What about @lyft for food?
We looked @Postmates + thought:
- the food arrived sloppy / restaurants don't care about delivery
- it took forever (1hr)
- too expensive
Nobody talks about failure in Silicon Valley, yet 90% of startups fail.
Why?
3 yrs ago, @neerajberry and I shut down @Sprig, which raised $60M from @GreylockVC + @socialcapital & grew to $20m revenue.
Then, it all fell apart.
For an honest story about failure,
**Read on**
What about @lyft for food?
We looked @Postmates + thought:
- the food arrived sloppy / restaurants don't care about delivery
- it took forever (1hr)
- too expensive
3 taps and $15 for a healthy meal delivered in 15 min
To make it possible, we had to run the restaurant ourselves; it would be expensive but worth it
We recruited @n8keller, Morgan Springer + @mattkent as founders
Our Series A was a hot round. I did 4 partner meetings on the same day. Raised $10M.
Great investors, great team, off to the races - @omal and @simonrothman
1) Govt. SF health + planning made our lives hell. They didn't like our innovations. We had to bribe officials ("lobbying").
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 were always “1-2 months away” from managing the burn.
We finally got some progress on margins, but it meant degrading the product: food is fickle.
Less money in, worse food out.
Sprig's peak was Feb 2016:
4,500 meals per day (largest restaurant in SF)
$22M run-rate (SF + Chi)
1,300 employees (incl delivery)
$60M raised
The public treated me like a star, which was both uncomfortable & awesome.
Even my dating life felt like it had improved 2-3x.
But secretly, I was nervous - it didn't feel like a done deal.
On Feb 22, 2016: our growth curve inverted. +2%/wk became -2%/wk.
We scrambled to figure out why.
Was it seasonality? Was it our rising prices? Was it the quality of the food?
Everyone was running tests to figure out why and what to do.
🤦
It was UberEATS, which launched that week.
Fucking Uber. After hearing all the war stories from @lyft, I knew they were unsavory competitors.
Super smart, ruthless with big coffers.
What about pursuing a sale? If we do layoffs, then we can’t sell. If we don’t, we may die trying.
We decided to pivot to a new offering that focused on food quality.
Everyone (fam, friends, investors) thinks you're doing well and you can't tell them you're not.
We were in pure panic mode.
We launched Sprig 2.0, shut down Chicago and laid off 1/3 of HQ staff to conserve burn.
I shut down external activities, such as talks and press, so we didn’t become a Theranos.
Internally, I leaned on my executive team. They were honest and kind with our employees. Through it all, we had only 1 departure.
We got to $0 margins, but the traction didn’t improve.
The board asked us: what would it take to be fully profitable?
We were running a restaurant doing $6M in revenue but paying real estate for a place that needed $20M in revenue to be profitable.
After 3 pivots & multiple layoffs, we faced a final decision. We had $8M left and knew we had to restart or quit and return the money.
@neerajberry & I made an exec decision: we shut @sprig down on May 27, 2017.
1) In 2013, we mistook present for future. Delivery apps got better w scale. We got worse.
2) The profit equation was off. The market size in SF was too small for our big kitchen. We blitzfailed.
3) Cap Table + Burnout. Hard to restart after losing $50M.
Learned way more in 4 yrs @sprig than 4 years @udemy or @UCBerkeley.
Few grudges were held & we took care of the team. They mostly landed on their feet (Silicon Valley embraces failure).
A classy ending helped sow the seeds for forgiveness.
If you're gonna fail, do it fast.
If you're gonna succeed, do it slowly.
In startups, remember to watch your flanks. Your competitors are not your direct competitors, but the whole market.
Thanks to everyone who believed in us.
Follow me to read more honest takes from a recovering founder 🙏🙏🙏
Here's an equally honest thread about @udemy going from 0 to $2B valuation:
https://t.co/mc9Dd8A6xI
I\u2019m biased but @udemy is a true underdog story + thought I\u2019d share details we\u2019ve never shared before.
— Gagan Biyani (@gaganbiyani) February 20, 2020
ICYMI, we announced a $50M raise at $2B valuation.
Udemy almost died at least 5x. We got rejected by everyone in the Valley. Startups are never a straight line.
*Read on*
More from Startups
5 Micro Skills That Will Improve Your Life Drastically
// A THREAD //
Even the small things compound over time... and become huge.
And they become HUGE.
This is the list of small skills that will improve your life A LOT over time, you can't even imagine how much... before you give it a try.
I'll present the skills in form of mini challenges.
1. Type with all ten fingers 10 days - 10 mins in the morning.
Most of us spend a lot of our time behind the computer typing.
Yet, not many people know how to write with all ten fingers —> drastically faster.
You can learn it for free here:
https://t.co/ow2WTHrXBJ
2. Make at least one Zap
Zappier allows you to make micro workflows between the applications you use.
Let's say you have to calendars (work and normal) and you want to sync them all the time —> Zappier
2b. You send an email every month remind your customers to pay the maintenance fee + reminder them if they won't —> Zappier
You want an email notification every time someone edits a Google sheet —> Zappier
Basic version is free. @zapier
// A THREAD //
Even the small things compound over time... and become huge.
And they become HUGE.
This is the list of small skills that will improve your life A LOT over time, you can't even imagine how much... before you give it a try.
I'll present the skills in form of mini challenges.
1. Type with all ten fingers 10 days - 10 mins in the morning.
Most of us spend a lot of our time behind the computer typing.
Yet, not many people know how to write with all ten fingers —> drastically faster.
You can learn it for free here:
https://t.co/ow2WTHrXBJ
2. Make at least one Zap
Zappier allows you to make micro workflows between the applications you use.
Let's say you have to calendars (work and normal) and you want to sync them all the time —> Zappier
2b. You send an email every month remind your customers to pay the maintenance fee + reminder them if they won't —> Zappier
You want an email notification every time someone edits a Google sheet —> Zappier
Basic version is free. @zapier
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1/ Some initial thoughts on personal moats:
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
Like company moats, your personal moat should be a competitive advantage that is not only durable—it should also compound over time.
Characteristics of a personal moat below:
I'm increasingly interested in the idea of "personal moats" in the context of careers.
— Erik Torenberg (@eriktorenberg) November 22, 2018
Moats should be:
- Hard to learn and hard to do (but perhaps easier for you)
- Skills that are rare and valuable
- Legible
- Compounding over time
- Unique to your own talents & interests https://t.co/bB3k1YcH5b
2/ Like a company moat, you want to build career capital while you sleep.
As Andrew Chen noted:
People talk about \u201cpassive income\u201d a lot but not about \u201cpassive social capital\u201d or \u201cpassive networking\u201d or \u201cpassive knowledge gaining\u201d but that\u2019s what you can architect if you have a thing and it grows over time without intensive constant effort to sustain it
— Andrew Chen (@andrewchen) November 22, 2018
3/ You don’t want to build a competitive advantage that is fleeting or that will get commoditized
Things that might get commoditized over time (some longer than
Things that look like moats but likely aren\u2019t or may fade:
— Erik Torenberg (@eriktorenberg) November 22, 2018
- Proprietary networks
- Being something other than one of the best at any tournament style-game
- Many "awards"
- Twitter followers or general reach without "respect"
- Anything that depends on information asymmetry https://t.co/abjxesVIh9
4/ Before the arrival of recorded music, what used to be scarce was the actual music itself — required an in-person artist.
After recorded music, the music itself became abundant and what became scarce was curation, distribution, and self space.
5/ Similarly, in careers, what used to be (more) scarce were things like ideas, money, and exclusive relationships.
In the internet economy, what has become scarce are things like specific knowledge, rare & valuable skills, and great reputations.
