31–40 of 95 posts
Earlier quoted context omitted.
A couple of pieces of legislation in the 1940s and 1950s had the effect of encouraging companies to offer health benefits in lieu of others forms of compensation. Seems to have just snowballed from there.
That doesn't make it right.
Amazing write up, thanks for this. Question though - I always thought hiring movers was a higher-end service that targeted richer people? Most people I know rent a truck or U-haul and get their friends to help move for a case of beer...
Well, U-Haul's business is fucking people. There's a long story, but briefly, they promised a truck would be available, it wasn't, we found another, the manager swore he could see it on the lot... and it wasn't actually there. Meanwhile we had hired people to put stuff in the truck and they were sitting at our apartment waiting for us while we were scrambling a third time to actually get a supposedly fully reserved t…
Fortunately hertz penske saved us with a much better price (much less than the original u-haul) on short notice and gave us a great truck.
Very few people understand just how difficult it is to operate in the moving industry. Having worked with a lot of moving companies, here are just a few reasons: -In terms of stress, moving ranks just under death and divorce. Movers joke that half their job is carrying furniture, the other half is therapist. -1 in 5 moves involves some kind of claim. This isn't because movers are careless, it's just the nature of mov…
15-20% margins is by no means slim.
This gives the appearance that Walnut founders either didn't perform this research (seems unlikely given the research-heavy approach they displayed) or had a large blind spot when deciding to move forward, a bit of blind optimism that somehow it might work out.
"In short, we found product-market fit." "Despite our early successes, we’ve decided to close Walnut. Our tests revealed that we could create an experience customers loved, but we doubted our ability to be profitable long-term." If people weren't willing to pay for a product you were offering at a price that would sustain the business, then you did not in fact find a product-market fit.
I don't much care about the semantics of product market fit, but there are a lot of companies - some with astronomical valuations - that sell things at prices that won't sustain the business. These guys could have taken other people's money and done the same thing. "We just need to buy market share until the autonomous moving robots are available!" I applaud them for not doing so. And FWIW I usually find these autops…
Sure, there are companies with astronomical valuations with unsustainable business, but for whatever it is worth they seem to be good at marketing/presenting to VCs too.
This was an interesting postmortem, but nearly the first thought that struck me as it proceeded into the closure reasons was that many of the factors (to be fair, not all) seem to be industry knowledge easily gained through the market research about the industry. This gives the appearance that Walnut founders either didn't perform this research (seems unlikely given the research-heavy approach they displayed) or had…
Earlier quoted context omitted.
15-20% margins is by no means slim.
It's not grocery store thin, but it's not making out like a bandit either. It's pretty middle of the road.
http://www.aei.org/publication/the-public-thinks-the-average...
In short: “What we found was that while many people complain about their moving companies, even the highest income consumers would not pay for a better service. Our mistake was conflating desire for a better product with desire to pay more for a better product”
There's several companies dedicated to moving ultra high net worth individuals. It's hard to believe there's no market between that and the cheapest options. Sounds like their marketing wasn't great or they ran out of runway.
I'll quote the relavant section at the end, but my when money is no object, you usually go by recommendation of friends. At that high of a premium, would you go to a team with good marketing copy, or somebody who has already moved your equally rich friend with superlative service?
FTA:
We considered our second option more seriously. High-end customers understood our value proposition, and we believe they would be willing to pay for it. But as we dug deeper, we realized turning Walnut into a premium service had too many challenges along the way.
The strategy would shrink the serviceable market, and we would also have to be excellent at finding a smaller customer base at the exact moment they’re looking for movers. Even if we solved the marketing challenges, our moving service would also have to meet new, higher expectations. Our concern was whether we could ever deliver enough value in this compulsory experience to justify the substantially higher price.