Most delivery related startups in the food space have been having trouble over the past year and by the looks of it, we seem to be ushering in the new year with news of more firings. Why is it that all the guys in the food delivery business seem to be experiencing problems?
The cause of their troubles is to do with a more fundamental questions; what is a startup?
According to me;
Startups are businesses that have an asymmetry between manpower needed per unit of additional income.
If you run an agency engaged in building websites, there are only so many websites that you can build simultaneously with a team of 10 developers. In order to increase your income, you need to be able to do more which means bringing in more people. There is hence a symmetry between the human resources needed to grow income. Of course, you will find efficiencies as you scale, but those will be to the tune of 10%-20%; not 70%.
Unless, some part of it can be automated.