1. You don't understand the economies of scale.

2. Umbrellas are just the first step. First it was umbrellas, but next they'll do water bottles, etc.

3. Amazon didn't make a profit for the first 10 years, they're just focusing on growth.

4. It's recurring revenue, so it's actually worth more than one-time sales.

5. They're not an umbrella company, they're a tech company.

Yes, it's an example of https://en.wikipedia.org/wiki/Poe%27s_law but it is, in fact, a parody. These are all justifications that companies tell their investors.

You say parody, but all I hear is business plan that's going to get $2 million in funding if the right keywords are attached.

What if you had...VR umbrellas?

Was that meant to be parody? That's an honest question; I'm not sure whether you're serious or not.

I'm honestly not too sure myself.

Like I mean they all seem like stupid reasons that are used to justify loss-making companies that have no chance at success. At the same time, for the right company, they are pretty logical reasons. That said, loss-making umbrella shop really seems like a better explanation than a "a growth focused tech company with massive economies of scale, recurring revenue, and huge potential in a wide variety of other markets."

The first one gives it away. It's a rephrasing of "we'll sell at a loss and make it up in volume".

We lose a dollar on every sale, but we'll make it up on quantity!

>They're not an umbrella company, they're a tech company.

Well given that their tech-y umbrellas seem to cost more than normal ones and aren't returning anyway maybe they should just use normal ones while they're working out the kinks in the business plan. Cost cutting measure so to speak.

--Management consultant

Ah, of course. They're disrupting the sharing economy, starting with umbrellas.

Step 1: distribute umbrellas

Step 2: ?

Step 3: Profit!

Is this satire?

Sharing Waterbottles?! Yikes.

What if there where a app on the market for sharing herpes. They stole my idea!

Not necessary. Though it is quoted "an umbrella costs the company 60 yuan ($8.82 USD) each to replace"

It doesn't mean they are going to replace it. The 60 yuan probably factor in cost like manpower etc rather than just the cost of the umbrella.

So like some of the readers pointed out, it could possibly be a good way to sell umbrellas whilst crying out wolf that they are losing money as a way to prevent copycats

If they raised only $1.5M then it stands to reason that either the umbrellas didn't cost $8.82 or they didn't acquire 300,000 of them.

But look at all the revenue!