Growth strategies that subsidize usage with outside capital — e.g., Uber/Lyft paying drivers a flat guaranteed rate regardless of ride volume, or startups deliberately overspending on AdWords beyond payback breakeven to buy share — were a product of the zero-interest-rate-era (ZIRP) capital environment, where money was cheap enough to fund years of losses in exchange for market share. Casey Winters notes this class of blitzscaling-style subsidy has largely fallen away since rates rose and capital tightened.
GrubHub, by contrast, was capital-constrained from early on and grew profitably by holding a tight payback-period discipline on its acquisition spend rather than subsidizing growth.
Apply: when evaluating a growth strategy that depends on sustained subsidy, check whether it assumes ZIRP-era capital availability — that assumption no longer holds, and a payback-period-disciplined approach like GrubHub's is the more durable default.
Casey frames blitzscaling as a product of its era: 'this line of thinking was possible in the zero interest rate environment and has sort of fallen away.' Cheap capital was the precondition for subsidizing growth at a loss; without it, the strategy mostly isn't available.
He generalizes the tension as liquidity game vs. scalable efficient growth game: well-funded competitors subsidize both sides of a marketplace to force liquidity/PMF fast ('they're playing a liquidity game... and you're playing a scalable efficient growth game'), while capital-constrained companies grow incrementally within LTV discipline. Recognize this framing when a competitor's spending looks irrational — they may be racing to unlock liquidity you've already unlocked, so their economics don't need to look like yours.
Concrete mechanisms on each side: