As someone who's ordered from spoon rocket dozens of times over the past two years, I'm definitely sad to see it go.
A quick timeline (from what I can remember):
- Initially started out in Berkeley / Emeryville area by a couple of Berkeley alumni who had previously launched a food delivery startup focused on midnight munchies (aka, unhealthy food for college-type students). Each meal was initially only $6, tasted quite good, and delivery only took ~15 minutes.
- Expanded to Oakland area (first Downtown, then eventually other areas like Lake Merritt). Meals were still only $6, taste was usually good but sometimes wasn't as good. Delivery was still fairly fast (usually - Expanded to SF. Meals became more expensive and had variable pricing (I think it was first $8, $10, then $12, depending on which dish). A delivery fee ($2.50) was created. Food quality dropped (usually was OK, but not as good as it used to be); meals could take up to 1hr to get delivered (usually under - Started their elite food delivery plans which provided free meal delivery and a bit of extra credit, by agreeing to pay upfront each month (e.g. $20).
Thoughts:
- From a business perspective, I think SpoonRocket (SR) made a lot of the right moves. While a lot of people say "disruptive innovation" loosely right now, I think SR actually did it by: 1) focusing on a low-end market that wasn't well addressed (e.g. college students), 2) used a technology to rapidly improve the experience for this low-end market (e.g. using Google Maps to efficiently route drivers to deliver on-demand meals), and 3) go upstream in the market to gain market share in higher-end consumer segments.
- So why did SR fail? I'm speculating here, but I think it's because scaling all these type of on-delivery startups is really, really hard work. Unlike Google or Facebook which could effortlessly scale up across the world with its technology-heavy solution, scaling up a company like SR requires hiring a linear amount of employees like drivers and support staff. As others have noted, it's difficult to get the economics right for an inherently low-margin business with a high labor component.
- Can other food startups succeed? I'm willing to bet most food startups probably won't survive this fundraising crunch if it extends another year. As far as I could tell, SR was ran as a very lean operation where they tried to batch deliveries, produce a small set of meals in large quantities, and focused on efficiency (e.g. calling you two minutes ahead of time to minimize delivery driver's waiting time). If SR couldn't make the economics work, I'm not sure how others could. Perhaps by going more high-end than SR, and charging a higher price (a la Munchery) or is it perhaps by selling a lot more quantity?
- Lastly, what I'm hoping for is the "Airbnb" of food, where regular people could cook meals and sell them to neighbors on a marketplace with reviews, pictures, etc. Of course the economics would be challenging like any food business, but that's the kind of service that I could see myself regularly using. There's also the regulatory side (after all Airbnb itself has followed the policy of 'asked for forgiveness, rather than permission') Who doesn't like the sound of buying a home cooked meal from a neighbor?