One of the classics that explains the why behind VC backed tech companies is Peter Thiel's book Zero to One.
A big takeaway for me from reading that book was that the companies that become extremely profitable are basically monopolies with no or few competitors that focus on scaling up rapidly. That was counterintuitive for me because I would have thought you'd ideally want to be profitable at all times. I'd also assumed that competing against incumbents that have little or no competition was the best way to get a profitable business running. That's actually a bad idea unless you're at least 10x better than the incumbent which you probably won't be.
A big takeaway for me from reading that book was that the companies that become extremely profitable are basically monopolies with no or few competitors that focus on scaling up rapidly. That was counterintuitive for me because I would have thought you'd ideally want to be profitable at all times. I'd also assumed that competing against incumbents that have little or no competition was the best way to get a profitable business running. That's actually a bad idea unless you're at least 10x better than the incumbent which you probably won't be.