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Instacart (YC S12) wants to be Amazon with 1 hour delivery

techcrunch.com

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Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#21

Post by cs702 »

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful!

That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.com ended up raising a quarter billion dollars before shutting down.)[1]

The main challenge is that same-day, point-to-point delivery is very expensive -- a complex problem. (Most delivery systems in use today rely on some kind of hub-and-spoke design.) Perhaps the wide adoption of smart phones will make point-to-point delivery economically viable for Instacart -- e.g., by giving the company cost-effective access to underused delivery vehicles as needed to satisfy the ebbs and flows of consumer demand.

I'm curious to see if and how Instacart can pull it off.

--

[1] http://en.wikipedia.org/wiki/Kozmo.com#History

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#23

Post by danielweber »

nukethefridge wrote: post #17

This looks great. Today I'm sick WFH and could really use some meds delivered. I signed up for an invite... what is the process/wait time like? I may have to try something else if I'll need to wait too long.

Unfortunately for you I would expect medicine to be something they won't deliver. Alcohol, too.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#24

Post by nukethefridge »

danielweber wrote: post #23
nukethefridge wrote: post #17

This looks great. Today I'm sick WFH and could really use some meds delivered. I signed up for an invite... what is the process/wait time like? I may have to try something else if I'll need to wait too long.

Unfortunately for you I would expect medicine to be something they won't deliver. Alcohol, too.

I was thinking more like cough drops and advil, not prescriptions... would those still be outside the acceptable list of things to deliver?

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#27

Post by kevinh »

The techcrunch article title is misleading - they don't want to be Amazon; they're not maintaining warehouses (which may prevent them from crashing like Webvan). They're effectively delivery people that you hire to bring you products from local stores, which is a very different market.

Regardless, there are a lot of dead companies that litter the path for a product like this. I'd be surprised if Instacart succeeds.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#29

Post by dafnap »

nukethefridge wrote: post #24
danielweber wrote: post #23

Earlier quoted context omitted.

Unfortunately for you I would expect medicine to be something they won't deliver. Alcohol, too.

I was thinking more like cough drops and advil, not prescriptions... would those still be outside the acceptable list of things to deliver?

I ordered Advil through instacart. Really saved me.

Re: Instacart (YC S12) wants to be Amazon with 1 hour delivery

#30

Post by apoorvamehta »

cs702 wrote: post #21

I'd love to have this service at home, so I'm (selfishly) hoping Instacart becomes hugely successful! That said, I can't help but wonder whether the company will find a business model with sustainable economics. A lot of really smart people have tried and failed to accomplish this sort of thing before. For example, Amazon invested $60 million in Kozmo.com back in the late 90's, and they couldn't make it work. (Kozmo.…

While I agree that a lot of smart people have tried this before (Kozmo.com, WebVan, etc), I believe that there are significant differences in the approach that we are taking.

Specifically, Kozmo.com was founded in an era where you could IPO without having profits. Having that mentality from day one allowed them to make huge concessions to users such as give them free delivery on everything, and not have a minimum order. For example, you could pay $1.50 for a gum on Kozmo and get it delivered to you within an hour. WebVan, on the other hand spend $1B on building it's own warehouses and fulfillment infrastructure.

Learning from those companies, we have done a lot of things differently. For starters, there is a minimum order of $10. There is a delivery fee of $3.99 for 3 hours and $9.99 for 1 hour. (Would you not pay $4 for someone to do all your groceries?) And, we do not hold any inventory - all of it is sourced directly from local retailers.

It is also important to mention that the time that we live in is very different. People are a lot more comfortable adding their credit card information on web/mobile. Not to mention, the access to smart phones that people have gives customers the ability to shop from anywhere - office, couch, next to the fridge.

We believe we are different from the companies that have tried this in the past. And, we hope we are live in your hometown very soon.

(edits to follow)

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