Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

Maple

High-quality food delivery startup

General Information
Category
Food and Beverage
Country
United States
Started
In 2014
Business Failure
Business Outcome
Acquired
Closed
By 2017
Cause of Failure
Bad Business Model
Founders & Employees
Number of Founders
Two
Name of Founders
Akshay Navle, Caleb Merkl
Number of Employees
Between 101 And 250
Funding
Number of Funding Rounds
2
Total Funding Amount
$29M
Number of Investors
8
Description

Maple was a startup that prepared and delivered meals in New York. It provided its customer with complimentary maple sugar cookie in every order made. Unlike others companies, maple gave full restaurant experience for it had its own apps, delivery staff, and kitchens. The idea was to have top chefs prepare the main menu and have satellite kitchens provide the complementary dishes. Since the business didn’t have to incur in the high expenses that come when opening an actual restaurant, they could afford to provide premium dishes at an affordable price.

Cause of Failure

Maple’s original plan when they started out in 2015 was to offer customer great food at reasonable prices. However, leaked reports from the company revealed that Maple was losing money on each delivered meal and it only began making a 30 cents profit on meals from 2016. Although they first relied on their investor’s fundings to cover operational costs, the forecasted losses were too high and they wouldn't be able to sustain it. So, they increased the price, added delivery fee and changed ways of computing sales tax. This sudden price increases led many customers to shift to other providers that offered the same or better services for less money.

Maple also spent a lot to buy expensive grass-fed beef, antibiotic-free chicken and also imported pricey oils. Some sources claim that Maple lacked the operational chops to prepare and deliver meals on scale while maintaining quality and producing a profit. Maple kitchens were also not well equipped to cook 10,000 meals a day.

Furthermore, when Maple launched they used to give a complimentary maple sugar cookie, afterward they withdrew them saying that they were moving away from all kinds of non-natural products to good simple food. This might have ulteriorly displeased customers that became accustomed to the signature free of charge cookie after each order.

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