For anyone comparing us to Webvan - we are different. I've shared why that's the case several times before (google instacart). But, I think pictures speak louder than words:
That you are no-one and they are a big company,mature and well organized? This is what I got as a person how know nothing about both. And I am not sure that is a point for you.
I think (judging purely from the pictures) his point is that they attempted to integrate the whole supply chain instead of sourcing from local stores and delivering.
The point is, in case you truly didn't get it, is that these guys are a scrappy start-up (which, we hope, isn't burning money into a fiery pit of despair), and Webvan is a too-big-for-its-britches lumbering incumbent.
Good luck guys - Instacart seems like it's got amazing potential and I hope you guys do wonderfully.
It is totally fair. People (especially in the valley) tend to think small is better/more efficient than big. But what are the statistics on actual failure rates?
Start-ups that 'succeed' (buyouts, etc) for their founders can still fail before making any real difference in the actual marketplace.
Nothing against Instacart, but that first picture must become like the second before history will call them 'successful'
I think the point of the image is more that starting small makes them less likely to fail SPECTACULARLY. There is zero chance that Instacart will lose $830 million before it sees traction, which is what happened to Webvan. If Webvan had just been a small grocery startup, nobody would have cared if it failed.
Also, "historically notable" is a pretty high bar you're setting.
Finally, I'm sure Instacart hopes to reach that kind of scale eventually. But they don't want to start there because again, that's how you fail spectacularly and lose tons of money without giving people something they want.
I think this is best translated as: Back in the day you couldn't get this kind of business off the ground without a huge fulfillment center, a huge server farm and a huge fleet of trucks. Today all you need is a notebook.
And for those who aren't aware, WebVan attempted to do roughly the same thing over 10 years ago in the dotcom boom and was a poster child of the famous crash.
pclark, I don't think this is the best one. But, like i said, I've talked about this at length several times but it doesn't stop people from comparing the two companies. I thought a picture showing the contrast would help.
I think Instacart is a fantastic concept / service but for me it doesn't come without some internal conflict. When I was in grad school and didn't have a car, it was a huge pain to go grocery shopping. I had to bike a mile to the nearest grocery store and I could only fit a few items in my backpack. On top of that, it would rain often (thank you Florida), making the whole experience absolutely miserable. I always wished there was some service that could do "maintenance shopping" for me and always deliver the weekly essentials. I thought the same about laundry as well.
Now that I have a job and live a few blocks from the nearest store and have a car, is it right to pay someone else to do my shopping for me? Am I really that lazy? Do I really value other's time less than my own? I have often pondered these questions ever since services like Taskrabbit started and I saw people (able-bodied 20-somethings) using TR to do things like screw new light bulbs in.
So I'm not saying services like this shouldn't exist, because there is clearly a need...but I worry about what it means for our culture.
The entire purpose of the modern economy is to pay other people to do things so you don't have to do them yourself. Did you build your house from trees that you chopped down yourself? Do you grow all your own food? Do you cut your own hair?
If you think it's worthwhile to do your own grocery shopping, then you may do so. But there's nothing wrong with paying someone else for a service.
You presumably pay people for their skillsets. Screwing a light bulb in or doing your grocery shopping doesn't require a special skillset. There are some tasks that just aren't in the same ballpark as building homes, growing food, and cutting hair, and I think shopping is one of them.
The thing is that someone who is listing their services on TaskRabbit wants to exchange their time for money. If it's an amount of money that's worth it to you, it's not you who valued their time less then your own, it's they who did it. Why do law firms have janitors? Because lawyers' time is economically, if not morally, more expensive than janitors' time.
It's not a cultural failure to hire someone to do something you could do yourself, but rather wouldn't. Someone who is on TaskRabbit delivering groceries probably isn't using a bicycle, can get better at it than you can by combining deliveries, and can make money at the same time. It's a win for both parties.
I urge you to think deeper about this. You are saying these people chose to list their time, but why do they consider it in the first place and why don't you? Alternatively, think about the array of choices they have to make money and yours.
I'm not saying its an immoral service. I'm implying that "distributed labor" startups are problematic for me to participate in as a customer because I find the notion of spinning up people like we do servers to do tasks that I can buy my way out of to be problematic.
Whoah, hold on a minute. There are millions of people doing things for you less expensively. Just because you have a direct connection to an Instacarter (or whoever) doesn't really change much.
It makes the problem more real though, doesn't it? Unless you live next to an Apple factory, most people are abstracted away from this dilemma. If an Instacarter dropped off a package of light bulbs (sticking with the theme), what type of assumptions would you make?
By flushing your toilet you're participating in a system that requires someone to literally deal with your crap for probably far less money than they deserve to do it. This is more OK because you don't have to look that person in the eyes?
Good for them - I use Instacart at least weekly and it's a fantastic service. I really hope it's sustainable, as same-day delivery services have had trouble in the past. Launching in the valley where people will pay to have more time was a great idea, but I anticipate a long road ahead when it comes to middle America.
Instacart has same day (3 hour and 1 hour) delivery options. Freshdirect is next-day. As a startup founder, this kind of flexibility is great. Instacart also has a slick mobile app, which is a more pleasurable shopping experience.
FreshDirect is next-day at BEST. I've tried to order and have been limited to 2 days later at odd hours. I suppose that's a result of their success, but certainly something to be aware of and optimize against.
Can someone explain how the economics of scaling this type of business works now in 2012 when it failed in 2001? (most famously, Kozmo). I thought the problem was that the all-in cost of delivery was greater than the flat delivery fee added to each purchase. What's the trick to make this type of business work now?
Maybe this time around the business can be profitable at scale. What few people know/remember is that Kozmo, despite ultimately burning large amounts of money, was profitable in three cities right before they shut down.
I love Instacart, I use it almost every day! Glad to see some big name investors agree.
Focus on Trader Joe's. Their stores are smaller and easier for your shoppers to get in and out of, with a much more concise number of items. People trust the brand and are much more likely to try something out just by seeing and reading about it. Trader Joe's = Big time success.
In the UK the supermarkets offer a delivered groceries service themselves. Is this something that US supermarkets don't offer? Or is Instacart's selling point the rush delivery?
Maybe something like that does exist in the US, but I've never heard of it. Very few businesses deliver; pizza, sandwiches, Chinese food. That's about it.
Webvan maintained inventory/warehouses. The modern equivalent is Amazon Fresh ( http://fresh.amazon.com/ ).
Instacart is more like an Exec/Taskrabbit model. Their inventory/warehouse is your local grocery store. They pay drivers to go grab stuff there and bring it to you. So not terribly different in value prop, but pretty wildly different in terms of business model.
Instacart: http://imgur.com/2tWWh Webvan: http://minus.com/l2Mq5zUpwCP6E