Is there any reason to believe the modern day incarnations are more sustainable then their dot-com counterparts? It certainly feels that way but the article is very light on evidence.
The dot-com era was full of companies getting heavy funding with zero sales, zero product, zero track record and absolutely no real market evaluation.
Companies would literally spend days of meetings trying to figure out what colors to paint their huge offices and have massive catered lunches.
I worked at one company that had ZERO revenue and had secured $20 million in funding, and immediately hired 200 people. When the money ran out, they got another cash infusion of $40 million from a pending buy out, and when we were being told this by the CEO, I joked to a coworker that we would need to spend twice as fast this time to run out at the same speed...the very next thing that came out of the CEO's mouth was "so we're going to be doubling our staff right away". I found out later that we had TWO actual programmers in our company (I was one) and 10 "managers" for every actual "employee".
It was ludicrous. I think there are issues with today's 'VC' fueled market, but it's nothing like back in '99.
Nothing beats Atari, who in their heyday had 500(!) marketing drones. Who spent their days at lavish conventions in Hawaii etc. and went through a billion dollars before they got bought out (and all fired).
In terms of sustainability, things like same-day delivery are being attempted by companies with much greater capacity to absorb losses. Google and Amazon can explore potential market opportunities without devoting their entire operation to that venture. If it works out - great, but if-not, they haven't gone out of business, and can re-focus on their core business model.
No one is currently making any money in online food delivery in the UK (unless you count Just Eat, who had the fantastic idea of doing away with any sort of logistics on their part). There's definitely potential for the market to be huge as people become more comfortable with the idea of having someone else pick their bananas for them though.
A pity to see even they're running so lean on the profit margins - I've found them to offer the best organised process for actually getting the groceries inside, where all the crates are staged first, then the bags unhooked and hefted inside, taking very little time at all, versus the loose bags or even completely loose items of the other supermarket delivery operations.
There's an online shoe/fashion retailer in Germany (Zalando, because faux Italian is the new dot-com) that's apparently following Amazon's "every sale is a loss but we're making up for it in volume" model. They're ridiculously successful (in terms of sales and market share) and often held up as an example for successful tech companies.
I'm not entirely sure what their long term plan is, but I'm hoping this is just an attempt to establish a monopoly that can then be exploited to turn the operation into a profit.
Interesting. Is this in any way correlated to the change in legislature regarding free returns? Many armchair economists were speculating that that would be one of the biggest financial pain points.
Most people use food delivery services run inhouse by the major supermarkets, which also means that it's hard to tell whether or not they're profitable. Tesco claims that theirs is (though not masively so) but it's not clear how accurate their figures are, and the competing supermarkets refuse to provide that information.
