In every startup cycle, there are attempts to source consumer goods faster than ever, in the hope that technology has improved to the point where such deliveries are financially possible. The infamous blackouts of the dot-com era are now ancient history, but they indicate how long the founders and the investors behind them have been working on the concept.
The dream of super fast consumer deliveries never went away. Amid the rise of Uber, several startups tried to create businesses focused on fast-food delivery, tapping into convenience foods and a supply of drivers in urban areas to deliver meals. Unfortunately, SpoonRocket and Sprig did not survive.
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Instacart was a big deal, aiming for one-hour grocery delivery, a model that has been expanded to include next-day delivery and the like. Some major platforms are experimenting with sub-hour delivery, absorbing costs to work on the idea of ​​even faster customer service.
Startups have also been working on the idea in recent years, leaning on so-called dark stores (mini stores, more or less) to provide a local supply of products that can be delivered to consumers’ doors in record time. .
GoPuff has raised a tectonic amount of capital, for example, as have many other startups around the world. The model, called quick trade (q-commerce for short), has attracted billions of dollars in funding in recent years.And as in previous cycles, it is falling apart. This is not to say that every company in the q-commerce market will fail today; GoPuff has major sponsors and, despite some problems, is able to pull off its model.
But we are seeing, once again, startups that raised huge sums of money to build super-fast consumer delivery models lay off staff, try to merge, and stay alive after burning through mountains of cash. Who could have seen it coming?
Fast is expensive, slow is cheap
It’s not hard to see why q-commerce caught the attention of founders and investors alike. Uber Eats helped keep its parent company’s gross merchandise volume afloat during COVID, when demand for ride-sharing services plummeted. And DoorDash grew like a proverbial weed in recent years, leading to a mega-IPO and a stock price that peaked at $257 in late 2021.
Consumers wanted deliveries, and they wanted them fast, and at companies that were in that game were doing well. . So why not try the same model, but even faster? Wouldn’t consumers love that even more? As long as I had a model in mind that could make the math shake at least on paper, thanks dark shops! – He went to the races.
