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Cash Burns Fast for Uber-Like Startups That Grow City by City

Cash Burns Fast for Uber Like Startups That Grow City by City Bloomberg Business


The list of city-by-city startups includes mobile car-booking companies Uber Technologies and Lyft, food delivery startup Munchery, parking provider SpotHero, shopping service Instacart and laundry startup Washio. While they rely on technology to deliver new products and services, their business models are a departure from the low-cost ventures built by a few programmers working in a cramped office. Instead, they're setting up kitchens, renting warehouses and hiring local staff.

Although Good Eggs started out as a software company, Spiro sought funding as he pivoted and rolled out distribution operations."The real value was in building physical distribution infrastructure city by city, driven by technology,"  Spiro said. "Investors were open to it."

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Pro: Creates serious barriers to entry.

Con: Requires a lot of capital up front. 

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