Thread by @modestproposal1

This shareholder letter from Grubhub is one of the most brutally honest management communications I've ever seen.

Can read it as having two audiences: GRUB's shareholders, and the investors in and potential investors in Doordash, Postmates, and UberEats.

s2.q4cdn.com/772508021/file…

While this is certainly useful information for GRUB shareholders, there is 100% an entirely separate audience for this

"The topic du jour in tech right now is the sudden reappraisal of some high-flying startups based on unit economics/gross margins (e.g. WeWork, Uber, DoorDash, Postmates, etc).

“Growth solves many problems at startups, unit economics is not one of them”

medium.com/craft-ventures…

"you're asking me about the timing is definitely a timing element to this. Everyone knows there's extreme pressure on profits right now... we should be leveraging our advantage to create a differentiation that to replicate will be extraordinarily expensive to our competitors"

"I think they're seeing the same thing we are and that there is weakness in the private markets, there is a push for profitability. I think some of these companies are finally going to be held accountable for a lot of their investments"

"creating a scenario where to replicate our consumer facing differentiation competitors are going to have to spend a incredible amount of money exactly at the time their shareholders and boards are forcing them into more profitable investments. So I think this is the right time"

"I think there's a lot of bogus arguments floating around our industry, when you're trying to justify incremental jolts of capital. And so we're just trying to pop those fallacies and we see them."

"And one of the challenges is, if you are on the boards of these companies, is choosing not to engage is ceding the field. So, I think it's one of the toughest things a board has ever had to analyze. Like, any board in the history of business. Like, if you don't engage, you lose"

There's going to be a great competitive strategy case study to come out of the food delivery wars, regardless of the outcome.