How did DoorDash succeed? We are having trouble selling to restaurants | Hacker News Reader

How did DoorDash succeed? We are having trouble selling to restaurants

capitalandgrowth.org

13 pointsjkuria13 comments

Pretty much every big social company got their start by faking, cheating, impersonating, or scraping.

> In large part by not asking restaurants for permission to list them on DoorDash's platform and publish their menus. A lot of restaurants complained about this but DoorDash didn't care. In cities like Seattle, this was made illegal but by then DoorDash was too big. A lot of these VC funded companies use shady tactics to grow and usually have powerful allies in the right places. Btw, AirBnB was also notorious for spamming Craigslist using bots to bootstrap their two-sided marketplace

How true is this?

What I understand is DoorDash lists restaurant and their menus without permission. Does that mean DoorDash doesn’t charge a listing-fee and gets revenue purely from those who order food?

Yes it’s true. Basically DoorDash creates a fake website for the restaurant and even sets up a phone line to take orders. The order is then forwarded to the actually restaurant who aren’t aware that this order is done through DoorDash. If there are any issues i.e. wrong order forwarded, too busy for phone orders so long prep time, or out of a particular menu item, the restaurant gets the blame and the customer has no idea that they didn’t order with the restaurant directly but rather through a middle man. This has little upside for the restaurant and plenty of downsides.

DoorDash also sets prices independently of the restaurant menu. In some cases this means DD prices are higher than the store, in others DD prices it lower than the restaurant, and takes a loss in hopes of gaining market share.

This results in fun opportunities like Pizza Arbitrage https://www.readmargins.com/p/doordash-and-pizza-arbitrage

That's amazing. didn't they do that in Silicon Valley show ? didn't think it was real

Yes. In these cases, which aren't all - DoorDash does have contracts with many businesses - DoorDash is acting as a reseller, purchasing food at retail and selling it on to the customer for profit, at least when they get the prices right - www.bbc.com/news/technology-52724062

> In large part by not asking restaurants for permission to list them on DoorDash's platform and publish their menus.

Unsurprising - I think a few months ago someone posted a list of big software companies and the iffy strategies that they used to get market share.

Please define ‘succeed’. How many billion dollars do you need to lose to be a ‘success’ ?

Definition of 'succeed': Greater fool theory. https://en.wikipedia.org/wiki/Greater_fool_theory

Start company, let's call it "GreaterFoolTheory Company."

Get many investors.

Lose money right and left but the business "has promise" even if losing money.

Owners sell GreaterFoolTheory Company. for $5 billion to a bigger company, let's call it "Spooge-gle."

Success for me, made billions from selling GreaterFoolTheory Company.

GreaterFoolTheory Company keeps losing money as a division of Spooge-gle.

Spooge-gle's stock price goes up because they have acquired a company with "promise" and Spooge-gle "growing" through acquisition. Purchase price of GreaterFoolTheory Company is drop in bucket for Spooge-gle, and it extremely small percentage of company.

Spooge-gle closes GreaterFoolTheory division but does not mind because they have purchased more money-losing companies with "promise" and these new companies make investors not notice the original purchase of GreaterFoolTheory failed, or doesn't mind because Spooge-gle has so many hot new companies - and so Spooge-gle's stock price goes up.

Stock price goes up so investors' portfolios goes up. CEO, CFO, CMO, COO's paychecks go up vastly because stock price goes up and their contracts reward them if the stock price goes up.

Success for Spooge-gle, Spooge-gle's investors, and Spooge-gle's C suite. Win-win all the way around.

Know the game.

Any questions?

What about all the ones that ipo like DoorDash?

Same same.

The people buying the stocks are the greater fools and the original owners still succeed as their stock is now trading publicly and they can sell their stocks and make a bundle.

In this case, the investors do get hosed, so not a win-win, unless they sell it to the next greater fool before it collapses. Kinda like bitcoin. One could always sell it to a greater fool, until one can't. And hopefully that ain't you. If it is....suckk-ker...

Sad but true.

They generated a worldwide pandemic forcing restaurants to close in person sales and quickly turn to their established delivery platform in an attempt to survive.

Reply on news.ycombinator.com