Episode 98: World's Biggest Travel Businesses, DoorDash Goes Large, HotDoc's Missing Dance Partner and the guys speak to EatClub Founder Pan Koutlakis
The guys discuss the world's most profitable travel businesses, DoorDash's big week as it buys Deliveroo and SevenRooms, HotDoc's ambitious IPO plans, and the guys speak to EatClub's founder.
The Contrarians catchup
Adir met a fan of the podcast walking around Sydney, who manifested him into existence when he said “I feel like this might be somewhere Adir might walk when he comes to Sydney”, before running into Dr. Biceps himself.
Adam discusses prominent investor Yuri Milner’s four traits he believes define successful founders: understanding customers, storytelling, having a partner, and a loving family. Adir added being lucky, understanding psychology, persistence and resilience, learning from failures, being smart, and being kind.
Adam: “Have you heard the saying, ‘watch your pennies and the pounds will flow?’”. Adir: “I haven’t heard that in the 21st century.”
The latest Adir book recommendation: ‘The Dream Architects: Adventures in the Video Game Industry’, by David Polfeldt, the Managing Director of Massive Entertainment, a video game studio part of Ubisoft. One quote that stuck with Adir, that will be the title of his memoirs, is “if you’re not paranoid, you don’t know enough”.
An Adam quiz: What are the three most profitable travel businesses in the world? 1. Google ($27B), 2. Emirates ($9B), 3. Booking.com ($6B). Adam argues many people see Emirates and Singapore Airlines being on par, but Emirates makes triple the profits.
Adir grilled Adam on the breakdown of his work week, which is roughly a third spent on decision-making, around 10% on internal meetings, and around 20% on external meetings, with a lot of variation week to week. Adir said 80% of his week is people saying a problem has happened - “if you've got a problem, that's okay. My whole life is problems. I sleep perfectly at night. Bring me the problem early so we can talk about it and there's time to fix it”.
Live with EatClub Founder Pan Koutlakis
Restaurant app EatClub has picked up an $18.2M series A, led by Co:Act, as it expands into the UK.
The app is a way for restaurants to fill up empty tables by pushing time-sensitive discounts for nearby diners to claim straight away. Venues pay for demand with a commission on bills generated, while customers score immediate deals with no upfront fees.
The guys chat about the Series A with Founder Pan Koutlakis.
Pan: “Our vision is to introduce dynamic pricing to the hospitality space similar to what's happened in the hotel and airlines industry. Restaurants actually make really healthy gross margins, but sometimes don't do enough volume throughout the days and weeks to make a healthy profit. And price is one of those levers restaurants can pull to really generate demand at specific times.”
Pan: “We were totally shocked by Covid. There were a lot of businesses in the food space that got a massive tailwind from Covid. Our business was not that at all. We were predominantly dining and lockdown regulations effectively just pulled all the revenue from underneath us overnight.”
Pan: “I think there is a world where one day there is no price, like the price is totally arbitrary. There's no discounting surge price, there is just a price that's going to get that particular customer on that particular table at that point in time.”
DoorDash gobbles up Deliveroo and SevenRooms
DoorDash has taken out a horizontal and vertical competitor in a few swift moves, acquiring New York-based hospitality CRM leader, SevenRooms, for $1.2B, as well as British food delivery firm, Deliveroo for $3.9B. DoorDash is currently valued around $85B, up 77% in the last 12 months.
Adir: “I feel sad for restaurants. Basically you've got these weak, helpless, disaggregate restaurants. A few of them have brands, but the rest of them struggle to exist. And as if they don't have enough problems in life, they're getting eaten by delivery businesses that are charging them huge amounts of money in the form of fees, and now that company that's taking all of these fees is going to be the company that's trying to have the backend software in their businesses as well.”
Adir: “Basically any store that's selling other people's stuff, whether it's products or services, thinks the way that it can make more money is not only to take a clip of profitability on selling that company's thing, but also to force that company to pay to advertise so that it's considered.”
Adam: “We've talked about these businesses really being lose, lose, lose. DoorDash doesn’t win that much, the restaurants lose, the customers don't have a great experience.”
HotDoc's missing dance partner
Digital doctors’ booking start-up HotDoc has scheduled in a new corporate adviser before a potential $200M sale later in the year.
The guys discuss the helpful but dwindling space, where HotDoc and Healthengine essentially provide the same service and consumers would benefit from consolidation.
Adir: “I just I cannot believe we're sitting here and the most obvious deal is not there, which is join together, fire some people, get some synergies, make some profit. My worry here is they may have missed the window, but there’s no global player in the market.”
Adam: “This is a really interesting space that looked incredible 10 years ago but probably hasn't reached the heights that many investors, myself included, thought these businesses would reach.”
Five other stories worth following:
A nine-month-old baby with a rare genetic disorder has become the first to receive a custom gene-editing treatment targeting a single mutation. Using CRISPR, scientists corrected a specific genetic letter, offering hope to over 30M Americans affected by one of 7,000 rare genetic diseases.
MIT has retracted a widely circulated research paper by a doctoral student, citing concerns over its “integrity.” The paper claimed AI implementation at an MIT lab significantly boosted worker productivity. The university now urges readers to disregard it, stating it should be “withdrawn from public discourse.”
Epic Games has escalated its legal battle against Apple, filing a new request for Apple to allow “any compliant version of Fortnite” onto the US App Store. The dispute centres on in-app purchase commissions, with Epic arguing Apple’s policies are anti-competitive and restrict developer autonomy.
Former President Biden has announced he has an “aggressive” form of prostate cancer that has spread to the bone. Discovered last week during treatment for “increasing urinary symptoms,” the cancer is “hormone-sensitive,” which could allow for effective management. Biden is currently evaluating treatment options with his doctors.
In bad news if you’re a Disney boy, Universal’s Epic Universe theme park opens in Orlando, featuring five new themed worlds based on Harry Potter, Nintendo, and Universal’s monster movies. Analysts project the park could generate $2B in its first year, further cementing Orlando’s reputation as a theme park destination.