This is the text of the attachment to my email to Manu referenced in this post.
Thoughts on Dishero
What we have today - Dishero isn’t working. We have built a great team and phenomenal engineering, but failed in scaling up the business.
What I learnt is selling to restaurants is an extremely painful process, between chasing down the crazy busy owners, identifying the decision makers, who are constantly putting out fires (sometimes literally), do not open/read/reply to emails, do not answer phone calls, running very low margin businesses, low wage employees and continuous churn. And the number of times we were stood up in face-to-face demos/meetings with prospects…
The business model has been proven to be difficult to scale.
We’ve spent $1M and north of one year iterating on it so far. We have $1.79M left in the bank, burning ~$100K a month, after a revenue of ~$9K/month (July/2015). Despite the long and comfortable runway combined with (slowly, but steadily) growing revenue, our current sales convergence performance does not result in a necessary positive trend (i.e. profitable or be ready for Series A).
Option A: Continue to iterate on the current product & sales strategies/tactics.
Pros: The engineering and business teams are setup to do it, we have all the assets, initial minimal traction and revenue, plus enough funding to continue.
Cons: So far, we haven’t identified a way to unlock sales performance to an interesting point. Doubling sales numbers AND doubling our prices results in a minimally profitable business in 3 years, with no chance for Series A. And even that, we do not know how to do it today. Our model as it stands cannot be ‘fixed’ with sales/marketing strategies/tactics.
Option B: Pivot within the restaurant industry
Pros: The engineering and business teams are setup to do it, we have all the assets, initial minimal traction and revenue, plus enough funding to continue (basically same as Option A). Plus we have local industry connections to potentially test and experiment with ideas/get feedback.
Cons: Restaurant industry is a pain in the rear (see above), ideating, experimenting and iterating will probably take months, and I find it unacceptable to do it with a $100K burn. If we already decide to pivot, the only reason to stay in the restaurant industry is the existing business team, but it is also the primary reason for the high burn.
Option C: Pivot outside of the restaurant industry
Sub-options: Scale down/Sell the company/Asset sale/Dissolve. Details matter!
Pros: Try, learn, fail, learn, move on. Don’t sell to restaurants. Rest. Start over!
Cons: Loss of a solid team, loss of existing (albeit minimal) momentum
- Paying customers/revenue
- Engineering assets
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