Most delivery startups die before their first order

Hi, it’s Sharan.

I have an unusual seat in this industry.

I sell delivery platforms for a living, so founders come to me every week with a plan. Over the last few years I’ve watched a lot of those plans play out. Food delivery, groceries, couriers. In the Gulf, in Africa, in Europe, and in smaller markets the big apps don’t bother with.

Some of those launches turned into real businesses. Yalla built a food and grocery platform that found its market. Borku started with African cuisine and is expanding city by city. Hedge surprised me the most, they took the same software and built a marketplace for landscaping supplies.

A lot of the others never took a single order. One pattern I keep seeing is a founder spending months and most of his savings on a custom build, then having nothing left to run the actual business. I’ve seen budgets between $30,000 and $100,000 go into apps that launched late or never launched at all.

People assume the winners had better apps, or more money. I was close enough to tell you that wasn’t the difference.

In almost every failure the app was fine. The problems were around the app. The budget went into development instead of the launch. The plan was to cover a whole city from day one instead of starting with one area or one niche. There was no cushion for the early months, when orders are coming in but not enough of them to pay the bills yet. The winners did the opposite. They started small, kept their technology cost fixed, and put their real money into getting customers.

Most delivery startups don’t die because of competition. They run out of money before the first order.

I’m telling you this because I want to be clear about what this newsletter is for. Every Friday I’m going to share what I’ve learned from this seat. The launch stories and the failures. What the successful ones did in their first few months, where the money goes, and the mistakes I keep watching repeat.

And I’ll be honest, I sell one of these platforms, so I’m not neutral here. But you can take the lessons without ever buying anything from me. If an issue of this newsletter stops you from a launch that was going to fail, it did its job.

One request. Reply to this email and tell me two things. Where you are right now, whether that’s idea stage, building, or already live. And the one question you most want answered. I read every reply, and the most common questions will become the next issues.

Talk soon,
Sharan