Gee, how long is this one going to last? Do those problems sound awfully familiar?
Full details of the financing are missing, but that’s a big name, amount, and valuation. I wouldn’t bet against them. I’d be more cautious if the lead was a big corporate partnership.
Fair enough, but it is interesting how it is facing some of the same Uber problems (with employee classification). Again, can this version of the grocery delivery service ultimately stay viable and be profitable against say an Amazon?
Don’t know anywhere close to enough about employment law, but laws can change and can be interpreted differently. It’s been going on for a long time.
The day you see unicorns with their “teeth” up, you are not dreaming, just the economy taking its course.
But, keep buying their stocks will ya…
Not to say it won’t go belly up too, but here are supposedly the differences:
I wonder how much instacart’s item markup is? They are providing the labor to pick the items, put them in the bags, and the delivery service. I don’t see how this could generate much profit. The math is pretty easy in terms of average order size (units and $), average markup, items picked per hour, hourly labor cost, deliveries per hour, and driver cost per hour.
Instacart…a service I will never use…
Not groceries, but another meal delivery service bites the dust…
The math on food delivery is HORRIBLE. It won’t be profitable without drones doing the delivery. The only reason it works for Pizza is you have a large volume of orders departing from a single point. You can batch deliveries together, so you deliver more per hour. You can’t do that if you’re picking up food from multiple places. It’ll get cold before it gets to the customer.
Has anybody used grubhub? They seem to be doing well. But I haven’t done any research on their business model.
I’ve used just about all of them. It’s honestly luck of the draw in terms of food freshness. Avoid ordering stuff that gets cold fast or gets ruined by getting cold.
So many negative thoughts here. I saw the same mood when Facebook’s IPO. No wonder they haven’t been in the news as the CEO of certain company.
Precisely, this type of attitude is the one that makes other people successful, they go against the current, the negative thoughts.
This is the business I was commenting on the topic of Uber. There are people that can’t go out because they are tied to some chores and they know that going out will mean wasting more money or time than ordering a bunch of crap from 7-11.
Say you are in a thirsty mood for a beer, a girlfriend is there, your family, who knows, and instead of going to your favorite bar, 7-11 or the store you order them through an app. You enjoy your family visit, girlfriend, etc. You may not be able to drive after drinking a few beers, so why not save yourself a ticket for a price?
Don’t based a business decision using anecdotes. They are for illustration only, easy to explain an idea or concept.
Business 101: Size of the target market. How big is it now, and can you grow it? You quote an situation where one might need the service. How many people at any one time would need it? How many similar situation? With this size, can you organize a profitable business?
Nobody can tell you that, it would be hearsay. Probably a survey or something like that, but asking me or anybody in this forum would be a waste of time.
The way you measure if any commercial endeavor will make it is by doing it.
I bet the same was said about Uber, Lyft, Facebook, etc. Who would’ve thought of such stupidity.
I heard an interview with the Instacart founder. He worked at Amazon before. Wanted to start something so naturally he moved to SF to do it. Grocery shopping is the very definition of a chore. Every 4 days I go to Trader Joe’s to buy exactly the same things, and it takes me at least an hour round trip door-to-door. How much is one hour of my time worth? I think Instacart provides real value for busy people.
Like Marc Andressen said, there is no wrong ideas. Only early ideas. Webvan was clearly ahead of its time. Turns out you need a pocket supercomputer in everyone’s hand to arrange fast pickup and deliveries. Another cautionary tale of the dot.com era, pets.com, has a present day analog in Chewy.com. Chewy just sold to petsmart for 3.4B. Pets.com was two decades too early.
Manch, I wasn’t commenting on the viability of the business. I was commenting on buying house’s idea that going against current is a good idea. I had said similar thing in this forum as Mark a few times, in different words, what he said is nothing original.
I use Instacart sometimes. It’s great if we have a really busy week or the kids are sick and I know taking them to the store will be a nightmare. It has a better business model than web van since they can use existing infrastructure and can scale up/down rapidly.
However like most of the unicorn startups, they are recklessly taking on financing and have valuations that are total fantasy numbers. The focus is on rapid growth and not a profitable and sustainable business model. It’s all about being the first and/or the biggest. It might work (Amazon, FB) or it might night (Webvan, Pets.com). A few will survive but there will also be a lot of dead unicorns during the next downturn.