A few days ago, I had a conversation with a friend of mine who told me something shocking: a particular cloud company's gross margins on cloud products are below -40%. That is not a typo, it is minus 40% or worse. Essentially, the company is doing one of: burning investor money; running down their own cash reserves; borrowing from banks or the market; or subsidizing from other business lines. Whatever the method they are using to stay afloat, they are burning quite a hole.

I have no idea why it surprises everyone. Every time some technology goes through the "hype cycle", or the sector as a whole goes through a "we're not in a bubble" bubble, inevitably, when the hype dies down or the bubble bursts, people suddenly "discover" business fundamentals. Often, it is not the people discussing it who discover it. Rather, they are the ones reminding everyone that the fundamentals count.

Years ago, a young man, let's call him D, with whom I had once gone to summer camp followed his dream and opened a meat restaurant. They had great big burgers, flaming wings, fresh onion rings and fries, a meat-lovers dream. Not only did I enjoy going there, but when a group of friends helped me move apartments before I got married, I took them there for a "thank-you" dinner.