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Why are Silicon Valley startups continually trying to get into the food and grocery delivery business? Is there research somewhere that shows that this is a luc

Why are Silicon Valley startups continually trying to get into the food and grocery delivery business? Is there research somewhere that shows that this is a lucrative market? I'm old enough to remember Webvan, I'm seeing COSTCO cede their delivery service to Google, and I realize that most food delivery business is minimum wage work. I don't see the money in it.

mmanfrin 12y ago
I think for two reasons: Food delivery is essentially rent-taking, since once someone begins to use it, they'll use it indefinitely (until a better service or format comes along); and secondly, I see grocery delivery as a way to trojan horse in to same-day parcel delivery, since if a person is delivering your groceries, the marginal cost of having them also deliver a package is tiny in comparison to the cost of delivering just the package.
27182818284 12y ago
>I'm old enough to remember Webvan, I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch. So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?
- encoderer 12y ago
  Also wasn't WebVan running warehouses? That is so totally different than InstaCart and Google Shopping Express. Your long memory is, IMO, working against you here. AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.
  - 27182818284 12y ago
    >Your long memory is, IMO, working against you here. What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy. Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token. [0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step/dp/0984999302 http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...
    - encoderer 12y ago
      Sorry, my reply was to GP.
deleted 12y ago
[deleted]
rhino369 12y ago
I really wonder why as well. Grocery is a super low margin, super competitive business.
imjk 12y ago
It's a time consuming and often inconvenient thing that almost everyone has to do on a regular basis. Everyone is a large market and if you can find a small percentage of that market willing to employ your services, that's still significant.
pkteison 12y ago
I assume the idea is to give their drivers something useful to do with downtime. If all drivers could be closer to 100% utilized by taking a delivery when there are no passengers, they could have more drivers and happier/wealthier drivers. Similar to AWS, really. Originally the AWS idea was that Amazon needed those extra servers and a way to manage them anyway, might as well do something valuable with the excess capacity.
- ereckers 12y ago
  I can see that thought process. However, I think there's a big difference between racks of servers and racks of people. People skip work, crash into things, ask for raises, unionize, sleep in, etc.. I don't know much about commoditizing things, but I'd much rather invest in a warehouse full of machines, then a low wage and potentially uninspired human workforce.
UVB-76 12y ago
I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services. There isn't much money in grocery delivery services at scale.
- timjahn 12y ago
  "I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services." Couldn't agree more. Amazing how tunnel visioned they are.
adamio 12y ago
Uber outsources most all their costs. It's lucrative for Uber

mmanfrin 12y ago

I think for two reasons: Food delivery is essentially rent-taking, since once someone begins to use it, they'll use it indefinitely (until a better service or format comes along); and secondly, I see grocery delivery as a way to trojan horse in to same-day parcel delivery, since if a person is delivering your groceries, the marginal cost of having them also deliver a package is tiny in comparison to the cost of delivering just the package.

27182818284 12y ago

>I'm old enough to remember Webvan, I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch. So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?

encoderer 12y ago
Also wasn't WebVan running warehouses? That is so totally different than InstaCart and Google Shopping Express. Your long memory is, IMO, working against you here. AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.
- 27182818284 12y ago
  >Your long memory is, IMO, working against you here. What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy. Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token. [0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step/dp/0984999302 http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...
  - encoderer 12y ago
    Sorry, my reply was to GP.

deleted 12y ago

[deleted]

rhino369 12y ago

I really wonder why as well. Grocery is a super low margin, super competitive business.

imjk 12y ago

It's a time consuming and often inconvenient thing that almost everyone has to do on a regular basis. Everyone is a large market and if you can find a small percentage of that market willing to employ your services, that's still significant.

pkteison 12y ago

I assume the idea is to give their drivers something useful to do with downtime. If all drivers could be closer to 100% utilized by taking a delivery when there are no passengers, they could have more drivers and happier/wealthier drivers. Similar to AWS, really. Originally the AWS idea was that Amazon needed those extra servers and a way to manage them anyway, might as well do something valuable with the excess capacity.

ereckers 12y ago
I can see that thought process. However, I think there's a big difference between racks of servers and racks of people. People skip work, crash into things, ask for raises, unionize, sleep in, etc.. I don't know much about commoditizing things, but I'd much rather invest in a warehouse full of machines, then a low wage and potentially uninspired human workforce.

UVB-76 12y ago

I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services. There isn't much money in grocery delivery services at scale.

timjahn 12y ago
"I think a lot of Silicon Valley startups cannot see beyond their Bay Area bubble where everyone earns $150k, treats their time like gold dust, and will pay a premium for menial services." Couldn't agree more. Amazing how tunnel visioned they are.

adamio 12y ago

Uber outsources most all their costs. It's lucrative for Uber