Answers
Sep 01, 2022 - 05:57 PM
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.
Sep 03, 2022 - 06:36 PM
Interesting comments from Hacker News submission
-----------
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/doordas...
------------
Please define ‘succeed’, when talking about DoorDash. 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...
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?
-----------
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/doordas...
------------
Please define ‘succeed’, when talking about DoorDash. 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...
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?
Add New Comment