
Uber for X Startups that Failed - sillysaurus3
http://nextjuggernaut.com/blog/11-uber-for-x-startups-that-failed-are-you-making-the-same-mistakes/
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skrebbel
A bit off topic, but one thing I've always wondered about Homejoy is how it
went bankrupt, yet somehow the leadership team seem to have gotten out richer
than when they started. At least, I assume you have to have some money on the
bank to be able to become a YC Partner, and Adora Cheung is a YC Partner now.
Maybe this is an incorrect assumpion on my part.

Anyway, I'm not trying to single them out, they seem great people and had
enough shit to handle. But I am wondering how this happens because IIRC
Homejoy isn't the only case like this. If a company tanks, how is it possible
for the founders to cash out? Did they sell some shares to investors in
earlier rounds? Is that common? Wouldn't it be a huge red flag for investors
for a founder/exec to cash out early?

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birken
It's possible the founders took out a "small" chunk during their large funding
round, but it is equally possible they didn't. Taking out a huge amount (>10%
of your equity) would be bad signaling and investors wouldn't go for it, but a
founder turning a few percent of their equity into cash to cover life expenses
isn't a big deal. Sometimes founders will have gone years with little or no
salary so recouping some of that is very understandable to the investors.
Still though a lot of founders are what I'd consider irrational and don't want
to sell any stock because of their belief in the company. I know multiple
instances of founders turning down massive paydays during a secondary round
because of course the stock is going to be worth so much more later (and as of
yet none of them are wrong -- though I imagine in the future some will be).

The founders and employees didn't get anything from their stock after
Homejoy's sale. I highly doubt the founders ended up being "rich" from
Homejoy.

Maybe they are "rich" now that they are a YC partner. I don't know. But I
don't know how those things would be related. Startups have a lot of luck.
Just because a startup fails doesn't mean the founders weren't really good at
it. It doesn't mean they aren't exceptional investors or startup advisors. It
just means their startup didn't succeed.

The reason websites like the OP are extremely stupid is because they distill
down a startups failure to a bunch of points that if flipped around could be
reasons for success for another startup. I worked for a company that was a
direct competitor to many of these companies and their "Fatal Flaws" worked
just fine for us. Yes, there are obviously better and worse decisions a
startup can make, but everything is so context specific these general rules
are worthless.

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skrebbel
Fantastic response, thanks a lot!

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wazoox
How does Über, Deliveroo, etc work? They pretend spending in marketing but
actually subsidizes market acquisition with VC money (for instance Deliveroo
pays the delivery guy at least 7.5€, but charges the customer 2.5€: it just
doesn't add up), with the assumption that they can form an actual monopoly and
eventually reimburse investors by ripping off workers and customers in the mid
term.

The only upside I see is that they actually spend money from quantitative
easing and market bubbles in the real economy. They're a symptom of a sick
financial system and a sick economy.

This business model doesn't belong to companies, but free association of
workers. They all (Über included) should be closed down, the sooner the
better.

~~~
hobofan
I am not a big fan of Deliveroo, Foodera, etc. either, but from what I've seen
reported they are not too bad when it comes to treating their drivers (at
least here in Berlin). The restaurants/kitchens also seem to profit from it
and a lot of new places opened up specifically with those services in mind.

AFAIK your calculation also isn't true. Deliveroo pays it drivers
7.5€/__hour__ + 1€/delivery (or something like that), so as long as they do
enough deliveries/hour, that should work out. I'm still more concerned about
the absurd marketing battle, but in my personal perception it slowed down
quite a lot the last months in Berlin.

~~~
wazoox
In Paris they just dropped the hourly wage. No delivery, no money. Once
they're ahead of competition, they screw their "partners".

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kantspel
wow that's appalling.

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thinbeige
OT but maybe the right place to ask: How can I as a marketplace avoid
disintermediation where users try to deal directly with each other after a
short while (eg Homejoy).

~~~
hobofan
Put fines for the suppliers in the contract that they have to pay for each
violation of contract, ban them from the platform and be public about it.
There should also be rules about not handing out direct contact info to the
client, only marketplace-supplied business cards.

They will try to be clever about it, but sooner or later it will come out.
Often the users don't even they did it and accidentally blow their cover. You
can also make test appointments with someone who will report back to you about
attempted rule violations, once you have suspicions.

You can also counteract the leakage by setting up analytics about "unusual"
canceling customers, which you will then manually contact (which should be
part of your anti-churn strategy anyway). E.g. it could be somewhat suspicious
that customers stop booking on your platform after they booked a specific
supplier once. This is actually a pretty good use-case for ML.

On the more "positive" side, you can try to build a hard to replicate tech
solution that helps their workflow but is also so deeply ingrained that
circumventing the system becomes more of a hassle.

You will never get to 0% leakage, but there are a few techniques to get close.

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joelrunyon
HelloParking - this sounds like just a failed startup.

[http://SpotHero.com](http://SpotHero.com) has done this and pivoted towards
working more directly with parking garages.

They're doing quite well as of late -
[https://www.crunchbase.com/organization/spothero](https://www.crunchbase.com/organization/spothero)

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cblock811
Funny that it mentions TaskRabbit, which hasn't failed (I know because I work
there). We pivoted a long time ago sure but that's very different from the
fate of the other companies..and the title of the article.

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tim333
Indeed, if anything they have become more Uber like after the pivot - just
click here to have your furniture assembled rather than an auction site.

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startupdiscuss
Is there a list of Uber for X that are still around?

Example: Lyft is like Uber for car rides.

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elmar
well Uber copied Lyft that in turn had copied Sidecar (that even had a patent)

You can even make a strong case that what fundamentaly differentiates the
three outcomes it's the CEO.

[http://fortune.com/2016/03/16/sidecar-uber-
innovation/](http://fortune.com/2016/03/16/sidecar-uber-innovation/)

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lemoncucumber
It remains to be seen if Uber itself eventually ends up on that list.

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foobaw
I know your comment is more of a joke, but Uber has already seen enough
success to never end up on this kind of list.

They might be in a different list along with Pets.com or Myspace though.

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FICO
Depends on how you measure success. Uber has yet to make a profit and they
depend on VC capital to subsidize every ride. It hasn't yet established itself
as a legitimate business model.

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bookbinder
They're waiting for driverless cars to become a thing...so they can fire all
of their non-employees and reap huge profits. They're playing the long game.

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tim333
Full driverless cars that can go down your high street with no one in the
vehicle are a way off. Uber's cash will last about 2 years at the present
rate.

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danschumann
"Uber for X" is a way of describing companies that facilitate gigs, like a
workforce marketplace, I think. Freelancer.com would count(not as a failed
example, but an example).

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tribby
not mentioned is washio, which was one of the few uber-for-x startups I was
surprised to see fail. solved a real problem.

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tim333
I presume they were selling a $10 service for $5 and ran out of VC money.

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tribby
possible, though I don't think that was it. their prices were more than 2x the
cost of the low end of wash-and-fold services, maybe a little below the high
end. their infrastructure shouldn't have cost much. maybe they hired too many
people too quickly. my own guess is that growth stagnated.

