money to scale up.</text></item></parent_chain><comment><author>woofie11</author><text>It works brilliantly. It&amp;#x27;s called dumping. It created major businesses like Standard Oil, prior to antitrust laws. Indeed, it&amp;#x27;s #1 on Wikipedia&amp;#x27;s list of anticompetitive strategies:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Anti-competitive_practices#Types&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Anti-competitive_practices#Typ...&lt;/a&gt;&lt;p&gt;I have mixed feelings about some of the big money SV strategies. Antitrust concerns aside:&lt;p&gt;- They do allow some types of long-term transformative businesses, which would otherwise be impossible.&lt;p&gt;- They don&amp;#x27;t allow many forms of sustainable businesses to exist. If you and I have the same idea and ability to execute, whichever of us raises more money (and in an ideal free market, this means whichever of us is willing to accept less favorable terms) wins. This drains value from entrepreneurs to capital. Perhaps it speeds things up a little bit, but it&amp;#x27;s a net lose. It also leads to businesses with unsustainable debt and burn rates, and many viable business models crash-and-burn.</text></comment>
<story><title>A classic Silicon Valley tactic – losing money to crush rivals – under scrutiny</title><url>https://www.washingtonpost.com/technology/2021/07/06/facebook-bulletin-antitrust/</url></story><parent_chain><item><author>DougN7</author><text>Isn’t that what Amazon did early on?  If so, looks like it worked.</text></item><item><author>lostcolony</author><text>Debt to scale up is one thing; operating for years operating&amp;#x2F;selling at a loss leading to ever increasing debt to choke out competitors and maintain a monopoly, fueling it with the expectation of a market valuation that will offset those losses, itself fueled by choking out those competitors, and all reliant on either getting out before it comes crashing down, or jacking up prices to profitable levels once there are no competitors left, is something else.</text></item><item><author>barrkel</author><text>This is one of SV&amp;#x27;s main competitive advantages vs not just the rest of the US, but the rest of the world: the amount of available financial capital to pour into scaling up quickly, which of course happens at a loss - sales generally lag costs and especially fixed costs.&lt;p&gt;If you include human capital, it&amp;#x27;s almost all of SV&amp;#x27;s competitive advantage: co-location of the people and the money to scale up.</text></item></parent_chain><comment><author>hoppyhoppy2</author><text>I don&amp;#x27;t think they&amp;#x27;re arguing that it doesn&amp;#x27;t work for the company doing it. I think they&amp;#x27;re arguing along the the lines that it&amp;#x27;s unfair or unethical (anticompetitive) and comes with costs for the broader society.</text></comment>