Drop Fixed Negative Margins in 2019 Following Shifts in VC Focus
Derrick Fung · How to Launch a Marketplace | Derrick Fung, Founder of Drop · PMF Show · Mar 8, 2024 · at 18:14
Derrick Fung is the founder and CEO of consumer rewards platform Drop. He describes how Drop transitioned from rapid user acquisition at negative margins to focusing on sustainable unit economics.
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“We made them because, you know, now it's like 2019 and, you know, to fundraise, there was a big focus on unit economics and payback and all of that. And I think you know, you didn't, It didn't have to be fully solved, but we needed a story. And as we were operating at, you know, in a very unideal state around gross margins and whatnot, we said, we just said to ourselves, Hey, this is just the right thing to do because we can't just, this business isn't sustainable because we're just burning through investor money and not, you know, doing deals with merchants and partners and have them pay.”
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