You’re Not Thinking Like a Silicon Valley Startup

Last Sunday, America was watching the Super Bowl LIV, with hundreds of millions of people gathered around TV screens, drinking beer, and eating junk food.

For those who work in the business of food delivery, that’s the equivalent of Christmas day. And you better bring up your A+ marketing game for that.

Even though, frankly, I had no interest in football, that morning I woke up to an email from Postmates, the app that delivers food from local restaurants, with a deal that recovering-from-Saturday-night me found too good to pass: one year of their Unlimited service at 54% off, or just $46.

The job of a VC-funded startup in 2020 is not to generate any profit for anyone, save for its founders.

If you aren’t familiar with Postmates Unlimited (just like I wasn’t before), that includes no-fee deliveries for all your orders, as well as other perks. I usually order food delivery about once or twice per month only, and I would have never considered an “unlimited” subscription at the full price of $99 per year. However, with delivery fees on my previous orders at $4.96 each, the math was simple: I would break even just after making 9 orders per year.

When I told my friend about what I had just signed up for, their first question was: “this deal sounds too good to be true, how are they even making money?”