People are mad that Siete "sold out"
But we all encouraged this outcome, whether we like it or not.
Allow me to explain...
Small companies burn cash
It's just the cost of being small.
Since they can never make products as cheaply as the Big Guys, they have one of two options:
1. Start off cheap, and profit only when they get big enough
2. Charge more money, and reduce prices when profits allow
Customers love the first strategy-- at first. They get a higher quality product, and they don't have to pay much for it.
But what they don't appreciate is that those low prices are subsidized by massive amounts of venture capital investment.
And investors don't do this for fun-- they want a big payday.
They can get their payday in two ways: you "sell out" to a bigger company/go public, or you buy them out yourself.
But because you sold stuff for cheap for so long, you racked up a lot of investment that needs to be bought out. Even worse, you have less profit with which to do so.
Even if you didn't want to sell your business, the only way for investors to get that payday is for you to "sell out"
And they have the control, since they own so much of your company.
So the business sells out, everyone gets their cut, and those same customers who were happy to buy the product at a low price are now pissed off, and blame "the system" which they are a part of.
Alternatively, the second strategy allows a business to avoid this outcome.
By charging more up front to cover their higher costs, such a business would lose less money, and require less outside investment.
The less outside investment, the less money they'd need in order to "buy out" their investors
And as they grow, they can reduce prices while maintaining profitability, buying out their investors and regaining full control of their company.
At this point, the company is big, profitable, and has the resources to do whatever it needs to continue growing beyond what most startups typically accomplish.
However, very few startups choose this path
And the reason is simple-- customers don't like it. They complain that they have to pay higher prices.
We get this complaint dozens of times a day about
@Masa_Chips
And most business owners don't want to deal with it.
But they aren't thinking about the longterm benefits. That company will independently last for decades if not generations, providing the same quality and never "selling out", while reducing prices over time. This is exactly what
$tsla did, and it's worked out for them so far.
Not everyone could afford a Tesla roadster back in the day. But now, Teslas are widely available and much cheaper, and people are happy.
In conclusion, small businesses must charge high prices if they want to maintain longterm control. And we as customers should be happy to buy their products, knowing that we aren't lining the coffers of the major conglomerates.
So let's remember that next time we get upset that a company "sold out", and consider what role our desires as consumers had to play in all of this.
๐จBREAKING: popular seed-oil-free food brand Siete foods was just bought by Pepsi for 1.2 Billion. ๐ณ