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Comment by downandout | Hacker News Reader

Wow what a crowded space. This reminds me of the daily deals site era, but at least then there was some room to compete because there wasn't a $40 billion behemoth waiting to crush them. I suspect that at whatever point Uber Logistics (or whatever they choose to call this inevitable extension of their service) takes flight, DoorDash and its $40 million will quickly vanish. This definitely isn't a space I would be doing a startup or investing in at this point.

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Many things look similar from a 1000 miles away. At the actual business level, Uber and DoorDash are different in almost every way. This is one advantage that investors close to these companies have, and one reason why it can be so hard to understand any of this just by reading blog posts. DoorDash has a great business, in many ways better than Uber's.

Whether carrying passengers or food, they are both in the delivery business. The primary difference is that one is worth $40 billion and one is not. Doordash may have some restaurant relationships that Uber doesn't, but that is ground that can be quickly made up with money. These VC's are merely hedging their bets with this investment.

In that case you should assume that FedEx will put them all out of business. There's a lot more going on than "delivery".

I wouldn't assume that. Fedex has many constraints on its business, and shares almost no core competencies with DoorDash or Uber. Its fleet consists not of nimble passenger cars, but of large, fuel guzzling trucks - making one-to-one pickups and deliveries inefficient and unprofitable. It also has no expertise in the area of recruiting independent contractors to perform work for it, which is one of the core competencies of both DoorDash and Uber.

I wouldn't turn to DoorDash to deliver live lobsters to me from Maine overnight, and I wouldn't turn to Fedex to get me food from down the street. Those are very different businesses requiring very different infrastructures. Therein lies the problem for DoorDash: they are not that different from Uber. They have similar core competencies, but Uber is vastly better known and financed.

Time will tell :)

didn't all the Fedex drivers start out as contractors, until a court case ruled that they are actually employees? Time will tell if this will happen to DoorDash and Uber.

I feel like your post highlights one of the glaring problems with the SV/SFBA echo chamber.

Uber, DoorDash, whatever, they're services glued together with server-side logic and mobile apps.

Fedex, UPS, and I'll even lump Amazon in there. These are logistics powerhouses. Their physical world equipment isn't a liability, its their advantage. Fedex and UPS have knowledge on how to manage a fleet of hundreds of aircraft, thousands of long-haul tractor trailers, tens of thousands of local delivery trucks, and hundreds of thousands of employees.

Your app does not have that. You have users. You have VC money. And while you might think you're more agile than logistics dinosaurs, they have the upper hand. Good luck.

> DoorDash has a great business, in many ways better than Uber's.

Have you considered what happens to that business if DoorDash is forced to reclassify its workers as employees? A delivery business is particularly sensitive to classification because of all the expenses that drivers incur, namely those associated with the use of their vehicles.

Do a Google search for "delivery driver class action" and look at the Glassdoor reviews for some of the companies in the space, this one included. Instacart has already been sued and it's only a matter of time before all of the major players are forced to defend their models in court too. You don't just get a free pass because you build an app, raise a bunch of money from VCs on Sand Hill Road and try to position a basic delivery service as a technology-based communication platform.

I share your opinion, but I would have passed on a Twitter seed round so what do I know.

What would really be interesting is to understand why so many smart and experienced people have the exact opposite opinion.

The only reason that Twitter is successful is because it was embraced by celebrities very early. I would have passed at the seed round stage as well, but that's because no one could have predicted the celebrity embrace of such a service. The reality is that they, along with most other startups, got seed funding not because of the idea but because of the pedigree of the founders.

I suspect there is some of that going on here as well. They are all current/former Stanford students and have been involved in successful companies. According to Crunchbase:

DoorDash was founded by four Stanford students: Evan Charles Moore worked on the founding team of Vevo; Tony Xu was at Square and Red Laser/eBay; and Andy Fang and Stanley Tang spent a summer together at Facebook. Moore and Xu were friends in Stanford's business school, and Fang and Tang are undergrads.

Same deal with Larry and Sergey, Mark Zuckerberg, Evan Spiegel, and most others. They weren't merely college students; they were Ivy League students. As much as people say college doesn't matter anymore, the evidence says otherwise. We'll probably never know if entrepreneurs from lower-tier and public universities can succeed at an equal rate, because they won't be given the funding to try.

Celebrities didn't embrace twitter for three years after it was launched. That counts as "very early"?

That must be why they didn't really grow until about 3 years after they were founded:

http://static1.businessinsider.com/~~/f?id=4abbcbef60b187740...

And yes, it was "very early" in their growth cycle. In fact celebrity embrace was the catalyst for their growth. No Ashton Kutcher = no Twitter today.

'eh. I think cause and effect are pretty hard to untangle here. Mostly I think you're wrong. But I'll admit that it's hard to bring real evidence to the table. There were a billion tweets before Ashton though and the celebs showed up because there was an audience to be had.

I can see your point of view though.

Few startups die because someone else stepped in. Most of the time they die by their own mistakes.

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