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Instacart is composed of CEO Mehta(Apoorva Mehta) and Mullen (Max Mullen) Created. In just 8 years of its establishment, Instacart has gradually become a leader in the fresh food distribution industry.

After the outbreak of the “new crown” in 2019, the number of orders for the company in a year increased by 500%, and the average consumption amount per order increased by 35%. Thanks to explosive growth, Instacart announced on June 11 that it had raised US$225 million in a new round of financing. Its valuation has soared from US$7.9 billion to US$13.7 billion. The 33-year-old Mehta is worth 12 One hundred million U.S. dollars.

Picture source: theshelbyreport

Although the development of this new company is like a broken bamboo, the pressure from the market and the company once forced Mehta to apologize publicly. How did an Indian youth get on the entrepreneurial express train in Silicon Valley? What crisis has Instacart encountered?

1. Before success, first fail 20 times

Picture source: Ferniefix

On the street in the cold winter, carrying two heavy bags with meat, vegetables, and some daily necessities in the bags, the bus is late and the hands are gradually numb…

Such a scene is familiar to many people, and for Mehta, who was born in India, grew up in Canada, and likes cooking, it’s just a lot of discomfort that he has to endure every weekend a small part.

At that time, Mehta, who was standing on the street waiting for a bus, would not have thought that one day in the future, this unsatisfactory experience would give him an opportunity to start a business, and he would never have thought of the one named Instacart. The product will eventually make him worth more than $1.2 billion, and he will be on the Forbes list.

Picture source: the business journals

Mehta grew up in Canada and is deeply fascinated by technology. Mehta said: “From the atom to the computer you see on Google, all the mysteries… I want to learn everything in between.”

Because he didn’t know what he wanted to do after graduation, he enrolled in the electronic engineering course of the University of Waterloo (University of Waterloo).

After graduating from university, Mehta worked in Qualcomm (Qualcomm) and BlackBerry (BlackBerry) and other technology companies, and even worked in a steel plant for a while.

“I don’t know anything about these things, but I like to put myself in a position: I have to understand an industry and try to solve the problems they may or may not have.” He wants to try various things, come Help yourself figure out what you really want to do.

Finally, he moved to Seattle and worked as a supply chain engineer at Amazon.com (Amazon.com). This is 2007, Amazon began to enter the fresh food field.

Picture source: The Verge

Home fresh food is a pain point in the industry. Before Amazon Fresh, Google and a company named Webvan also tried to solve this problem. But in the end both of them withdrew, and Webvan burned out $1.2 billion, leaving a mess.

Picture source: Tim Boyle/Getty Images

Even if it is as powerful as Amazon, it was not until 2016 to establish a third “base” outside of Seattle and Los Angeles. One of the reasons is that the warehousing and logistics system that transports fresh food is too expensive.

Picture source: Forbes

The fledgling Mehta was just an unremarkable screw in this huge entrepreneurial machine. But in the past few years, he has understood two things: he likes to write software, and he wants to be challenged.

During the Amazon period, Mehta’s colleagues often reported to her boss that Mehta was “not serious”. And Mehta is really not wronged, he does often use Xcode on the company’s computer to write some small programs that are not related to work.

Working in Amazon (mo) as (yu) Two years later, he quit his job.

In the next two years, Mehta filled the “challenge” task: he had 20 entrepreneurial ideas, such as advertising web pages, doing takeaway group purchases, developing social networks for lawyers… But without exception, these All the projects died in the end.

“When I get home, I don’t think about it (lawyer social) because I don’t care about lawyers. I never thought about it. What do lawyers do every day.”

Mehta learned an important lesson from these failed ventures—solve a problem that you really care about.

Second, selling vegetables can also make you rich

Interestingly speaking, Mehta was living in San Francisco at the time. In order to realize her entrepreneurial dream, she worked 14 hours a day and was too busy to buy food and cook. “After working 14 hours a day, the last thing you want is to face an empty refrigerator.”

Soon, how to buy food more conveniently became a lingering question in his mind.

The idea of ​​ordering groceries online and delivering them to your door is not new. Giants such as Webvan are a lesson. But when Mehta brought up the topic again, it was already in 2012. In this year, Uber and Lyft were successful, and the sharing economy swept Silicon Valley.

In Mehta’s words, “Timing is more important than ideas.”

“In 2012, people order anything online, meet people online, watch movies online, but one thing everyone does every week—buy groceries—we’re still using an ancient Smart phones have become ubiquitous. People can easily transact through their phones, and the idea of ​​using apps to hire someone to perform tasks has quickly become the norm.” Mehta said: “The advent of smart phones has changed this and so on. Style.”

The increasingly popular smartphones and sharing economy model are Mehta’s breakthrough.

Mehta borrows the Uber model, so that every ordinary person with a mobile phone can apply to become a shopper(i.e. purchaser), when After the customer sends the demand on the platform, the shopper closest to the customer can take the order on the mobile phone, and then deliver the goods to the customer’s home as quickly as possible to complete the “last mile” transportation.

This solution is low cost, low threshold, easy to operate, and there is no expensive cold chain transportation cost. Under the existing supermarket system, all that is needed is a smoothly running “order” software-this is Internet thinking Another extreme application.

Picture source: Instacart

In less than a month, Mehta wrote a rough version of the App for herself. In the first test, since Mehta had not hired any employees, he could only place and receive orders himself. Although it sounds very sad, he successfully verified the feasibility of using this model for fresh food.

After the app was developed, Mehta started to seek investment without stopping. He turned his attention to the famous Silicon Valley incubator YC. Unfortunately, when Mehta submitted his application, the YC deadline had already passed two months.

But Mehta worked repeatedly and mobilized all YC alumni. After countless coffee chats and Elevator Pitch, YC partner Gary Tan finally said: “You can try to apply, but almost It’s impossible to enter.” After receiving the news, Mehta had an idea.

He used Instacart to order half a dozen beers and sent them to YC headquarters. Gary dumbfoundedly called Mehta and asked, “What is this?” Mehta replied, this is what I mean by Instacart. In this way, Mehta successfully won the favor of YC.

Instacart, consists of two words, instant and cart, “instant + shopping cart”. The nascent Instacart has many competitors, such as Shipt(Shipt was acquired by Target Group, the second largest retail group in the United States in 2017, and is currently its subsidiary. Fresh platform), such as Amazon Fresh, the old club of Mehta.

How to generate advantages for peers? Mehta believes that the secret lies in his product name: “Quick”, the ultimate fast.

three, “time management master”

If a customer who uses Instacart thinks that the company is merely recruiting a group of part-time workers in their spare time to carry food from the retail store to their doorstep, it would be wrong.

Instacart is not only a porter, it is also a “time management master” using a lot of black technology.

What order does each shopper take, what route to take to the designated retail store, how to quickly find the designated product in each retail store, and what route to take to deliver to each consumer after purchasing…< /p>

If we can achieve accurate prediction and planning for all these processes, we can make our delivery service the fastest in the industry.

At the same time, Instacart must be responsible for its forecast accuracy. If the forecast accuracy is low, then the result will be a delay in the customer’s order. This will not only increase the cost of fulfillment, but also make customers dissatisfied. Cause loss of customers.

Therefore, Mehta chose the most popular big data and machine learning algorithms nowadays to enable the App to continuously optimize the planning of the route, and finally make the slogan of “one hour delivery” a reality.

Picture source: Instacart

According to data, on Instacart’s big data platform, only shoppers have about 1GB of GPS positioning information every day; Instacart will classify and deploy these data, perform offline data analysis, and then build a variety of prediction models to predict Customer needs, supermarket shopping time, delivery time, etc.

Each model will be retrospectively tested with historical big data to continuously optimize the algorithm.

The model does repeated training every day to improve the accuracy of prediction. evenInclement weather or emergencies are also included in the calculation. Instacart has a team that monitors market changes, and they will use their own interface to adjust forecasts when necessary.

It can be said that it is these black technologies that helped Instacart become the “unicorn”.

Picture source: Forbes

In 2013, Mehta was selected for the Forbes “30 under 30” rich list;

During the COVID-19 pandemic in 2019, due to the “home order” issued by various states, the volume of fresh food on-site business increased by leaps and bounds. Instacart, Walmart Grocery under Walmart, and Shipt mentioned above all set new download records every day.

Comparing the average daily downloads in February with March 15th, Intacart, Walmart Grocery and Shipt increased by 218%, 160% and 124%, respectively . (Data source: Apptopia)

In 2020, after receiving multiple rounds of financing, the 33-year-old Mehta will be worth US$1.2 billion.

However, despite the good momentum, Instacart has encountered the biggest crisis since its establishment. This crisis finally forced the founder Mehta to personally apologize before finally calming down.

From November 2019 to the beginning of 2020, thousands of shoppers organized multiple strikes and condemned Instacart for embezzling tips to pay shoppers’ wages.

Picture source: PBS

Here must also mention Instacart’s charging model. Instacart charges users the shipping fee (Delivery Fee), service fee (Service Fee), 5% tip (Tips) and peak shopping fee (busy shipping fee) etc.

In addition, users can also choose to become a member, pay a membership fee of 99/year or 9.99/month, and enjoy free shipping(consumption over 35) Free discounts on peak shopping fees and service fees.

In both charging methods, tips are paid directly to shoppers as a supplement to the basic salary, and the basic salary of shopper varies from 5 to 10 US dollars depending on the location. The most tempting thing is that Instacart has promised employees that each batch of orders will pay at least $10 (including tips), and companies that are not enough will pay.

However, shoppers find that their basic salary has been reduced repeatedly after joining the company, and tips, which account for a large part of their income, are sometimes even paid as wages. Shopper watch