Munchery CEO Tri Tran's harrowing journey to Silicon Valley | Hacker News Reader

Munchery CEO Tri Tran's harrowing journey to Silicon Valley

bloomberg.com

70 pointsmiraj48 comments

A bit tangential, but I grew up in an area with a lot of Vietnamese immigrants - so many, in fact, that I was regularly the only white face in a restaurant or store.

Watching the wider world grapple with unhealthy diets and the boring ('boring') healthy alternative, Vietnamese food has always struck me as THE perfect solution.

I'd been waiting for a while for someone to start a Vietnamese food chain in Australia and when it did - check out Rolld.com - it immediately blew up.

Taking Cuon (rice paper rolls), Bun, Goi, and the perennial favourite Pho, you have the foundations of a week's worth of delicious and healthy meals. (My mouth is watering just writing this)

Which makes me wonder why Munchery hasn't been pushing Vietnamese food harder, given its origins. I just don't understand - in a world where Chipotle dominates, where is its Vietnamese equivalent?

The founders of Chipotle started Shophouse which they describe as "the bold flavors of Southeast Asia," so you're on to something.

Takeout food is generally unhealthy, though. The pho I've eaten has off the charts amounts of sodium, but it does have plenty of vegetables.

> Takeout food is generally unhealthy, though. The pho I've eaten has off the charts amounts of sodium

Is there something takeout places usually put in it that people who make it at home don't?

Most people have trouble adding MSG directly to their food, restaurants have no such qualms.

MSG is not unhealthy AFAIK. Wikipedia covers that for one. For anecdata see Japan. Highest life expectancy, most msg usage. And it's commonly used in home cooking

It's just salt and glutamic acid (naturally occurring in mushrooms, tomatoes, etc), and it immediately dissolves to each of those components in water. Usually the problem isn't with MSG but with too much salt at places that also add MSG.

Arguably, MSG itself isn't unhealthy (in limited doses), but it enhances taste so much, that it's often used to cover up for poor quality or even expired products. For example, lower quality hot dogs without MSG and other additives are basically inedible, for the same reason junk food is tasty as well.

You can mask poor ingredients by dumping salt and sugar into dishes. Sugar actually stops you from tasting all the salt.

I spent almost two months in Vietnam and ate tons of pho (the easiest thing to order since most restaurants have no menus and spoke no English). The amount of vegetables, if any, was very small.

I'm not sure where you were, but my wife and I just returned from 14 days in Vietnam. There was so much diversity in the food: Lemon grass, garlic, ginger, morning glory, two types of basil, onions, two types of cilantro, carrots, three types of peppers, lettuce, green onion, peanuts, sesame, shallots, cucumber, tomato, mint, banana flower, cabbage, papaya, mango, dragon fruit, breast fruit, lime. I'm sure I'm still missing a dozen.

I was referring to pho specifically. But in general, vegetables are harder to find if you are away from the tourist areas. I traveled the entire length of the country, over 2000 miles on a motorcycle, from the Cambodian border to the south, to the "North Pole" (border with China). If you saw a menu, then you ate at touristy places.

At one point, while in the extreme north, I might have eaten dog once or twice. Who knows? No one spoke English and Vietnamese is a very difficult language. Of course, no menus.

I've never seen pho with any appreciable vegetables.

Vietnamese are probably bored with their stuff and longing for a burger and fries.

The perfect solution is to know what you put in your mouth. You can have a six pack and still enjoy sugars and fats. But you have to be aware of how much carbs, fats and proteins your body needs and how much you actually get. Then adjust your diet to that on the fly.

Ate a bunch of fries (fat and carbs) for lunch? Eat a stake and veggies for dinner (protein and fiber).

My observation is that unhealthy people are the ones who usually end up at “healthy diet” salad bars, trying to compensate for sugar addictions. The really fit people I usually find at buffets - Asian, etc., which many people in my social circle consider to be “unhealthy diets”. There they can put together their own dish by themselves, depending on how much carbs, fats and proteins they roughly estimate that they need right at that moment.

Footscray?

My memories of authentic Vietnamese restaurants and home-cooked Vietnamese food involve very significant amounts of tripe, ligament, collagen, tendon, cartilage, and so forth. Those were in fact my close friend's favorite parts of every dish.

I realize that was only one perspective on authentic Vietnamese food, but those things are not popular in the American diet. So I imagine the only form it can take off is as the Vietnamese equivalent of Panda Express.

> tripe, ligament, collagen, tendon, cartilage

As someone who's never had it before, what does it taste like?

I eat pho fairly often, but I usually just chicken out and get flank and brisket. I keep telling myself that one day I'll try tendon and tripe out of sheer curiosity, but I'm too nervous.

It's been years (except for the cartilage), but I don't remember it tasting particularly weird. I just couldn't handle the textures. Crunchy, chewy, springy, spongey...

The cartilage, in particular, was like chewing carrots crossed with chewing gum, it took forever to break down enough to swallow.

If you relish beef or chicken gristle, you will probably love tendon, tripe, etc.

Also, it's cheap. I regularly get an enormous sandwich and shrimp rolls from this awesome place in Sunnyvale:

http://www.yelp.com/biz/cam-hung-sunnyvale

It's almost SUSPICIOUSLY cheap! But sooo good! .. it's like $7 for the giant meal which could feed me for two meals. I always amazed at the quality you get for the price.

Rethinking food delivery? Perhaps there's something novel with their real-time routing algorithms, but that's a razor thin edge in food. The food game is an old game. To put that much money to use in a food business, your best hope is to buy distribution facilities where the real estate will appreciate and then convince enough consumers to get out of the mindset of cruising the grocery store freezer isle for convenient microwavable meals. So in the end, you're some premium, made for urban environments, version of lean cuisine. I'm sure there's a market for that, but is it a market worth this much investment?

What struck me about the article is how much effort this company has gone through. It equated the business struggle with the harrowing escape of the founder from Vietnam. And after all that struggle (both the escape and spending millions on the business), the company still doesn't have a real business model. It left me with a feeling of hopelessness for the company, not the feeling of triumph I was expecting.

What's the advantage of this compared to heating up a frozen dinner you bought from the grocery store?

Doesn't a $10-$15 dollar frozen dinner have quality ingredients too?

Or does it taste a lot better if it's frozen for hours compared to days/weeks?

Honest questions. These services don't exist in my city yet, so I don't know.

I think the idea here, is that those traditional frozen supermarket meals you're referring to, are just loaded with salt and preservatives. These are meant to be more like mom freezing leftovers for you.

Perhaps salt (depends on the brand), but because the food is frozen it doesn't need a bunch of preservatives.

It doesn't matter, they are. Freezing isn't indefinite shelf life.

Look at the label sometime, you will be surprised. I just opened my freezer and looked at the back of an Amy's meal, it's not surprisingly real food:

http://www.amys.com/products/product-detail/indian-meals/000...

> Rice, onions, peas, garbanzo beans, water, paneer cheese (, distilled vinegar, diced tomatoes, tomato puree, expeller sunflower oil, carrots, sea salt, garlic, cornstarch, turmeric, paprika

They even have a line specifically for low sodium.

You're cherry picking an example of an all natural, organic, frozen dinner. Yes, they exist, and that's what this guy is doing. But historically, processed, frozen food, is all sodium and preservatives.

I use Munchery a lot. It's significantly better than frozen food, and generally better than "quick service" to-heat food from the grocery store.

It generally does taste like decent (not Sysco-provided) chef-created restaurant food, though obviously you lose the composition/presentation aspect of it as a general rule.

And the dishes also come with reheating instructions that are explicit about whether to use an oven or microwave, etc.

Overall the process does a pretty good job of getting food in front of you at the right temperature with the right texture, which is -way- more than I can say for most alternatives, classic food delivery services included.

I more or less suck at food prep and have pulled out some pretty tasty meals from Munchery for just a few minutes time spent. I can genuinely recommend them, though I have no clue if they're the best of competing services or what.

healthy/gourmet food deliveries? innovative.

http://londonist.com/2015/02/londons-gourmet-food-deliveries

http://www.foodtechconnect.com/2014/04/12/omgfoodtech-the-fo...

I really can't see where there is the 'rethinking delivery' here - just eat was interesting, as middle tier between me and the food - but I think there still some margin for something like that but with a private fleet of delivery guys, to bring the long tail of brick and mortar establishment over the internet without changing their workflow (much)

Pulau Galang, where the protagonist lived as a refugee, is fascinating. It's a small island in a small chain which many people now call by the name of the largest: Batam. Today there are bridges but when the Chinese-Vietnamese refugees were encamped there, Galang Island was totally isolated. Foreign missions built churches which today are very eerie, and the refugees built their own informal economy and businesses at a moment when they had nowhere even to apply for jobs. It took many years to discharge some of those refugees (who numbered a whole lot more than the 10k suggested in this article).

https://en.m.wikipedia.org/wiki/Galang_Island

There is not much interesting about the business itself. More likely, the article's purpose is to advertise for the refugee experience in America.

I almost never get food delivery (SF is loaded with good food you can walk to) but I have tried Munchery and it is impressive. The food is delicious and tastes fresh, and they delivery it really quickly since there is nearly no prep time on their side. The only thing is they tend to sell out by the end of the day, you have to order before you're hungry.

I think there's a spectrum of food options, and Munchery fits into a slot where I had not previously seen an option:

  * Shop and cook yourself
  * Get grocery delivery that you order, cook yourself (Instacart)
  * Get grocery delivery that someone else chooses, cook yourself (Blue Apron)
  * Have someone else deliver and cook a fresh meal for you (Munchery)
  * Have someone else deliver a restaurant meal for you (Seamless)
  * Go to a restaurant

The stark difference in tone between the beginning of this article and the end was startling. Judging from the set-up, I thought it was going to be a profile of a company working to improve conditions in rural areas, or for immigrants.

But the inherent mismatch between the depiction of Tran's very hard early life resulting from the aftermath of war and logistical difficulties in a third-world country made the problem he's facing now, how to make food for middle-to-upper-class households in America, seem laughable and trivial.

What problems are start-ups like Munchery trying to solve? Not the conditions that created Tran and many like him, but the issue of those who don't have home chefs.

I'm not saying clawing back time from the day and isn't important and isn't valuable. It most definitely is, especially for parents working in the "second shift"[1], after work.

But depicting the idea that Munchery is some great force with a vision while ignoring the larger systemic problems in the story (poverty, access to clean water, aftermath of war) that propelled Tran to arrive in America is a failure of journalism.

Let's work on - and shed light on - the harder stuff.

[1] https://en.wikipedia.org/wiki/The_Second_Shift

> But depicting the idea that Munchery is some great force with a vision while ignoring the larger systemic problems ... is a failure of journalism.

That's like, 80% of startup coverage.

I think it's uncharitable to take Tran's interesting story and turn it into a criticism of him for not working on "harder stuff". You didn't phrase it that way, but it follows from what you're saying, and that's unfair. A person with his background is as free to work on what motivates him as anyone else is.

No one would disagree that "harder stuff" is important, but the trope of using this in arguments to belittle what others are working on comes across as finger-pointing. On an actions-speak-louder-than-words level, few of us are in a position to judge others about this, and I have the impression that those who are, tend not to.

Given how hard it was for him to escape Vietnam, I do think it's fair to say that he should be working on something really impactful. And I'm not sure if food delivery is it.

It isn't anyone else's place to say what somebody should be working on.

The article says they've raised $115 million to deliver in 4 cities. The populations of those cities are:

San Francisco: 837,442

New York City: 8,400,000

Seattle: 652,405

Greater Los Angeles: 3,800,000

For a total of 13.6 million people, or $8.45 per person.

I looked at one example by finding an SF zip code, and found they were charging $10.95 for 650 calories(if you assume 2000 calories, you might say they're looking to raise $10.95 at a $33.69 daily food valuation). It's also 59 calories per dollar: https://munchery.com/menus/sf/#/0/dinner/bbq-pork-with-rice-...

I checked a couple other zip codes, and they do seem consistent with $30-$34/day in food 'valuation' by calories.

Looking at San Francisco, it looks like people spend an average of $3,937 to buy 48% of their away-from-home food(2000 * 0.48 * 365 / 3937 = 89 calories per dollar), and $4,215 on 52% of their at-home food(90 calories per dollar) http://www.bls.gov/regions/west/news-release/ConsumerExpendi...

So their food is about 50% more expensive than the average in the region, per calorie. If you assume people's expenditures rise with their income exactly, and that the average income in San Francisco was $92,780 from that same link, then you'd expect them to be targeting people who make 1.5 * $92,780 = $139,170 which is the 74th percentile in San Francisco. Applying this uniformly reduces the 13.6 million audience to 3.264 million(edit: Not sure you can apply a percentile like that).

I'm not sure what their markup is, but if you assume it's the 50% rather than them simply choosing more expensive restaurants, then they need to generate $3x in sales to generate $x in revenue. So $115 million / 3.264 million = $35.23/person * 3 = $105.70/per person on average to make revenue equal to their investment. If you assume only 10% of its target audience ends up using Munchery, then this rises to $1057/person, or about 96 overpriced meals. They appear to outsource all the actual work to restaurants, but they might get a bulk discount. Maybe that's eaten up by their operations.

You could reduce this by a factor of f by assuming that the valuation was some fixed multiple f of their valuation. I've heard 3 is common for f, and probably these are preferred stock so the multiple might be higher.

I don't know - it seems like the average yuppie would have to buy way more overpriced delivery Chinese food than I expect is reasonable for their business to make sense. My historical credit card statements show about $6/day on all my food, compared to their 'valuation' of $33.69.

I'm not sure I understand where the investor money's coming from though: It's traditionally hard to get money for a restaurant(loans require higher down payments, etc.) since they tend to lose money. Buffets tend to be more efficient than sit-down restaurants like they indicate here, and I've also seen some restaurants hire delivery staff. If they sold it to investors as "We want to set up a couple buffets three times as big as average with some delivery staff instead of a sit-down area", I can't see them actually raising the money. (The 3x comes from me looking at a local buffet in Portland, which was 11,000 square feet, and comparing it to the 30,000 one mentioned in the article. Admittedly theirs probably doesn't have any sit-down room).

Your San Francisco Bay Area population is way off - I'm guessing you actually mean San Francisco proper (not the entire SF Bay Area). Checking my former zip codes it does not seem to extend out into the East Bay yet.

I think you're right. My method for that was to punch into Google 'San Francisco Bay Area population' and write down the number that came up. 'San Francisco population' gives the same number, so I guess it was just the city.

It's a good idea to try individual zip codes: It seems like you could get more accurate population data by trying all the possible zip codes and summing the associated census data.

The Census actually measures city sizes in terms of "Metropolitan Statistical Areas" or MSA's. Here are the populations for the areas in question:

  SF-Oakland-Hayward MSA: 4,516,276
  New York SA: 13,038,826 (according to [1])
  Seattle–Tacoma–Bellevue MSA: 3,671,478
  Los Angeles-Long Beach-Anaheim MSA: 12,944,801

[1] https://en.wikipedia.org/wiki/New_York_statistical_areas

And depending on how you define Greater Los Angeles, the population is 2-5 times 3.8 million (which is just the city proper's population).

They do extend to south san jose, so I assume they cover the entire 101->El Camino->280 corridor from SF down to SJ.

I know this is just rough back of the napkin analysis but I absolutely loved reading it. Though rough, I think this type of exercise is a valuable way to think about and try to understand a business. Thanks for writing it down!

People pay extra for low-calorie food, though.

I like the idea of doing back of the envelope calculations, but i feel like these are all off... starting with the populations... sf and ny are different by a magnitude of 10, but i suspect they have comparable populations in their delivery range... idk... just guessing.

also... you spend $6/day on food? "yuppies" as you condescendingly call them... spend far more. i assume/hope you are buying groceries and not eating out on $6. i know homeless people that spend more on food than you. srsly.. this homeless guy that lives by my loft in a doorway... he eats at mcdonalds and family dollar, and he spends more than $6 on food per day if he has the money. otherwise he eats at a shelter. you are clearly not their target demographic.

I wasn't sure if they served the entire metro area or just the city. It probably makes sense to deliver to the entire area, but I didn't punch in zip codes in their site to confirm the extent of their delivery area. It could also change the income levels too(people in the suburbs probably make less than people in the city, right?)

I bought a $20 ham from the local grocery store a week ago and am still eating it - I think it's something like 500 calories per dollar. Rice is cheap and filling. Eggs are cheap. Pasta is cheap. Potatoes are cheap. Corn is cheap. Flour is cheap. Spices aren't cheap, but you only need a little. Cheese is expensive, but you only use a little so it doesn't matter. If I make a large pizza, I spend like $3/day over a couple days.

Basically, if you eat anything that's tracked on the stock market as a commodity, you can be sure that people are working hard to compete out even the slightest profit on it. But when a slick-tongued CEO tries to sell you some 'added value', run for the hills: McDonalds can't buy the exact same commodities and then add operating expenses for thousands of stores and employees to make food for cheaper, not even if they do it at scale. I do admire them in other ways though: I once walked in, ordered, and walked out with more food than I could eat in 17 seconds(I timed it). That's a thing of beauty.

Munchery has the best user experience/delight I've encountered since Uber and Lyft.

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