Rocket ships and tractors

There are essentially two business models right now: boring, useful things that can print money and tastemaker brands that can brute force cultural relevancy. Dumb $ is funding the middle: stuff that is neither useful nor cool enough to make it past current startup headwinds.

The last decade showed that questionable business models can subsist for a long time (and even flourish) when capital is abundant. Thirteen years after its founding, Uber is still figuring out how to be profitable: the company’s gross margins actually declined seven percentage points over the past three years, and the net profit margin is -3%.

Hypothetically (and notwithstanding hardware switching costs), let’s say John Deere’s business model relied less on upfront revenue from the sale of a tractor and more on how many acres their equipment covered. Their authorized service and dealer model — not to mention their product design — would look substantially different.