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Blue Apron Plans to Cut 24% of Staff Barely a Month After IPO
- this_user 9y agoThis IPO has been a complete disaster: The initially lowered the price range, and then did the IPO at the low end of $10. Stock opened for trading at exactly that level, instead of higher, and has lost around 40% since then. Normally this IPO would not have been that big of a deal. But since the tech IPO pipeline is largely frozen at the moment, APRN was widely seen as a canary in the coalmine for the sector. The fact that it was this poorly received, only underlines the fact that there is currently sector rotation out of tech going on.
- whipoodle 9y agoYeah, makes sense. Any ideas what the next place to dump institutional money is? Energy? Transportation?
- rm_-rf_slash 9y agoCryptocurrencies.
- ceejayoz 9y agoDump being the correct operative word, for sure.
- hari_seldon_ 9y agoMade me chuckle -- agreed.
- toomuchtodo 9y agoCommodities.
- lenley 9y agoTransportation / Logistics (energy is shifting away from carbon-based, populations are shifting to cities -- especially in developing countries). Food. Moving from traditional livestock to other more efficient sources of protein (plant and insect).
- jliptzin 9y agoWhat makes blue apron a tech IPO?
- criddell 9y agoI'm not certain, but I'd guess it's two things: 1. You interact with them almost entirely through the web. 2. Significant logistics around recipe design, ingredient acquisition, and delivery. If neither of those qualifies them as a tech IPO, then what makes Uber a tech company?
- manigandham 9y ago> then what makes Uber a tech company Nothing. They are a transportation/logistics provider.
- hari_seldon_ 9y ago^ this. I think the bigger question becomes "why does it matter if something is a tech company?" Is it because that is what makes it easier to raise money today? If that's the case, then I wish more investors and analysts would go back to first principles and understand why slapping a "tech" label on a company does not necessarily mean it will scale well or succeed in the long run.
- barkingcat 9y agoUber's primary competitor are taxicabs - they are a transportation company.
- criddell 9y agoThere's a Quora question[1] about this that has a different take than you: > Uber is a tech company because that's what we do. We create a service that powers a marketplace through technology, and we provide apps that let people participate to this marketplace. Specifically, that marketplace lets individual users or businesses buy transportation services from partners. > We are not a transportation company because we don't transport goods or people - our partners do. We just facilitate that. And we are not a cab company for the same reasons, and on top of this, we don't own a fleet of vehicles. 1: https://www.quora.com/Why-is-Uber-considered-a-technology-company-and-a-lot-of-people-place-it-among-tech-giants-like-Google-Facebook-etc https://www.quora.com/Why-is-Uber-considered-a-technology-co...
- manigandham 9y agoThis isn't a tech* company. It's a prepared food/grocery delivery business with too much VC and some fancy design. *there's actually no such thing as a tech company at all
- Spivak 9y agoI think it's more accurate to say that every company is a tech company in some capacity.
- manigandham 9y agoHow is that more accurate? Every company uses technology, at which point saying anything like "tech company" is a useless modifier compared to just "company".
- potatolicious 9y agoI think "every company is (nowadays) a tech company" is a relatively fair assessment, even if somewhat exaggerated. Increasingly, successful companies require ownership of proprietary technology, rather than purchase of commodity technology from third parties, and in that way more and more companies - even those in "traditional" fields - have invested in in-house tech R&D. More importantly, software engineering has become a critical part of companies' success, even if the company doesn't ship software to end users (see: UPS, FedEx, Visa, MasterCard). It certainly seems like the old definitions of "tech company" is increasingly archaic - is Amazon a tech company? Or are they just a retailer that uses technology? Is Grubhub a tech company, or just a delivery service with a frontend? > "Every company uses technology, at which point saying anything like "tech company" is a useless modifier compared to just "company"." I think that's exactly the point. Software has become so critical to almost every field (and more importantly: in-house developed software) that many companies have become tech companies, and those that haven't are either getting on the bandwagon shortly, or will perish soon after. There may come a point where "company" vs. "tech company" loses its distinction, but for now it seems like "companies" are becoming "tech companies" rather quickly.
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- odonnellryan 9y agoI have Blue Apron and largely they're really good. It's surprising to see they aren't doing well, apparently?
- this_user 9y agoWell, a company can provide a good service but be a terrible business. See TWTR or SNAP as examples. Uber would be another. They're mostly burning cash without a clear path to profitability. Given their recent scandals, an IPO seems to be extremely far away.
- toomuchtodo 9y ago"Non-profits generating consumer excess attempting to shift the financial burden to public markets"
- kec 9y agoThey don't have a great moat (all recipes are available for free online for instance) and the meal kit market has gotten very, very crowded since they invented it 5 years ago.
- hari_seldon_ 9y agoAgreed. I also saw a talk by a PM from Blue Apron a while back, and it seems that another problem is that people subscribe with the hopes of cooking more but then discover that having the meal kit still involves enough time and friction to limit them from doing it. I think that many people love the idea of cooking more often but still wish it were more convenient. To Blue Apron's credit, they have made it fairly streamlined!
- ScottBurson 9y agoIt takes me about half the time to make a Gobble meal as a Blue Apron meal. Blue Apron is streamlined relative to doing it completely from scratch, but it's still more work than I have time for.
- Spivak 9y agoLook, I get that most people are just going to read the headline, hell most people who share this article will probably never open it, but that's really no excuse for writing an 'article' that has no more substance than the headline. Questions I want answered in an article like this: * What is Blue Apron's reason for the job cuts? * What are Blue Apron's plans for the future? Focusing on core markets, expansions, grocery store partnerships, more product offerings? * What do their finances look like? Things like customer acquisition, subscription length, service costs? How did the job cuts affect them? * What is the author's analysis of the situation? * How's the meal-prep market doing overall? * Is there a downward trend in these kinds of convenience services? * Was this going to happen anyway or was there increased pressure from the IPO? * Is this typical for companies that IPO?
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- whatok 9y agoThe WARN notice showed up about an hour and a half ago. It's still a developing story.
- tyrust 9y ago>that's really no excuse for writing an 'article' that has no more substance than the headline I don't really agree. This is breaking news and it is unlikely that the distributor has any of the answers to the questions you've asked. Readers of a new distributor (here, Bloomberg) get the convenience of having to only follow one source to get a variety of breaking news.
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- padobson 9y agoSeems like there's an opportunity for a publishing platform that can pull up answers to rudimentary questions like these and include them in sidebar to breaking new like this.
- digitalneal 9y agoDidn't Blue Apron and Square Space alone underwrite like half the podcasts in the world last year? Wonder what this means for podcast advertising in Q4/Q1-18
- peternicky 9y agoNever heard 'underwrite' used in that context. Can you provide links?
- deleted 9y ago[deleted]
- withdavidli 9y agothink they are using it as a synonym for sponsor. it does show up under the definition for underwrite, never heard of it used this way either.
- digitalneal 9y agoI was using the term in a sarcastic tone around the buying of ad space. I'm a weird bird, apologies for the confusion around terminology.
- mkmk 9y agoA bit of context: Due to regulations about advertising on publicly owned wavelengths, one cannot place a 'direct response' ad on a public radio station (think of your local NPR station here). Instead, there is an 'underwriting message' allowed– typically shorter than a traditional ad, and with no direct sales pitch. Usually somebody that buys podcast ads is also buying radio ads, and sometimes the terms they use get muddy. 'Underwrite' is probably the wrong term to use for podcast advertising, but since it's frequently used for public radio the meaning would be clear if you were in the industry.
- jonbarker 9y agoSo you can't use offer codes and promo codes on fm/am? Pretty sure I've heard people use those. Is my definition of "direct response" not correct?
- cs702 9y agoThis is EXTREMELY unusual -- in fact, unheard of -- for a company that just consummated its IPO. Historically, companies that IPO are in growth mode; they use the IPO to raise more money to fund more investment in growth opportunities. Think of it this way: in an IPO (initial public offering), a typically young company offers newly issued shares to public-market investors in exchange for fresh money. The investors buy those newly-issued shares if they believe the company can put the money to good use, for example by investing in growth opportunities. If investors believe the company has no growth opportunities or is in retreat, an IPO is unlikely to be successful. Yet here is a company that consummated its IPO only a month ago and now is firing a quarter of its employees!
- forthefuture 9y agoFrom what I understand of the last 15 years, IPOs are now for cashing out when you've manufactured a solid enough filing to convince normal people that you're worth what the 10 VCs who gave you money say you're worth. No company IPOs if they don't absolutely have to. It's like conceding that you can't make enough profit privately to recoup your investment on any kind of reasonable timescale.
- whipoodle 9y agoRight, in a certain sense it seems like they filed their IPO at just the right time.
- ChuckMcM 9y agoIn theory that can't be true. To IPO you don't need to convince "normal people" to IPO you need to convince institutional investors (those that run funds that are called on to fund retirement payouts, people who manage university endowments etc) on a road show that investing in your company will be a 'good thing' because the company is growing. The S-1 and prospectus should tell you all about the risks in clear detail and what is and is not known about the market. These people are not 'normal' people in that they analyze investment opportunities all the time. They usually ask detailed questions and want detailed answers. Usually a representative from the independent accounting firm that audited your financials is along to answer questions as well as the company's CFO to put the best possible spin on it. These investors are not going to buy your initial stock and then turn around and dump it because that would kill the value of any stock. Instead they have to believe that they can buy your stock and hold it for 12 - 36 months and it will become more valuable so that if they chose to they could sell it into the market over enough months to not disrupt the price and make a return on the money they invested. They need that return because the people who pay them to manage the fund demand a certain standard of performance or they get fired. If the goal was to just 'cash out' you have to convince all of these people that you're not really going to cash out in order for them to buy into your IPO. That is hard to do with dozens of new investors.
- losteverything 9y ago<cutting 1,270 jobs from its New Jersey facility according to a public notice Friday. It had 5,202 workers as of March 31. Doesnt that seem like a lot of employees? I know an average walmart non supercenter store has around 210 total employees. There tasks must be very labor intensive
- pavel_lishin 9y ago> There tasks must be very labor intensive If these are the folks doing the food prep, almost certainly. Have you ever used something like Blue Apron? All the ingredients have to look good, and be packaged into little individual servings - think two cloves of garlic in a vacuum sealed bag. Times six for the five other ingredients in the bag, many of which are probably more fiddly than "put two cloves of garlic into bag, and place into vacuum sealer." Times, say, five thousand packages that have to go out and get delivered tonight so people can make their dinner.
- losteverything 9y agoSo.. Their orders won't decrease 24% The remaining employees will have to work faster and harder.
- pavel_lishin 9y agoOr the quality of their product may suffer. Or they've come up with a way to automate or 'outsource' garlic-bag-stuffing.
- VLM 9y agoMost likely once the garlic guy is fired, the recipe selections will no longer include garlic-lime chicken, or situation extremely similar to this.
- thesmallestcat 9y agoWhat is extreme similarity? Identity?
- beager 9y agoFrom the article, they purport to be gunning to automate the function of most of the folks who will be cut, but whether the cuts are based on some dire condition of Blue Apron or are just part of getting more efficient is obfuscated by the site move and clever explaining. More to the point in the comments here about Blue Apron and other underperforming IPOs, and the sense of IPOs being cash-out schemes for VCs and founders: Is there a growing climate of such IPOs that would elicit a feeling that tech IPOs are a means to extract money from the public/an exchange by IPO'ing high and letting the share price slide to something real?
- lamename 9y ago"... the meal-kit delivery company shifts operations to a bigger site opening in the state later this year...the cuts reflect employees who chose not to make the move." Sucks for employees who can't make the move, but from the company's perspective, this just precedes growth, no?
- shampine 9y agoYes it seems that way and the headline is extremely misleading.
- ControlledBurn 9y agoSeems a bit clickbait-y to me, as the article implies the 1,270 cuts are employees that chose not to move to a new facility that's only 15 miles away.
- bbarn 9y agoA bigger facility, at that. Sounds less like trouble and more like growth.
- leothekim 9y agoThat headline is misleading. CNBC is reporting this: "The company's employees were given the option to transfer to the new facility located in Linden, New Jersey. The 1,270 cut jobs indicate those who decided not to transfer, the company said." https://www.cnbc.com/2017/08/04/blue-apron-to-cut-more-than-1200-jobs-by-october.html https://www.cnbc.com/2017/08/04/blue-apron-to-cut-more-than-...
- leothekim 9y agoAnd now the Bloomberg headline for the same link changed to "Blue Apron Is Closing Jersey City Facility and Moving 1,270 Jobs". This is irresponsibly different from the original "Blue Apron Plans to Cut 24% of Staff Barely a Month After IPO" headline.
- wonder_bread 9y agoTitle is absurdly click bait once you actually read a couple of articles about what they are actually doing
- ProfessorLayton 9y agoLooks like this isn't true: https://twitter.com/mdudas/status/893540763921002496 https://twitter.com/mdudas/status/893540763921002496
- victor106 9y agoBlue Apron sucks. This week was the first time we ordered from them. The garlic they sent was spoiled and rotten. It took quite sometime to make and the instructions are unclear. We will trying other services but never Blue Apron
- jajern 9y agoWe've been through most of them. I liked Hello Fresh but that wasn't amazing either. Even though ingredients are mostly prepped the preparation and cooking can be pretty time consuming. Lately we've been working on recipes with small ingredient lists that share ingredients. It's cheaper, easier and bigger portions. I like having leftovers to take to work the next day. We don't like grocery shopping but most of the stores near us are doing either at the door pickup or even delivery.