Investors weren’t exactly wrong to be excited about the companies trying to make meal kits and plant-based meat cool. But they sure haven’t made any money from those bets. So…what went wrong?
Patrick Badolato is an associate professor of instruction in accounting for The University of Texas at Austin’s McCombs School of Business. In this podcast, he joins Motley Fool host Ricky Mulvey for a conversation about companies that have opened the door for genuinely exciting opportunities, but haven’t yet been able to figure out a workable business model.
They also discuss:
- Expanding your definition of competition.
- Why Blue Apron and Beyond Meat haven’t taken off like their IPO investors hoped.
- Whether Coca-Cola is at risk of becoming a “Cabbage Patch concept.”
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A full transcript is below.
This video was recorded on March 29, 2025
Patrick Badolato: It’s easier to add an app to infrastructure than infrastructure to an app. Think about your competition or who can replace you might not be up here. Like, what’s the entity that has the stuff, can do the stuff that we do and can possibly do it with better scale and everything else? Because it wasn’t really a Hey, some other player in the space outdid them. It was the existing infrastructure was able to come in and say, we appreciate you doing all the product market fit and the R&D and all that, and we’ll take over now. Thanks a lot.
Mary Long: I’m Mary Long, and that’s Patrick Badolato. He’s an associate professor of instruction at The University of Texas at Austin’s McCombs School of Business, where he teaches accounting. He’s also a returning guest to Motley Fool Money. My colleague, Ricky Mulvey caught up with Badolato for a conversation about what we can learn from companies that brought great ideas to life, but struggle to turn those ideas into successful growing businesses. They also talk about what went wrong with Blue Apron and Beyond Meat, went to be wary of the Lynchian approach, expanding your definition of competition and the importance of testing out ideas with other people.
Ricky Mulvey: So we had a discussion on the show about a month ago. I was talking to Anthony Schiavone, specifically about apartments and multifamily REATS in the Sunbelt area where investors got a trend right, but the stock ended up being a loser, which was a lot of people are going to move to the Sunbelt area when you can work from home, things are a little bit sunnier there. What’s ended up happening is there’s been a little bit of a period of overbuilding. Remote work, the demand for remote work has evened out, I would say, and now you have a stock like Mid-America Apartments, which has gone down, not a total loser, but people who invested money at the peak have lost money. This is not a unique phenomenon, though. There are times where investors will get a trend absolutely right and completely dead on. But as my colleague Jim Gillies would say, the price you pay matters at a high level, when do investors get a trend absolutely right, but they see their stocks end up being total losers, even though they were right on one account.
Patrick Badolato: I want to add one thing to the price you pay matters, which is, I think the company, like the horse you’re riding really matters, too, that the trend can exist, but if you’re betting on a company that doesn’t actually have a competitive, sustainable advantage, it might be one that has some years of performance and growth and everything else, but it just doesn’t pan out. We talk about this extensively in class. It’s honestly one of my favorite conversations, and I know we’re going to get into this in more detail, but some of the examples we’ve used over the past couple of years, I’ll just give two, and then we can add to this as needed. One of them is the meal kit trend, but I actually want to broaden it.
