An Uncertain Future: New Entrants In The #Food #Delivery Space Decline As Existing Startups Struggle

Maple’s acquisition and Munchery’s recapitalization highlight challenges in food delivery, with fewer fundings, increased M&A activity, and some companies ceasing operation.

Sourced through Scoop.it from: www.cbinsights.com

WHY THIS IS IMPORTANT

The first question a good friend of mine always asks when I come to her with this great new idea (and it happens more often than not) is: “how are you going to make money?”. And she is right: if the business model is not there, then no matter how much funding you get at some point in time, you will run out and will have to close. Simple. But frustrating for an entrepreneur to hear because my ideas are so great…!

That being said, I am old enough to remember the dotcom bust in 2000 and the various same-day delivery outfits that folded. Because they did not have a viable business model. So it may seem that the same has repeated here with one difference: the market is much larger than in 2000. Thus there may be some niche markets or geo that provide sufficient margins to make this a money making business. All others, see you next time.

I wrote about possible doom of same day delivery in the past so you can verify that I am not just saying in retrospect but that I called the shot years ago (earliest post is in 2013).

– first warning in 2013: http://sco.lt/6nkd4z

– same day delivery:  http://www.scoop.it/t/digital-transformation-of-businesses?q=same+day+delivery 

– food delivery: http://sco.lt/8tvFnl 

– same day not good, next day is great: http://sco.lt/4wpmQT 

– google same day not a great idea: http://sco.lt/67V5iz 

 

Farid Mheir
farid@mheir.com
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