Scale Built by Burning Cash Shrinks When the Stimulant Stops

Robin: “Find a business model that works in the real world and can endure, rather than scale built solely by burning VC money. Once that spending stops, you may fall from heaven back to earth, because you have not created genuine value or solved customers’ real problems.” --- For new consumer brands, going from zero to 100 million is vastly easier than ever. But reaching 1 billion a year may be harder, and exceeding 5 billion a year is less likely than at any time before. Most VC-backed projects may reach 100–200 million at astonishing speed, but their fate is to stall at 300–500 million, then shrink and dissolve. Why? The three-part formula of “burn VC money + build buzz on Xiaohongshu + sell at a loss in livestreams to attract traffic” creates no niche. Without a niche, there is no position in consumers’ minds. Stop the stimulant and sales immediately shrink; morale plummets, talent leaves, and a vicious cycle follows. Strong founders may withstand it and retreat to a small, excellent business. Those without the resilience may fail within two years. Original link in the first comment.