Patch Plants is crowdfunding

[engineer]

No worries, thank you! It’s healthy to have different views on a business model that’s growing. Andreessen Horowitz VC fund runs red-team exercises to stress-test business ideas. And we here are all learning how to do research and invest.

We aren’t VCs who have other investors’ money to effectively bet with—gotta be extra careful.

In addition, a market size can be “massive”, but we have seen plenty of crowdfunded business fall apart because of many factors:

Crowdfunding graveyard

During this fintech crowdfunding frenzy - with the Financial Times Alphaville writing about Curve’s lack of proper disclosures and all ([Crowdfunding ] Curve - #57 by engineer) - Emoov is an interesting case study of :moneybag: disappearing quickly: This is a repost from the CarWow crowdfunding thread. Emoov: $1.5mln - 150% of target raised in July 2018: With just under a week left to go, we have reached 150% of the target that was set in its latest crowdfunding round. In the two-week peri…

@Patchplants

and much of the rest scales as our delivery density increases (reducing drop costs) and our reach increases (reducing customer acquisition costs)

Those are just assumptions, not facts—customer acquisition costs can vary—and, as in the case of several UK and US unicorns, they can only grow, as some customers need to incentivised, before they become “sticky”. Plants aren’t a necessity, unlike food and getting around, so it can be difficult.

There’ve been plenty of unicorns that stopped growing as fast after a hitting a certain size, despite a large potential market size for each category.

(Also, to readers—to scale and to grow/expand are two different things. I’ve heard plenty businesses misuse the terms.)

Re: Amazon—I’d never underestimate them. They have a culture of Day 1. I am not a shareholder of Amazon but have studied them for long enough to see they don’t care about margins. Tesco and the likes used to say cheeky stuff to reporters back when Amazon announced it’d do groceries in the UK a few years ago—because its a “hard business”, “supply chain” , “relationships”, etc etc. Today, Tesco, M&S, Sainsbury’s are in a different world. Having such large and small competitors would be under “Risk Factors” if crowdfunding required to prepare S-1 / pre-IPO style legal doc.

Regarding smaller competitors—users still have a choice with Small and Medium and “large” (Waitrose) operators, so this should be considered by investors:

In the end, users will always win with more offerings (think Uber or Deliveroo—both of which are no technically tech), but this doesn’t guarantee that businesses will keep growing, which affects future valuation.