I was employee #2 at Shipt and the early CTO. Was really great seeing us go from absolutely nothing to a strong platform, great team and lots of customers.
In telling our story early on I would talk about how Lyft was #2 in the ride-hailing space and was a billion dollar company. If we could be #2 in the grocery delivery space we should command a comparable valuation to Instacart (meaning we'd be worth a fraction of their valuation, but it would still be great by any standard).
And we did exactly this [1]. With much less cash (60M vs 800M+) and in a very short period of time (we literally hadn't started building this three years ago from today).
I haven't been involved in the past couple years, but am still friends with the founder and several on the team; and had a bit of equity (whohoo! :-).
Really happy for everyone involved and for Birmingham and Alabama!
[1] Here are my ratios based on recent valuations:
Hey guys. I was with involved with Shipt for a little over a year. I honestly left because I am an entrepreneur at heart and have my own business that I did not want to see die.
It would have been easier to have stayed at Shipt. Being a CTO is a relatively easy job for me. But I don't measure my success by what is easy or what makes sense.
I certainly would have made more on this acquisition if I had stayed longer, but what can I say... being an entrepreneur is both a blessing and a curse!!!
It was an honest question. I don't see what your beef is. So many top level employees show to put their name on something for a year and leave with a payout. I've fallen scam to this a number of times myself.
That wasn't an honest question by the standard commenters are expected to maintain here. Please read https://news.ycombinator.com/newsguidelines.html and fix this. To fix it should be simple if you want to.
Of course it's not so simple to avoid seeing others through the filter of our own past experiences, especially online where so little information is available. Most of what we're all doing when we read online comments is massive curve-fitting to our own pre-existing conditions. But the rules in the guidelines are designed to mitigate at least the worst effects.
over time it would dramatically increase the size of the pool of talented engineers, among tons of other stuff. That's a great thing for all the tech companies in the city or companies with engineering divisons (and there are quite a few). This is optimistic, but it might create enough demand for immediately adjacent housing that more areas get cleaned up (abandon houses torn down, etc..). Realistically amazon employees are well paid though, so they could live in almost any nearby community with a couple exceptions.
I don't know that it would affect Shipt's business a ton; its not like they are super tied to just the local (grocery) market any more.
That said, as much as I'd love it, Birmingham almost definitely isn't getting HQ2. Public transit is next to non-existent, the greater metro area BARELY meets their minimum requirement (~1.1m as of 2010), and while we are close to some major universities they don't have super strong CS departments (which might not be the end of the world); UAB probably has the strongest (and there are ~18k students total).
But, if somehow BHM HQ2 happens I will glady streak naked through my neighborhood wearing an Amazon box as a helmet.
I don't know about Shipt, but their moving there would start moving the marks on a lot of quality-of-life measurements and perhaps lift it out of dead last for nearly everything.
Smart decision by Target. Certainly a necessary move to simply keep pace with walmart, bestbuy, Amazon, etc. Doesn't really provide a clear edge, but allows Target to stay competitive in the market for the near future. Interesting decision by Shipt, a little surprised they couldn't get at least 1 billion for the purchase considering how big the e-commerce market is and its expected long term growth.
Since I haven't read other user reports here, I'll chime in and say I get most of my groceries from Shipt (in conjunction with a local grocer/retailer, Meijer) and it's been a fantastic, reliable service. The shoppers have been uniformly courteous and great at communicating if an item isn't available (you can opt to have them use their best judgement in these scenarios, and it's always worked out well). The experience of getting anything at a large grocery/general store delivered to your house within an hour or two is addictive. I really have nothing bad to say about it - competitors will have to compete on price.
your use of "local grocer" made me chuckle since that term makes me think of the corner grocery store. meijer on the other hand is one of the 100 largest employers in the country and has ~$17B in yearly revenue.
I don't know where saturdaysaint is located, but people in West Michigan really do think of Meijer as a local grocery store. Many older people refer to it as "Meijer's", as in "Fred Meijer's Thrifty Acres", the old name for the store when it was far smaller than it is today.
They've enjoyed a lot of success, but Michiganders still think of it as "our" store, and they're headquartered in a Michigan town you may have never even heard of.
And even then, a large corporation that provides steady office jobs for an area at the center of the Rust Belt? That's going to make people look fondly on you, too.
I mean hell, people in West Michigan think highly of Amway of all places, because they pay well and employ a ton of people at their headquarters in the area.
> people in West Michigan think highly of Amway of all places
...not really. A very token few people actually think highly of Amway.
The majority will quietly put up with Amway, since they do give a few people a small living, but will always temper that statement with "of course Amway is a giant pyramid scheme scam and you shouldn't ever be a reseller, don't fall for the trap".
They'll just coat that statement in Midwest-nice language that sounds like praise. If you don't speak the language, it's easy to miss the subtleties.
Right, not 100% of Grand Rapids people love Amway. But if you talk to people who work for Amway (the corporate Amway, not as a reseller) or people who have family who work for Amway, you're not going to find many complaints about the corporate entity.
I say this because it's in stark contrast to what you mentioned, anyone who doesn't work for Amway corporate will generally have a negative opinion about Amway.
Ha, oops, that's... kind of embarrassing - I do live in Michigan, but somehow I haven't noticed many of their stores outside the Midwest. I guess I've subconsciously given up on creating any sort of mental map of which grocery stores are in which regions (outside of the omnipresent giants like Walmart, Target, Costco, etc).
I’ve used both Target and a Walmart’s pickup options and the former is superior.
Walmart makes you go to the back of the store. The walk alone takes a few minutes. Then you wait for an employee to show up, then you wait for them to lookup your order, then they go into the back room to get it. Then walk all the way back out.
For Target the pickup spot is right by the entrance and there’s already a person waiting there. They just scan your barcode, show your ID, and hand you your item.
Walmart is totally revamping the store pickup and putting a huge emphasis on it with lots of branding. My store has already switched over to the new system but they may still be in the process of rolling it out. They moved it to the front of the store next to the entrance and you check yourself in on a touch screen kiosk, either scanning a barcode or looking up your order by name or order number. Then an employee gets a notification on a smartphone and they grab your order. There is a status bar on a monitor letting you know what's going on.
When it works it works really, really, really well. I mean, in and out in less than two minutes. However, there was a time the employee didn't get a notification, so it might still need to get the kinks ironed out.
I agree that previously the store pickup was an afterthought and not always run very well.
I did an in-store pickup at Walmart last night. I got a text message with the pickup # and when I went there (Walmart's on my way home and I stop there most days), the greeter at the door was the person who got my order. Pickup station was right by the door and I was done in under 2 minutes.
I honestly don't know why it takes Walmart so long to switch over. I live in Atlanta and I've seen one that has it... And another a few miles away not. I've never used the new layout, but the old one sucks.
I was there to pick up photos (thus store has online pickup and photos at the same place)... They screwed up my order and I waited 45 minutes and left empty handed because no one there knew how to make a photo calendar and doesn't k know where mine went. But I digress.
I basically witnessed 45 minutes of a train wreck of people trying to pick up orders (probably Christmas presents) from a disorganized and understaffed center. No one was happy...
This is the experience we get in our local Walmart as well. The way the local store is run, I would be surprised if there is an upgrade coming for pickups. This is certainly not a commentary on Walmart - it is however a commentary on my area at large as far as retail is concerned.
Exactly, Target's pick up in store is really fast and simple. I had ordered a gift for my friend half way across the states and he was able to go and just pick it up himself the next day
Agreed. I've been considering dropping Prime, since something like 8 out of 8 deliveries didn't arrive within the 2 business days promised - often with delays of up to a week. Customer service would waste an hour of my time each time I called to ask and verify just so I could know whether I needed to go to a brick and mortar store to buy the item in time. Really, really unpleasant.
>Customer service would waste an hour of my time each time I called to ask and verify just so I could know whether I needed to go to a brick and mortar store to buy the item
Amazon customer service is just the worse. They seem to only know how to press two buttons: "refund order" or "ship item." Or maybe "cancel order" and "return" too. If you need something that doesn't get solved by one of those buttons you're going to have a really, really frustrating experience. Every person I ever talked to has a fundamental lack of understanding of the English language, way worse than your typical Indian call center. You ask a question and they just don't understand what you're asking, they get confused, and tell you some irrelevant information. It's a frustrating, time consuming, back and forth to ask a simple question and sometimes you don't even get an answer and your issue is literally never addressed.
It just astounds me that it's that bad.
But because they reflexively just press "refund order" most of the time the average person thinks they are getting good customer service...
In contrast, Walmart's free two day delivery has been on point.
Agreed. Sometimes, you may not even be able to get the a refund. Amazon seems to be incurring a growing cost for refunds and its reneging on them whenever the chance arises. That's what happens when an entity becomes a monopoly.
I've been experiencing this as well- seemingly with increasing frequency as they use their own "AMZL" delivery service.
It's rapidly discouraging me from ordering things from Amazon if I'm going to rely on the delivery date. Or casually ordering things (i.e. via Alexa) that I might not be paying attention to the delivery of.
I've had prime since it became available, and this is a very disappointing turn for Amazon from my point of view.
Yes, I've also had similar experiences. I rarely get 2 business day delivery! Such a scam. The service is amazing only if it works nearly 100% of the time. Otherwise, you don't know if your Prime item will come in 2 days or 6 and it gets really hard to order some things with that uncertainty.
Curious where you guys live to have these experiences? I split my time between Minneapolis and Chicago, and have yet to have a (noticed at least) delayed Prime package.
Prime Now is even more insane. Last item I ordered arrived in 18 minutes from pressing the button.
I'm sure this happens, I just am wondering where one must live for it to be a common occurrence.
My experience is that things still mostly take two days to ship/deliver, but that they often don't get shipped for random period of time (I just ordered something, for example, that looked like a regular Prime shipping product, but the ship date won't be until the 25th, though it of course notified me of such during checkout, though it's an extreme example). (Tangentially, I only have Prime when they offer a free month and then I cancel near the end of it.)
My wife and I have noticed this lately. If seems like they're trying to play a numbers game by setting too many items as prime and too aggressively setting delivery dates.
Just give me a date that you can hit 99% of the time. I don't mind a missed delivery every now and then, but lately 9 out of 10 deliveries are late.
My kids figured out that the online target.com prices are much lower than the local store, so they still shop there but price-match everything at the register.
I just tried the pickup in store option and it was really convenient although since it was my first time I didn't know there was convenient parking on that side.
I also bought some stuff there and then went to get my online pickup and tried to go back to my car through the store - the cart's wheels locked up because it thought I went to the parking lot. I had to move all my stuff to a new cart.
Store pickup is still nice but $99/yr for delivery is even nicer.
Yes please. I would love an amazon alternative, because I want to support a company that values its employees better. I started by letting my prime subscription expire.
IDK about the people in warehouses, but regular Target store employees are not treated badly. I mean, it's a low hourly wage job so the expectations are low, but I didn't dislike working there. They were happy to train me across multiple teams and work with my schedule. That said, it highly depends on the branch's general manager.
They do make you watch anti-union propaganda during orientation though.
That's a good question. I live in Seattle and have heard many negatives about Bezos and Amazon culture. Especially from SWEs who have worked at both Amazon and other tech companies. I also have gotten offers from Amazon, and they are on the low end.
I haven't heard complaints about Target. So I could be wrong, but I hope competition includes competition for talent, which means better treatment of employees.
I still have Prime, but I understand what you're saying.
I might be in the minority here but I feel like Amazon still has better selection in products than Jet/Walmart/Target.
I think if they want to succeed they need to have a lot more products, and have them all in stock.
Example: Yesterday I was looking for a Motorola phone. When I type it in Amazon I get G, G Plus, E, E Plus, X, Nexus 6, Z, G4 Play, Z Play, Z2 Play etc. All in stock, and with 2 day prime shipping.
Then I type it into Target.com and it has G, G Plus and a bunch of E models. Many were limited quantity.
It's stuff like that that personally makes me stick with Amazon for now.
They have large selection and because third party vendors can store their items in Amazon and fulfillment centers and get it shipped via prime. Unless Target also does that, Amazon will always have a much larger selection of items (like 1000 types of iPhone X cases).
Walmart offers third party selling but not as streamlined and its not shipped by Walmart. Just another ebay store.. If you have a problem with an order, you deal with Amazon and not the vendor.
I have friends who work at HQ and others that were laid off during the myriad rounds they had a few years ago. It would be safe to say that their warm/fuzzy corporate culture has been completely changed with their current CEO Brian Cornell. It's a numbers game at this point. Not saying it's a bad thing when you're fighting for survival, but to say they value their employees well and that Amazon doesn't, isn't necessarily founded in reality. In fact many former Target employees I know have either gone on to start their own rep companies that work with or go to work directly for Amazon. Which should tell you something.
This is a very convenient service. But how viable is it long-term? People will only shop+deliver for $15-20/hour for so long until they realize between the cost of the vehicle and their time (plus taxes), they're not making nearly as much as they think.
On their application page, shipt requires of potential "shoppers" own a "reliable vehicle, 15 years old or newer", I wonder how well defined "vehicle" is in the fine print?
What's to stop "shoppers" from using something like a bike for the deliveries? Drastically cuts down on the operating costs of the shoppers, adds a good workout, I can see the appeal for many people. Could maybe even be good for marketing "Eco shipt, the local and green delivery".
It's what German startup Foodora has been doing with take-out food deliveries, so far quite successfully.
In some areas you need a car: the area might not have traversable by bike, you might have a 80 item order, or have a 20 mile trip to make your delivery.
It should be good for Target too. For them it is all about the technology and the entry point with lots of customers. And ultimately about giving them a way to better compete with Amazon and Walmart.
500m for what exactly? Really would like to see more numbers on this. Also dont see what Target has to gain from the acquisition, seems pointless given what I can see at surface level, there has to be more to this.
I was actually just thinking, “WebVan and Kozmo were just ahead of their time” — now both businesses had major issues even aside from the .com bust (I haven’t seen E-Dreams in at least 10 years but I recall it glossing over many of the whys behind the company’s failing, probably because when the director started working on it, it was a different story. Startup.com did a better job pivoting in that respect), but the ideas of nearly 20 years ago are now finally ready, thanks to improved logistics, customer mindset, and infrastructure changes.
Speaking of Kozmo, I was in high school when Kozmo was briefly in Atlanta, and I knew it couldn’t last. I would have DVDs and candy delivered to class for almost nothing.
This feels like Target grasping for straws. They're watching Walmart/Jet.com and asking themselves how to compete. I'd be amazing if they don't fuck this up.
Target is portrayed in the book "Naked Statistics" as having some pretty advanced data collection and modeling techniques -- they could figure out which of their shoppers were pregnant and adjust their weekly ads sent to those particular households depending on that information. This was in fact too good because the pregnant woman ended up being a teenager, and had an angry father calling demanding to speak to a manager.
What any of this means to me is if they have capabilities like that I am sure they made an informed decision based on where they see the market heading and decided this would be a purchase that would increase the bottom line, not grasping for straws as you say.
I think that was the parent's point. Target spent a whole bunch to enter Canada and it was an abject failure for, in retrospect, some pretty obvious reasons. If they were so good at data-driven decision making, they wouldn't have failed so badly.
The whole department that does the statistics modeling is based on one guy starting it up... And he probably has nothing to do with the rest of Target's operations.
I started using target.com instead of amazon, at least for certain things. It looks like they did a lot work and got their shit together. The website works well and shipping is fast. I recommend trying it out if you haven't used them in a few years.
They are clearly copying amazon, but doing a good job in my opinion. The site is much better than walmart's.
Can you elaborate on why you feel this is grasping for straws? From my admittedly limited view point, they see the writing on the wall to compete in the future and know that they will become irrelevant if they cannot offer a competing service. They basically thrive on being "Not Walmart", so it's probably good that they also create a form of same-day that meets and exceeds whatever Walmart ends up with.
Everyone's moving to compete with Amazon. Only now, a year after Walmart bought Jet.com, Target is trying to get into the game too. Except all I see is a "me too" strategy, no thought leadership, no unique value proposition except "we're Target". It's not a competitive advantage, it's a not being left behind strategy.
The funny thing is, I actually like sears online pickup. It is faster than anyone else. You can park outside and check in and have someone bring it to you. Or check in at a kiosk and someone is out within a minute. There is a timer that counts down from when you check in.
The online pickup is directly in front of a lesser used entrance so you don't fight for parking.
Also sears has lots of online loyalty incentives through shop your way that makes their prices probably the best... Problem is they don't have a large selection of items.
"We aren’t in your city right now, but don’t lose hope! We are expanding into new cities every week. We’ll shoot you an email when we are expanding into your area!"
This is definitely not in competition with Walmart, Amazon, or even a company I currently use for grocery delivery (instacart). It's a great move for a company that isn't even nationwide at this point. This should help them to move into more cities.
The reason I've been seeing people subscribe and save on Amazon was heavily predicated on the "save" portion and only slightly on the "don't have to go to the store" portion. But maybe my sample isn't representative.
I disagree that this is awesome news for the team at Shipt. The best exit is not always a buy-out; they seem to have been doing great as an independent company. Now they're tied to Target.
I'm mostly worried about what will happen to their existing stores:
> Our shoppers fulfill orders from your favorite local stores in the cities we serve! It varies by market, but we currently shop at your favorite local stores:
● ABC Fine Wine and Spirits
● Central Market
● Fry’s
● Harris Teeter
● H-E-B
● Kroger
● Meijer
● Publix
● Western
> More stores will be offered as we grow! [1]
Given that, I don't see a good reason for Target to have bought Shipt. Why not just sign up with them like these other retailers? Unless they plan to cut these partnerships.
I certainly hope that they follow through on their claim from the article that "It will continue to operate independently and plans to expand its business with other retailers" and not have Target attempt to cut these partnerships.
>The best exit is not always a buy-out; they seem to have been doing great as an independent company.
It was not a hostile takeover so maybe Bill Smith thought they had a brighter future with with Target's investment.
From the article, it says that Target and Shipt have been in discussions since the summer so Bill and his team had several months to work out the terms of a friendly deal.
Crunchbase says they had 3 rounds of funding.[1] If it's reasonable to guess that Bill still has at least ~30% equity left, it would translate to $160+ million payout. Maybe staying independent had more risks in his mind.
Maybe Target wants to expand shipit and profit off of sales from all of these other companies, the same way Amazon makes money off of its cloud infrastructure via AWS.
They have 20000 customers so that's $2M of membership revenue. There maybe other delivery revenues but surely that can't be more than a small multiple of that. How does 500M price tag make sense?
their pricing model is a subscription + an upcharge on purchased goods (10%?). The upcharge may not do much more than pay shoppers and cover some of those associated costs, I don't know, but there's more than just the base subscription revenue.
Would they really? They already have a good amount of developers working on their apps and websites. Now this app will be consolidated as an extra feature on the Target app. I really seem to be missing something here. Jet acquisition made (atleast some) sense because it had much bigger employee count and showed it can run okay.
What I know for sure is that the investors are super happy with their returns.
I’ll reserve my judgement until I see the org chart.
Every so often the smaller company gets its executives placed high in the organization making it more like a merger than a buyout. Some of those turn out pretty well.
The ones where they talk about a strategic purchase and learning this and blah blah that but they end up strangling the company end up sounding really good at the beginning but then turn sour quick. Also the rank and file employees usually get screwed in this scenario.
In telling our story early on I would talk about how Lyft was #2 in the ride-hailing space and was a billion dollar company. If we could be #2 in the grocery delivery space we should command a comparable valuation to Instacart (meaning we'd be worth a fraction of their valuation, but it would still be great by any standard).
And we did exactly this [1]. With much less cash (60M vs 800M+) and in a very short period of time (we literally hadn't started building this three years ago from today).
I haven't been involved in the past couple years, but am still friends with the founder and several on the team; and had a bit of equity (whohoo! :-).
Really happy for everyone involved and for Birmingham and Alabama!
[1] Here are my ratios based on recent valuations:
Lyft/Uber, 11B/70B = .16
Shipt/Instacart, 550M/3.4B = .16
Astonishingly accurate! :-)