SpoonRocket shuts down
As someone who&#x27;s ordered from spoon rocket dozens of times over the past two years, I&#x27;m definitely sad to see it go.<p>A quick timeline (from what I can remember):<p>- Initially started out in Berkeley &#x2F; 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.<p>- 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&#x27;t as good. Delivery was still fairly fast (usually &lt;15 minutes), but could take up to 30 minutes.<p>- 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 &lt;30 min though)<p>- 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).<p>Thoughts:<p>- From a business perspective, I think SpoonRocket (SR) made a lot of the right moves. While a lot of people say &quot;disruptive innovation&quot; loosely right now, I think SR actually did it by: 1) focusing on a low-end market that wasn&#x27;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.<p>- So why did SR fail? I&#x27;m speculating here, but I think it&#x27;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&#x27;s difficult to get the economics right for an inherently low-margin business with a high labor component.<p>- Can other food startups succeed? I&#x27;m willing to bet most food startups probably won&#x27;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&#x27;s waiting time). If SR couldn&#x27;t make the economics work, I&#x27;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?<p>- Lastly, what I&#x27;m hoping for is the &quot;Airbnb&quot; 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&#x27;s the kind of service that I could see myself regularly using. There&#x27;s also the regulatory side (after all Airbnb itself has followed the policy of &#x27;asked for forgiveness, rather than permission&#x27;) Who doesn&#x27;t like the sound of buying a home cooked meal from a neighbor?