I’ve come up with a handful of business ideas over the years that just didn’t have the right math behind them. These are things like products that provide $20 worth of value but would cost $100 to produce. It’s just a losing bet. I’ve had a few app ideas like that, a crazy idea with an HDMI dongle, and a few others. They were cool ideas, but the math just didn’t work. Any solid business needs to provide value that it far ahead of the cost, and successful ones do a great job of that (like trash services).
It’d be like if I offered a service to come over to your house every morning, grab your car keys, and start the car for you so it’d be warmed up. Nice service, but what’s it worth? $5, maybe? For me to drive over and go through that effort it would at least need to cost $25 or so, so the math just doesn’t work. I’m not going to do all of that for $5, but you’re not going to pay someone $25 just to start your car.
That was kind of a silly example, but I think we’re seeing the math slowly unravel on food delivery services. With services like Grubhub and Uber Eats there are two main problems:
- Factoring in the delivery cost (plus tips) makes the food much more expensive than it “should” be.
- Delivery drivers aren’t making enough money to be worth their while.
There is a growing demand for customers to offer higher tips to delivery drivers, but those customers are already paying a lot for their food. It’s a lose-lose. You either need to raise prices on food delivery even higher to help the drivers, or lower it more to help the customers. Either solution makes the other problem worse.
The solution might eventually be found with automation (food delivery by robots), but that’s still years away for most of us. In the meantime, maybe this is just an untenable situation that doesn’t have a good solution.
I hate that some of my ideas over the years weren’t doable, but I’m glad to have realized that up-front instead of wasting time trying to make them work.