{"id":10709,"date":"2020-05-20T14:30:00","date_gmt":"2020-05-20T21:30:00","guid":{"rendered":"https:\/\/BigJimIndustries.com\/wordpress\/?p=10709"},"modified":"2020-06-20T14:34:04","modified_gmt":"2020-06-20T21:34:04","slug":"vc-20-virus-hits","status":"publish","type":"post","link":"https:\/\/bigjimindustries.com\/wordpress\/2020\/05\/20\/vc-20-virus-hits\/","title":{"rendered":"VC-20 Virus Hits"},"content":{"rendered":"\n

from The Verge<\/a><\/em><\/p>\n\n\n\n

A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16<\/h1>\n\n\n\n

This is your brain on venture capital<\/p>\n\n\n\n

By\u00a0Bijan Stephen<\/a><\/p>\n\n\n\n

\"\"\/
Photo: DoorDash<\/figcaption><\/figure>\n\n\n\n

There are many things that don\u2019t make sense about global capitalism that I enjoy anyway \u2014 the clearly inadvisable, venture-backed monstrosities like dockless scooters and ride-sharing that, in the before times, changed how I interacted with the places I went. The thing that doesn\u2019t compute for me is how these companies continue to burn through a reality-warping amount of other people\u2019s cash in a way that upends the basic economics of things like taxi service and food delivery and fail, intentionally, to turn a profit. <\/p>\n\n\n\n

Yesterday, Ranjan Roy, a content strategist and writer, wrote about the latter\u00a0in his newsletter The Margins<\/a>; one of his friends who owns a few pizza restaurants suddenly got an influx of customers complaining about delivery when the restaurants didn\u2019t offer delivery. \u201cHe realized that a delivery option had mysteriously appeared on their company\u2019s Google Listing. The delivery option was created by Doordash,\u201d Roy wrote.<\/p>\n\n\n\n

Apparently, this is one way that DoorDash does customer acquisition \u2014 by bullying restaurants. But what\u2019s funnier about Roy\u2019s friend\u2019s problem (and it was a real problem because of Yelp reviews and angry customers) is that DoorDash priced the pizzas incorrectly. \u201cA pizza that he charged $24 for was listed as $16 by Doordash<\/strong>,\u201d emphasis Roy\u2019s. And then: \u201cMy third thought: Cue the Wall Street trader in me\u2026..ARBITRAGE!!!!\u201d <\/p>\n\n\n\n

And so the story unfolds. \u201cIf someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You\u2019d net a clean $8 profit per pizza [insert nerdy economics joke about there is such a thing as a free lunch<\/em>],\u201d wrote Roy. They order 10 pizzas this way, and it worked! The money was free, a seamless transfer from SoftBank\u2019s deep venture capital-lined pockets to Roy\u2019s friend\u2019s business bank account. Eventually, in another series of what Roy hilariously calls \u201ctrades,\u201d they just ordered pizza dough through DoorDash for $75 in pure profit.<\/p>\n\n\n\n

[ click to continue reading at The Verge<\/a> ]<\/p>\n","protected":false},"excerpt":{"rendered":"

from The Verge A pizzeria owner made money buying his own $24 pizzas from DoorDash for $16 This is your brain on venture capital By\u00a0Bijan Stephen There are many things that don\u2019t make sense about global capitalism that I enjoy anyway \u2014 the clearly inadvisable, venture-backed monstrosities like dockless scooters and ride-sharing that, in the […]<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[6,8],"tags":[],"class_list":["post-10709","post","type-post","status-publish","format-standard","hentry","category-mirth","category-weirdness"],"_links":{"self":[{"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/posts\/10709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/comments?post=10709"}],"version-history":[{"count":0,"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/posts\/10709\/revisions"}],"wp:attachment":[{"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/media?parent=10709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/categories?post=10709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bigjimindustries.com\/wordpress\/wp-json\/wp\/v2\/tags?post=10709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}