I could have been more clear. My point is that aggressively reopening might still be dangerous, but it'll take a while for the public to convince themselves it's safe enough to start going out, even though it isn't. I'd imagine this would be driven by both consumers not wanting to get sick _and_ businesses trying to avoid liability for employees and customers.
This perfectly illustrates the "opening up" paradox. If you, as a Government, aggressively open but the public still sees risk, not much will change. People won't go outside much because they perceive risk. We'll have to wait much longer to actually know whether opening aggressively is a mistake or not. From my perspective the risk of opening too early and starting a second wave much later in the year, is worth taking very seriously.
I'd say anyone drawing conclusions from a a few weeks data has a 50% chance of getting burned at this point.
Becoming a massively profitable megacorp isn't the only winning formula.
Were Linkedin, Instagram, Beats by Dre, WhatsApp, Tableau, Skype, GitHub, MuleSoft all failures because they were acquired for billions, making lucrative paydays for their founders and investors?
Let's leave it at this then: if capital is completely miss-allocated and a bubble has been inflating over the last 5-10 years as you claim, then we'll hear the proverbial pop in the next three to six months as a rapid pullback in consumer spending unwinds nearly all VC backed growth stage companies.
Are we talking about investment strategy or cherry picking data for the sake of arguing?
1. There are plenty of companies on the path to IPO that didn't take 1B+ in VC money
2. The "sharing" platforms are expensive investments because there are so many players fighting for market share.
We're talking about a strategy of fast growth vs slow and steady. All the companies we've mentioned so far invested in fast growth early on, whether from VC or reinvestment.
I'm not sure what you're getting at. Here are the facts: Companies following these accelerated growth trajectories now make up a total of 4 trillion in market capitalization depending on how you count it. That's really just the FAANGs, not the smaller companies that are profitable or on the road to profitability [1]. If you count everything you can safely say the number is closer to 8 trillion.
Every year, VC in the US _as a whole_ invests roughly 100B [2]. If you cut out non-growth and non-tech sectors I'd guess that number total goes to around 40B, and roughly 100B (very rough number) globally.
So yeah, some money gets "wasted" but it creates huge market capitalizations that are around two full orders of magnitude larger than a single years investment, and growing strong year over year.
I'd counter that Pizza hut has a key logistical advantage of vertical integration. A delivery service is a very different business than a restaurant chain that does its own delivery.
I agree that GrubHub, Doordash, and to some extent Uber seem bloated when considering the sum total of the markets they play in. That doesn't mean these business models aren't sustainable, though. Some companies allocate resources to a few areas that turn into profit centers, some don't. The ones that don't will be sold off or parted out. And the cycle will continue. I'd wager that one of these companies will survive and turn out to be a profitable, healthy business in the next few years. The rest will probably be sold off or slowly downsized.
More broadly, to your criticism of SV's investment strategy, resource allocation is a hard problem. If you want to direct large sums of capital at certain business verticals, do you want to grow slowly and steadily over a 20+ year period only to find that the economics don't work, or do you want to fail fast with some extra waste in the middle? Failing fast has some upside to it, though I understand why I consistently hear this criticism on this site. It feels like the last decade has seen the pendulum swing towards fast money and back a little. I don't think were as far off from a healthy middle ground as some might argue.
From all appearances this is more or less what China is doing today. Lockdown until the number of new cases in a geographic area is zero, then slowly loosen the grip of suppression and calibrate based on new information. When the second wave starts I'm sure the response will be a little more measured this time.
This is only true if you don't count the cost of massive casualties that are impossible to fully quantify the cost of and only count of the cost of running the healthcare system at existing capacity.
Let's cook up a fantasy scenario where we have unlimited resources and can treat as many patients as needed. Let's also optimistically pretend that only 1% of cases need ICU treatment. Take 1% of 327M and you get 3.2M ICU beds required. Now let's say that at the peak, half the population is sick (likely given the unmitigated exponential explosion scenario), meaning we need 1.6M ICU beds at the peak. We have roughly 100k ICU beds in the country, 1/16th what we need. The cost of those beds would be trillions of dollars. Of course we can't magically materialize ICU beds, so hundreds of thousands will die. I'd choose 6-12 months of the GFC over that _any day_.
Do you not believe these basic facts or just don't have empathy for other people who are at risk?
Sure but what happens if we do nothing for a month and let the virus spread rampant. Then we bankrupt the entire country paying for healthcare assistance packages for those who cannot afford it and are the hardest hit. Or would you recommend we just leave them sick on the streets?
Not sure why this is getting voted down, this is absolutely the case. Either you kill exponential growth via isolation/inoculation or damn near everyone gets sick in an exponential explosion and the healthcare system is overrun. This is simple statistics.