Instacart (YC S12) Scores $220M Investment • Hacker News Board

Re: Instacart (YC S12) Scores $220M Investment

#21

Post by mtrpcic » Wed, Dec 31, 2014, 4:12 AM UTC

carbocation wrote: post #6

xasos wrote: post #5

Congrats to the Instacart team! I love what they are doing. Their app has a great user interface and the service is fast and easy to use. It's definitely interesting to see that the world is finally ready for something like this, because Webvan (I know it's brought up a lot) didn't do so hot back in the day. We obviously have the technology now that we lacked 10 years ago to make something like this a major success.

Is the difference technological or cultural? In other words, what different technology do we have now that would have enabled Webvan to succeed? To me it seems that the most marked difference is the consumer culture and comfort with online buying.

Faster internet makes building a grocery-sized cart online a lot easier today than it was 15 years ago. Add to this that the majority of cellphones in 2000 were mere phone/SMS devices, making it hard for shoppers to even get the lists they need to buy. Without GPS tracking on shoppers, it'd be much harder to estimate when the delivery would arrive. On top of all the actual technical benefits, everything has gotten easier/smoother/faster overall as aesthetics and UI have improved over the past 15 years.

Re: Instacart (YC S12) Scores $220M Investment

#22

Post by steven2012 » Wed, Dec 31, 2014, 6:21 AM UTC

bbcbasic wrote: post #11

$100m revenue is impressive. But what are the gross margins on that?

They must be including the cost of the groceries in as revenue. However, there's a good question as to whether or not they are allowed to include this as revenue or not, similar to Groupon. Revenue recognition is going to be a tricky one for them, since they are clearly distinguishing themselves as the delivery agent for stores like Whole Foods, Safeway, etc.

This, and the question of whether or not their workers are actually contractors or employees are the two biggest issues that I would be curious about. If history has any bearing, I think Instacart, Uber, etc will face the same outcome that Microsoft did with their "contract" workers, ie. they will be deemed employees and will have to pay up.

Re: Instacart (YC S12) Scores $220M Investment

#23

Post by steven2012 » Wed, Dec 31, 2014, 6:34 AM UTC

carbocation wrote: post #6

xasos wrote: post #5

Congrats to the Instacart team! I love what they are doing. Their app has a great user interface and the service is fast and easy to use. It's definitely interesting to see that the world is finally ready for something like this, because Webvan (I know it's brought up a lot) didn't do so hot back in the day. We obviously have the technology now that we lacked 10 years ago to make something like this a major success.

Is the difference technological or cultural? In other words, what different technology do we have now that would have enabled Webvan to succeed? To me it seems that the most marked difference is the consumer culture and comfort with online buying.

It wasn't the technology so much as the customers/marketplace.

Back in 1999/2000, the market to buy groceries over the Internet wasn't there. Paying for shipping was still a sore point, and Amazon Prime wasn't around yet. People just didn't associate buying groceries with the Internet, so there was a considerable amount of friction they had to overcome, and not a lot of time considering the burden of all the infrastructure they had. Once the bust hit, it was over for them because they didn't make enough revenues to pay their obligations and no more VC money to give them some breathing room.

These days, buying things like groceries is an afterthought, especially post-smartphone where you have a computer everywhere you go, so you can monitor the progress of deliveries, without having to sit by your desktop.