My partner Hasan’s online grocery business TazeDirekt closed shop two weeks ago.
Since TazeDirekt was Hasan’s own business rather than one of our minority investments, it was up to Hasan to decide when and how to explain the business’ closing. This is why I didn’t write about the closing in this blog.
Yesterday, Hasan shared the reasons for the closing and his learnings on Webrazzi. You can read his full statement in Turkish here.
As Hasan explains, the basic reason for the closing is that, although demand was strong and growing, and customers were very happy, the economics weren’t working out.
We had anticipated that the business’ variable costs per order would decline with scale, but this didn’t take place. In addition, there was no near term improvement in sight.
Add to this the fixed costs of the business. It takes a lot of resources, both in terms of people’s time and money, to run a business that produces its own fresh food, aggregates the products of hundreds of suppliers, and delivers them to customers across three cities (Istanbul, Ankara, and Bursa) as early as the next day.
These high fixed costs and non-declining variable costs came together to produce an unsustainable bottom line.
Whenever a startup stops operating, among the lost resources of time and money, the lost time is what matters. Although losing money is painful, you can make it back again. That’s not the case with time. It’s gone forever.
So the biggest pain from a startup closing its doors is the time that everyone in the company spent to try to make it a success. I spent roughly a day a month advising the company but hundreds of workers spent all of their working hours on TazeDirekt. It’s their time that matters.
I thank each of them for choosing to spend their time on TazeDirekt.