Fascinating story about the evolution of business models in this era of #ZIRP.
Reminds me of the first generation internet companies incentivized by sky high revenue multiples to "barter" $millions in ad purchases from each other in the 90's to show growth. https://t.co/rBMtcYTdjM
Andrew "Not cool enough for an ETH scam" Glidden - @asglidden1 week ago
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Mitch Hedberg Is up there smiling "I think Pizza Hut is the cockiest pizza chain on the planet because Pizza Hut will accept all competitors' coupons. That makes me wish I had my 1own pizza place: Mitch's Pizzeria -- this week's coupon: unlimited free pizza."
I think that this is reflective of the way a lot of dot coms have been groomed. Take Doordash. I imagine that the folks that started the company were trying to do something innovative and make some money. They get venture capital to pony up a few suitcases full of cash. The company ownership is still trying to start a company to do some good stuff, and make some money.
On the make money side they have a plan that includes their exit plan. Something that is emphasized in all the start up literature: how do you get your business up and running, and then exit with a bunch of cash.
The exit plan seems (to me at least) to pretty much involve a public stock release and sell the ownership stake in the business. Venture gets its money, and then some back. Owners make a pile. Investors get to buy in to the successful business that has not made any profit yet but, by golly, you damn well know it will.
At the end of the day venture capital has succeeded in getting the public - the investing public - to assume all of the losses for this business. The investing public including those big pension type funds that are run by smart(ish...) folks but who are not experts on Doordash's financials. The regular public folks who see an opportunity to get in on one of those damn Silicone Valley IPOs that only the rich get a chance at. Etc.
Bottom line, if you are a venture capitalist, Doordash losing money hand over fist for a few years does not matter to you. Your exit, including a damn good return on investment, is wrapped up in the IPO. You are counting on the ability to off load loss on the larger public.
I am not even sure I could attribute all of this to malice. Could just be that current venture investment strategies evolved to rely on giving it to the public in the fourth point of contact and there is not any real examination of what is happening or how.
Malice or not, the point remains that Doordash, as a corporate entity, apparently does not care about losing money. Which means that losing money does not matter to their eventual bottom line. Sure, it reams the employees, and a bunch of restaurants and customers. But that is irrelevant when you are the venture capitalist and nobody has any idea who you are or what you do.
I'm getting tired of all these paid services. You can't even go to the god damn grocery store without running into a multi layer cart completely getting in your way and blocking shelves. I fucking hate it....
They should just have doordash deliver all of their takeout orders to the store before handing them to the customer. They make the pizza. A doordash driver shows up. Driver grabs the pizza and immediately hands it back, then they resell the pizza again to the customer. Now the customer is paying $24, but the store is getting paid $32. Super extra bonus points if the owner signs up as a doordash driver so he's getting paid for that as well.
I mean it's shitty morally but you just described a pretty sustainable business model. Make another industry do all your work, charge a hefty margin to the end consumer as well as a delivery fee, and increase the overall volume that industry would see (while taking the profits)
I was asking someone else a question because I want their definition
Media tells me these startups are constantly losing money to boot, but clearly...not so sustainable. I think the substack article made that same point
The single thing they appear good at is fucking over businesses they purport to "help"
>Mais oui, un bon coup d'antitrust et de réglementation contre la vente à perte ferait du bien à ces industries.
Même sans ça je vois pas trop où ça va (cf article). L'idée étant que les boîtes en question creusent les pertes pour capturer le marché et se rattrapent ensuite. À la limite pour un machin qui a de gros effets de réseau je peux concevoir ça (Facebook...) mais pour la livraison de bouffe ou les courses en VTC, quelle est la baise ?
Supposons qu'on est arrivé dans "le monde d'après" où Deliveroo (ou Uber Eats) est super dominant. Supposons encore qu'ils s'adressent aux consommateurs qui vivent dans les grandes villes parce que l'équation est déjà difficile dans les zones denses, ne parlons pas encore des campagnes. Soudainement, il faut couvrir les coûts et la livraison passe à 8 ou 10 euros. Est-ce que les consommateurs vont se dire "ah tant pis j'ai la flemme et je suis inscrit sur la plate-forme, allons-y" ou est-ce qu'ils vont bouger le cul de leur canap' et parcourir à pieds ou en vélo les 100 - 400 m qui les séparent du restaurant en question ? Vu ce qui semble être le prix d'équilibre j'ai ma réponse (mais je me trompe peut-être ?). Et dans les campagnes ou le périurbain où les distances sont plus longues, ben c'est encore pire vu que les gens ont des bagnoles perso avec un coût marginal à peu près nul pour un trajet supplémentaire.
En plus le passage d'un prestataire à un autre est super facile, OK on n'en veut probablement pas quinze, mais passer d'un service de VTC à un autre pour un consommateur ce n'est pas d'une pénibilité majeure. Donc ils prendront juste celui qui continue à vendre à perte jusqu'à ce qu'il n'y ait plus de VC qui remette la main au pot...
Yep, tu soulèves de bons points. C'est un peu la guerre à celui qui tiendra le plus longtemps sur ses fonds propres et qui fidélisera le plus grand nombre de clients. L'espoir c'est d'être le dernier survivant et de profiter du monopole.
Toutefois, tu as raison de souligner que la viabilité des marchés qui ont plus ou moins été créés par de la vente à perte est vraiment douteuse dans une hypothèse où les vrais coûts sont répercutés sur les prix.