Many fast-growing companies in Silicon Valley have one thing in common: they cater to a small, affluent, urban population — the 1 percent. Residents in high-cost cities like San Francisco, New York and Los Angeles can order an array of goods and services from their mobile phones.
These startups, including Uber, Instacart and a host of food delivery apps like Munchery, GrubMarket, Blue Apron, and Postmates, eventually have plans to broaden their offerings to attract middle-income consumers. This is the classic trickle-down business model.
As Farhad Manjoo wrote in The New York Times, “The rich subsidize the rest of us — were it not for the suckers who spent more than $10,000 on early versions of the Mac, Apple might not have survived to build the iPhone.”
As a venture capitalist who has invested in both Chinese and U.S. startups since 2005, I’ve backed several companies leveraging the…
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