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Beepi and Vroom and Carvana - will they make a DENT?

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#151
It's amazing the capital being poured into tech startups like this. My hunch is that they just couldn't compete with the rest of the industry. Even with auto lending at an all time high they failed! Carmax didn't flinch. I think the only thing valuable in their offering is the instant trade offer. I remember AutoTrader doing that - what happened there?
 
#156
I hate to sound so cynical, but I think it's ridiculous that some of these startups are getting hundreds of millions of dollars in capital when all their competition needs to do is tighten up the online-to-offline sales process (front-end). The backend is well optimized already! It seems so obvious. From Beepi to Carvana to Vroom...their value-add is credit and pre-populated paperwork?!
 

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#158
After reading that post on TechCrunch. I'm really baffled here. How do you take $150 million dollars in investments ($150 MILLION) and go completely bust a few years later? Actually go in the hole $6 million!! Did they not have an accountant in the freaking building?? Someone to say, "Hey guys! We are spending more than we are taking in here! Let's maybe change something we're doing?" Or... Someone to say something about over spending instead of saying "Well... the bank account is getting low. Let's just try and raise more money!!" I really don't get how ppl can be that freaking careless!! Now there's 300 people out of a job!!
 
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#159
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#160
Rick Buffkin said:
After reading that post on TechCrunch. I'm really baffled here. How do you take $150 million dollars in investments ($150 MILLION) and go completely bust a few years later? Actually go in the hole $6 million!! Did they not have an accountant in the freaking building?? Someone to say, "Hey guys! We are spending more than we are taking in here! Let's maybe change something we're doing?" Or... Someone to say something about over spending instead of saying "Well... the bank account is getting low. Let's just try and raise more money!!" I really don't get how ppl can be that freaking careless!! Now there's 300 people out of a job!!
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Not that the comparison is exactly apples to apples but if you recall the long road to profitability for Amazon they didn't make money for a very long time. The investors of Beepi and all the other "startup" companies in the automotive space are betting on potential. The potential of disrupting a huge already fragmented industry. The potential to become the next CarMax, just the 2017 version rather than the early 90s.

The flaw of Beepi was in the business model. The core belief that dealerships are somehow impervious to being a victim of disintermediation is silly. Sure there are huge operational hurdles. It is an extremely capital intensive industry. The franchise model is protected by state laws and by OEMs(for now). But the thought that some(some is a huge number by the way) customers are not ready for if not begging for a different way to buy a car is just wrong.

Carvana is doing well. Others have already started to follow. There will be more to come.
 
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