I think there is a difference between chasing profits and requiring them. Postmates is a market place and platform, for us to be successful we have to drive value to everyone that participates. That means driving value to our Postmates, customers and merchant partners. This also includes us, Postmates, as a participant of the platform.
Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform.
Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend.
EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins.
There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies.
If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
>If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
Unless by subsidizing, this company takes more market share and causes the non-subsidizer to dip into their own margin, and the race to the bottom continues.
Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform.
Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend.
EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins.
There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies.
If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.