Creative Founder - NP

1. Lessons From The Past

2. 1. How did they fund themselves in the early days?
2. Who were key early investors, and why?
3. How and with what and who did they achieve product/market fit? (what
was the product, who were the customers)
4. What were their biggest crises? If they failed, why? If they beat it, why?
5. What was their exit?
6. How are they doing now (according to the pundits)?
7. What is their current "molecule"? (may be more than one, depending on
the company, but you only need to have one of them as a molecule.)

4. What is Instacart?
Instacart is an on-demand grocery delivery platform facilitating doorstep deliveries
of groceries and other home essentials in major cities of USA. The technology
driven business model of Instacart boosts of delivering groceries to customers in
as little as 1 hour, making it one of the most promising and futuristic company of
USA which is based on sharing economy model.
http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

5. http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

6. Funding?
The company has raised over $674.8M in 7 Rounds from 22 Investors to date from
Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Sequoia Capital, Y
Combinator, Khosla Ventures & Canaan Partners in addition to other participants.
https://www.crunchbase.com/organization/instacart#/entity
How did they fund themselves in the early days?

7. https://www.crunchbase.com/organization/instacart#/entity

8. https://www.crunchbase.com/organization/instacart#/entity

9. Key Investors?
On October 12, 2012, Instacart receives 2.3 million dollars from Investors such as
Haystack, Canaan Partners, Khosla Ventures, FundersClub, Semil Shah and a key
partner, Hrach Simonian.
https://www.crunchbase.com/organization/instacart#/entity
Who were key early investors, and why?

10. Product Market Fit?
Instacart was able to achieve a product/market fit by addressing 3 key players:
Users, Shoppers, Stores.
http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/
How and with what and who did they achieve product/market fit?

11. Users
• They have an app from where they can order groceries by choosing one or more
stores.
• They can even order from a desktop or laptop using a web based interface.
• Users pay online for their order and can tip their shopper in advance during
check out.
• Option to shop from any of the available stores in their area. An order can even
be placed by combining items from different stores.
• Users can schedule orders for a specific day and time.
http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

12. Shoppers
• Shoppers receive orders on their smartphones.
• Shoppers are stationed near the stores in order to save time.
• They pick up the ordered items manually and deliver it to the customer.
• Apart from the per hour pay, shoppers often get a tip from customers.
http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

13. Stores
• Instacart has tie-ups with major superstores in various cities.
• These stores have been able to increase their revenue through online sales via
Instacart.
http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

14. Business Model: http://nextjuggernaut.com/blog/how-instacart-works-makes-money-revenue-business-model/

15. Biggest Crisis?
Shopper Retention: As all shoppers work part time, it is difficult to retain them for a long time. To
enhance the earnings of shoppers, Instacart added an option to pay tip to a shopper in the check-
out section of the website.
Reduce Delivery time: Delivering groceries within 2 hours was a challenge for Instacart. To reduce
the delivery time, Instacart places its shoppers outside the stores where it has tie-ups. Whenever a
shopper receives an order, he is already at the store saving him 50% of the time.
Shopper Shortage: As Instacart shoppers work as freelancers with flexible schedules, it is difficult to
manage the freelancers fleet and assign instant tasks to them. To deal with this problem, Instacart
introduced a “busy pricing” policy by which it adds few dollars as delivery charges to a customer’s
bill depending on how busy its shoppers are. A part of this additional price is also paid to the
shoppers so that they can work as quick as they can.
https://www.crunchbase.com/organization/instacart#/entity
What were their biggest crises? If they failed, why? If they beat it, why?

16. Biggest Crisis?
Customer Trust: Customers lost their trust in Instacart when they came to know that the company is
putting up its own pricing for products. These prices are marked up from the in-store prices.
Instacart soon admitted to the marked up prices. However, few uses might have stopped using
Instacart due to this, but majority are ready to pay the mark-up prices in order to get groceries at
their door step.
Wrong item Delivery possibilities: Sometimes a shopper picks up the wrong item and delivers it.
To handle all such issues, Instacart has a dedicated support team which can be reached over the
phone or through email. Refund is processed if the personal shopper misses an item in the order
list.
Out of stock items: Sometimes, Items in the shopping list go out of stock. In such cases, shoppers
replace the non-available items with similar items that are available, which might not be wanted by
the customer. To deal with this problem, Instacart allowed customers to add notes and they also
added a “often out of stock” button on such items for the reference of customers.
https://www.crunchbase.com/organization/instacart#/entity
What were their biggest crises? If they failed, why? If they beat it, why?

17. In 2016 the companies signed a five-year agreement that made Instacart the
exclusive delivery service for Whole Foods' perishable items. And, according to
a source familiar with the situation, Whole Foods has no contractual "out,"
which would mean Amazon won't be delivering you kale and organic eggs
from Whole Foods anytime soon.
https://www.axios.com/instacart-is-both-very-and-not-really-important-to-whole-foods-2442926922.html

18. Exit Strategy?
N/A

19. How Are they doing now?
According to pundits
Instacart is still in this. With a vast network of grocery chains and retailers, a quality customer
experience, and an industry-wide pressure to get into delivery, Instacart finally has the final piece of
the puzzle: validation. - TechCrunch
“We’ve seen how much our customers love this fast and convenient way to receive Whole Foods
Market groceries right to their door, so we are excited to extend our relationship with Instacart,”
said Walter Robb, co-CEO of Whole Foods Market, in a statement. “Working together, we will
continue to find even more ways to create outstanding shopping experiences – whether they’re
happening in the digital space or within the four walls of our stores.” - TechCrunch
https://techcrunch.com/2016/03/10/instacart-and-whole-foods-confirm-expanded-relationship-plans-for-expansion/
https://techcrunch.com/2017/06/17/in-wake-of-amazonwhole-foods-deal-instacart-has-a-challenging-opportunity/

20. What is their current Molecule?
People
Problem Solution
Working Class Citizen
in major working cities.
For those who are limited
on time to shop and people
who want groceries delivered
Instacart created an
Uber for groceries.