DoorDash (YC S13) Raises $17.3 Million From Sequoia To Expand On-Demand Delivery

Re:DoorDash (YC S13) Raises $17.3 Million From Sequoia To Ex... by tpeng on Friday May 23, 2014 @01:10AM (#7788078)

Businesses in local have two-sided network effects. The most famous two-sided network effect is eBay, where the buyers attract the sellers and the sellers attract the buyers. Here you have local businesses and consumers as the two sides. Ideally, you would have long-term, exclusive relationships with the local businesses and offer some loyalty rewards to the consumers.

There are also some interesting scale economics unique to logistics. It doesn't cost much more to deliver to two houses on the same street vs. one house. So as the density of your userbase goes up, your cost per delivery drops. That being said, scale advantages of local delivery do not approach the scale advantages of a wider network like UPS/FedEx. If delivery were the only aspect of the business, I agree that it would be very competitive

Although I do believe local delivery companies are defensible, they are not necessarily a winner-take-all business in every market like eBay or craigslist. Multiple delivery companies can coexist in a local market, each serving a distinct set of restaurants

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Re:DoorDash (YC S13) Raises $17.3 Million From Sequoia To Ex... by Nimi on Friday May 23, 2014 @08:33AM (#7789028)

So if I understand correctly, the plan is eventually to become the "marketplace for food"? We have one here in the high-tech sector around Tel-Aviv (mainly for lunches), this is indeed very defensible. You might be interested to know they apparently built their customer base by saving the employers the hassle of accounting for the lunches for tax purposes - the employer is simply informed of a sum at the end of each month and that's it; they also have a way to limit the expenditure of employees to something reasonable each month.

BTW, this marketplace take wasn't the impression I got from the TC article.

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