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| William Bao Bean |
The Globe&Mail:
The resultant distortions go beyond good money-chasing bad ideas. A cash-rich environment can also lend power to those with the biggest war chests, rather than those with the best concepts.
“When you have too much money in the system, the good guys get funded – but also the idiots,” said William Bao Bean, a prominent venture capitalist in China. “And when everybody is funded, people start using money as a weapon.”
Take food-delivery services, which have transformed how Chinese urban dwellers consume food – by ordering in rather than eating out or cooking at home. But in the battle for market share, companies have offered deep discounts, competing on their ability to buy customers.
The result? “China’s entire population of students ate 50-per-cent off for a year and a half, courtesy of venture capitalists,” Mr. Bao Bean said.
More at the Globe&Mail.China’s bike-sharing companies, too, have courted customers with massive subsidies, making it often possible to simply ride for free.
William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.
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