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Stuart, The Same-Hour Delivery Startup Raises €22M Pre-Launch
- saosebastiao 11y agoVenture backed delivery businesses have jumped the shark. EUR 2.99 for a delivery? For city-wide point to point? Within an hour? Pizza delivery companies have been doing this for decades, but they've been surviving off of a product that has >$20 sales prices and >90% margins pre-delivery, paying below-subsistence wages, aggregating deliveries due to meal time peak behavior, consolidating pickup areas to single restaurant locations, and constraining delivery areas to something more akin to a neighborhood than an entire city. Amazon has tried for years to get low margin grocery delivery to work with sophisticated state of the art logistics software and the cash flow muscle of Amazon to push for market penetration and subsequent delivery density, and the only strategy that worked for them was raising prices. There is no way this business goes anywhere without changing their pricing model or the laws of physics.
- shostack 11y agoHow about the delivery mechanism? When drone delivery takes off, shipping will be turned on its head once the maximum carry weight and flight duration improve. Then <1hr delivery will be the norm for much of this stuff, you'll have a fraction of the human capital costs, and many other benefits.
- untog 11y agoWhen drone delivery takes off, shipping will be turned on its head Sure. Then launch a startup doing drone delivery when it is viable. These guys will burn through their funding long before that happens.
- shostack 11y agoTotally agree that they will. Personally, I'm curious to see what happens to all these delivery/food delivery startups when the economy slows and people have less disposable income for urgent delivery of non-essential items.