The article discusses the evolving landscape of technology and consumer experiences, particularly focused on AI and startup economics. It references the era of the Millennial Lifestyle Subsidy, where customers benefited from subsidized services despite companies operating at a loss. As interest rates rise, the funding dynamics have shifted, yet investors are still eager for growth, leading to significant investment in AI products. This situation reflects a realignment in how consumers interact with technology, as traditional platforms like search engines and social media appear to be falling short.
We lose money on every sale, but we make it up in volume is not just a surprisingly-old joke, but the real pitch to investors.
That investor money is going straight into subsidizing the costs of LLM-based products, farming free trial accounts from AI startups.
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