The food delivery start-up Gorillas, is the fastest rising unicorn to come out of Germany in years. What at first seemed like a too-good-to-be-true investment opportunity, is more and more looking like a cautionary tale.
Gorillas started off fast and furious, rapid expansion, hiring at a clip pace, and popping up in city after city, country after country. The young, charismatic face of the company, co-founder and CEO Kağan Sümer lured in investors as fast as he expanded his business.
Gorillas was going to revolutionize the food industry, with its 10-minute delivery window, no minimum or maximum order, Gorillas aimed to change the way we shopped for food forever. But the usual start-up problems became glaring issues that have turned Gorillas from an opportunity that investors could hardly wait to invest in, to one they are now likely to shy away from.
Each issue Gorillas experiences seems to find its way back to Sümer’s leadership and his lack of experience. First there is security, Gorillas had a data breach that leaked the personal information of over 200,000 users. While this issue was fixed, experts report it was a patch job that likely will not last in the long-run.
Additionally, the leak exposed that Gorillas does not make their own tech, which, for a tech unicorn, is downright embarrassing. Gorillas’ underlying technology is a white label courier and NOT their own proprietary software.
Rather than investing in and creating its own unique technology, Gorillas, under Sümer’s leadership, took a short cut and is now paying the price. Or to be more exact, its customers are paying the price.
This is not the only area Sümer has cut corners. Gorillas relies on human labour, specifically, it uses pickers to fill orders, a slow and tedious process that is prone to mistakes, but it is cheap, and that is how Sümer likes it.
While his competitors are investing in costly automation technology, Gorillas continues to rely on human labour. This reliance has allowed Sümer to expand Gorillas so quickly. Human labour is the cheapest and easiest to upscale, but it will cost him in the long-run.
Automation is the future of the industry; it is more accurate and far faster than humans. This technology can stock dozens of items in minutes, allowing drivers to more quickly get out the door and deliver their packages.
It is also vital in speedy restocking of warehouses and dark-stores, as the technology automatically updates what items are low on stock, out of stock, and do not need to be re-ordered. Whereas Gorillas has to do manual checks which are slow. Reliance on human pickers also comes with high turnover, something that is not an issue with automation.
So, while Sümer is proud of Gorillas’ rapid expansion, the cost will be Gorillas’ inability to keep up with the competition long-term.
Sümer also has problems with his workforce, whom he refers to as a “family.” Workers laugh at this notion, and instead report feeling ignored, abused, and marginalized. Employees report having no outlet to note complaints, exemplified when Sümer said during one company meeting that he would not hear any complaints as he did not want to encourage a complaining culture.
This refusal to hear employee concerns and complaints has backfired, and now Gorillas has an increasingly angry and disgruntled workforce. Not to mention the numerous drivers who are reportedly using their positions to deliver drugs.
Another point of concern, Sümer cannot seem to hold onto co-founders. First there was Jorg Kattner, then Oliver Merkel, and finally Felix Chrobog. All three reportedly left due to disagreements with Sümer over how to run Gorillas. Notably, Merkel left Gorillas but not the industry, staying in the market through Flink, who also promise to deliver groceries within 10 minutes.
It is unclear what exact issues the former Gorillas executives were concerned about, but it was enough to make them jump ship. These start-up and industry veterans no longer want to be associated with Gorillas anymore, and this should be a red flag to any future investor.