
Grover raises €37M Series A to offer latest tech products as a subscription - Kemet
https://techcrunch.com/2018/07/30/grover-raises-series-a/
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salawat
Lets see:

A) You don't own the product. B) The product will likely require more
contracts to be signed than physical count of objects being handed over. C)
Creates a new opportunity for an insurance submarket. D) Only looks feasible
due to increasing centralization of capital E) Yet another attempt at creating
a company based around a recurring revenue stream F) Absolutely stupid name G)
Is reliant on poor technology use habit H) Doesn't really solve any problems
for the end user

Go home, tech. You're rent seeking again. Come back with an actual idea that
solves a problem. The trend toward -- as a Service is really getting a bit
grating. The -aaS bubble will pop sooner rather than later I hope.

~~~
puranjay
I disagree. There are pieces of technology that I want to try but don't want
to fork up the cash for. I'm not sure if I'll actually use them or if they're
worth the price.

VR, AR, 3D printers - basically anything at the cutting edge of the tech
experience would be a good candidate. I can't justify spending $1,000 on a VR
rig. But I don't mind paying a few dollars every month just to try the thing
out.

~~~
radiorental
> I want to try but don't want to fork up the cash for

see pretty much every point in the original comment but specific bad tech
habit use.

If you're not really sure you need this stuff then you don't need it. Plain
and simple.

If you don't have the disposable cash to pay for it outright then you can't
afford it anyway.

With that all said you can try out the three examples you cite at your local
Best Buy, Microsoft Store, Maker Space, Home Depot, etc etc.

If the argument is that you're in rural Idaho without access to this stuff
then the business model is broken.

~~~
MatthewMcDonald
> If you don't have the disposable cash to pay for it outright then you can't
> afford it anyway.

You're conflating people who can't afford it with people who can afford it,
but aren't certain that they want to buy it.

I think it might be valid to say that if you can't afford to buy it outright
then you shouldn't lease it.

I can afford a VR headset, but what if I'm not sure which headset I would
prefer for long term use?

> With that all said you can try out the three examples you cite at your local
> Best Buy, Microsoft Store, Maker Space, Home Depot, etc etc.

This is not the same thing as trialling something for hours/days in the
comfort of your own space.

Also, what if I know I will only need an expensive item for 3 months?

~~~
radiorental
> Also, what if I know I will only need an expensive item for 3 months?

Can you give an example?

~~~
MatthewMcDonald
Taking on a contract for development that requires testing on multiple
physical devices that you don't already own

Using a 3D printer to prototype basic hardware at a company that doesn't
expect to have more hardware products in the near future

Renting multiple VR/AR headsets for an extended customer demo

\-----

It might be worth mentioning that I'm one of the founders of EquipmentShare,
which is sort of similar but in the construction industry, so this type of
business only seems natural to me. In our industry, the more variability in
the equipment requirements of your jobs, the more difficult it is to be
efficient with your capital. In construction nobody owns _all_ of the
equipment they use; it would require far too much capital, and a large chunk
of your fleet would sit idle most of the time. It's far more efficient to have
a blend of owning and renting.

~~~
salawat
Then you negotiate the cost of acquiring the devices with the person you're
doing the work for. Odds are they will either have them available as you are
not the first contractor they've hired, or you are, in which case you should
be telling them that unless they intend not maintain whatever you make for
them, it would be wise to make sure they have the hardware to develop it
further.

The 3D printing can be contracted out. Consumer grade 3d printers wouldn't be
a wise investment in that case.

You're doing business in VR/AR development. If you are going to be anything
over a one-man operation, youshouldalready have multiple VR/AR sets for
development and testing purposes.

I appreciate the candidates, and can better appreciatewhere you are coming
from. In construction, however, you have already transcended the "consumer
grade" level of investment. You're now dealing with industrial grade equipment
which is a completely different ballgame.

Several of your examples somewhat contradict the stated intention of the
company from my understanding. They were looking to break into the market for
consumer grade cutting edge tech, NOT for primarily business level customers.

The article paints a picture of a company not looking at other companies as
customers, but the general public.

If they intend to focus on the Enterprise level, your arguments make sense.
Not so much for private customers. The niche they are trying to fill is a
symptom of a lopsided economy, not a healthy one.

~~~
MatthewMcDonald
All good points. Perhaps I read too much into the bit about them exploring the
B2B space, as I see this being most useful for small businesses.

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rekshaw
I gave a look at their site. If you want to own an iPhoneX + MacBook Pro for
12 months, it costs you almost 200 EUR a month. And at the end of it you have
nothing. If you spent 2,400 you could get a new iPhone X + a barely used
MacBook Pro and use both at _least_ 2 years. Doesn't make much sense unless
money is no issue and you _really_ hate ownership.

~~~
wongarsu
It obviously has to be more expensive than buying the stuff yourself,
otherwise they wouldn't make money. What you are buying is essentially
flexibility.

It's great if you

\- need the equipment for the next trade fair or vacation and give them back
after that

\- know you will switch to the latest model that will come out in 6 months but
need something until then

\- are a cash-strapped startup and are fine with paying extra as long as you
don't have to provide money upfront

Especially the last category might be a major market.

~~~
mmt
> It obviously has to be more expensive than buying the stuff yourself,
> otherwise they wouldn't make money. What you are buying is essentially
> flexibility.

> \- are a cash-strapped startup and are fine with paying extra as long as you
> don't have to provide money upfront

This is where the legitimate value of VPS and cloud computing for early
startups.

The price premium (i.e. a multiple, rather than merely a percentage) is
comparable. That implies a high degree of waste/risk with unused/unreturned
inventory is baked into the price.

What I have yet to read, when reading about this benefit, is what happen when
the startup is no longer cash-strapped. In practice, I've seen many remain
"fine with paying extra", with the benefit being not having to transition to
the cheaper option. It's a subtle form of lock-in.

This service, however, appears to be aimed at consumers and only considering
B2B in the future, so perhaps it's all academic.

------
a_d
>”funding consists of €12 million in equity and a new €25 million debt
facility. Building an inventory of new tech products to rent is quite capital
insensitive, after all.“

> “if Grover’s subscription model becomes compelling enough, it’s hoped that
> purchasing many tech products will become so unattractive as to create
> Netflix-level changes in consumption behaviour. Or, at least, that’s the
> aim. In my case, that would mean spending far less time recycling things
> like smartphones and music technology gear on eBay as I tread a well-trodden
> and perpetual upgrade path.“

Questions to consider:

1) This business requires upfront capex into depreciating hardware with the
hope that users are sticky. And users would be sticky partially because they
would succeed in changing general attitudes towards ownership. Does this seem
plausible?

2) If this works, there is going to be a gold-rush style copycats (since TAM
is big). How could they fend off copycats? ie another company giving iPhone X
at $x/mo, where x is 50-cents lower than Grover.

3) Out of General curiousity, does an average person have this problem? (Of
wanting consumer electronics on $x/mo, so they can upgrade?).

4) All leasing businesses have an end of life value problem — I always thought
that consumer electronics has a big EOL problem (worse than cars, say) in that
they don’t have a second-hand market. It’s either recyclers or landfill. In
that scenario, isn’t consumer electronics the worst place to start a leasing
business. (They mention laptops for businesses; that makes more sense, because
first, it’s B2B (TCO and cash flow matters) and there is _some_ secondary
market). What am I missing?

~~~
michaelt

      does an average person have this problem? (Of wanting
      consumer electronics on $x/mo, so they can upgrade?).
    

Plenty of people pay $x/mo to get a cell phone on contract with little or
nothing to pay upfront.

~~~
eli
... and own the phone at the end of the contract. That's just financing.

~~~
michaelt
Sure - but that's irrelevant to my point, which is that anyone who enters into
a contract and stops using their old phone, or gives it away, sells it, throws
it away broken or obsolete, trades it in, or accepts an 'upgrade' from their
network that extends their contract, gets an upgraded phone by paying for it
monthly.

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pjc50
This actually looks like the re-invention of hire-purchase, or "buying things
on the never-never".

Its viability is dependent on a market where people's income is reliable
enough to rent these things, not quite reliable enough to get them cheap
consumer credit, and not quite enough to save up for them.

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foxhop
Instead of Grover they should be named Oscar (the grouch who hoards garbage).

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arghimonmobile2
What an environmental tragedy! If only people would reuse/repair/recycle more,
not less.

~~~
pjc50
Depending on how they handle ex-rental devices this could result in more
reuse. It's not clear. But happening in Germany is a good sign - Germany is
very big on environmental responsibility.

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hddherman
Sounds like a device security nightmare, with all the control they will have,
plus the risk of a malicious actor on the inside being able to do something
nasty.

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wnsire
Interesting concept , don't know if this is something that would work outside
of germany though , because of how dependant it is on the culture of the
country between owning something and renting it.

I'm very curious to know if product come in a generalist box with the company
logo on it or if it's sent with the original box that is sold with product ?

~~~
fuxufu
We've just received our Vive yesterday. It comes in a brown regular box where
the original product box is inside. They also packed an additional cleaning
cloth with it.

------
danielmg
This will be a magnet for fraud.

Aside from that, I just don't get it. For example in the UK you can bundle the
price of a mobile-phone into the contract payments. Laptops/iPads etc always
take knocks etc and who wants to risk personal data by handing back such a
device.

~~~
mgiannopoulos
It’s quite easy to format a device. It can even be done remotely (iOS)

~~~
danielmg
and just as easy to recover data from a formatted device unless a secure wipe
is done (which takes time and knowledge).

I work in banking and we shred drives when we are done with them for this
reason.

~~~
mgiannopoulos
People already sell used laptops without looking into bank-level secure data
erasure though. This isn’t a real concern for this company.

