Well, this is going to end in tears.
CB Insights released a report this week showing that the “on demand” economy isn’t quite as beleaguered as…. Well, every single sign would suggest.
On demand was overhyped for sure. But the way it was over-invested in took two forms.
There were the Ubers and Airbnbs of the world, where one company raised such a gargantuan amount of money from major investors early enough that they had a relatively small number of well funded, legitimate competitors. Uber effectively has one in the US, and Airbnb has none. Compare that to hundreds of, say. YouTube competitors that sprouted up as if from nowhere. (A phenomenon we wrote about in detail here.)
Or there are the categories like meal kits and food delivery-- where no clear player got a dominant lead and funding position early on and so it became the most overfunded category by deals, if not by concentration of dollars.
The leader of the first camp is Uber. The leader of the second is Blue Apron. Yeah…. Money going in wasn’t a problem for these guys, but money coming out seems another matter….