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I am amazed that against all common advice people still venture out into heavily competitive segments with strong incumbents. I am impressed and at the same tim

by baxtr 6y ago

I am amazed that against all common advice people still venture out into heavily competitive segments with strong incumbents. I am impressed and at the same time wonder how exactly they managed to convince investors. Would love to see their pitch deck.

albertgoeswoof 6y ago
It’s a growing market, maybe not everywhere. It’s also hard to get right- the incumbents don’t have a good business model and may collapse in short order.
pm90 6y ago
If there are multiple players in the market, they will either try to buy or kill the new players. Established incumbents are often not nimble enough to quickly match the newbies. If the newbies move fast and corner an important market segment, they can either replace the incumbent or be bought out by them. Both are opportunities where investors could reap big returns.
Jnr 6y ago
Not sure how popular it is elsewhere, but here where I live, Wolt is the most popular food delivery service by a large margin. And their service is great. For us it is like Spotify or Netflix, but for food. The rest of the EU and world probably deserve and would appreciate a service like that.
- szatkus 6y ago
  Yup, even before pandemic I saw a lot of Wolt boxes in some cities, although they don't serve where I live.
- emptyfile 6y ago
  I honestly thought it was EU wide, but apparently their main markets are scandinavia and eastern europe. Great service, great business model.
  - emteycz 6y ago
    Food apps are extremely popular in central/eastern eu, here in Czechia the local DameJidlo is also a largely successful company. Wolt is now becoming a serious competitor to them, they already have a much better app.
    - magnusmundus 6y ago
      Not to detract from your point re competition, but isn't DameJidlo one of the brands of Delivery Hero? Do they have an engineering office in Czechia?
      - emteycz 6y ago
        It was sold to DeliveryHero (if that's indeed the current owner), originally a Czech company; they had a rather large engineering centre here when it was still Czech, not sure about the present. The founder went on to create Rohlik.cz
  - odiroot 6y ago
    They're also present in Central Europe but they're in no way the most popular.
  - ghaff 6y ago
    Probably a good data point that some of these delivery services are relatively local. Something like Uber there's an advantage for travelers to have it in a bunch of different places if they already have the app installed. On the other hand, I don't even use Uber once a year locally. Whereas with food delivery, I don't really have decent options. But, if I did, I would probably use it now and then at home. But I think it's accurate to say that I have never used food delivery while traveling.
  - flemhans 6y ago
    They go for cities where they feel like they have a chance, and where there are not already 10 other competitors. That's why they didn't go for e.g. London. At least that was the original thinking of one of the founders, according to an article I read in some in-flight magazine.
- jarv 6y ago
  They are the main food delivery in Slovenia and have pretty much completely taken over incumbent due to the better service and better quality application.
user-the-name 6y ago
I can offer this piece of insider information: Starting your business in the very high-cost-of-living Finland really helps. (High cost of living means having to pay high fees to couriers and so on, which means it is impossible to do even do if you do not work out the economics properly right from the start, which then gives a huge advantage moving forward.)
- kakoni 6y ago
  According to various sources Finnish couriers charge somewhere between 13-14e per hour as contractors (They are not employees but self-employed entrepreneurs) To give a reference point, cleaning contractors typically charge around 30e per hour.
  - fy20 6y ago
    Is that €30/hr what a cleaning company charges to clients, or what the workers get? Finland doesn't have a minimum wage, so I don't understand what's typical there, but it seems rather high if it's the later - in UK/France/Germany they'd get little more than €10/hr.
    - antupis 6y ago
      What cleaning company charges, then there is lots taxes and tax-like payments and cleaner gets probably that 10€/hr.
    - kakoni 6y ago
      €30/hr would be what self-employed entrepreneur would charge from the clients (versus employee in cleaning company earns somewhere in the €10/h range.)
JonAtkinson 6y ago
I guess investors suffer from FOMO just like the rest of us.
danielscrubs 6y ago
Well, depends on what you compete on. Tech stack? Getting drivers? Getting customers? Uber Eats for example cannot deliver to me, but several others can. Tech stack isn’t that expensive to build. I think it’s easy for programmers to think that the whole world revolves around tech stacks and not see how you can be innovative in getting drivers for example. Can’t really say I’m loyal to any platform when it takes less than one min to sign up for another. It’s the same with Amazon which is just the worst shopping experience I’ve ever encountered and slow deliveries to boot and I’m very happy they have local competition that blows them out the water.
- user-the-name 6y ago
  Wolt competes, in large part, on overall user experience.
  - jacquesm 6y ago
    An in places where there is relatively little competition because the big players have focused on juicier targets. In the Baltics for instance Wolt is doing quite well.
ignoramous 6y ago
> I am amazed that against all common advice people still venture out into heavily competitive segments with strong incumbents. "There is always room": https://archive.is/xPiWc#selection-272.98-272.100 https://archive.is/xPiWc#selection-272.98-272.100 Also, I think there are a lot of exceptions and counter examples especially in the startup world. According to some, if you're out to build a monopoly, that's a different ball-game, and it then makes sense to steer clear of any market with competition with deep pockets (walmart) unless you've something revolutionary up your sleeve that can't be easily replicated / duplicated (amazon). One of the most striking examples I know is facebook.com: They had fierce competition from copy-cats (vk) and other companies that had their own take on social (orkut, friendster). Some lost (path, color), others won (whatsapp, twitter), and/or are winning (tiktok). There is always more room than one may be led to think.
ransom1538 6y ago
Slide 1 Food delivery: A hyper competitive, low margin, man hour intensive, inventory rotting, logistical & insurance nightmare.
- ashleshbiradar 6y ago
  On the other hand, cloud kitchens
ma2rten 6y ago
Google wasn’t the first search engine.
Sharlin 6y ago
There were no strong imcumbents in the market that Wolt started in. Indeed right now Wolt is the strong incumbent, with Foodora its sole competitor if you disregard local small-scale pizza joints etc.

by baxtr 6y ago

albertgoeswoof 6y ago

It’s a growing market, maybe not everywhere. It’s also hard to get right- the incumbents don’t have a good business model and may collapse in short order.

pm90 6y ago

If there are multiple players in the market, they will either try to buy or kill the new players. Established incumbents are often not nimble enough to quickly match the newbies. If the newbies move fast and corner an important market segment, they can either replace the incumbent or be bought out by them. Both are opportunities where investors could reap big returns.

Jnr 6y ago

Not sure how popular it is elsewhere, but here where I live, Wolt is the most popular food delivery service by a large margin. And their service is great. For us it is like Spotify or Netflix, but for food. The rest of the EU and world probably deserve and would appreciate a service like that.

szatkus 6y ago
Yup, even before pandemic I saw a lot of Wolt boxes in some cities, although they don't serve where I live.
emptyfile 6y ago
I honestly thought it was EU wide, but apparently their main markets are scandinavia and eastern europe. Great service, great business model.
- emteycz 6y ago
  Food apps are extremely popular in central/eastern eu, here in Czechia the local DameJidlo is also a largely successful company. Wolt is now becoming a serious competitor to them, they already have a much better app.
  - magnusmundus 6y ago
    Not to detract from your point re competition, but isn't DameJidlo one of the brands of Delivery Hero? Do they have an engineering office in Czechia?
    - emteycz 6y ago
      It was sold to DeliveryHero (if that's indeed the current owner), originally a Czech company; they had a rather large engineering centre here when it was still Czech, not sure about the present. The founder went on to create Rohlik.cz
- odiroot 6y ago
  They're also present in Central Europe but they're in no way the most popular.
- ghaff 6y ago
  Probably a good data point that some of these delivery services are relatively local. Something like Uber there's an advantage for travelers to have it in a bunch of different places if they already have the app installed. On the other hand, I don't even use Uber once a year locally. Whereas with food delivery, I don't really have decent options. But, if I did, I would probably use it now and then at home. But I think it's accurate to say that I have never used food delivery while traveling.
- flemhans 6y ago
  They go for cities where they feel like they have a chance, and where there are not already 10 other competitors. That's why they didn't go for e.g. London. At least that was the original thinking of one of the founders, according to an article I read in some in-flight magazine.
jarv 6y ago
They are the main food delivery in Slovenia and have pretty much completely taken over incumbent due to the better service and better quality application.

user-the-name 6y ago

I can offer this piece of insider information: Starting your business in the very high-cost-of-living Finland really helps. (High cost of living means having to pay high fees to couriers and so on, which means it is impossible to do even do if you do not work out the economics properly right from the start, which then gives a huge advantage moving forward.)

kakoni 6y ago
According to various sources Finnish couriers charge somewhere between 13-14e per hour as contractors (They are not employees but self-employed entrepreneurs) To give a reference point, cleaning contractors typically charge around 30e per hour.
- fy20 6y ago
  Is that €30/hr what a cleaning company charges to clients, or what the workers get? Finland doesn't have a minimum wage, so I don't understand what's typical there, but it seems rather high if it's the later - in UK/France/Germany they'd get little more than €10/hr.
  - antupis 6y ago
    What cleaning company charges, then there is lots taxes and tax-like payments and cleaner gets probably that 10€/hr.
  - kakoni 6y ago
    €30/hr would be what self-employed entrepreneur would charge from the clients (versus employee in cleaning company earns somewhere in the €10/h range.)

JonAtkinson 6y ago

I guess investors suffer from FOMO just like the rest of us.

danielscrubs 6y ago

Well, depends on what you compete on. Tech stack? Getting drivers? Getting customers? Uber Eats for example cannot deliver to me, but several others can. Tech stack isn’t that expensive to build. I think it’s easy for programmers to think that the whole world revolves around tech stacks and not see how you can be innovative in getting drivers for example. Can’t really say I’m loyal to any platform when it takes less than one min to sign up for another. It’s the same with Amazon which is just the worst shopping experience I’ve ever encountered and slow deliveries to boot and I’m very happy they have local competition that blows them out the water.

user-the-name 6y ago
Wolt competes, in large part, on overall user experience.
- jacquesm 6y ago
  An in places where there is relatively little competition because the big players have focused on juicier targets. In the Baltics for instance Wolt is doing quite well.

ignoramous 6y ago

> I am amazed that against all common advice people still venture out into heavily competitive segments with strong incumbents. "There is always room": https://archive.is/xPiWc#selection-272.98-272.100 https://archive.is/xPiWc#selection-272.98-272.100 Also, I think there are a lot of exceptions and counter examples especially in the startup world. According to some, if you're out to build a monopoly, that's a different ball-game, and it then makes sense to steer clear of any market with competition with deep pockets (walmart) unless you've something revolutionary up your sleeve that can't be easily replicated / duplicated (amazon). One of the most striking examples I know is facebook.com: They had fierce competition from copy-cats (vk) and other companies that had their own take on social (orkut, friendster). Some lost (path, color), others won (whatsapp, twitter), and/or are winning (tiktok). There is always more room than one may be led to think.

ransom1538 6y ago

Slide 1 Food delivery: A hyper competitive, low margin, man hour intensive, inventory rotting, logistical & insurance nightmare.

ashleshbiradar 6y ago
On the other hand, cloud kitchens

ma2rten 6y ago

Google wasn’t the first search engine.

Sharlin 6y ago

There were no strong imcumbents in the market that Wolt started in. Indeed right now Wolt is the strong incumbent, with Foodora its sole competitor if you disregard local small-scale pizza joints etc.