Munchery Stiffs Early Backers and Cuts Staff in a Bid for Survival(bloomberg.com)
bloomberg.com
Munchery Stiffs Early Backers and Cuts Staff in a Bid for Survival
https://www.bloomberg.com/news/articles/2017-03-29/munchery-stiffs-early-backers-and-cuts-staff-in-a-bid-for-survival
11 comments
The problem with competing in an ultra-competitive market, like food delivery is that you don't have the margins to pay multiple software engineers ~$100,000/year. (Not to mention office staff, executives, VCs, and all the other costs of running a firm.)
Pretty much everybody involved in food works like a dog, and gets paid an absolute pittance. That nice restaurant down the street? Their head chef probably makes ~$34,000/year, works 100 hours a week, and sleeps in the kitchen. Oh, and the restaurant is as likely as not to go bankrupt and shut down in <2 years. (And he's not doing it with the hopes that Ricky's Pizza Joint will IPO as the next Facebook.)
Yet, for some reason, people think that this business model has the margin to pay a team of developers, working out of a hip, air conditioned Market Street office, complete with a free beer fridge and a Foosball table.
Pretty much everybody involved in food works like a dog, and gets paid an absolute pittance. That nice restaurant down the street? Their head chef probably makes ~$34,000/year, works 100 hours a week, and sleeps in the kitchen. Oh, and the restaurant is as likely as not to go bankrupt and shut down in <2 years. (And he's not doing it with the hopes that Ricky's Pizza Joint will IPO as the next Facebook.)
Yet, for some reason, people think that this business model has the margin to pay a team of developers, working out of a hip, air conditioned Market Street office, complete with a free beer fridge and a Foosball table.
well, they aren't running a restaurant. it's a delivery only service and the economics are very different.
For example, in the Brooklyn branch of the service the prep kitchen and delivery center was located in Gowanus (low rent, industrially zoned neighborhood) and they were certainly not running a full-compliment of front-of-house and back-of-house staff the way a restaurant would. They also don't have to pay high rent for a good location. They also don't have a head chef on premises, and they aren't locked in to a specific menu style.
I'm not totally familiar with the economics of it but I can easily imagine that it could, in principle, be a profitable operation even with the overhead of having a technology division to produce the website and app.
for point of comparison: https://order.andofood.com/
that's David Chang's delivery-only food service, which also has a technology division that produces a website and app. the prices on ando's menu are in line with their competitors in NYC. Munchery was always overpriced. I don't know if ando is taking a loss on every order or what, but I doubt it.
For example, in the Brooklyn branch of the service the prep kitchen and delivery center was located in Gowanus (low rent, industrially zoned neighborhood) and they were certainly not running a full-compliment of front-of-house and back-of-house staff the way a restaurant would. They also don't have to pay high rent for a good location. They also don't have a head chef on premises, and they aren't locked in to a specific menu style.
I'm not totally familiar with the economics of it but I can easily imagine that it could, in principle, be a profitable operation even with the overhead of having a technology division to produce the website and app.
for point of comparison: https://order.andofood.com/
that's David Chang's delivery-only food service, which also has a technology division that produces a website and app. the prices on ando's menu are in line with their competitors in NYC. Munchery was always overpriced. I don't know if ando is taking a loss on every order or what, but I doubt it.
That's the problem - they don't think they are running a restaurant. But they are - a restaurant with a ton of expensive, unnecessary overhead. That's why they will be out of business as soon as VC patience runs out. (And why Ricky's Pizza Joint, or a nearly-identical business will still be around.)
The lack of head chef isn't an upshot for their business. It's a symptom of the problem. Compared to the cost of an engineering team, it's penny-wise and pound-foolish.
If no-front-of-house-delivery-only could afford this kind of extravagance, then street food trucks would have gold-plated steering wheels.
The lack of head chef isn't an upshot for their business. It's a symptom of the problem. Compared to the cost of an engineering team, it's penny-wise and pound-foolish.
If no-front-of-house-delivery-only could afford this kind of extravagance, then street food trucks would have gold-plated steering wheels.
The economics are different - though I'd hesitate to call them very different, but that's probably splitting hairs.
I just took a look at the Munchery menu for my zip code, and honestly not sure why I'd ever use them in a market as competitive as NYC. The "aren't locked into a specific menu style" thing seems like more of a bug than a feature - lack of specialization means I drift towards more specialized restaurants that deliver.
Why go for their beef stroganoff when I can get it from the amazing Ukrainian place that delivers to me? Why get the Korean rice bowl when there are several Korean places nearby? Chicken teriyaki - no shortage of Japanese-focused places that deliver, also.
The nature of NYC's food market (and I'm sure true of other places too) is that delivery restaurants are running incredibly lean operations on razor thin margins - I think it's far from a given that a no-front-of-house-delivery-only restaurant operation can generate the kind of numbers that justify stratospheric VC-tech valuations.
I'm also skeptical that they can achieve the kind of volume/market share they'd need to make their unit economics work. There seems to be this weird idea that, by serving 10-15 dishes a day, that they can capture a significant fraction of the total delivery orders in their service areas - in every zip code they operate in NYC they are up against literally hundreds of other delivery places.
To the consumer they appear as one restaurant in a sea of many choices - I don't see how they can expect to capture and outsized portion of orders this way.
I just took a look at the Munchery menu for my zip code, and honestly not sure why I'd ever use them in a market as competitive as NYC. The "aren't locked into a specific menu style" thing seems like more of a bug than a feature - lack of specialization means I drift towards more specialized restaurants that deliver.
Why go for their beef stroganoff when I can get it from the amazing Ukrainian place that delivers to me? Why get the Korean rice bowl when there are several Korean places nearby? Chicken teriyaki - no shortage of Japanese-focused places that deliver, also.
The nature of NYC's food market (and I'm sure true of other places too) is that delivery restaurants are running incredibly lean operations on razor thin margins - I think it's far from a given that a no-front-of-house-delivery-only restaurant operation can generate the kind of numbers that justify stratospheric VC-tech valuations.
I'm also skeptical that they can achieve the kind of volume/market share they'd need to make their unit economics work. There seems to be this weird idea that, by serving 10-15 dishes a day, that they can capture a significant fraction of the total delivery orders in their service areas - in every zip code they operate in NYC they are up against literally hundreds of other delivery places.
To the consumer they appear as one restaurant in a sea of many choices - I don't see how they can expect to capture and outsized portion of orders this way.
On top of that, you can add significant saving on materials(maybe 30%-50%), and a lower labor cost per dish - both because of large volumes.
well this also alludes to a classic scaling issue. I have family who worked in restaurants for years and one of the few things that would really drive revenue were banquets and other large catering events. From what I observed, it was almost like you play the daily nickel and dime game to put you in the running for those bigger opportunities as they come up.
This is what happens when developers drink the startup Kool-Aid and decide they're the only smart people around. Not every industry is stodgy and "ripe for disruption".
> Yet, for some reason, people think that this business model has the margin to pay a team of developers, working out of a hip, air conditioned Market Street office, complete with a free beer fridge and a Foosball table.
Its kinda fun to watch VC dollars get burned up on each cycle of the attempt though.
Its kinda fun to watch VC dollars get burned up on each cycle of the attempt though.
And yet, it's possible to get fairly rich doing it: a friend of mine recently retired (in his 40s) after selling his ~decade-old catering business for FU money.
I stopped using the service because they could not provide competitive pricing even in my very expensive zipcode (a nice neighborhood in Brooklyn
The competition in this field is just immense. I don't get how any of these companies are going to make any money—Munchery, Ando, CookUnity.us, Uber Eats, and others are all competing fiercely against each other for a relatively low-margin, high-elasticity of demand business. In some ways, Blue Apron, Hello Fresh, and the other box companies are also competitors.
Like you I've used the various discount codes at various times, but they're all too expensive to be worth using with any regularity.
The competition in this field is just immense. I don't get how any of these companies are going to make any money—Munchery, Ando, CookUnity.us, Uber Eats, and others are all competing fiercely against each other for a relatively low-margin, high-elasticity of demand business. In some ways, Blue Apron, Hello Fresh, and the other box companies are also competitors.
Like you I've used the various discount codes at various times, but they're all too expensive to be worth using with any regularity.
The amount of these companies that are popping up leads me to believe there is a desire for this type of service. I've always been surprised that the supermarkets around me don't put together Blue Apron style meal kits that one can pick up and make. For awhile I used a local service that did that, and it was incredible.
Interesting, I had the opposite experience. The prices were competitive with options like DoorDash and Postmates, but the quality wasn't there. A dish from Munchery would be $10-13 typically, and delivery was around $3, which compares well against competitors. However, the quality was really lacking. The food had just felt like it wasn't fresh. I assume it was the preservatives and/or salt they add, since it's often cooked a day or two in advance. I stopped ordering from them because of this.
I think much of their revenue was from corporate customers --office park enterprises where restaurants are sparse and selection minimal. But looks like they miscalculated costs and overhead.
I recently canceled my membership after a year. I love the idea, and the food is good too, but the dish prices have skyrocketed recently. Now I know why. I liked to order 4 or 5 dishes and eat them over the next couple days for lunch and dinner. It tastes way better than frozen food, and is better quality than prepared dishes I could pick up at the grocery. However, their model seems to actively punish ordering multiple dishes. They have raised dish prices rather than delivery fees, and their rewards program rewards you per order rather than for dollars spent. Regardless, $10 is a psychologically significant limit for me per meal, and while they used to have a number of dishes under this price point, very few are now.
And that's why all of these companies are going to go under: as soon as they start having to charge real prices, instead of the artificial, VC-funded promo prices, people bail. Because, whoa, food delivery is actually expensive.
Did none of these companies check, before moving in to "disrupt" the restaurant industry, that there was actually anything to disrupt? Restaraunts are not lazy incumbents growing fat on their unchallenged dominance: it's a cutthroat business. And their costs are almost entirely the food and the labor, which are, for all practical purposes, fixed. There are no margins to steal from here.
Did none of these companies check, before moving in to "disrupt" the restaurant industry, that there was actually anything to disrupt? Restaraunts are not lazy incumbents growing fat on their unchallenged dominance: it's a cutthroat business. And their costs are almost entirely the food and the labor, which are, for all practical purposes, fixed. There are no margins to steal from here.
As far as I can tell the problem is a series of disconnected motives. The VC's have money to burn and want to become the next level of rich, which requires striking gold, often in fields they have no real conception of. The "disruptors" also want to strike it rich, but they can do that just by getting the VC capital and chalking the devastating losses they wont' personally suffer up to "valuable experience".
Then of course success isn't necessarily contingent on providing a reasonable service at a sustainable price... see: Uber.
Then of course success isn't necessarily contingent on providing a reasonable service at a sustainable price... see: Uber.
They're not going to go under per se, because I think the customers are probably pretty valuable. I think a more vivid hint as to their future is in their choosing someone from Simply Hired as their new (7/16) CEO: positioning Munchery for acquisition in a crowded marketplace.
Honestly, I don't agree that the customers are very valuable. There doesn't seem to be either loyalty or lock-in with these delivery startups: as soon as they raise their prices, people just uninstall the app and grab another one. I don't see anything worth acquiring here, so an IPO is pretty much it for an exit strategy, if they can last that long.
Could be, but the fact remains that they chose a new CEO whose most recent experience was winding a company down into acquisition.
We used it very frequently for awhile, and than stopped as we got tired of the dishes they seem to rotate though. When we went to order again recently I was pretty surprised at the jump. One main and side seemed to cost about what we would have paid for 2 mains and a side before.
To me this seems like a dead end business to be in, too many competitors in limited markets (like SF or NY), competition with brick and mortar options (Joe's Deli etc), and enormous cost of acquisition trying to outdo the competition. This seems like a market for one winner and lots of losers. Is investing $120M in such a business a good idea? You have almost zero ability to innovate and produce something better than your competitors, so why even get into this?
We used to order Munchery all the time back in ~2013 because the food was really high quality. Then they dropped the price which I was fine with, then they the dropped quality too. At which point we stopped. There are a lot of options available for shitty food.
It's hard to fathom how no one at any point just presses the pause button and says, guys, everybody STOP! Let's take a step back and make this damn thing profitable in one city before we scale it.
Sheer VC-fueled insanity.
Sheer VC-fueled insanity.
650,000 prepared but unsold meals? I hope they were able to direct them somewhere worthwhile.
That is not the number to be worried about; that it is "an average of 16 percent of the food the kitchen was producing" is, because "Wasting an average of 16 percent of food produced is above the typical 4 percent to 10 percent that most restaurants waste" (both quotes from https://www.bloomberg.com/news/articles/2016-11-21/munchery-...)
Also, that was over a period of almost two years, so 'only' about 1000 a day, and the company claims most of it was donated to charities.
From those two Bloomberg articles, I don't think that's the main reason they need more money.
Also, that was over a period of almost two years, so 'only' about 1000 a day, and the company claims most of it was donated to charities.
From those two Bloomberg articles, I don't think that's the main reason they need more money.
I see homeless people eating them all the time in the mission (and the plaid-colored boxes littering the streets). My guess is they're being given to shelters and food kitchens.
What exactly is a recapitalization? It says the round doesn't value them but doesn't the $5MM note have a cap of $80MM?
a recap is when the company issues new shares to change the capital structure of the company (i.e., the ownership percentages). the early investors aren't getting any new shares, so their stake in the company gets "crammed down".
it might be to make room for a new shareholder to get a larger stake of the company for a given dollar amount than might otherwise be implied by the current capital structure (a down round).
it might be to make room for a new shareholder to get a larger stake of the company for a given dollar amount than might otherwise be implied by the current capital structure (a down round).
Why is it legally easy for them to do this, but in other high profile examples it was difficult for companies to dilute a now-unwanted partner? For example, Gates and Ballmer pushing out Allen, or Zuckerberg pushing out Saverin.
Legally very easy because it's a down road (read up on "VC cram down"). They'd raised $120million prior, and now they're doing a $5-$15million convertible at a $80million valuation (significantly down round). All existing investors will either "play" (invest more at this valuation) or "pay" (suffer significant dilution). When valuation takes a down turn, all rules are off - the board has the fiduciary duty to do whatever it thinks is right for the company, even if it means getting rid of all previous shareholders who are not pitching in to help. VC backed companies are like drugs - feels great as long as you're high but could die in a second.
it's not quite apples/apples, and the law tries to protect minority shareholders from unfair actions by majority holders, but if the major stakeholders can say "it's in the best interest of the company" with a straight face and not just so the major stakeholders can enrich themselves at the expense of others, it's usually passable. in general, you'd ask lawyers a lot of questions about this, and you definitely take into account the risk of a shareholder lawsuit.
so, it's a lot easier to do this kind of thing when there's a downround and the alternative to these terms is the company shutting down - basically, the new folks diluting old folks can say this is ultimately in the best interest of the company because the alternative is a shutdown.
in the context of MS or FB, both companies were on the up and increasing in value, so harder for the big stakeholders to say pushing out another SH was just about "serving the best interest of the company" with a straight face.
so, it's a lot easier to do this kind of thing when there's a downround and the alternative to these terms is the company shutting down - basically, the new folks diluting old folks can say this is ultimately in the best interest of the company because the alternative is a shutdown.
in the context of MS or FB, both companies were on the up and increasing in value, so harder for the big stakeholders to say pushing out another SH was just about "serving the best interest of the company" with a straight face.
It's been a long time since I took business associations, but you aren't allowed to discriminate against any of the shareholders. You can dilute everyone, but you can't dilute just some people.
IIRC Zuckerberg and Thiel created a new entity and gave Saverin a difference class of shares/equity then diluted that class. They must have known they'd never get away with it, it was likely just a move to be able to fire him quickly and just cut a check at a later date.
IIRC Zuckerberg and Thiel created a new entity and gave Saverin a difference class of shares/equity then diluted that class. They must have known they'd never get away with it, it was likely just a move to be able to fire him quickly and just cut a check at a later date.
I think it means doesn't value because convertible notes set an upper cap on a valuation, but don't actually set the valuation.
e.g. the next round could be at $40mm, and if it's priced, then this $5mm note would be at $40mm (minus any discount on the note). or if the next round is at $100mm, then this note would be at $80mm.
e.g. the next round could be at $40mm, and if it's priced, then this $5mm note would be at $40mm (minus any discount on the note). or if the next round is at $100mm, then this note would be at $80mm.
a recap is a pretty general term used to describe any time capital structure is meaningfully changed, but in this case (and oftentimes in the realm of VC-backed co's) it usually refers to a situation where in connection with a new round of fundraising, existing stakeholders have their (preferred stock) rights meaningfully altered, and usually for the worse. this usually occurs in the context of a downround, where the new investor has a lot of leverage and the existing investors are effectively asked to give up some meaningful portion of their rights in order to sweeten the deal for the new investors, either by literally giving those rights up (usually by converting to common stock), or else by granting the new investors some very superior terms that diminish the existing investors rights (like a discount on IPO shares for new investors that existing investors do not get, or a higher-than-usual liquidation preference that supersede existing investors'. in contrast, the "cleanest" fundraising terms would be something like: new investors get the same rights as older investors, just with the price-per-share-based rights adjusted for the higher valuation the new investors bought at. (for reference, here's a good example of a widely read VC post where the term is used with that general framework: http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/)
in some cases, a recap is also formulated to incentivize existing investors to put in more money by setting up a deal where existing investors who don't put in more money will end up with their shares converting to common stock (thereby losing their liquidation preferences and anti-dilution provisions), but those who put in their share (usually pro rata) will maintain comparable preferences to the new investors (or whoever is leading the round). (this is sometimes called pay to play, and it's one of the more common recaps i saw when i was an attorney)
In this case, could be a novel spin on the same dynamics using a convertible note valuation cap: they are raising a down round (their last reported valuation was $300m, so a major down round here), and "Old investors were asked to pony up more money or see their stakes lose their value, according to one person familiar with the matter." it does not go exactly into the mechanism for how the value would be reduced, it might just be through straight up dilution (see note below), but in any case it seems like the ultimate objective is the same: using a new structure to reward new (or returning) investors who are willing to save the company in these (arguably self-imposed!) hard times, and push/punish existing investors who may have lost faith in the company.
one thing I'd note: honestly, they seem to be implying a significant recap, but there's nothing specific in the article that points directly to any particularly unusual mechanisms. In fact, it's possible that this is just be a down round using a relatively straightforward convertible note with a cap, and even in that case the following statements that seem to imply a recap could still be true: "The value of shares that may be doled out to backers later will change depending on the company's subsequent valuation." (that can be true in a regular convertible note deal) and "Old investors were asked to pony up more money or see their stakes lose their value, according to one person familiar with the matter." (weirdly worded, but this could be true for any new infusion of capital). also, for relatively small investments ($5m) on mid/late stage companies, convertible notes are used just because they are fast/easy to negotiate and execute on, so i would not be surprised if this is just something like that - still, a major downround in any case!
in some cases, a recap is also formulated to incentivize existing investors to put in more money by setting up a deal where existing investors who don't put in more money will end up with their shares converting to common stock (thereby losing their liquidation preferences and anti-dilution provisions), but those who put in their share (usually pro rata) will maintain comparable preferences to the new investors (or whoever is leading the round). (this is sometimes called pay to play, and it's one of the more common recaps i saw when i was an attorney)
In this case, could be a novel spin on the same dynamics using a convertible note valuation cap: they are raising a down round (their last reported valuation was $300m, so a major down round here), and "Old investors were asked to pony up more money or see their stakes lose their value, according to one person familiar with the matter." it does not go exactly into the mechanism for how the value would be reduced, it might just be through straight up dilution (see note below), but in any case it seems like the ultimate objective is the same: using a new structure to reward new (or returning) investors who are willing to save the company in these (arguably self-imposed!) hard times, and push/punish existing investors who may have lost faith in the company.
one thing I'd note: honestly, they seem to be implying a significant recap, but there's nothing specific in the article that points directly to any particularly unusual mechanisms. In fact, it's possible that this is just be a down round using a relatively straightforward convertible note with a cap, and even in that case the following statements that seem to imply a recap could still be true: "The value of shares that may be doled out to backers later will change depending on the company's subsequent valuation." (that can be true in a regular convertible note deal) and "Old investors were asked to pony up more money or see their stakes lose their value, according to one person familiar with the matter." (weirdly worded, but this could be true for any new infusion of capital). also, for relatively small investments ($5m) on mid/late stage companies, convertible notes are used just because they are fast/easy to negotiate and execute on, so i would not be surprised if this is just something like that - still, a major downround in any case!
This seems like it will be an extremely difficult business to turn around. Food delivery is an extremely competitive and low margin business with highly price sensitive customers. I've seen coworkers rotate to whichever new service was offering a discount to juice their adoption numbers. I don't see this ever being a lucrative investment, just good money being thrown after bad.
The other Bloomberg article gets into the details of why this company has burnt so much cash (1). Shaking my head after reading this:
In August of 2015, Munchery held a party at the Line Hotel in Los Angeles to celebrate a new partnership with chef Roy Choi. He's known for his Korean taco fusion food truck, Kogi, and for his L.A. restaurants, including two in the Line Hotel. Choi's new contract promised him more than $100,000 a month to design his own line of meals. He was also consulting on branding.
At the party, people lined up around the block for free kimchi pork fried rice served in Munchery's cardboard containers. Pishevar, Munchery's chief hype man and a major investor, arrived wearing a black cowboy hat. Hollywood filmmaker Jon Favreau attended.
By the end of the year, the startup ended Choi's contract. It cost the company more than $500,000, according to people familiar with the matter. Choi had provided Munchery with just two recipes. An agent for Choi declined to comment.
Around the same time, Munchery also terminated a contract with marketing agency West, according to former employees. The firm had helped Munchery offer free meals to attract new customers and to strategize about its branding.
Munchery spent heavily on direct to consumer marketing ahead of fundraising rounds, former employees said. In a month, the company could easily spend hundreds of thousands of dollars putting flyers on people's doors offering discounts on Munchery, they said.
1. https://www.bloomberg.com/news/articles/2016-11-21/munchery-...
In August of 2015, Munchery held a party at the Line Hotel in Los Angeles to celebrate a new partnership with chef Roy Choi. He's known for his Korean taco fusion food truck, Kogi, and for his L.A. restaurants, including two in the Line Hotel. Choi's new contract promised him more than $100,000 a month to design his own line of meals. He was also consulting on branding.
At the party, people lined up around the block for free kimchi pork fried rice served in Munchery's cardboard containers. Pishevar, Munchery's chief hype man and a major investor, arrived wearing a black cowboy hat. Hollywood filmmaker Jon Favreau attended.
By the end of the year, the startup ended Choi's contract. It cost the company more than $500,000, according to people familiar with the matter. Choi had provided Munchery with just two recipes. An agent for Choi declined to comment.
Around the same time, Munchery also terminated a contract with marketing agency West, according to former employees. The firm had helped Munchery offer free meals to attract new customers and to strategize about its branding.
Munchery spent heavily on direct to consumer marketing ahead of fundraising rounds, former employees said. In a month, the company could easily spend hundreds of thousands of dollars putting flyers on people's doors offering discounts on Munchery, they said.
1. https://www.bloomberg.com/news/articles/2016-11-21/munchery-...
A party and half a mil on Roy Choi recipes doesn't seem like a significant factor compared to a peak burn rate of $5mil/mo or millions in prepared but unsold meals.
Well, that gives you two solid data points...a few more and you've got a pretty reliable trend to explain that burn rate and wasted meals.
A data point and wishing for a few more does not give you a 'pretty reliable trend'. It does the opposite of giving you that.
You're absolutely right. Except that I said 2 data points and then waiting to see if there are more...in which case you would be able to argue for a reliable trend.
Yes, if you knew the company was throwing expensive parties every weekend and spending millions of chefs on a regular basis, maybe. But you don't. The point was, the stuff the commenter highlighted doesn't really explain their losses.
As the old joke goes, "half a mil here, half a mil there, and pretty soon you're talking about real money."
Ah..I recall attending a startup launch party that had Don Johnson and Chinese food. There must be some Perl script they use to generate the permutations..
The level of doublethink required to make decisions like these, while at the same time believing you're actually disrupting the food industry with its commonly known slim margins is astonishing.
If I were a scout for executives, I would make sure that Munchery leadership is engraved in eternity on some no-hire blacklist.
I wonder how pervasive these delusional people are in SV in other industries.
If I were a scout for executives, I would make sure that Munchery leadership is engraved in eternity on some no-hire blacklist.
I wonder how pervasive these delusional people are in SV in other industries.
The level of blind condescension required to make a comment like that....
It's really easy to call out the losers once they fail.
You call this delusional because you fail to factor in the scope of the opportunity. The food industry is enormous. If the founding team and investors believed they had a mere 1% shot at disrupting it, spending $100M to run the experiment is entirely rational.
I feel the need to leave a quote here in the hopes of deterring other people from espousing your attitude.
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. "
It's really easy to call out the losers once they fail.
You call this delusional because you fail to factor in the scope of the opportunity. The food industry is enormous. If the founding team and investors believed they had a mere 1% shot at disrupting it, spending $100M to run the experiment is entirely rational.
I feel the need to leave a quote here in the hopes of deterring other people from espousing your attitude.
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. "
Thanks, a quote like that from the 5th wealthiest president of the US during the Gilded Age or thereabouts really cemented my view that you live in some deep cognitive dissonance.
If you're a libertarian too, then perhaps your level of doublethink rivals the one I made my comment about. If it does, it's pointless to discuss with you anything of substance.
If you're a libertarian too, then perhaps your level of doublethink rivals the one I made my comment about. If it does, it's pointless to discuss with you anything of substance.
The level of critical thinking missing in order to make a comment like that...
Wasting $100 Million on a 1% chance to disrupt an industry that is not ripe for disruption, and has been famously known for having razor thin margins is not a rational action.
Wasting $100 Million on a 1% chance to disrupt an industry that is not ripe for disruption, and has been famously known for having razor thin margins is not a rational action.
I was brought in by one of those flyer campaigns. We order two meals twice a week, and we're about 100 orders in. The food is pretty good, though they did noticeably raise prices over the last 6 weeks.
"The startup has been trying to muster a turnaround effort under the helm of new Chief Executive Officer James Beriker, the former head of recruiting company Simply Hired. He has cut jobs across the company this year to stop the bleeding."
Ironic that the former head of a recruiting company has cut jobs at Munchery
Ironic that the former head of a recruiting company has cut jobs at Munchery
i wonder if he sent their resumes over to SimplyHired
eww, processed snack food is gross, do they deliver fresh fruits?
I really wonder what was going on. At a fundamental level, when competing in an ultra-competitive market (food delivery), you have to take price seriously, and they just didn't. Everything they were offering was 25% more expensive than similar delivery options from neighborhood restaurants.