The problem with profitless-on-purpose startups

spoonrocket

SpoonRocket

There are dozens of services operating in and around San Francisco like – Homejoy for cleaning, BloomThat for flowers, Postmates for courier service, SpoonRocket a gourmet meal-delivery service, and on and on. Most of them provide cheap, convenient amenities at the tap of a smartphone app. Few of them are profitable on a corporate level. And together, they’ve formed the backbone of a strange urban economy: one in which massive venture-capital injections allow money-losing start-ups to flourish, while providing services that no traditional, unsubsidized business can match. It’s an economy built on patience, and the hope that someday, after the land grab is over and the dust has settled, a better business model will emerge.

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