The rise and fall of Blue Apron

Special thanks to Mercury for partnering with me! Mercury gives founders powerful banking, cards, and financial tools built to help businesses operate smarter. Learn more and get started at http://mercury.com/ I’ve used Mercury across my businesses for years, and Mercury Spend helps my teams operate without making me the bottleneck. Teams can have their own cards, budgets, and spending limits while I keep visibility into where the money is going. Receipts can be captured through Gmail, text, or a photo. If you’re building a team and want a better way to manage how money moves across your business, check out Mercury Spend: http://mercury.com/ And if you want to spend time with other business owners and operators thinking through lessons like these, learn more about Compound Conference here: https://www.girdley.com/compound Blue Apron went from explosive growth and a multibillion-dollar valuation to selling for just $103 million. In this business breakdown, I look at how Blue Apron grew so quickly, why customers didn't stick around, what went wrong with its operations, and the business lessons founders and operators can take from its collapse. Get the 2-minute cheat sheet for this video → https://girdley.com/youtube 👇 SUBSCRIBE for more business breakdowns @michael-girdley ► Get my weekly letter to business owners: essential insights to run, grow, and stay ahead in your business → https://links.girdley.com/newsletter-yt ► For sponsorships or inquiries please reach out to: [email protected] ► Do you have a hat I should wear in a video? Send it to us: [email protected] ► Free events on all things small business: https://links.girdley.com/lectures-yt ► Deep dives on businesses for sale: @acquisitionsanonymouspodcast ► Follow me on Twitter/X: https://x.com/girdley Blue Apron looked like one of the great startup success stories of the 2010s. Founded by Matt Salzberg, Ilia Papas, and Matt Wadiak, the meal-kit company grew from roughly $75 million in revenue to around $340 million in a year, eventually reaching $881 million in 2017. Venture capital poured in, podcast advertising put Blue Apron in front of its ideal customers, and at its peak the company had more than a million subscribers. But underneath that growth was a difficult business model. Analysis cited in the video found that nearly three out of four customers were gone within six months. Blue Apron was spending heavily to acquire customers who often didn't stick around, while asking busy consumers to pay a premium for meals they still had to cook themselves. The result was a recurring-revenue business with a serious churn problem. Then Blue Apron made a huge operational bet on its Linden, New Jersey fulfillment facility. Problems there forced the company to pull back on marketing just as it prepared to go public. During its 2017 IPO roadshow, Amazon announced its acquisition of Whole Foods, adding another challenge at a critical moment. Soon afterward, HelloFresh gained ground in the U.S., Blue Apron's revenue fell sharply, and the company struggled to find a profitable model even when COVID temporarily increased demand for cooking at home. The rise and fall of Blue Apron is ultimately a lesson about confusing revenue growth with business quality. Software economics don't automatically translate to physical products: every new meal kit meant ingredients, labor, packaging, fulfillment, and delivery. In this Blue Apron documentary, I break down what happened to Blue Apron and why understanding customer retention, market size, unit economics, and operational complexity matters more than a great-looking growth chart.