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Comment by jonaf | Hacker News Reader

I'm shocked to see an IPO for one of these delivery companies. Not because there doesn't seem to be a value proposition, but because I don't understand what sets them apart from the competition. They seem to be in a flooded market: Plated, HelloFresh, I think I've seen commercials for a few more, and they seem to barely add value on top of another flooded market, grocery delivery: instacart, uber has a service like this, probably Lyft does, and most grocers are getting in on it, too. HEB, Walmart, et al. And HEB isn't even a nationwide company. Why would the public invest in this company compared to others? Is it a strategy to put fear in the biggest competitors' minds as a setup for an acquisition?

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I'd argue that they add a ton of value over grocery delivery. They're handling meal planning and portioning. That's a lot less wasted food and a lot less stress for anyone that isn't content to recycle the same few recipes week in week out.

I do agree that differentiating between competitors is tough though. On the surface all of these companies look about the same. They try to cater to different segments - health conscious, upscale, etc, but I'm not sure how effective this is.

For a while we ordered mostly takeout which was both expensive and unhealthy. We were able to start cooking for ourselves for a bit on our own, but eventually the weekly meal planning and shopping run got to be too much of a burden. That's where we found Blue Apron which had us eating healthy for another ~6 months. During this time we tried Plated too, but that week was guest recipes from some magazine and they were poorly timed and included practically inedible ingredients. After 6 months work situations changed and we just didn't have time for an hour of cooking 3 times a week. Since then we've been using Munchery which we're very happy with.

Exactly the same- we use Munchery and love it. I don't get why people want to fake-cook Blue Apron when you can just heat it up with Munchery... same quality!

Capital. The more money you raise, the longer you last at gambler's ruin. Hence why they're IPOing.

That's interesting, but it sounds too simple. Surely any of the competitors could also IPO, and at that point, Blue Apron still needs to justify why the market is better off investing in their company. By contrast, prior to its acquisition by Google in October 2006, Youtube was one among many social video sites, and neither it nor any of its competitors IPO'd, ever (source: I searched for news relating to "video sharing IPO" and found nothing prior to 2010 -- I could still be wrong about this claim, though). However, the operating costs of such a massive site (65k new videos with 100MM views per day, a mere 1 year after launch[0]) are substantial. If an IPO is just a way to defeat the competition using sheer survival tactics, I would have expected Youtube (or one of its competitors) to IPO or start fielding an IPO early-on. Maybe Google just bought them too quickly, as they were acquired in October 2006?

Does it mean that Youtube competitors like Vimeo must be profitable private companies in order to stay in the market? Youtube's pockets are, at this point, effectively infinite, so my sense is that Youtube competitors are not directly competing with what Youtube offers, but similar niches peripheral to Youtube.

[0]: https://en.wikipedia.org/wiki/YouTube#Company_history

YouTube was bought really quickly, well before they had a revenue model. Post dot-com boom, you generally need at least revenue to have a decent chance of success on the public markets, even if you don't have profits.

A better analogy might be Groupon (IPO'd 2011) or GrubHub (IPO'd 2014). Both of those were in similarly indefensible industries - GrubHub even in food delivery - and they both IPO'd basically because having capital gave them a competitive advantage over competitors that didn't, because it let them not-die and continue attracting customers with subsidized prices. Neither was kind to public market investors, but it was absolutely the right choice for founders & early investors who got out (or in some cases, were forced out).

What distinguishes BA is they have the largest market share. IIRC they are 10x bigger than the #2 company.

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