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Beepi Winding Down After Burning Through $150M
- nikanj 10y agoFounded in 2013, winding down in less than four years. There's a lesson about burn rates here.
- puranjay 10y agoHow the hell do you burn through $37.5M a year? It's a used car marketplace? How...?
- btgeekboy 10y agoA ton of ads on FM radio would be my guess, based on on how often I heard them.
- meddlepal 10y agoInteresting... I never heard or saw a single ad for them. Literally the first time I am ever hearing about Beepi.
- bmm6o 10y agoThe industry is pretty geographically fragmented. Beepi was apparently mainly in California, though they didn't seem to have much of a presence here in Socal. The competitors they mention in the article - Vroom and Shift - I've never heard of, so I assume they are centered elsewhere. I know someone who works for Carvana, so I know they are also regional and expanding (ATL and PHX mostly, I think). The industry is used cars, so it's a product buyers generally want to see in person and it has to be delivered to them. So physical location is more important than many tech startups.
- beamatronic 10y agoI only knew of them from seeing TONS of cars in the area with Beepi licence plate frames. I thought this company was like 3-5 guys in a small office.
- isolli 10y agoMaybe they're returning some of the money to investors, like Staffjoy did recently?
- deleted 10y ago[deleted]
- sjcsjc 10y agoPaywall workaround https://www.facebook.com/l.php?u=https://www.wsj.com/articles/beepi-winding-down-after-burning-through-150-million-1487203816 https://www.facebook.com/l.php?u=https://www.wsj.com/article...
- slinger 10y agoThanks
- Rainymood 10y agoNot sure why, but this paywall workaround goes through facebook. It does work, but it goes through facebook.
- ThrustVectoring 10y agoBecause WSJ wants to have their articles shared on facebook viewable, but throw a paywall on other attribution sources. Like, I also do not have a WSJ subscription, but my email subscription to the Volokh Conspiracy gets me links to readable articles.
- sjcsjc 10y agoI should have given credit to ctrl_freak for showing us this a few days ago https://news.ycombinator.com/item?id=13621072 https://news.ycombinator.com/item?id=13621072
- deleted 10y ago[deleted]
- rblatz 10y agoSad to see them go, there are so many things wrong with the way Americans are treated when buying and selling a car. Even though I work for a company in the same space it was great to have a company like them around to keep us on our toes.
- vadym909 10y agoMost people understand that like trading in anything used, you get what you bargain for. The quality varies, prices vary and you risk buying crap sometimes. Don't like that? Pay a bit more and buy extended warranty or precertified cars. To sell your car, there's KBB, carmax, cars.com and any dealer you want to buy a car from. Beepi was just one of the many options (no hassle no haggle). However, instead of being a marketplace like cars.com, it took ownership of the transaction probably with hopes to take a bigger chunk of the transaction but effectively became a dealer. Car dealer margins are like 2%. At a 5x multiple, it would be worth 10% of Sales.
- cloudwalking 10y agoHow's Shift doing?
- praneshp 10y agoI hope they're doing well. We got a car from them few months ago, it was so much better than going to the dealer.
- blawson 10y agoSame, sold my car through them, and recommended a friend to the same. Great experience all around. The fact they were willing to deal with cars older than 6 years was the only reason I looked at them over Beepi.
- MITengineer 10y agoI heard they're burning 2-3M/month and on a lifeline at this point. SF is "close" to breaking even.
- dharmon 10y agoThere's an instructive lesson here in how both valuation and annual run-rate are meaningless numbers without a sound fundamental business underneath. Beepi was valued at $500MM and had an almost $200MM annual run-rate, yet evaporated and is now worth absolutely nothing. Who else out there has 9, 10, or even 11-figure valuations and high revenues but is actually a worthless business?
- hkmurakami 10y agoThis $200MM surely had to be GMV rather than ARR right?
- kak9 10y agoYup. People sometimes use ARR to mean multiple things. Previous poster was referring to run-rate which likely was the run rate for GMV--versys ARR which I assume you mean as annual revenue
- chriswilmer 10y agoOh weird, this exact comment was also posted on reddit (r/business) What's going on?
- dharmon 10y agoWasn't by me.
- rockarage 10y agoLearn from this. High Level Strategic planning & market research is often underrated by the Investors & Founders, that is why so many fail. And I can say this definitively because the reasons for failure can often be traced to one of these two reasons: 1) We expanded too fast - the result of poor stragetic planning 2.) The market for our products was weak - the result of of limited or no market research In Beepi case it was reason (1) they expanded too fast. Can't imagine what they were doing with 300 employees, technology should have been used to make them more efficient. Investors are more concerned with college pedigree yet that has not limited failures. They don't know what they need to know until it is over.
- mathattack 10y agoIn many cases, you don't really know #2 when you start, and #1 is a matter of timing and funding. I view this as a failure in the Venture funding process. Companies do #1 before validating #2.
- rockarage 10y agoYes you do know #2 when you start. If I'm working on a cure for (name your sickness) you know there is a market. You're doing it wrong if you don't know #2 when you start. Don't be a solution looking for problem/market see: Is Your Product a 'Vitamin' or 'Painkiller?' https://www.entrepreneur.com/article/230736 https://www.entrepreneur.com/article/230736
- mathattack 10y agoMany startups haven't figured out monetization at the beginning, that's why they search for Product Market Fit. If you do MVPs properly, you won't have burned much money on the way.
- disiplus 10y agosometimes its hard to do a MVP properly, and sometimes doing MVP and getting insufficient or wrong data is also the case. like, here are some people that showed interest in this feature, lets build it, and after you build it you see that you simply did not have enough data. like in A/B test if you stop it to early an you get some screwed data. we had some external company do a FB ads for our company, and indeed we did get a loot of new signups, but after examination we saw that all those signups where garbage. you really need to do it properly, and i dont think thats easy.
- yueq 10y agoBeepi's business model is not scalable at all. I would be very surprised if any experienced investor has a dime in it.
- edoceo 10y agoI hate seeing things like this. As an entrepreneur it's frustrating that I've built a business, in a growing space, $300k ARR, consistent growth, a few employees, no debt and a well defined path to 10x growth that's not built on any (bulshit) models that VC seems to love. And for some reason it's very hard to find funding that's not from Wall Street guys (who love models that earn). Hey VCs! I can burn less of your money a little slower!! Hit me up!
- rahimnathwani 10y ago10x is $3m ARR. What will your gross margin be at that point? Do you expect to be able to scale beyond that size? How large is the addressable market?
- boxcardavin 10y agoVCs invest in people they know and people who know people they know. Need-ta fix that first, but those peeps might not be the type of peeps you wanna know. "The game is the game."
- dnautics 10y agoI think this is an underappreciated fact... SV (but not exclusively SV, it's worse in academic science, for example) runs a pretty insidious narrative of how the entrepreneurship game works, that I don't think is at all accurate.
- achou 10y agoWhy bother raising from a VC? Bootstrapping can work out very well.
- Sacho 10y agoIsn't the point of VC that they gamble high-risk high-reward situations because the high-reward ones pay off the failed risks? If they want to go for a safe option, is your business a better investment than (insert safe investment options here, i don't know much about investing)? There's probably a fixed cost related to every investment(having to study your company etc) which might mean it doesn't pay off to invest in small companies.
- killbrad 10y agoSilicon valley mental bubble. I've never heard of this company (not a problem), but there seems to be a SV problem I see constantly repeating: - Some people like this thing. There could be a market. - Investor cash gushes in; fast fellation or get no orgasm! - Startup uses up all of the money somehow on bullshit or self-payment of execs. - turns out a good thing is now shit because VC's jizzed them full of undeserved cash, the founders sucked up the money, and the staff no longer has any incentive to deliver. - Hacker News article. Venture capital is a major problem here. Rich idiots keep giving out money to people that want money, hoping that one of them will become a unicorn. News flash: the bubble is gonna pop again because venture capitalists are basically all idiots. They gamble money they can lose. However, the average person can't handle those fluctuations.
- hyh1048576 10y agoI used them and sold my car at a price better than any dealer. But I personally doubted whether their business model was viable. Actually people don't sell cars very often and being an "car dealer on the internet" doesn't change that fact.
- dang 10y ago> VC's jizzed them Please don't do this here. It's kind of gross. Also, please don't post overheated rants to HN. It lowers the signal/noise ratio, which is what we're hoping to optimize for. Thoughtful critique is welcome. One method for turning overheated rants into thoughtful critiques is to (a) edit out name-calling and pejoratives and (b) add information, such as specific examples.
- ww520 10y agoWhat is their business model? What's their monetization pipeline?
- downandout 10y agoQuestion: now that the Google workaround no longer works for WSJ links, are they even allowed on HN? @dang has implied that paywalled articles without workarounds aren't allowed.
- gulbanana 10y agoi had the same thought, i can't read the article at all
- maverick_iceman 10y agoUse this bookmarklet someone posted in HN a few days ago: javascript:window.location="https://m.facebook.com/l.php?u="+encodeURIComponent(window.location.href); https://m.facebook.com/l.php?u="+encodeURIComponent(window.l...
- downandout 10y agoFor those that read this, here [1] is a draggable bookmarklet that will instantly unlock WSJ articles based on the above code: [1] http://salzeko.com/wsj http://salzeko.com/wsj But 99% of HN users are not going to see this and the whole reason the "web" link exists is to aid in the Google workaround, because that was the gold standard until now. WSJ has now put itself into a special class of sites. Unless I post my link on every single WSJ story submitted to HN, non-subscribers (the vast majority of people seeing it here) won't be able to read it, which means they can't discuss it etc. Therefore it would make sense to me that WSJ links should be blocked here.
- forgotmypw 10y agoI mod a large sub-reddit, and I added an automoderator rule that basically tells people to paste the text of the article into the comments or the link is taken down after 2 hours. It is very effective.
- buro9 10y agoThis is not a good idea. There is no fair use for the copying of a whole text, and whilst the person who posts it is the one who has infringed copyright I am not so sure that you could consider yourself to not be involved.
- abrookewood 10y agoWas this just Ebay for cars?? Not really that clear. "The Mountain View, Calif.-based startup, founded in 2013, was operating an online marketplace for used cars."
- LeoPanthera 10y agoThe eBay of cars is eBay. eBay Motors is hugely popular.
- hkmurakami 10y agoTheir "we will buy your car if it doesn't sell in X months" guarantee was the most egregious unforced adverse selection I've seen.
- dirtae 10y agoThat's a good point. Beepi seemed like they were just way too generous, in general. (See my comment elsewhere in this thread about them allowing you to charge your entire car purchase to a credit card.)
- underwater 10y agoThey would do a full inspection on the car before ever setting a price and were apparently picky about what they accepted. They also offered significantly less than the consignment price if it didn't sell. So it wasn't as bad as it seems on the face of it.
- prostoalex 10y agoThe pricing on the guarantee wasn't too generous, it's similar to what a used car dealership would be willing to quote you based on Kelly's Blue Book without seeing the car.
- dirtae 10y agoI bought a car on Beepi, and it was a great experience, much better than buying a used car from a traditional dealership or a private party (e.g., Craigslist). One thing that struck me as particularly crazy, though, is that they allowed you to charge your entire purchase to a credit card! That was great for me, since I got a ton of credit card points out of it, but it didn't seem very sustainable, and I guess it wasn't. Shift (one of their competitors) also seemed quite nice, but they didn't allow you to charge your car to a credit card, so that was one factor in my decision to choose Beepi instead.
- prostoalex 10y agoI sold my car through Beepi, and I basically pitched them against Shift on pricing. Both companies were an order of magnitude better than car dealership trade-in experience, Beepi's guaranteed offer just came a few bucks over Shift's guaranteed offer. It's a bummer if this model is not sustainable, the customer experience alone would definitely drive me towards Beepi (and Shift) next time I need to buy/sell.
- conchy 10y agoI also bought a car from Beepi, and it was also a wonderful experience for me. I chose them because all of the local car dealers scoffed when I offered to pay them in Bitcoin. So I went online, pressed a few bottons and bought a car online from Beepi with Bitcoin, which completely eliminated one of the most painful parts of buying a car (dealing with the bank). Of course at the time I thought it was incredible that in 2015 I could purchase AND PAY FOR a new car without leaving the comfort of my couch. But in retrospect if I would have paid in dollars and kept the Bitcoin, or waited until 2017, I could have bought a Lamborghini!
- beamatronic 10y agoThat is too bad. I was strongly considering them for my next car purchase.