Is Silicon Valley entering reality?
Scooter outfit Bird has now announced that it is actually looking to make a profit on its core mobility service. That shockingly turns the whole Silicon Valley grab-the-cash-from-VCs strategy on its head.
Well, appropriately monikered CEO Travis VanderZanden – nope, sometimes don’t have to make these things up – didn’t exactly say that. What he told TechCrunch was that go-for-it growth is so yesterday and that “positive unit economics is the new goal line”. Which translated from techspeak means turning a profit on each transaction.
VanderZanden seems to have had an epiphany here. He adds that it was close to a year ago that the company recognised the world was changing. Though he doesn’t say how that brilliant insight came about.
He does say that new Bird investors see that “we are paving the road for a long term sustainable and healthy business”. Which may suggest that previous investors are in for a shock.
But Sequoia Capital partner and company board member Roelof Botha is on message. “The degree to which [Bird] was devoted to and accomplished strong contribution margins in a compressed timeline is rare for a company so early on in its development,” he says in VanderZanden-speak.
By the way, has the world changed? Morgan Stanley equity strategist Michael Wilson believes so. Pointing the finger at WeWork, he said its travails mark the end of the era of “endless capital for unprofitable businesses”.