Now consider another question for your newly-minted lemonade unicorn: What happens when investor money runs out?
Entertain a thought experiment: In this day and age, how would you build the world's biggest lemonade-stand business?
The business of lemonade should be simple: You need the raw goods and a sales platform . Using this model, you might eke out $0.10 in profit for each $1 cup sold — not bad, but hardly a high-growth, paradigm-shifting business. Suppose you become more ambitious. You sprinkle some caffeine into your concoction, tout the health benefits of vitamin C, and bill your beverage as the"future of hydration." You create a mobile app to place orders, contract with drivers to deliver the lemonade, and spend a truckload on marketing. All of this is expensive, so it now costs you $1.75 to sell a $1 cup. Despite these losses, your customer base grows explosively.
— Uber, Lyft, DoorDash, Instacart, and the like — have gone through these gymnastics at tremendous scale, building massive operations on the back of money-losing ideas. At their most basic these companies, from taxi-cabs to food delivery, are comparable to my proverbial lemonade stand: a simple business that allows its operators to eke out a profit.
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