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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

#41

Post by zeroonetwothree »

cs702 wrote: post #37
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…

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…

Sure it's NP-hard for an optimal solution, but the n here might be fairly small (how many orders in a 1 hour window?) or they can just use heuristics to do very well, if suboptimally.

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

#43

Post by tomfakes »

TillE wrote: post #35
Wilya wrote: post #14

Earlier quoted context omitted.

Well, except they sell only groceries, which isn't at all Amazon's core business (and isn't what Amazon does, in 99.9% of the world).

And they do their own delivery. It's nothing at all like Amazon, except perhaps for the user.

In Seattle, Amazon is testing Amazon Fresh for groceries. Amazon Fresh has their own delivery infrastructure with their own trucks and drivers.

They also deliver other things using this system. I received a CD via Amazon Fresh on Sunday, that I'd ordered on Saturday, whilst still paying for Tuesday delivery (free with Prime)

If Amazon can make this scale, they are absolutely competing with them directly. If Amazon can't make this scale, then it's unlikely to be a profitable business model for anyone else.

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

#44

Post by apoorvamehta »

cs702 wrote: post #37
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…

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 substitution. Since we are focusing on a niche (groceries), our system has already calculated the substitutes of items. We know how to substitute a Store Brand Ketchup to Heinz IF needed.

A lot of what I know about logistics is from my time at Amazon Supply Chain, where I dealt specifically with the challenge of fulfilling packages to the customer from AMZN FCs (aka warehouses). And, at Instacart we believe we can have the same efficiencies IF we model the stores in a city just like AMZN modeled warehouses across the world.

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

#45

Post by endeavor »

zeroonetwothree wrote: post #42

If they were to do alcohol delivery this could be really big. Even if they charge more for it (say $20) it's going to be extremely popular.

That's a very interesting idea. I can see the demand being there, but a lot of legal hurdles.

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

#46

Post by cs702 »

zeroonetwothree wrote: post #41
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…

Sure it's NP-hard for an optimal solution, but the n here might be fairly small (how many orders in a 1 hour window?) or they can just use heuristics to do very well, if suboptimally.

[...] how many orders in a 1 hour window?

Depends on the city. In large metropolitan areas like NY, Chicago, the VA-DC-MD corridor, etc., potentially tens or hundreds of thousands at certain times of the day (e.g., 7pm, when people get home from work).

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

#49

Post by cs702 »

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 somehow get a network of local retailers in each city, such that the stores together behave like and otherwise have similar operating and economic characteristics as regional warehouses, then, yes, I agree, it's possible. That's a big IF, though.

I have to take my hat off to you guys for attempting this!

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