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By the same token, you could argue that investment screws up the software market, because companies operating at a loss hire employees they couldn't otherwise a

by beat 13y ago

By the same token, you could argue that investment screws up the software market, because companies operating at a loss hire employees they couldn't otherwise afford. Again, a: they cannot sell at a loss at scale, and b: venture capital is invested with the expectation of building business model infrastructure, not being a fly trying to beat whales on cost. If they're actually blowing VC money on underpricing commodities like food rather than hiring programmers and marketing, their VCs should be ripping them a new one.

jbooth 13y ago
No, you can't make that same argument. Software is fundamentally scalable, due to incremental copies being free after the first copy costs a lot of money to produce. Food service is about as far towards the other end of the scale as you can get. Like I said, if they were making a unit profit and an overall loss due to building out their infrastructure, that would be fine and normal capitalism. They're not. I agree that their VCs should be ripping them a new one, or should not have invested in this plan in the first place. It's one thing for a 22yo to think you can make easy money in food service, the VCs should know better. What's next, the VCs investing in kids starting a bar with their friends?
- beat 13y ago
  Look at their business model (at least for SpoonRocket). They're directly addressing the production cost of food - limited menu (two choices a day), menu driven by availability (seasonalize ingredient cost), highly automated delivery (meals loaded in car before sale - use the car as the warming bin). Limiting to two meal choices a day isn't an option for most restaurants. This is a significant efficiency optimization in manufacturing that also drives significant optimization in delivery. This doesn't strike me as a dumb hack at all. Quite the contrary, I'm very impressed. I wouldn't be surprised at all if they're actually profitable from a production/delivery standpoint, and the losses are just software and market development. (I have many years of restaurant experience in addition to software experience. I see the optimizations. Wow!)

by beat 13y ago

jbooth 13y ago

No, you can't make that same argument. Software is fundamentally scalable, due to incremental copies being free after the first copy costs a lot of money to produce. Food service is about as far towards the other end of the scale as you can get. Like I said, if they were making a unit profit and an overall loss due to building out their infrastructure, that would be fine and normal capitalism. They're not. I agree that their VCs should be ripping them a new one, or should not have invested in this plan in the first place. It's one thing for a 22yo to think you can make easy money in food service, the VCs should know better. What's next, the VCs investing in kids starting a bar with their friends?

beat 13y ago
Look at their business model (at least for SpoonRocket). They're directly addressing the production cost of food - limited menu (two choices a day), menu driven by availability (seasonalize ingredient cost), highly automated delivery (meals loaded in car before sale - use the car as the warming bin). Limiting to two meal choices a day isn't an option for most restaurants. This is a significant efficiency optimization in manufacturing that also drives significant optimization in delivery. This doesn't strike me as a dumb hack at all. Quite the contrary, I'm very impressed. I wouldn't be surprised at all if they're actually profitable from a production/delivery standpoint, and the losses are just software and market development. (I have many years of restaurant experience in addition to software experience. I see the optimizations. Wow!)