Where are tech startups going wrong?

Remember when sale season was well categorized-summer sale, winter sale, end-of-the-season sale and so on. Today, you don't need to wait for a sale season, for discounts are abound all year round, thanks to the e-commerce companies that jostle to take the biggest bite of the market.

But is the market based on revenue or volume? Most companies firmly believe that as long as they have enough scale, they are safe, even if they are losing money on each transaction. The idea is to make up the losses on volumes. But industry experts say that a business cannot defy the basic logic of sales, expenses, profit and loss for too long. This attitude is missing among most of the startups, especially tech startups.

It is also widely believed that going through a long period of heavy losses is a natural course because Google, Facebook, and Amazon went through this. The problem with this idea is our skewed idea of what 'tech' is. During the time that they were making massive losses, the big American Internet giants were building their infrastructure and developing genuinely groundbreaking technology.

For instance, Amazon, which was supposed to be just a retailer, invented the infrastructure-as-a-service concept and is now ahead of Google, Microsoft, IBM in cloud computing. But tech businesses pay little attention to infrastructure development, and would rather please the customer with heavy discounts to jack up the volume of sales.