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How On-Demand and Subscription Startups Juice Growth, Raise Money, and Die

I’ve chosen Freshly to pick on, but let’s be real, there’s tons of them that we’ve seen in the last few years.


How Freshly.com Grows Really Big and Fails.

We can’t do forensic accounting on digital fraud, but I think that’s what has actually occurred here.

The question is whether or not the investors are cognizant of Freshly faking their reviews?

Here’s the basic Freshly Meal Delivery Smash n’ Grab.

  1. Give away groupon style deals.
  2. Everyone wants them. The deals are ridiculous. Gourmet meals for 5 bucks. Just reheat them. The company pours ads on top of this and do referral programs. Super easy to setup with good modals and images.
  3. Freshly buys fake reviews. (yep it happens all the time)
  4. Freshly Show investors their growth curve.
  5. Investors dump money onto the company.
  6. Use same groupon strategy to expand in other cities.
  7. Oh Fuck moment when the lifetime value of the customers disappears.
  8. Company implodes.
  9. At first I didn’t doubt their ability to run a food delivery company, until I brought them 14 customers and found it exceedingly difficult to cash in on the promo-codes they fed me back. (This was more of an experiment with a twitter bot I setup to find hungry people in the Bay Area.)

Their cashout mechanism on referrals is ungodly difficult. The only reason they’d make it this way is because they don’t want customers to cash out on referrals.

If their Lifetime Value was real, they would have a robust affiliate program to blitzkrieg the market. They however, do not.

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