Comment by ilamont | Hacker News Reader

Comment by ilamont | Hacker News Reader

The other Bloomberg article gets into the details of why this company has burnt so much cash (1). Shaking my head after reading this:

In August of 2015, Munchery held a party at the Line Hotel in Los Angeles to celebrate a new partnership with chef Roy Choi. He's known for his Korean taco fusion food truck, Kogi, and for his L.A. restaurants, including two in the Line Hotel. Choi's new contract promised him more than $100,000 a month to design his own line of meals. He was also consulting on branding.

At the party, people lined up around the block for free kimchi pork fried rice served in Munchery's cardboard containers. Pishevar, Munchery's chief hype man and a major investor, arrived wearing a black cowboy hat. Hollywood filmmaker Jon Favreau attended.

By the end of the year, the startup ended Choi's contract. It cost the company more than $500,000, according to people familiar with the matter. Choi had provided Munchery with just two recipes. An agent for Choi declined to comment.

Around the same time, Munchery also terminated a contract with marketing agency West, according to former employees. The firm had helped Munchery offer free meals to attract new customers and to strategize about its branding.

Munchery spent heavily on direct to consumer marketing ahead of fundraising rounds, former employees said. In a month, the company could easily spend hundreds of thousands of dollars putting flyers on people's doors offering discounts on Munchery, they said.

1. https://www.bloomberg.com/news/articles/2016-11-21/munchery-...

A party and half a mil on Roy Choi recipes doesn't seem like a significant factor compared to a peak burn rate of $5mil/mo or millions in prepared but unsold meals.

Well, that gives you two solid data points...a few more and you've got a pretty reliable trend to explain that burn rate and wasted meals.

A data point and wishing for a few more does not give you a 'pretty reliable trend'. It does the opposite of giving you that.

You're absolutely right. Except that I said 2 data points and then waiting to see if there are more...in which case you would be able to argue for a reliable trend.

Yes, if you knew the company was throwing expensive parties every weekend and spending millions of chefs on a regular basis, maybe. But you don't. The point was, the stuff the commenter highlighted doesn't really explain their losses.

As the old joke goes, "half a mil here, half a mil there, and pretty soon you're talking about real money."

Ah..I recall attending a startup launch party that had Don Johnson and Chinese food. There must be some Perl script they use to generate the permutations..

The level of doublethink required to make decisions like these, while at the same time believing you're actually disrupting the food industry with its commonly known slim margins is astonishing.

If I were a scout for executives, I would make sure that Munchery leadership is engraved in eternity on some no-hire blacklist.

I wonder how pervasive these delusional people are in SV in other industries.

I was brought in by one of those flyer campaigns. We order two meals twice a week, and we're about 100 orders in. The food is pretty good, though they did noticeably raise prices over the last 6 weeks.

The level of blind condescension required to make a comment like that....

It's really easy to call out the losers once they fail.

You call this delusional because you fail to factor in the scope of the opportunity. The food industry is enormous. If the founding team and investors believed they had a mere 1% shot at disrupting it, spending $100M to run the experiment is entirely rational.

I feel the need to leave a quote here in the hopes of deterring other people from espousing your attitude.

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. "

The level of critical thinking missing in order to make a comment like that...

Wasting $100 Million on a 1% chance to disrupt an industry that is not ripe for disruption, and has been famously known for having razor thin margins is not a rational action.

Thanks, a quote like that from the 5th wealthiest president of the US during the Gilded Age or thereabouts really cemented my view that you live in some deep cognitive dissonance.

If you're a libertarian too, then perhaps your level of doublethink rivals the one I made my comment about. If it does, it's pointless to discuss with you anything of substance.

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