Co-Founder of Autosend.io. Veteran full stack engineer in the world of iOS, Python and the pieces that bring them together. Lover of great vegetarian dishes!
From a consumer standpoint, it is nice enjoying all these artificially cheap services in the Bay Area where similar services that are non "tech" cost at least double the price.
However, from a common sense business standpoint, it's amazing how many startups there are that fail to do basic math and realize that their "business model" is unsustainable, but instead survive off of VC money until the growth slows or the money stops.
How in the world could you survive charging less for for a prepared meal than a similar restaurant when you have drivers, vehicles, a fancy office, marketing budgets, and two-dozen employees making ~$140k/yr? That doesn't even include the costs of actually making/buying/preparing the food. And as long as you have vehicles, drivers, and delivery, your scalability will never match that of a true software-based tech company. Hell Pizza Hut barely sells a meal for under $10, and they probably buy the cheapest, lowest quality, bulk wholesale ingredients you can find.
It's basically startup welfare... as long as money is being given away, sustainable business models go out the window.
Consumers love cheap prices and companies that offer those prices typically win, but I'm sure Wal Mart did not offer bottom of the barrel pricing before reaching a scale that made it economical for their business.
3 weeks, 6 days ago on Drowning in venture capital, mobile startups are waging unsustainable price wars
Oh governments... is it so wrong to allow your people to live happily, voice their opinions, and have constructive arguments peacefully?
2 months, 2 weeks ago on Russian regulators threaten to shut down Twitter, Facebook and anyone else they damn well please
I could be wrong, but I see a few problems with this on-demand food sector when it comes to long-term sustainability.
1) I believe the prices are too cheap that it would take massive scale at breakneck speeds to sustain itself in terms of finance and service quality. With these services at roughly ~$10/plate with the cost of drivers + vehicles + gas + parking + packaging + marketing, it makes you wonder how slim the margins must be (which is pretty common in the food industry) or the quality of the ingredients used. And one could argue that owning a physical restaurant with staff is expensive, but that savings is probably eaten up (pun intended!) by now having engineers, data scientists, etc who probably cost about 4X what a typical waiter costs.
2) I just don't think there is a large market of people outside of early adopter, tech-savvy, urbanites in a handful of cities in the US who would use this type of service on a consistent basis. Especially considering these companies would be competing with existing restaurants, the growing number of competitors entering the space, and the mindset of people who actually like eating out if not just for social purposes.
3) Exit strategy. I'm not the type to start a business with the intentions of solely focusing on exit strategy, but once VC money is involved it's on the table. That being said, I'm not sure I see an exit for investors besides the hopes of an IPO. These companies are restaurants + logistics. There aren't many large players in this space that I can see being interested in acquisitions except maybe companies such as Yum Brands or Darden Restaurants or some grocery store chain wanting to get into this space. But even still, the direct to consumer logistics isn't something I think these large brands would want to touch. Of course there are the tech giants who could acqui-hire, but that will most certainly dry up soon now that Wall Street isn't so kind to technology companies anymore and I think Google, Facebook, Yahoo and the like will finally realize it's probably not worth it anymore to spend $50million on a startup to get a handful of engineers who will most likely quit after two years to repeat the cycle again.
All this being said... I will more than likely use one of these services (along with my continued usage of Instacart and GoodEggs) and hope that they put on their conservative hats from time to time to ensure they are growing their business in a heathy manner.
2 months, 2 weeks ago on SpoonRocket raises its Series A: “We know we can make a profit on this. We’re already doing it.”
The beauty of starting a business, is that you don't have to be the expert of the machines that power the business, you just have to know where these people are when you need them. As long as you're solving a problem, know what problem you're solving, and have the expertise to solve that problem, then I think it's irrelevant to have to know how to assemble an engine to run a car company or bake a pie to run a restaurant.
Treatings connects people online by allowing them to interact offline to further their careers. You're solving a problem, and your mastery is the solution your company provides. So unless you plan on being an engineer in a future role if this fails, then I wouldn't worry too much about trying to pass Google's interview process.
This coming from an engineer, I think people are too quick to discount "soft" skills such as being the idea guy who knows how to coordinate people to accomplish a goal or being the creative minded person who always thinks of the road less traveled way of doing something, both sides of the brain are of equal importance in most business environments.
8 months, 3 weeks ago on Should a non-technical founder hedge against failure?
I will agree that celebrities do attract attention to these newer platforms, but ultimately these platforms already benefit the unknowns before celebrities arrive. This is partly because celebrities only latch onto something once they have a large enough fan base using the platform in question.
But It's not just regular celebrities that cause unease when they use Kickstarter. For me, it also includes the multi-million dollar companies who want's to use Kickerstarter to garner "grassroots" support, to the very successful videogame designer/developer who has multiple hits and plenty of cash and media support in his back pocket already.
I think others feel this way because Kickstarer in particular, was thought to be a platform where ideas get funded and marketed by people who believe in the vision for individuals or organizations who didn't have the access to capital or customer reach as the larger company or known celebrity.
I feel once you already have access to enough cash and marketing capabilities like most celebrities do, Kickstarter is solely a tool to expand your brand. The long term costs if this continues could be a growing pool of funders/backers who are only willing to "donate" money to their favorite celebrity or well known brand. I could be wrong and overreacting though. :/
1 year ago on Stop your bitching: Why we should welcome celebrities to Kickstarter, Twitter and any other digital platform
I think it's important for people in the startup/entrepreneurship world to think about _levels_ of failure...or success (if we want to speak positive).
Maybe your startup maxes out at generating $400k/yr profit vs the $10million you were hoping for, if it's just you or one other person...it's a pretty good salary in most places in America. Or perhaps your startup never gets the hype and popularity you'd like, but maybe it pretty much solidifies financial freedom for you for years to come.
I guess I'm saying that not reaching your true goal can be considered a failure, but one must not completely ignore the fact that there are also many levels of success as well
1 year, 1 month ago on What if things don’t work out for you?
@LauraLovesDsign I would argue and say it's less of Apple trying to make a device to impress your friends and rather your friends being impressed by your beautiful device.
Would you rather Apple and the like design chunky black plastic notebooks and smartphones like everyone else, just so it doesn't appear expensive in your eyes?
I guess i'm just not a fan of the philosophy that good looking and well designed products mean it is exuding some kind of posh attitude. That thought process is playing into the belief that "regular people" don't deserve any nice shiny things.
1 year, 1 month ago on Meet the Apple of the coffee world: Nespresso
Having a degree doesn't protect you from the future state of the economy either if your career path is obsolete. Anyone going to college today is thinking about today, not necessarily 10 years from now.
So my point is that 5, 10, 20 years from now without a degree, you would have hopefully gained real world work experience to insulate you from the lack of holding a piece of paper. Especially in a field that rapidly changes with the times anyway. I'm certainly doing okay as an engineer 10 years into my career living in a rather nice place in one of America's most expensive cities without a degree.
I was self taught, and I believe in order to succeed without a degree, you need to have a similar drive and passion for your field AND be in a field where specific certifications don't matter, unlike say the medical field.
1 year, 2 months ago on How much does your college degree matter?
Great post! I often feel buyer's remorse when it comes to larger purchases usually because most materialistic things aren't worth it, but this is also good advice during my startup adventure.
1 year, 2 months ago on The Apathy Epidemic: Why your startup will suck you dry
@efemurl and I'm sure people in the locomotive industry were saying the same thing when cars started taking off. In an ever-changing world, either adapt or go hungry.
1 year, 5 months ago on What’s good for Silicon Valley might not be good for America
@PatrickSF I see what you're saying as far as some unemployed may not have the right skills and luckily as a software engineer in Mountain View my skills are in demand. But I also think there are smart people out there who are not in our industry(tech) to be able to benefit from our great economy in a great region (Silicon Valley).
Someone has to design and architect those cool startup offices. Someone has to cater the food. Someone has to design the logo and make the tshirt that us engineers wear. I just think there are casualties of a down economy and ultimately we'll all be healthier if a majority of folks thrive. (More customers for startups :) )
1 year, 7 months ago on Ask any entrepreneur: The freelance economy is a sucker’s game
I think from an employee standpoint that it doesn't matter if you're a freelancer or not for a company unless you have equity. Being a full time employee does not necessarily mean I'm not going to quit the next day if I come up with a brilliant new idea of my own or if I'm swayed by another sexy job offer, and I don't think employers should have that false sense of security either, especially in a job seekers market like today for engineers.
I think the answer is that companies and employees/freelancers need to follow the path that makes the most sense for their situation. If a company really wants to hold on to top talent and attract people who are willing to work 10+ hours a day then equity is the only way you can somewhat guarantee that will happen.
I would agree that this is a tough space. Square is doing very well but Intuit has started pushing hard on their version of a "Square Killer" and I think they may have a slight advantage actuall.
Intuit is really playing on being the makers of QuickBooks, and with an overwhelming majority of small businesses using QuickBooks combined with the lack of desire for companies to want to switch out their payment processing system, I'd say it's a great marketing angle.
1 year, 10 months ago on Groupon Taking on Square? Don’t Make Me Laugh
I've probably been part of the silent crowd for the past 3 years or so. The only real reason I still have an account is for the services that have Facebook login as their credentials management.
1 year, 10 months ago on Facebook’s Growing Silent-Majority Problem
So glad you guys use Vimeo as I can watch it on the Vimeo channel on my Roku box!
2 years, 2 months ago on Why Isn’t This News: Exclusive Very Sneak Peek At NSFW Corp (Kinda)