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The failure of Sprig

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Re: The failure of Sprig

#31

Post by ska »

danellis wrote: post #19

> Nobody talks about failure in Silicon Valley What an odd thing to start with. People talk a lot about failure in Silicon Valley, to the point that it's a stereotype.

People talk a lot about it in the abstract, and there is a lot of armchair quarterbacking. I suppose all of that has a smidgen of value, if nothing else to set expectations of people starting out.

On the other hand, very few people with truly detailed internal knowledge talk about the why's and how's, especially avoiding 20-20 hindsight. It's a difficult enough thing to do objectively for yourself, and sharing it takes that up a notch. Especially when you're all but guaranteed to have a bunch of people tell you how you were obviously idiots; many of them having never so much as tried to build something new.

Re: The failure of Sprig

#32

Post by marcell »

opqpo wrote: post #21

That's why you should never start the Uber of X and the Amazon of Y. Because if the actual Uber and Amazon see that the market is good they will massacre you unless you're fortunate to get an offer from them.

Fwiw Instacart had the same problem, and it succeeded, even after Amazon acquired Whole Foods. It's really case-by-case, and depends on so many factors.

Re: The failure of Sprig

#33

Post by muzz »

SirensOfTitan wrote: post #3

> Govt. SF health + planning made our lives hell. They didn't like our innovations. We had to bribe officials ("lobbying"). San Francisco's population leans quite left, but they seem to really hate change over there. I've never lived in a place so hellbent on ensuring that nothing changes. In fact--the entire bay seems to hate change, and the peninsula may arguably be worse. There's that old saying: "you couldn't get…

He never says how the business responded to this. I.e. why didn't it shift to Oakland, San Jose, or even another metro area. Unless the business model only worked in San Francisco.

Re: The failure of Sprig

#34

Post by sharkmerry »

notyourday wrote: post #14
sharkmerry wrote: post #10

Earlier quoted context omitted.

> 2) Gross Margins (GM). As we grew, our burn rate grew too. We were losing money on every meal. If only we could get to critical mass. > We had epic revenue growth w/ burn rate growth. Soon we were burning $1.5-2M/mo! > We were always “1-2 months away” from managing the burn. I dont understand, how in good faith, he can bring up SF-regulations as issue #1. When issue #2 is the crux of all their issues. They lost mon…

People who are not in the actual retail restaurant industry do not understand that there's no way to make money with ghost kitchens. Theoretically, to make money with a ghost kitchen one needs it to be churning out a very large number of standard meals at a price that customers want to pay to achieve the economy of scale which at the same time requires an economy of scale in logistics, which has its own overhead. By…

ghost kitchens can absolutely make money. Them being done at scale with VC money, most likely not.

But as the below commenter said, if you can use same ingredients across multiple dishes, it reduces waste and can reduce COGS. A small restaurant can do it, the issue there is establishing a brand, but if all your orders are coming via 3rd party apps. not sure how much brand awareness you actually need

Re: The failure of Sprig

#35

Post by muzz »

> It was UberEATS, which launched that week.

He doesn't mention it specifically, but UberEATS was 15-minute delivery at the time, IIRC

Competitor SpoonRocket closed just 1 month later: https://www.inc.com/kenny-kline/how-spoonrocket-blew-135-mil...

Although, Postmates got into the game the month after that, in NYC: https://techcrunch.com/2016/04/19/postmates-launching-15-min...

Re: The failure of Sprig

#36

Post by vechagup »

fasteddie wrote: post #2

I loved Sprig. I used to use them as my example of a favorite product when asked in interviewed. Problem: I am hungry right now and can't/don't want to cook. Solution: As the founder notes, once signed in, it was literally three taps to get food to my door really quick. Also the design was beautiful. Doordash, UberEats, et. al have certainly (glactically) widened the variety of food I could order, but I always find m…

> We finally got some progress on margins, but it meant degrading the product: food is fickle.

> Less money in, worse food out.

I tried Sprig a few times and really found the food quality so underwhelming that I never became a repeat customer. Maybe I caught them during this period.

Re: The failure of Sprig

#37

Post by notyourday »

derefr wrote: post #16
notyourday wrote: post #14

Earlier quoted context omitted.

People who are not in the actual retail restaurant industry do not understand that there's no way to make money with ghost kitchens. Theoretically, to make money with a ghost kitchen one needs it to be churning out a very large number of standard meals at a price that customers want to pay to achieve the economy of scale which at the same time requires an economy of scale in logistics, which has its own overhead. By…

> a very large number of standard meals Or a number of meals all made of the same 5-to-7 ingredients arranged differently, i.e. the McDonalds / Taco Bell model.

McDonalds/Taco Bell do not have ghost kitchens. If all of their meals were completely and totally made off site and were delivered to the customer to order from an off-site then those would be examples of ghost kitchens.

Re: The failure of Sprig

#38

Post by notyourday »

sharkmerry wrote: post #34
notyourday wrote: post #14

Earlier quoted context omitted.

People who are not in the actual retail restaurant industry do not understand that there's no way to make money with ghost kitchens. Theoretically, to make money with a ghost kitchen one needs it to be churning out a very large number of standard meals at a price that customers want to pay to achieve the economy of scale which at the same time requires an economy of scale in logistics, which has its own overhead. By…

ghost kitchens can absolutely make money. Them being done at scale with VC money, most likely not. But as the below commenter said, if you can use same ingredients across multiple dishes, it reduces waste and can reduce COGS. A small restaurant can do it, the issue there is establishing a brand, but if all your orders are coming via 3rd party apps. not sure how much brand awareness you actually need

> ghost kitchens can absolutely make money.

That is as assumption that has been made time and time again and it always failed. The most important part of a successful kitchen is a near zero dwell time. The smallest dwell time is achieved by having a kitchen be colocated with the customer.

Re: The failure of Sprig

#39

Post by derefr »

notyourday wrote: post #37
derefr wrote: post #16

Earlier quoted context omitted.

> a very large number of standard meals Or a number of meals all made of the same 5-to-7 ingredients arranged differently, i.e. the McDonalds / Taco Bell model.

McDonalds/Taco Bell do not have ghost kitchens. If all of their meals were completely and totally made off site and were delivered to the customer to order from an off-site then those would be examples of ghost kitchens.

I didn’t mean to imply that they did; just that their kind of menu-planning approach—of having many different (fast) final preparations that all take as input the same small set of pre-cooked ingredients—would also be a workable model to copy, to achieve the economies of scale that ghost kitchens require.

Re: The failure of Sprig

#40

Post by kjs3 »

morley wrote: post #12

> Govt. SF health + planning made our lives hell. They didn't like our innovations. What innovations did they make that the health department didn't like?

Exactly...I'd like to understand that as well. I really don't want to eat food where someone is 'innovating' (disrupting?) safety and hygiene regulations without some check and balance. And I don't think this 'attitude' on the part of health inspectors would be unique to SFO...
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