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

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

#71

Post by philh »

LargeWu wrote: post #39
apoorvamehta wrote: post #30

Earlier quoted context omitted.

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 ord…

> Specifically, Kozmo.com was founded in an era where you could IPO without having profits Yes, it's different this time. Just ask Groupon. Also, and maybe you have a lot more insight into the business model than I do, but I just do not see how this scales, as your marginal labor costs have got to be a very high portion of your revenues. How many deliveries per hour can an employee handle? For example, assume you are…

> Yes, it's different this time. Just ask Groupon.

(The important part of what you quoted was not "you can no longer IPO without profits" but "the ability to IPO without profits harmed kozmo, and we are not making the same mistake". It's not particularly important whether or not IPOing without profits is actually still possible.)

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

#72

Post by SoftwareMaven »

Monday I was having a conversation with a coworker about the looming major showdown between Amazon and Walmart. My take was Walmart should offer exactly this, allowing them to leverage their massive supply chain and warehouses in every city with more than 5000 people (aka "The Walmart").

Awesome to see a startup rising to the challenge.

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

#73

Post by laglad »

jonmc12 wrote: post #55
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.…

I'm hoping service succeeds also - its an awesome value proposition for consumers. However, I've built a few real-time delivery businesses, and I'm pessimistic. Real-time operations are costly to manage even though the software has become easier to build. Not being Amazon and not being able to control inventory, and access to that inventory, hurts. However, probably a bigger issue is establishing consumer habit - tri…

Do you think that the delivery economics work better in incredibly dense regions like Mumbai or Shenzen?

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

#74

Post by jaylevitt »

msbarnett wrote: post #70
rogerbinns wrote: post #64

Earlier quoted context omitted.

The expense is mainly because of the driver. The moment self driving vans become economically feasible the delivery expenses will drop precipitously.

And customers will, what, walk out to the robovan and dig through the boxes until they find theirs? Paying a guy to sit in the robovan and run the packages to the door isn't going to be appreciably cheaper just because he sits in the passenger seat.

Robotically offering me a box seems significantly easier than robotically driving a freaking van.

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

#75

Post by boomzilla »

laglad wrote: post #73
jonmc12 wrote: post #55

Earlier quoted context omitted.

I'm hoping service succeeds also - its an awesome value proposition for consumers. However, I've built a few real-time delivery businesses, and I'm pessimistic. Real-time operations are costly to manage even though the software has become easier to build. Not being Amazon and not being able to control inventory, and access to that inventory, hurts. However, probably a bigger issue is establishing consumer habit - tri…

Do you think that the delivery economics work better in incredibly dense regions like Mumbai or Shenzen?

Actually I think this business model works better in big and dense Asian cities. There are a few things going for them: 1. cheaper labor: that drives down delivery costs 2. low credit card penetration is a business advantage: the drivers (or bicycle riders :), can collect COD. That saves card transaction fee too ... 3. buying habit: I know for certain that many Asians still shop groceries daily. This, together with a very busy, growing, new middle class, provides for a big and fast growing market

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

#76

Post by K2h »

apoorvamehta wrote: post #44
cs702 wrote: post #37

Earlier quoted context omitted.

apoorvamehta: thank you for your prompt, articulate response. The logistical challenges look daunting to me. My recollection is that the problem of coordinating and optimizing deliveries in such a point-to-point system with time constraints is NP-hard (I could be wrong about this, but that's my recollection). Then one has to deal with all sorts of real-world problems like order-fulfillment errors and substitutions (i…

cs702, your recollection is correct. Last mile logistics is a hard problem. Not to mention, order-fulfillment errors and substitutions do happen. However, we believe these are solvable. It comes down to two things - one is proper training of the drivers and using technology as much as possible to eliminate chances of errors. That is too high level. Let me explain more clearly for one specific case of order substituti…

if you can coordinate your own employee, or an employee at the supermarket to pull the order and have it ready just-in-time style to the curb, and then have the courier, again, be it your employee, a taxi without a customer, or another shopper going home to the same neighborhood you have gold. I would focus on the coordination of activities people are mostly already doing and by putting it all together you, and this specialized order fulfillment network/consortium make a few bucks.

I wish you luck.. that is a super cool business you get to design.

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

#77

Post by [deleted] »

apoorvamehta wrote: post #44
cs702 wrote: post #37

Earlier quoted context omitted.

apoorvamehta: thank you for your prompt, articulate response. The logistical challenges look daunting to me. My recollection is that the problem of coordinating and optimizing deliveries in such a point-to-point system with time constraints is NP-hard (I could be wrong about this, but that's my recollection). Then one has to deal with all sorts of real-world problems like order-fulfillment errors and substitutions (i…

cs702, your recollection is correct. Last mile logistics is a hard problem. Not to mention, order-fulfillment errors and substitutions do happen. However, we believe these are solvable. It comes down to two things - one is proper training of the drivers and using technology as much as possible to eliminate chances of errors. That is too high level. Let me explain more clearly for one specific case of order substituti…

[deleted]

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

#78

Post by greendestiny »

jontas wrote: post #69
dclowd9901 wrote: post #61

Earlier quoted context omitted.

I think to solve this problem, Amazon needs to bridge the gap between their value and local retailers' stock. It'd work something like this: You go online. You want to buy a new A/V receiver You find the one you want on Amazon at 9 am Amazon then asks you where you live Amazon taps into a database of willing stores that might carry the product. Most big-box stores have web-based inventory checks, so syncing their inv…

Isn't this sort of the way those flower delivery sites work? You purchase some arrangement online and then a local retailer puts it together and delivers. So this model already exists and is (presumably) successful. I'd sure love to see it rolled out to other industries.

In those cases people tolerate massive delivery fees because it's not just the access to the florists they have to worry about but also access to the recipient.

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

#79

Post by lazerwalker »

msbarnett wrote: post #70
rogerbinns wrote: post #64

Earlier quoted context omitted.

The expense is mainly because of the driver. The moment self driving vans become economically feasible the delivery expenses will drop precipitously.

And customers will, what, walk out to the robovan and dig through the boxes until they find theirs? Paying a guy to sit in the robovan and run the packages to the door isn't going to be appreciably cheaper just because he sits in the passenger seat.

Amazon already has "Amazon lockers" scattered across Manhattan where you can go pick up your packages from a kiosk inside a grocery store / drug store. You enter a pick-up code on the touchscreen, and a specified locker opens up with your goods inside it. It's easy to see how similar tech could be adapted for use inside a robovan.
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