[HN Gopher] The failure of Sprig
___________________________________________________________________
The failure of Sprig
Author : dangerman
Score : 70 points
Date : 2020-06-26 17:52 UTC (5 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| danellis wrote:
| > Nobody talks about failure in Silicon Valley
|
| What an odd thing to start with. People talk a _lot_ about
| failure in Silicon Valley, to the point that it 's a stereotype.
| ska wrote:
| People talk a lot about it in the abstract, and there is a lot
| of armchair quarterbacking. I suppose all of that has a smidgen
| of value, if nothing else to set expectations of people
| starting out.
|
| On the other hand, very few people with truly detailed internal
| knowledge talk about the why's and how's, especially avoiding
| 20-20 hindsight. It's a difficult enough thing to do
| objectively for yourself, and sharing it takes that up a notch.
| Especially when you're all but guaranteed to have a bunch of
| people tell you how you were obviously idiots; many of them
| having never so much as tried to build something new.
| draw_down wrote:
| It was everyone else's fault: mean old City Hall and Uber did
| them in. Well, okay. The margin thing sounds like the real
| problem to me, but what do I know, I'm just a coder.
| hexenduction wrote:
| This whole account feels like this person isn't engaging with the
| actual problems at hand. I don't care if you grew 3x faster than
| udemy at one point, there is some other relevant factor. Uber is
| unsavory by their behavior, sure,, but calling uberEats unsavory
| just because they got in your space with a lot of money isn't
| really saying anything against them. Sprig had no risk of
| "becoming a Theranos", Theranos made wild healthcare claims they
| couldn't back up, this is just a business not doing so well with
| a competitor in their space. Mentioning dating life improving is
| irrelevant and a pretty weird detail to include...
|
| And then "I failed and then went to travel the world." Did you
| fail, buddy? What a privileged and disengaged narrative.
| opqpo wrote:
| That's why you should never start the Uber of X and the Amazon of
| Y. Because if the actual Uber and Amazon see that the market is
| good they will massacre you unless you're fortunate to get an
| offer from them.
| marcell wrote:
| Fwiw Instacart had the same problem, and it succeeded, even
| after Amazon acquired Whole Foods. It's really case-by-case,
| and depends on so many factors.
| xmprt wrote:
| Instacart is doing well but I think it's still too soon to
| call it a success. Hell I don't even know if I'd call
| Uber/Lyft a success yet.
| SirensOfTitan wrote:
| > Govt. SF health + planning made our lives hell. They didn't
| like our innovations. We had to bribe officials ("lobbying").
|
| San Francisco's population leans quite left, but they seem to
| really hate change over there. I've never lived in a place so
| hellbent on ensuring that nothing changes. In fact--the entire
| bay seems to hate change, and the peninsula may arguably be
| worse.
|
| There's that old saying: "you couldn't get elected as
| dogcatcher," that makes fun of the sheer number of elected
| positions in the US. It feels so true at the local level, with a
| bunch of domain specific politicians trying to exert their tiny
| slice of power. San Francisco seemed quite bad while I lived
| there, but they're hardly alone.
| overlordalex wrote:
| > There's that old saying: "you couldn't get elected as
| dogcatcher,"
|
| To be pedantic, this phrase actually refers to the quality of
| the person rather than the number of positions. The meaning is
| essentially "you're so unpopular you couldn't get elected to
| the most trivial/inconsequential position imaginable"
|
| More on your point I frequently observe that administration
| expands until it becomes the purpose of the organisation. You
| start out with something serving users (eg Education, or
| Government) which as it grows in size requires more
| coordination. However past a certain point the administrators
| require help themselves, starting the inevitable growth outside
| of user pressure. Eventually you reach a tipping point where
| there are more people working on improving administration than
| those working on improving user experience.
| jeffbee wrote:
| The people of San Francisco are not "left" on local matters
| like planning and permitting. In fact they are absurdly
| conservative or reactionary. And they have plenty of reason to
| be: the people who own San Francisco property are riding a
| dynastic money machine. A surprising number of them can trace
| their family wealth back to literally Mexican land grants, or
| similar historical accidents. All of them enjoy a state tax
| system that disallows increasing their property tax rates and
| allows them to pass real estate to their heirs, tax-free,
| without ever marking them to market. So of course the people
| who have a vested stake in this fucked-up system will fight to
| freeze it in amber.
| ziftface wrote:
| It's unfortunate that people get a sense of moral superiority
| for having one political view or another. It reminds me of
| how certain religious people have a sense of moral
| superiority and it makes them incapable of introspection. Not
| to mention that labelling an entire city as "left leaning" is
| absurd.
| throwaway21310 wrote:
| People get a sense of moral superiority for having one
| political view or another _after choosing among alternative
| political views by comparing their relative morality_. What
| do you do? Treat it like being a sports fan? Flip a coin?
|
| Labelling an entire city as "left-leaning" is a perfectly
| reasonable and quotidian practice. For instance, if over a
| period of time, City A generally voted for left-leaning
| politicians and passed left-leaning referenda, while City B
| generally voted for right-leaning politicians and passed
| right-leaning referenda, most people would think it was
| fair to characterize City A as "left-leaning" and City B as
| "right-leaning".
|
| I'm guessing by the including of "entire" you are confused
| about the meaning of "leaning"? It means that on average,
| compared to some larger (e.g. national) mean, the
| population of a city has views that are to the left of that
| mean. It doesn't mean every single person has left views on
| every single issue.
|
| It's a very widely shared perception that San Francisco was
| left-leaning for the latter half of the 20th century into
| the beginning of the current. Early San Francisco was
| dominated by a relatively conservative patrician elite but
| over time it earned its "Baghdad-By-The-Bay"
| (https://www.amazon.com/Baghdad-Bay-Herb-
| Caen/dp/0891740473) reputation from things like electing
| the first openly-gay man to political office in America
| (https://en.wikipedia.org/wiki/Harvey_Milk) to being the
| epicenter of the sociocultural phenomenon known as "The
| Summer of Love"
| (https://en.wikipedia.org/wiki/Summer_of_Love).
| idoh wrote:
| In 2016 only 10% of San Francisco voted for Trump. There
| was not a single neighborhood that had higher than 30% for
| Trump. So "left leaning" is apt, if you agree that left /
| right roughly maps to Democrat / Republican.
| muzz wrote:
| He never says how the business responded to this. I.e. why
| didn't it shift to Oakland, San Jose, or even another metro
| area. Unless the business model only worked in San Francisco.
| ssivark wrote:
| Population density (of target audience) is one of the most
| crucial things for a service like 15 minute food delivery, so
| if restricted to the Bay Area, few places can compete with
| SF. Further, cost of living in SF is significantly higher,
| which allows you to charge more... but your costs also
| increase, unfortunately. So you might be motivated to have a
| second "back office" in a cheaper neighborhood doing as much
| of the processing as possible, and then doing the final
| assembly in the "front office"... but food can lose freshness
| very quickly; so the game goes. I guess the point is that
| they "learned" that there doesn't exist a sustainable market
| for food delivery in the given situation.
| sharkmerry wrote:
| > 2) Gross Margins (GM). As we grew, our burn rate grew too. We
| were losing money on every meal. If only we could get to
| critical mass.
|
| > We had epic revenue growth w/ burn rate growth. Soon we were
| burning $1.5-2M/mo!
|
| > We were always "1-2 months away" from managing the burn.
|
| I dont understand, how in good faith, he can bring up SF-
| regulations as issue #1. When issue #2 is the crux of all their
| issues. They lost money on every sale! Food industry is
| notorious for thin margins, and then had negative margins and
| growth. SF regulations dont matter compared to that.
| notyourday wrote:
| People who are not in the actual retail restaurant industry
| do not understand that there's no way to make money with
| ghost kitchens. Theoretically, to make money with a ghost
| kitchen one needs it to be churning out a very large number
| of _standard_ meals at a price that customers want to pay to
| achieve the economy of scale which at the same time requires
| an economy of scale in logistics, which has its own overhead.
| By the time you figured out how to make eick out money there,
| customer 's preference changes and you need to start from
| scratch or a competitor shows up and cuts your margins.
| sharkmerry wrote:
| ghost kitchens can absolutely make money. Them being done
| at scale with VC money, most likely not.
|
| But as the below commenter said, if you can use same
| ingredients across multiple dishes, it reduces waste and
| can reduce COGS. A small restaurant can do it, the issue
| there is establishing a brand, but if all your orders are
| coming via 3rd party apps. not sure how much brand
| awareness you actually need
| jpm_sd wrote:
| "ghost kitchens" that make money are called factories.
| Factories where they make frozen pizza and lean cuisines.
| notyourday wrote:
| > ghost kitchens can absolutely make money.
|
| That is as assumption that has been made time and time
| again and it always failed. The most important part of a
| successful kitchen is a near zero dwell time. The
| smallest dwell time is achieved by having a kitchen be
| colocated with the customer.
| jayparth wrote:
| As someone who has never worked in the restaurant
| industry, I don't understand, at all, what you mean by
| this. Could you elaborate?
| derefr wrote:
| > a very large number of standard meals
|
| Or a number of meals all made of the same 5-to-7
| ingredients arranged differently, i.e. the McDonalds / Taco
| Bell model.
| notyourday wrote:
| McDonalds/Taco Bell do not have ghost kitchens. If all of
| their meals were completely and totally made off site and
| were delivered to the customer to order from an off-site
| then those would be examples of ghost kitchens.
| derefr wrote:
| I didn't mean to imply that they did; just that their
| kind of menu-planning approach--of having many different
| (fast) final preparations that all take as input the same
| small set of pre-cooked ingredients--would also be a
| workable model to copy, to achieve the economies of scale
| that ghost kitchens require.
| fasteddie wrote:
| I loved Sprig. I used to use them as my example of a favorite
| product when asked in interviewed. Problem: I am hungry right now
| and can't/don't want to cook. Solution: As the founder notes,
| once signed in, it was literally three taps to get food to my
| door really quick. Also the design was beautiful.
|
| Doordash, UberEats, et. al have certainly (glactically) widened
| the variety of food I could order, but I always find myself
| suffering from choice anxiety when I open those up. Sprig gave me
| a protein and veggie I could order without thinking too hard.
|
| I get why the food delivery model doesn't work well in the US for
| anyone, and I did notice Sprig's decline in food quality, but I
| am still sad the company is gone.
| parliament32 wrote:
| >I always find myself suffering from choice anxiety when I open
| those up
|
| This whole analysis-paralysis trend seems to be a thing not
| just in food delivery, but Netflix et al as well. I've lost
| count of the number of times I've kept scrolling through
| Netflix with a bunch of "okay" options at the back of my head,
| but searching for something better. Ditto for DoorDash.
|
| I wonder how well an "I'm feeling lucky" button would do on a
| food delivery platform.
| xmprt wrote:
| For the decision paralysis thing it helps to start a timer
| and force yourself to come to a decision by then. Or else
| come up with 2 or 3 decent options and then flip a coin/roll
| a die for the final decision.
| briefcomment wrote:
| When you don't see something that's a definite "yes" after a
| couple minutes on Netflix, why not just stop looking? And if
| this happens often, why not just drop Netflix altogether?
| Curious about what proportion of the time Netflix is just a
| time pass at best. I can count the number of shows which I
| would recommend to a younger me who is deciding whether to
| watch those shows on one hand.
| vechagup wrote:
| > We finally got some progress on margins, but it meant
| degrading the product: food is fickle.
|
| > Less money in, worse food out.
|
| I tried Sprig a few times and really found the food quality so
| underwhelming that I never became a repeat customer. Maybe I
| caught them during this period.
| folmar wrote:
| How is it different than just settling on ordering from one
| restaurant nearby?
| hn_throwaway_99 wrote:
| Contrast something like Sprig with Tso Chinese Delivery in
| Austin:
|
| 1. Instead of getting millions in VC funding off the get go, they
| started small as essentially a family business.
|
| 2. Chinese delivery is already super familiar to most people, so
| they just took it a step further: just a kitchen, no sit-down
| restaurant, developed their tech to improve delivery
| efficiencies.
|
| 3. They kind of got "lucky", if you could call it that, with
| Covid, in that most traditional restaurants were killed but a
| takeout-only business thrived. They also got a ton of goodwill
| for giving away free meals during the shutdown in TX.
|
| 4. I saw news that they recently got VC funding to expand their
| business.
|
| I.e. they started small, proved their model, then used capital to
| expand, instead of getting millions thrown at them with hope that
| they'd eventually improve on a "lose money on every sale but make
| it up in volume" business model.
| venkyk wrote:
| slightly off topic: what is the motivation to use twitter for
| writing very long posts? splitting your message up into so many
| tweets seems so distracting. what's the big idea of splitting it
| up?
| danellis wrote:
| They're going where the audience is, and where they can get
| maximum exposure (retweets).
| renewiltord wrote:
| It's the audience. That's where the audience is.
|
| Also Twitter is amazing, you always see stuff only from the
| people you follow, so he knows his audience is people who want
| to listen to him.
| derefr wrote:
| Let's put that another way, then:
|
| Why use Twitter for the _whole_ post, rather than using it
| for a _summary_ or _above-the-fold section_ of the post, with
| the actual post hosted somewhere else and linked to from that
| summary tweet?
|
| It's not as if any of the individual tweets, other than the
| first one, were formatted usefully as soundbites worth an
| individual retweet. The only thing people were
| sharing/responding to was the first tweet. So, AFAICT, that's
| the only part that needed to _be_ a tweet, right?
| renewiltord wrote:
| Clicks through drop off really fast. I know I almost never
| do it. The tweet thread format is good for information in
| small bites. I know that each tweet has got to have more
| information and I can just stop at the first that is meh
| because it's written for insiders.
|
| Articles on the other hand are written for an audience that
| usually likes more background etc. because that audience
| will complain if the background is absent.
| derefr wrote:
| But you have to click the tweet to see the thread anyway.
| What's the difference between clicking through to the
| thread, and clicking through to open the article in the
| embedded webview? Either way, you're stuck synchronously
| looking at the story until you click "Back."
|
| If it's just a matter of journalistic style, I assume
| there are people out there who write articles the same
| content-dense way people write tweetstorms; you could
| just decide to only follow such people.
| renewiltord wrote:
| I don't know what to tell you except that tweets are way
| more information-dense than anything else. The Medium
| audience demands "modern long-form" style with personal
| anecdotes and all that. The Twitter audience demands the
| punchy short stuff. So I know what I'm going to get on
| Twitter.
| derefr wrote:
| To be clear, I'm not suggesting someone write for some
| other audience or site first and then share the results
| on Twitter. I'm suggesting that someone write _for
| Twitter_ , starting off by writing essentially the tweets
| they were going to write, but offline in a text editor;
| then edit the resulting paragraphs for readability/flow;
| then slap that prose into a Gist and take the
| https://gist.io/ view of it (or do any other equivalent
| "pastebin to clean, unlisted-but-linkable HTML page"
| flow); and then publish the first of those tweets, as a
| link to that HTML page.
|
| In other words: maintain a _blog on Twitter_ , where the
| tweets serve as the blog's chronological index / human-
| readable RSS-feed and interactive comments section; and
| floating text pages hosted in arbitrary other places
| serve as the blog's content. This idea is what
| "microblogging" was supposed to _mean_ , before the media
| re-interpreted it as being equivalent to "really enjoying
| this poop I'm taking"-style life-logging.
|
| I've always been surprised that Twitter itself doesn't
| have a built-in first-party workflow for this. Tumblr,
| the _other_ 20-year-old microblogging platform, does: you
| can publish a post with an embedded "Read More" break,
| that will hide everything below it in your feed but show
| it when the static-HTML version of the page is viewed,
| with the "Read More" link at the bottom of the post in
| the feed, linked to said static-HTML page. It would make
| a ton of sense to me for Twitter to have something that's
| half this, and half Reddit's approach to text posts:
| giving you the ability to create a tweet that, instead of
| having a _linked URL_ to go with the tweet, has a
| _longform text body_ to go with the tweet.
|
| Think about the fact that you can "attach" a multi-
| minute-long _video_ to a tweet as a first-party workflow,
| and Twitter will host the video for you -- but you
| _can't_ "attach" a multi-minute-long blob of rich prose
| text, where Twitter will host the text for you. Seems
| silly when I say it that way, doesn't it?
| renewiltord wrote:
| Haha, I get what you mean, but the people who want that
| get that from the Thread Unroller apps so the need really
| isn't there. The Twitter restriction ensures that I get
| Tweet-style content.
| riantogo wrote:
| What a refreshing read. We need more stories like these to ground
| the industry in reality. The investment machinery and the
| publication makes it such that we only hear about the
| "successful" ones. Then there are the "gurus" who amplify those
| rare successes to bait followers: "If xyz did it so can you if
| you just invoke the universe to assist you. Let success find you.
| Move fast and break things."
| gallagos wrote:
| This, so much. Successes are so amplified it's impossible to
| find truthful opinions on shortcomings with primary evidence.
| These posts were very refreshing.
| dmitriid wrote:
| 3 years of constantly losing money.
|
| Failed because of Uber which has significantly larger pockets and
| is constantly losing money.
|
| Why are all these called "a business"? These are all price
| dumping ventures relying on external coffers.
| folmar wrote:
| The whole bubble foam is called "gig economy", previously in
| business as "sharing economy".
| vector_spaces wrote:
| My insight into Sprig's business was limited, but my impression
| from being in the industry at the time and knowing several of
| their vendors and folks working for them in operations was that
| they were a typical Bay Area startup operating in an industry
| they understood poorly, without much interest in learning it from
| people who had made it their lifeblood for generations. You won't
| get far in the food industry if you don't appreciate that
| relationships are everything -- you can't treat vendors like APIs
| that hand you some resource, while building a reputation for low
| pay among the people making and delivering your food.
|
| Good relationships with your vendors are how you earn pricing to
| support good margins even at "low" scale (compared to say Kroger)
| and unlock doors that will take you to 10x and higher. Good
| relationships with your employees is how you make people in the
| industry want to see you succeed -- no one wants to see yet
| another player show up in their industry driving down wages
| (allegedly in the name of efficiency while wasting orders of
| magnitude more food than your typical corner market with
| approximately the same revenue). And while none of this will get
| you all the way there when it comes to city government, it
| certainly doesn't hurt.
| ransom1538 wrote:
| Food creation & delivery: A hyper competitive, low margin,
| inventory rotting, regulated, logistical & insurance nightmare.
| Sprinkle on a San Francisco Office + 1300 employees: Madness.
|
| What waste: taking $2 worth of food across the city then trying
| to squeak out $10 -- after paying for the drivers time, the
| cooking staffs time, marketing, lawyers, the inventory staff, SF
| Rent -- there is nothing left but nursing home level food and bad
| reviews. Did anyone at this company know excel? One employee car
| accident your insurance drops you. One blown industrial food
| fridge your profits are gone for the month. One bad meal you lost
| a customer. My mind blows that experienced board members went
| along with this circus. Uber for cats just didn't cut it?
| muzz wrote:
| > It was UberEATS, which launched that week.
|
| He doesn't mention it specifically, but UberEATS was 15-minute
| delivery at the time, IIRC
|
| Competitor SpoonRocket closed just 1 month later:
| https://www.inc.com/kenny-kline/how-spoonrocket-blew-135-mil...
|
| Although, Postmates got into the game the month after that, in
| NYC: https://techcrunch.com/2016/04/19/postmates-
| launching-15-min...
| systemvoltage wrote:
| Why didn't they think "Oh geez, our idea isn't that revolutionary
| and anyone, including companies such as lyft or Uber with giant
| pockets can come in and swoop our lunch?" That should be the
| first day conversation. I am sure they had that, it would be
| stupid to not have, but the stupid part is about unsustainable
| growth whilst ignoring the competitive landscape with delusion.
|
| I know retrospectives are always easy to do and criticize, but
| these types of ultra-fast reckless growth companies do not pause
| for a second and think about their risks. They're smoking that
| drug of % growth and VC funds pouring in. I live in SV and this
| type of thinking is everywhere. Flail without foundation. Why not
| think about building something that no one can just easily come
| in and render you completely useless? That means that the
| business idea wasn't strong enough and it was mostly scaffolding
| - there was no foundation. IP was thin ice. This is pretty common
| with these delivery businesses.
|
| Build something that no one can easily replicate or compete with
| you. Build it so good that even if a competitor emerges, they
| have a lot of catch up to do. Build it slow, methodically and
| strategically. Unfortunately, growth hacking and bullshit pitches
| to the investors take precedence in SV from what I've seen. Not
| all companies are like that, but a lot of these hot bottle rocket
| companies die because of many aspects that were not thought out.
| Risk taking is great, reckless risk taking is not. A solid
| business is like a diesel engine than a hot bottle rocket. It is
| unstoppable once it picks up.
|
| I love companies like Boston Dynamics. Took forever to grow. They
| spun off from the MIT Leg Laboratory in the 90's, built _real_
| IP, not some VC backed presentation with fancy graphics. Zero
| expenditures on marketing, all in on R &D and engineering until
| now. They're unstoppable and they haven't even started yet. I
| know a delivery business is very different from BD, just trying
| to make a general point about building IP. Any amount of money
| that Microsoft + Apple + Google all combined can throw billions
| and billions on this but they won't be able to compete with BD
| immediately. It takes time and throwing money at it doesn't help
| at all. That's the best hedge you can have!
| jhpriestley wrote:
| Which startup business model do you have in mind, that would
| survive Uber entering the same market, selling the same product
| but losing money on every transaction for five years?
| martythemaniak wrote:
| Because if everyone thought that, then no one would do
| anything. Basically every single company Apple, Google, FB,
| Tesla could have thought that and just concluded that they
| should not even try. And that's far, far worse for society than
| some food business not working out.
| tonystubblebine wrote:
| I don't think you can really pay much attention to potential
| competitors. It's common to have competitors but rare to have
| good ones. And so, yeah, a lot of companies have deep pockets,
| but also that works against them in a particular way. The line
| of business that's making most of the money is also getting
| most of the good talent and leadership.
| derefr wrote:
| I think the GP's point is that some business models are
| predicated on having _no_ competition, where even _bad_
| competitors will beat you if they just have deep-enough
| pockets to outlast you.
|
| Compare and contrast: individuals suing large corporations.
| Even if the individual is in the right (i.e. has the
| "competitive advantage"), the corporation will still often
| "win" because it can just afford to keep delaying the trial
| longer and longer, until you run out of funds to keep the
| suit going.
|
| Or, to put that another way: you can't run a siege without a
| supply train. The city will always have more food than your
| army brought with it. Unless more capital is flowing in to
| match the rate of replacement, they're eventually going to
| win.
| skrebbel wrote:
| Comments like these are why many founders prefer not to share
| their failure stories so candidly.
|
| It's a well written, extremely well summarized postmortem. _Of
| course_ it 's obvious after the fact what they did wrong.
| You're shooting at an empty goal and, frankly, it's not very
| interesting.
| systemvoltage wrote:
| I recognize it is easy to take shots at failures and I
| prefaced it with this recognition.
|
| It feels like this is repeating pattern for delivery
| businesses, and it deserves harsh criticism. Anything with
| Uber for _____.
|
| Would you give a pass to Juicero which raised $118M? Doesn't
| it deserve harsh criticism? Or we want to learn from
| Juicero's insanely delusional value proposition and may be
| inspire others to try again? What about Theranos?
|
| I don't give Sprig the same footing for a postmortem than
| say, Gumroad: https://marker.medium.com/reflecting-on-my-
| failure-to-build-...
| [deleted]
| d_burfoot wrote:
| > I love companies like Boston Dynamics.... Any amount of money
| that Microsoft + Apple + Google all combined can throw billions
| and billions ...
|
| I hate to burst your bubble, but BD was OWNED by Google for
| years, until they sold it to SoftBank because they couldn't
| figure out how to make money on it.
| morley wrote:
| > Govt. SF health + planning made our lives hell. They didn't
| like our innovations.
|
| What innovations did they make that the health department didn't
| like?
| kjs3 wrote:
| Exactly...I'd like to understand that as well. I really don't
| want to eat food where someone is 'innovating' (disrupting?)
| safety and hygiene regulations without some check and balance.
| And I don't think this 'attitude' on the part of health
| inspectors would be unique to SFO...
| WrtCdEvrydy wrote:
| Probably some skirting of the rules around temperature
| keeping for pre-made items.
| kjs3 wrote:
| Let's be fair...if they've truly come up with a better, or
| at least equivalent but different, way of maintaining food
| hygiene that's more efficient that isn't being accepted
| because of regulatory ossification, then yeah, that needs
| to be addressed.
|
| But I'd bet you're exactly right, and it's just "we're
| betting there's not going to be a major food poisoning
| incident before we find an exit and make it someone else's
| problem".
| s1mon wrote:
| Sprig's food and delivery was pretty good at times, but the whole
| thing was so archetypical of venture backed insanity in SF and
| Silicon Valley. "We're going to throw a ton of money at X and
| disrupt it with our complete lack of industry knowledge and make
| a fraction back."
|
| It was essentially a decent restaurant with convenient delivery,
| and no eat-in option. There's no magical hockey-stick growth
| curve to be had in the restaurant business. The marginal cost to
| delivery another meal or add a new customer is pretty similar at
| N as it is at N+1 or N+1000.
|
| How did they get investment with that (lack of a) business model?
| aeontech wrote:
| A bit easier to read:
| https://threader.app/thread/1265755248922157066
| phkahler wrote:
| I saw one more reason for failure in there:
|
| >> We were running a restaurant doing $6M in revenue but paying
| real estate for a place that needed $20M in revenue to be
| profitable.
|
| Low interest rates. They drive real estate prices way up. Had
| they been able to buy vs rent or simply pay less, they would have
| been in better shape.
|
| IMO low interest rates are actually causing problems for the
| economy.
| luhn wrote:
| Related is the story of Bento from the StartUp podcast.
| https://gimletmedia.com/shows/startup/awhmbo/kitchen-confide...
|
| The restaurant industry is brutal.
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