Beepi Winding Down After Burning Through $150M
wsj.com
wsj.com
Beepi was valued at $500MM and had an almost $200MM annual run-rate, yet evaporated and is now worth absolutely nothing.
Who else out there has 9, 10, or even 11-figure valuations and high revenues but is actually a worthless business?
What's going on?
1) We expanded too fast - the result of poor stragetic planning
2.) The market for our products was weak - the result of of limited or no market research
In Beepi case it was reason (1) they expanded too fast. Can't imagine what they were doing with 300 employees, technology should have been used to make them more efficient.
Investors are more concerned with college pedigree yet that has not limited failures. They don't know what they need to know until it is over.
like, here are some people that showed interest in this feature, lets build it, and after you build it you see that you simply did not have enough data. like in A/B test if you stop it to early an you get some screwed data.
we had some external company do a FB ads for our company, and indeed we did get a loot of new signups, but after examination we saw that all those signups where garbage.
you really need to do it properly, and i dont think thats easy.
As an entrepreneur it's frustrating that I've built a business, in a growing space, $300k ARR, consistent growth, a few employees, no debt and a well defined path to 10x growth that's not built on any (bulshit) models that VC seems to love. And for some reason it's very hard to find funding that's not from Wall Street guys (who love models that earn).
Hey VCs! I can burn less of your money a little slower!! Hit me up!
"The game is the game."
If you can't give a compelling "yes" then it's not a good fit for them.
Shift (one of their competitors) also seemed quite nice, but they didn't allow you to charge your car to a credit card, so that was one factor in my decision to choose Beepi instead.
Of course at the time I thought it was incredible that in 2015 I could purchase AND PAY FOR a new car without leaving the comfort of my couch. But in retrospect if I would have paid in dollars and kept the Bitcoin, or waited until 2017, I could have bought a Lamborghini!
Both companies were an order of magnitude better than car dealership trade-in experience, Beepi's guaranteed offer just came a few bucks over Shift's guaranteed offer.
It's a bummer if this model is not sustainable, the customer experience alone would definitely drive me towards Beepi (and Shift) next time I need to buy/sell.
The industry is used cars, so it's a product buyers generally want to see in person and it has to be delivered to them. So physical location is more important than many tech startups.
To sell your car, there's KBB, carmax, cars.com and any dealer you want to buy a car from.
Beepi was just one of the many options (no hassle no haggle). However, instead of being a marketplace like cars.com, it took ownership of the transaction probably with hopes to take a bigger chunk of the transaction but effectively became a dealer. Car dealer margins are like 2%. At a 5x multiple, it would be worth 10% of Sales.
The fact they were willing to deal with cars older than 6 years was the only reason I looked at them over Beepi.
https://www.facebook.com/l.php?u=https://www.wsj.com/article...
Like, I also do not have a WSJ subscription, but my email subscription to the Volokh Conspiracy gets me links to readable articles.
javascript:window.location="https://m.facebook.com/l.php?u="+encodeURIComponent(window.l...;
But 99% of HN users are not going to see this and the whole reason the "web" link exists is to aid in the Google workaround, because that was the gold standard until now. WSJ has now put itself into a special class of sites. Unless I post my link on every single WSJ story submitted to HN, non-subscribers (the vast majority of people seeing it here) won't be able to read it, which means they can't discuss it etc. Therefore it would make sense to me that WSJ links should be blocked here.
There is no fair use for the copying of a whole text, and whilst the person who posts it is the one who has infringed copyright I am not so sure that you could consider yourself to not be involved.
For fora where the posters aren't inclined to paraphrase the original story, it's usually more than sufficient to paste only the second and perhaps third paragraphs of a news story; those generally contain the actual news.
- Some people like this thing. There could be a market.
- Investor cash gushes in; fast fellation or get no orgasm!
- Startup uses up all of the money somehow on bullshit or self-payment of execs.
- turns out a good thing is now shit because VC's jizzed them full of undeserved cash, the founders sucked up the money, and the staff no longer has any incentive to deliver.
- Hacker News article.
Venture capital is a major problem here. Rich idiots keep giving out money to people that want money, hoping that one of them will become a unicorn. News flash: the bubble is gonna pop again because venture capitalists are basically all idiots. They gamble money they can lose. However, the average person can't handle those fluctuations.
Please don't. It's kind of gross. Also, please don't post overheated rants to HN. It lowers the signal/noise ratio, which is what we're hoping to optimize for.
Thoughtful critique is welcome. One method for turning overheated rants into thoughtful critiques is to (a) edit out name-calling and pejoratives and (b) add information, such as specific examples.