61–70 of 194 posts
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Ignoring the app, and disruptive gimmick, I have to wonder what your average diner could have achieved with $13.5m in funding. You could build a small, well branded chain. Probably selling food above cost to boot! :)
AH, but you couldn't get any investors for that.
Just not any VCs.
Maybe Lyft will acquire Swig if they're not already cooking something up. :-D
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I can see how these businesses rationalize short term losses with a bet on a long term play that consists of one of the following outcomes: 1) Monopoly - If they can get enough lock-in on customers, they can outlast their competitors and then eventually move the prices up without losing customers (since there would be few viable alternatives). 2) Economies of Scale - In many businesses, the marginal cost does go down…
I have a hard time seeing how you can get a monopoly on restaurant food/fast food. There are few barriers to small-scale competition, and it's very easy for your competitors to differentiate their offerings. If McDonalds were to buy up every competing fast-food franchise in an area overnight, it'd be just a matter of time before somebody would open a Kurger Bing across the street. Speaking of economies of scale, thos…
Well, this sucks, I've been really enjoying my VC-subsidized services.
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Actually, this is standard finance terminology for "if I add X revenue to the business, how much flows to free cash flow" - what we can reinvest/pay back to shareholders. I, for one, am surprised they shut it down if they in fact had achieved positive contribution margin. Probably just couldn't tell a good enough story for how they'd grow, and demonstrate good upside, for new money in, given all the preferences/dilut…
Are you suggesting that my read was incorrect, and that they are cash flow positive after not just food costs but logistics as well?
>> Contribution margin, or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. “Contribution” represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.
So, positive contribution margin should imply they covered all the fixed and variable costs, the way I read it.
But then, why do they need to shut down? It looks like their def on "contribution margin positive" is something else after all.
I know I am but a tiny sample of the overall SF food market, but I'm squarely in the target demographic (work at home, don't like to go out to eat). I used SpoonRocket a few times, but entirely gave up on them after trying a few times. I love Sprig and order from the often. Here's why:
* SpoonRocket's meals simply weren't healthy. A lot of the folks in this space (Sprig, Munchery, etc.) are really focused on healthy food. I can call the Chinese place down the block and have an unhealthy meal delivered, but there traditionally have been very few good healthy options other than cooking yourself. SpoonRocket's food was heavy, carb-y, greasy, and just not that good.
* I know they had to do this for time efficiency/cost reasons, but the requirement that you meet the driver out at the curb was too big of a psychological barrier. I live/work in one of the (relatively rare, to be fair) SF highrises, but knowing that a SpoonRocket meal meant getting up, waiting for the elevator, going downstairs, meeting the driver, then going back upstairs - meant that I just never ordered from them (especially when Sprig will bring the meal right to my door.)
This just goes to show that in an absolute sense -- these relatively small differences might not matter (i.e. of course I'd rather go downstairs to pick up food vs. walk to a restaurant for lunch), but in the highly competitive environment where easier and healthier alternatives exist, their offering was unsustainable.
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Dude, tell me about it, I was a VIP with them, and ordered almost every single day due to a busy schedule, they would show up within minutes... the meatloaf stack, the enchiladas, the pasta, I always enjoyed it except for a couple times in all. RIP I will miss you Spoonrocket! Now that I think about it more, there was something odd about how most times I would order, the app would say 30-60 minutes which was discoura…
Their food was largely gross and very unhealthy. Mac and cheese daily, often with ranch and/or bacon?! And that Korean dish? I don't know where all they were located, but it felt more appropriate for dorm delivery than SF. Where's the kale man?!
I was a user since 2013 and enjoyed their stuff, too bad it's gone
wonder if sprig's gonna survive..