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I remember coming up with an idea for home grocery delivery using the internet to place orders. (This was in 1995 or 1996 I think... before I'd heard of WebVan)
by jt2190 14y ago
I remember coming up with an idea for home grocery delivery using the internet to place orders. (This was in 1995 or 1996 I think... before I'd heard of WebVan) Ten minutes of scribbling on an envelope convinced me that the idea could not be profitable, except perhaps for a niche market that was already well served.
When WebVan arrived, I was curious to see how they'd overcome the obstacles. They didn't.
No doubt someday, someone will make all of their "vision" happen, but it takes a lot more than vision to make a viable business.
- muzz 14y agoWebVan was profitable in the SF Bay Area from early on, and profitable in Southern California as well. So yes they had a lot more than "vision". They expanded too rapidly and the losses in those other geographic markets is what did them in.
- 1234the1234 14y agoYou were right about WebVan not being able to make enough money. Because it deals in everyday items(groceries, dry cleaning etc). These things have notoriously low margins. Pizza is the classic delivery model because a pizza is really cheap to make(beyond the upfront equipment), but the margins are enormous, because the buying public has it in their head that it's worth more. And they still have to squeeze drivers down to $4/hr and make them use their own cars. We have to be careful in having too much faith in magic capitalism thinking. Money doesn't always line up with the most useful, beneficial or really anything else. Often there are correlations between the two, but you must be very careful to automatically tie them together. Profitable things are profitable. Nothing more, nothing less. I know that sounds silly to read, but it's very important to keep that in mind if you are concerned about profit.