Amazon, Spotify, Netflix, Uber … all dominant players in their industry. What if the secret to their success is just that they were all willing to lose money for longer than any of their competitors? An article I read this week suggested that perhaps the ten year journeys of both Netflix and Hulu to now finally become profitable was largely due to their leadership’s willingness to keep losing money until eventually they would make it back. This was famously the strategy behind Jeff Bezos launching the money-losing Prime service which included free shipping for everything in service of building a dominant market share.
Given the number of examples that seem to fit this model, it does present a depressing reality check on how few innovations may survive the wringer of Silicon Valley funding and come out the other side. They say money can’t buy success but based on these examples, that may not entirely be true. The bottom line might really be that anyone can win … as long as there is someone willing to keep writing those blank checks until they do.
