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Why didn't they think "Oh geez, our idea isn't that revolutionary and anyone, including companies such as lyft or Uber with giant pockets can come in and swoop
by systemvoltage 6y ago
Why didn't they think "Oh geez, our idea isn't that revolutionary and anyone, including companies such as lyft or Uber with giant pockets can come in and swoop our lunch?" That should be the first day conversation. I am sure they had that, it would be stupid to not have, but the stupid part is about unsustainable growth whilst ignoring the competitive landscape with delusion.
I know retrospectives are always easy to do and criticize, but these types of ultra-fast reckless growth companies do not pause for a second and think about their risks. They're smoking that drug of % growth and VC funds pouring in. I live in SV and this type of thinking is everywhere. Flail without foundation. Why not think about building something that no one can just easily come in and render you completely useless? That means that the business idea wasn't strong enough and it was mostly scaffolding - there was no foundation. IP was thin ice. This is pretty common with these delivery businesses.
Build something that no one can easily replicate or compete with you. Build it so good that even if a competitor emerges, they have a lot of catch up to do. Build it slow, methodically and strategically. Unfortunately, growth hacking and bullshit pitches to the investors take precedence in SV from what I've seen. Not all companies are like that, but a lot of these hot bottle rocket companies die because of many aspects that were not thought out. Risk taking is great, reckless risk taking is not. A solid business is like a diesel engine than a hot bottle rocket. It is unstoppable once it picks up.
I love companies like Boston Dynamics. Took forever to grow. They spun off from the MIT Leg Laboratory in the 90's, built real IP, not some VC backed presentation with fancy graphics. Zero expenditures on marketing, all in on R&D and engineering until now. They're unstoppable and they haven't even started yet. I know a delivery business is very different from BD, just trying to make a general point about building IP. Any amount of money that Microsoft + Apple + Google all combined can throw billions and billions on this but they won't be able to compete with BD immediately. It takes time and throwing money at it doesn't help at all. That's the best hedge you can have!
- martythemaniak 6y agoBecause if everyone thought that, then no one would do anything. Basically every single company Apple, Google, FB, Tesla could have thought that and just concluded that they should not even try. And that's far, far worse for society than some food business not working out.
- tonystubblebine 6y agoI don't think you can really pay much attention to potential competitors. It's common to have competitors but rare to have good ones. And so, yeah, a lot of companies have deep pockets, but also that works against them in a particular way. The line of business that's making most of the money is also getting most of the good talent and leadership.
- derefr 6y agoI think the GP's point is that some business models are predicated on having no competition, where even bad competitors will beat you if they just have deep-enough pockets to outlast you. Compare and contrast: individuals suing large corporations. Even if the individual is in the right (i.e. has the "competitive advantage"), the corporation will still often "win" because it can just afford to keep delaying the trial longer and longer, until you run out of funds to keep the suit going. Or, to put that another way: you can't run a siege without a supply train. The city will always have more food than your army brought with it. Unless more capital is flowing in to match the rate of replacement, they're eventually going to win.
- skrebbel 6y agoComments like these are why many founders prefer not to share their failure stories so candidly. It's a well written, extremely well summarized postmortem. Of course it's obvious after the fact what they did wrong. You're shooting at an empty goal and, frankly, it's not very interesting.
- systemvoltage 6y agoI recognize it is easy to take shots at failures and I prefaced it with this recognition. It feels like this is repeating pattern for delivery businesses, and it deserves harsh criticism. Anything with Uber for _____. Would you give a pass to Juicero which raised $118M? Doesn't it deserve harsh criticism? Or we want to learn from Juicero's insanely delusional value proposition and may be inspire others to try again? What about Theranos? I don't give Sprig the same footing for a postmortem than say, Gumroad: https://marker.medium.com/reflecting-on-my-failure-to-build-a-billion-dollar-company-b0c31d7db0e7 https://marker.medium.com/reflecting-on-my-failure-to-build-...
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- jhpriestley 6y agoWhich startup business model do you have in mind, that would survive Uber entering the same market, selling the same product but losing money on every transaction for five years?
- d_burfoot 6y ago> I love companies like Boston Dynamics.... Any amount of money that Microsoft + Apple + Google all combined can throw billions and billions ... I hate to burst your bubble, but BD was OWNED by Google for years, until they sold it to SoftBank because they couldn't figure out how to make money on it.
- systemvoltage 6y agoYes aware of that - and they were being pushed around. BD was not part of anything when it started for over 15 years.