Of course, you won’t likely see pictures on Instagram or Facebook of the $2 million camps, chef-cooked meals, the Sherpa helpers and concierge services, or private and pristine toilets. That would mean that the tech elite actually cared about money — which would just go against the entire Burning Man spirit.
Instacart charges as little as $3.99 for grocery shopping and delivery. Yet Shah said its shoppers make about $20 an hour, plus tips, which makes profitability seem unlikely, even with the smartest algorithms routing shoppers through grocery stores and city streets. When I told him that, he sounded a lot like Borders back in Webvan’s heyday: “We’re really well funded, so that is not something we’re as worried about,” Shah said. “Growth is the most important factor.”
You can’t grow your way out of shitty unit economics when all your costs are already marginal.
John A. Deighton, a Harvard Business School professor who wrote a case study on Webvan, likes to compare the delivery business to shining shoes. “You make as much profit on one shoe as you do on a thousand shoes,” he said. “There’s just no scale.” In years past, it was difficult for Deighton to even teach his students about Webvan, because its fatal flaws were so obvious. They didn’t understand how the euphoria of the dot-com boom could have obscured its shortcomings. But in the last year, he has been asked to teach it three times. “Something has changed,” he said.
Pure-play online retailers don’t have the economic advantages that many observers ascribe to them. Analyzing the profitability of public e-commerce retailers, including the mighty Amazon, Bain finds that e-commerce’s pricing advantages mostly stem from unsustainably lower profit margins rather than from lower costs. The information technology, distribution centers, shipping, and returns processing required by e-commerce companies can actually cost as much as running physical stores.
Megaspice - Wannabe Peace
Mr. Horowitz, drawing on his extensive network, held his annual chief executive barbecue last month at his house in Silicon Valley, inviting his portfolio company founders to mingle with luminaries including Kris Jenner, the reality television star and matriarch of the Kardashian family. Mr. Horowitz called her “the greatest reality entrepreneur of all time.”
There are two time-tested strategies to change the world with technology. One is to build something that some people love but most people think is a toy; the other is to be hyperambitious and start an electric car company or a rocket company. Most of the “intermediate” companies, although it would take a separate long post to explain why, end up not having a big impact.
When availability bias runs wild.
On a recent Friday night, a dozen seekers in loosefitting attire, most in their 20s and 30s, climbed a flight of steps of a mixed-used community space in Bushwick, Brooklyn. After arranging yoga mats and blankets on the floor, they each paid $150, listened to a Colombian shaman and his assistant welcome them in Spanish and English, signed a disclaimer, and accepted large plastic takeout-style containers for vomiting.
There comes a point in most meetings where everyone is chiming in, except you. Opinions and data and milestones are being thrown around and you don’t know your CTA from your OTA. This is a great point to go, “Guys, guys, guys, can we take a step back here?” Everyone will turn their heads toward you, amazed at your ability to silence the fray. Follow it up with a quick, “What problem are we really trying to solve?” and, boom! You’ve bought yourself another hour of looking smart.
Also works with blogging.