The Supply-Constrained Startup: Why Buen Provecho Can't Run Ads Like Other Apps

Most consumer apps face a straightforward growth challenge: get more users. They can run ads, optimize conversion funnels, and scale user acquisition as fast as their budget allows. But for Buen Provecho, a food waste marketplace connecting surplus food from stores to conscious consumers, the growth equation works backwards.

On the Levels Podcast, Guillermo Martinez, COO and co-founder of Buen Provecho, explained why having too many users is actually a problem for their business—and how this constraint shapes every decision they make about growth.

The Inverted Growth Model

After validating their concept through a WhatsApp group, Buen Provecho launched their app and faced an unusual problem. While most startups struggle to find users, they needed to actively slow down user growth to match their supply.

"I actually would love to have 10,000 stores and just crank up the advertising lever. I really want to do that. Like in the bottom of my heart, I just want to do that because it would be amazing because I talk to people and say, what you do is incredible. How do I know about this? And inside I'm just trying to say, I can't. I'd love to, but I just can't."

The fundamental issue comes down to the nature of their product. Unlike food delivery apps where restaurants have full menus available during operating hours, Buen Provecho only offers what's in surplus on any given day. That could be three items at one store in the morning and nothing available at another until evening.

"You will always most likely have more demand than supply. Right. Because it's not like, you know, buying at any, you know, delivery service like Deliveroo or whatever you might have over there. Because you have the whole menu all along the time that the store is open. So there's always like almost infinite supply if you have enough stores."

When users open the app and consistently find no products available, they stop opening it. The app becomes associated with disappointment rather than discovery.

The Cost of Growing Too Fast

This creates a dangerous trap for supply-constrained marketplaces. Every dollar spent on user acquisition without corresponding supply growth actually damages the business.

Guillermo shared a painful reality: "We tried to keep it organic for quite a bit, like six plus months because it was just growing like small time, but just keep growing and the users were recruiting."

Those six months weren't about being unable to afford ads or lacking marketing expertise. They were about deliberately restraining growth until they had enough stores signed up to support a larger user base.

The team learned this lesson through experience with viral moments they couldn't control. When a small influencer's TikTok unexpectedly brought in 14,000 new users in two weeks, it created immediate problems:

"That actually brought us like almost 14,000 new users in the time span of what? Yeah, one to two weeks. That was obviously super rewarding, but at the same time, know, the problem, the supply side of things."

The Metrics That Matter Differently

For most consumer apps, metrics like daily active users (DAU) and monthly active users (MAU) are straightforward goals—more is better. For Buen Provecho, these metrics need to be carefully balanced against supply availability.

Guillermo explained their approach: "We try to keep it below store growth because otherwise people just fill up the app, they don't buy anything and you basically just lost money."

This means their growth team has to think about user engagement completely differently. Instead of maximizing app opens, they need to maximize conversion rate when users do open the app. The quality of each session matters more than the quantity of sessions.

They've also discovered that certain features work against them. For example, 38% of their purchases come from users who favorite stores and get instant notifications when those stores publish products. While this creates loyal, high-converting users, it also means power users snap up inventory before new users even see it.

"We have users that really like some particular stores and you can like favorite them. So you get a notification in the second that they publish something. So that actually is like a double-edged sword, right? Because active users get notified immediately. So they purchase instantly. But if you're new, you get kind of screwed."

Growing the Right Side of the Marketplace

Instead of focusing on user acquisition, Buen Provecho's growth strategy centers almost entirely on store acquisition. With 420 stores currently on the platform, 75% are in Uruguay and the rest in Argentina, where they're experiencing 15% month-over-month growth.

The breakthrough came when they shifted focus to larger partners. Small and medium stores are valuable, but time-consuming to onboard individually. The real leverage comes from chains and franchises.

"Here we saw that to actually have a bigger impact, right? Try to fulfill a vision to the biggest extent, which is to be one of the players in waste reduction in Latin America. We needed to go to big stock stores, retailers, supermarkets, those kinds of things."

In Argentina and Colombia, franchise models are common—one business owner might operate 20-30 locations. Sign one partner, get 30 points of sale. That's the kind of supply growth that allows them to finally "crank up the advertising lever."

The Strategic Trade-offs

This supply-first approach creates interesting strategic decisions that other marketplaces don't face. When major supermarket chains approached them about investment deals, Buen Provecho had to say no.

"I mean, yeah, it's actually very interesting that you mentioned it. We did have some stores that were interested in doing those things. Thankfully, we're starting with some big supermarkets here, mainly just, you know, the old tradition, just being there, doing the same thing, insisting."

The reasoning was clear: accepting investment from one chain would give them access to that chain's stores, but would make it impossible to work with competing chains. They'd be handing competitors the data on what sells, at what percentages, and how effective the platform is.

"If I go to one supermarket chain and do that, the rest won't work with me. I'm going to be giving my data of how efficient I am, what I sell, what percentages of what things I sell to my competitors. They don't want to do that."

It's a trade-off between short-term scale and long-term market position. Take the quick win with one chain, or build slower but maintain the ability to become the neutral platform all chains use.

What This Means for Other Marketplaces

Buen Provecho's challenges aren't unique to food waste apps. Any marketplace with constrained or variable supply faces similar dynamics:

Rental platforms where inventory depends on homeowner availability and seasonality need to match geographic user acquisition with actual listing density.

Service marketplaces can only grow as fast as they can onboard quality service providers, or they risk users having poor experiences with underqualified providers.

Ticketing platforms for events have inherently limited supply—you can't acquire users faster than you acquire events without creating a poor experience.

The lesson is that marketplace growth isn't just about demand generation. The supply side constrains everything, and trying to overcome that constraint through marketing spend often backfires.

Key Takeaways

• Supply constraints flip traditional growth strategy: When supply is limited, adding users without adding supply damages the business by creating poor experiences
• Viral moments become problems: Unexpected user surges can overwhelm supply and create retention issues rather than growth wins
• Power users compete with new users: Features that reward engaged users (like favorites) can make it harder for new users to find value
• Large partners provide leverage: Moving from individual stores to chains and franchises allows meaningful supply growth that enables user acquisition
• Strategic independence matters: Accepting investment from major suppliers can lock you into one partner and prevent you from becoming the neutral platform

Listen to the full conversation with Guillermo Martinez on the Levels Podcast to hear more about navigating supply-constrained growth and expanding across Latin America.