He nailed it.
From digital brand researcher L2 (he's the founder), now part of the Gartner empire, April 21, 2017:
The relationship between investors / shareholders and firms has largely been the same for a century: We (investors) will fund losses for 1-3 years, and then you (firm) begin making profits you distribute back to us. No more. The firms markets reward with the greatest valuations have turned this on its head and replaced profits with vision and growth. Losses are the new black.
The trend has gone hyperbolic. Facebook and Google were both profitable when they went public. The latest hot girl is Snap Inc., who in 2016 earned 412M and lost 500M. Not to be outdone, Uber did 5B and lost 3B. At L2, our venture capitalists convinced us profits were “so yesterday” and nudged / shoved us to take their fire hose of cash and begin spraying it at technology and people, and leave profitability in the rear-view mirror. And they were right. The marketplace wants growth and special, regardless of the resources to keep feeding the beast.
What caused this? Simple: firms mimic success, and the most successful firm in the world is Amazon. Amazon’s core competence is not operations, the cloud, or even technology, but storytelling. Jeff Bezos’ ability to paint an extraordinary vision (“Earth’s Biggest Store”) and register steady progress against that vision is rewarded with the cheapest capital in the history of business.
And…
Cheap. Capital. Is. Awesome.
Amazon can try 10 things for every one thing peers can. When I sit in board meetings, directors usually ask management to come up with ideas that provide advantage, relative to required investment — we want cool ideas, that don’t cost too much. I’ve never been in an Amazon board meeting, but I believe management is charged with coming up with cool ideas that are ridiculously expensive, as others can’t follow. The majority of (actual) wars have not been won with strategy, bravery, training, or superior equipment, but brute force. At the end of WWll, the Allies had 38 gallons of gasoline for every one the Germans did. Amazon is the retailer with 38 gallons.
Like an illusionist, Amazon has the markets and regulators focused on its super-competitive retail business, distracting them from the sectors the firm is also dominating, hose in hand — cloud, media, and video streaming. The craziest example of this is Amazon’s spend on original content this year.
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