Urban millennial lifestyle will get costlier – New start ups focus on profits

Urban millennial lifestyle will get costlier – New start ups focus on profits

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Venture capital has rejuvenated its new focus on profits rather than company growth and this will make urban millennial lifestyle younger and more expensive than ever before. Amidst the wake of WeWork’s unsuccessful IPO, conversations inside the boardroom have shifted already. The money-losing new startup firms are being coaxed by investors to make operations more stringent and gradually give a price hike.

We are living in a gig economy where the reality revolves around bump in prices, the brunt of which will be borne by the millennial. The present business model isn’t built in order to make profit and with the kind of pressure from the investors building on the public and private names to move out of the red. So, for the unprofitable startup businesses, it’s going to be a tough time.

For those startups that couldn’t make it big among market investors, WeWork has almost become the poster-child. After extremely weak demand, this real estate company could pull its IPO and later on, they obtained a rescue package from SoftBank, its biggest investor. Due to all these, investors are also becoming more watchful than what they ever were.

Lyft, Uber and Peloton which made their debuts in the year 2019 are all suffering from heavy losses. In fact, as per record, Uber has reportedly said that they already predicted to lose an amount of $3.4 billion in 2019 while Lyft said that they were ready to lose $1 billion during the first quarter of 2019. Among all the US companies that were backed by venture startups that debuted in 2019, only 10% of them were profitable.

Subsidies and allowances of venture capital

The startups of this gig-economy have been successful in offering low prices as a perfect incentive for making them sign up with their services. Amazon is often looked up to for their success story because they didn’t turn a single profit for consecutively 4 years post their public appearance. The financial analysts are of the opinion that this has led to low costs for the urban millennials and this has in turn helped their urban lifestyle.

What price of convenience do the consumers have to pay?

Most of the consumers are currently within the ‘convenience’ segment and they would be willing to pay only if the price increased by 10-15%. However, only with price increases, you can’t get these companies to gain profitability and hence they’ll also require utilization enhancements in order to reach out to that goal.

Cost-cutting is yet another path that you can take towards profitability. Start-up firms will require doing both and this is why people sitting in urban settings will see a hike in process. At the same time, there will be less hiring within these companies and the headcount will also be low enough.

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Hence, in order to gather instant profits, management has to cut down costs which could only play a role in increasing demand. As long as millennials are concerned, MeVero brings refer and win game for millennials that’ll help them earn money during such trying times.

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