I disagree with the article because so many of these "unicorns" (yet another term underlining the neoteny and magical thinking of the Valley) aren't building the future. Building the future can pay off at VC-acceptable levels in the long term, but does not consist of huge-in-four-years-or-dead gambits.
It's true that, in the Valley, burn rate doesn't much matter. Your one job as a VC-funded startup CEO is to keep investors interested in you and happy. Throwing them expensive bones is better than throwing no bones. With the former, you may need to raise money in 18 months instead of 24, and they'll ask you a lot of questions about why the bone you threw them cost so much. With the latter, they fund your competitors, and then it's over because they've found a shinier, newer toy and, while you might want to switch stage to a sustainable lifestyle business that doesn't need VCs, in practice it's hard to do that in a company that was never built to last (and that probably couldn't withstand an "oops, we grew too fast" layoff) and because investors often won't let you hold growth to a sustainable rate.
Isn't the one job of a startup CEO to keep customers happy?
Pandering to VCs to the detriment of customers seems like a surefire can't miss recipe for failure. Compare the biggest exits with the biggest disasters and you'll find that's the main thing that differentiates them.
Customers increase your revenues and your costs. If you're making a play that's long-term by necessity and will be running at a loss for a while, then customer acquisition actually speeds up your burn.
On the other hand, VCs determine: whether your company can raise money, whether your competitors get funding, what your acquisition/exit options are, and what kind of job you personally will get after leaving the company (one way or another).
Also, VCs are a small set of people who all know each other and in which one voice can end not just your job or company but your career. Customers are a large set of people where one might get pissed off and write a bad Yelp review.
Someone speaking in not so flattering terms about an industry (vc based growth startups) that this site caters to... it isn't hard to understand why they get downvotted. I personally like to read his comments on these kinds of threads. voice of reason and all that
Sorry for focusing on a sidenote, but this connection of neoteny and Valley culture piqued my interest. Do you know if there has been anything good written on the subject?
It's true that, in the Valley, burn rate doesn't much matter. Your one job as a VC-funded startup CEO is to keep investors interested in you and happy. Throwing them expensive bones is better than throwing no bones. With the former, you may need to raise money in 18 months instead of 24, and they'll ask you a lot of questions about why the bone you threw them cost so much. With the latter, they fund your competitors, and then it's over because they've found a shinier, newer toy and, while you might want to switch stage to a sustainable lifestyle business that doesn't need VCs, in practice it's hard to do that in a company that was never built to last (and that probably couldn't withstand an "oops, we grew too fast" layoff) and because investors often won't let you hold growth to a sustainable rate.