Tag: EC Consumer Applications

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The on-demand delivery trilemma

Ali Ahmed Contributor
Ali Ahmed is a serial tech entrepreneur with expertise in on-demand delivery and robotics.
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In the crypto world, there’s a popular maxim called the Blockchain Trilemma, which refers to the difficulty of simultaneously achieving three desirable properties in a blockchain network: security, scalability and decentralization.

The trilemma states that it is impossible to have all three properties at their maximum level. As a blockchain network becomes more secure, it becomes less scalable; as it becomes more scalable, it becomes less secure; and as it becomes more decentralized, it becomes less secure and less scalable.

When designing a blockchain system, trade-offs must be made among the three parameters, leading to a balance that is acceptable for a specific use case.

There is a similar trilemma that exists for on-demand delivery in the convenience foods sector:

The ‘on-demand delivery trilemma’.

The “on-demand delivery trilemma.” Image Credits: Ali Ahmed

It refers to the challenge of balancing three of the most important factors in the on-demand delivery of convenience foods: speed, profitability and affordability.

With the model of delivering preordered goods, it is impossible to maximize all three factors at the same time.

This “on-demand delivery trilemma” will continue to plague industry incumbents unless they can think beyond the existing model of delivering preordered goods.

For example, to achieve low delivery costs to pass on to consumers, or in other words, achieve affordability, the delivery system has to sacrifice either profitability or speed. To be profitable, the company needs to charge high fees, making it unaffordable, or improve its cost basis by being slow. To be fast, the company either needs to be profitable, which means charging high fees, or forgo those fees and sacrifice profitability.

Below, I’ll provide examples of each of the trade-offs and why it is not possible to get around them when employing the existing model of delivering preordered goods.

Incumbents using this existing model of delivery include:

  1. Delivery robots.
  2. Route-based ice cream and food trucks.
  3. Delivery apps.
  4. Quick commerce.

Delivery robots

Image Credits: Ali Ahmed

Delivery robot companies like Starship, Nuro, Serve, Kiwi and Coco reduce costs by automating the driver. This reduction in cost helps them achieve profitability and affordability, but they sacrifice speed to do so.

It takes longer for a robot to deliver something than it would take a person, and considerably so when we’re talking about slow-moving sidewalk bots.

Route-based trucks

Image Credits: Ali Ahmed

Route-based ice cream and food trucks have existed for decades, but new companies like Scream Truck and Zing are trying to modernize them.

However, they operate on the same underlying model of preordering goods and so can achieve only profitability and affordability; not speed.

By virtue of being route based, they park in central locations and force consumers to come to them, line up and buy goods to either consume or haul back home. A considerably slow experience.

The on-demand delivery trilemma by Ram Iyer originally published on TechCrunch

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A Vine mess: The choice between rebooting and reviving old software

Marcus Merrell Contributor
Marcus Merrell is vice president of technology strategy at Sauce Labs.

In October 2022, after completing the acquisition of Twitter, Elon Musk asked his team to work toward bringing Vine back to market. The team is likely now asking themselves if they should try to revive the old codebase or start from scratch.

Are the problems Vine is facing even technical in nature, or does it have to do with the core business model?

I have no actual knowledge of the Vine tech stack, but these questions (as we’ll see) have been a constant in the industry for well over 20 years. This article uses my own experience working on high-throughput B2B and B2C stacks during a similar time period that Vine was around, and I’m making some assumptions.

Whether I’m correct or not, the broader considerations will apply to anyone facing such a decision right now.

The trouble with Vine

The trouble facing Vine has nothing to do with its tech. It’s likely that the team at Twitter could define and ship a perfectly designed app and not even make a dent in TikTok’s market share.

The conversation they should be having is more about business than technology. When Vine launched in 2012, TikTok was still five years away, and Vine never figured out how to monetize its platform successfully in a way that took care of the top creators and influencers. It might be ambitious to think that you can go from zero to a world-class social media site in a matter of months.

Reviving parts of a codebase is like changing a plane’s engine while it’s mid-flight.

Whether the team chooses to reboot or revive Vine, they must answer questions about sustaining a business in the world the app abandoned in 2016.

For Vine, this is a business decision, but it’s being treated like it’s a technical decision. By choosing to reboot from scratch, you’re letting software developers decide your business strategy, and that approach risks losing the market.

With that in mind, let’s simplify this a bit: Companies face such questions pretty frequently, so what are the non-business considerations that should be factored in?

Revive or reboot?

Let’s pretend that Musk and his team have solved the business problems, or at least become comfortable enough with their ideas that they’ve tasked you with the choice: revive or reboot? How do you proceed?

I’m indebted to Joel Spolsky for his April 2000 article on the subject. A lot has changed since the time that blog was written: the world was pre-agile, pre-cloud, and pre-continuous-integration. Vine itself is probably showing its age as well. It launched in 2012, which means it was likely using REST APIs, which means it was pre-container, pre-gRPC and pre-Kafka. If they did data streaming at all, it was likely built in-house. Some former Vine engineers have already said it needs to be rewritten.

But Spolsky’s points remain as salient today as when Bill Clinton was President:

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3 views: What does the future of social media look like after Twitter?

Twitter’s demise might be overstated, but we still can’t unsee what we saw in 2022.

The newly Elon Musk-owned social network could continue zombie-shuffling for months or years for all we know if Elon Musk can scrape together enough advertising revenue to pay the bills — namely, the massive interest on the $13 billion in debt that he saddled the company with in order to buy it. Twitter could also declare bankruptcy and go poof — an outcome that Musk himself has said is very much on the table, and one that’s underlined by Twitter’s recent refusal to pay for everything from office rent to toilet paper.

Either way, the chaos has painted an uncertain future for one of the world’s most prominent and long-running social networks. It’s also presented an opportunity to reevaluate how the social media landscape could radically change in light of Twitter’s very tumultuous 2022.

Taylor Hatmaker, Amanda Silberling and Haje Jan Kamps offer up their own ideas of what they’d like to see in a potential post-Twitter world:

Taylor Hatmaker: Nothing lasts forever and that’s a good thing
Amanda Silberling: It’s time to get weird
Haje Jan Kamps: Bring back the good old days

Taylor Hatmaker: Nothing lasts forever and that’s a good thing

Elon Musk’s disastrous Twitter takeover showed that it just takes one person’s bad ideas to destabilize a social network that everyone assumed was a given.

3 views: What does the future of social media look like after Twitter? by Taylor Hatmaker originally published on TechCrunch

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Mastodon creator Eugen Rochko talks funding and how to build the anti-Twitter

Eugen Rochko came up with the idea for and built Mastodon some six years ago during another one of Twitter’s dips. A developer who had already been interested in and was working with open source software, he got the idea for Mastodon from a federated version of a forum he’d built in high school.

That project was called Zeon Federated, and it’s no longer active. While developing that, he also built and sold a platform to manage escrow for artists around commissions.

Mastodon’s success has somewhat taken its creator by surprise. Rochko didn’t jump into this project as a power user of social media, nor is he prone to sharing much about himself. When we spoke, he dialed into our video chat from an undisclosed location. He’s never even used Instagram. If growth hackers look at building audience or revenue as an end in itself, Rochko seems to be the opposite when it comes to development.

This week we spoke with Rochko about the early days of Mastodon, its recent surge in users and how advertising may or may not factor in its future.

TechCrunch: You’ve probably seen significant growth in the last six weeks or so. Has the rate of growth maintained pace, increased or tailed off since the first days of the handover to Elon Musk? How many users and servers do you have now?

Eugen Rochko: If you look at it on the graph, we had a huge spike around the news of Elon Musk buying Twitter. And there was another spike when Musk fired most of the employees at Twitter. It’s trailed off now, but the rate is way higher than it was before October. We now have 2.5 million monthly active users across Mastodon, across 8,600 servers.

We don’t chart the growth rate, but right now, app downloads on iOS and Android are about 4,000 each per day. The highest spike we saw was when Musk fired employees — we had 149,000 downloads on Android and 235,000 on iOS. Over the last 90 days, the iOS app has had 1.8 million downloads. Android provides different figures, but in October, the installed audience for the Android app was 53,000 devices. Now, it is 907,000 devices.

I can’t give you much on whether mobile is more popular than desktop: I don’t track it. We haven’t built dashboards for that.

“Moderation work is not automation-friendly. The simple cases are so simple that even if it’s a person doing it, it just takes a couple of seconds to do it. And when it’s complicated, then no automation can help. It requires a human to read into the context of the situation and to make the call.” Eugen Rochko

TC: You say “we,” but how many people do you have at Mastodon?

Rochko: I’m the only full-time employee, and the rest — five people — are contractors at the moment. I’m looking to expand the full-time team and have been working on some job listings. It’s kind of a slow process; I wish I could do it a lot faster. But it’s a new frontier for a company that has been a one-person venture for six years. It has been fine so far, but now we need more people.

TC: Is Patreon the only vehicle you’ve been using to fund it so far?

Rochko: Patreon is the main one. We built a custom sponsorship platform as well for when a business wants to sponsor us to save on Patreon fees. We also got a public grant this year from the European Commission to finance some of the work on features. But mainly, it’s Patreon.

TC: So the bulk of it is coming from around 8,500 backers on there…

Rochko: Yeah, that brings in $31,000 per month. That number has risen dramatically over the past month — it was only $7,000 last month. That’s the only reason we can even think about getting new employees.

This is the kind of scary part of running a non-profit based on donations. I’m responsible for myself if the donations dry up, but if you hire other people and the donations stop, suddenly you’re responsible for other people’s livelihoods. That’s been the stopper for getting other people as employees before now.

I think now there is some buffer, so we want to get a few more people involved.

Mastodon creator Eugen Rochko talks funding and how to build the anti-Twitter by Ingrid Lunden originally published on TechCrunch

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As tech companies seek to limit losses, a reminder of how far some have to go

The 2022 perspective that startups should cut their losses and chart a clearer path to profitability does not only apply to upstart tech companies. After a multiyear spending binge, larger technology companies are also pulling back on costs.

For some major tech concerns, the cuts have come in the form of explicit layoffs and staffing reductions created by not backfilling departing employees, while other tech shops are cutting costs, including perks and related employment-enticement efforts. But while some major technology companies are trimming spending to bolster profitability, others remain miles away from making money.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

Such is the case of Bilibili, a Chinese online video service with a social component. Today, shares of Bilibili are performing strongly, up sharply after the company reported better-than-anticipated Q3 earnings results. Naturally on the hunt for some good news amid a year of bearish headlines, compressing multiples and chaos, we took a look.

What we found was a business farther from profitability than we expected. The Chinese company, worth around $5 billion today per financial databases including Yahoo Finance, has done a fantastic job capturing a growing audience in its home market and keeping those netizens engaged. But when it comes to building a more profitable company — its stated goal, as we’ll examine shortly — it has much work ahead of it.

That shares of Bilibili are up more than 20% today is good news, albeit in a limited sense. The company’s shares trading on U.S. exchanges crested the $150 per-share threshold in booming 2021. They closed yesterday at $12.59 per share, before today’s uptick of nearly $3 per share.

The work ahead of Bilibili to reach profitability — measured in GAAP terms, mind — reminds us of other tech companies that saw their values skyrocket and losses stick during the 2021 era. Some of those concerns, like Twilio, are still growing quickly, and at scale, but their losses appear to have set a weight around their shoulders, compressing their total value.

Put more simply, Bilibili’s unprofitability tells us that unwinding 2021’s excesses will take years, in some cases. For already-public tech companies, this can mean a painful march to the black. For startups, it serves more as a warning about what happens when growth fails to generate sufficient operating leverage.

As tech companies seek to limit losses, a reminder of how far some have to go by Alex Wilhelm originally published on TechCrunch

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Why mobile subscription management platforms are enjoying tailwinds

Game engine company Unity and adtech company IronSource finalized their merger this week, aiming to “create an end-to-end for developers to build and monetize games,” TechCrunch reported.

While there’d be a lot to say about the deal from the perspective of game developers, we’d like to look at this from a different angle and wonder who might one day do the same, but for non-gaming apps.

Earlier today, we reported that New York-based startup Adapty raised $2.5 million to date to help mobile app developers grow their revenue. While the company is perhaps more focused on customer revenue growth acceleration than some of its competitors, it is not alone in its broader space, which could be described as mobile subscription infrastructure.

By magnitude of funding, the leader by far is YC-backed RevenueCat, which has raised $56.5 million in total, including a $40 million Series B in 2021. And with clients like Buffer, Notion and PhotoRoom, it is arguably the one that comes up more often in conversations.

Why mobile subscription management platforms are enjoying tailwinds by Anna Heim originally published on TechCrunch

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Korean internet giant Naver eyes North America, Europe as it grows its C2C marketplace business

Did you know that Google isn’t the top search engine in South Korea? It’s not even a close second.

Most Koreans actually prefer Naver for various reasons, and they like it so much that the search engine holds about 56% of the market, per Statista. Google is catching up, but it currently only has about a 35% share, and it’ll likely be a while before it can close the gap.

Naver’s other offerings are also received quite well in the country, including its e-commerce platform, messaging, payments, storytelling, digital comics (webtoons), metaverse efforts, a selfie app, games, the cloud and more.

But like any true tech company, Naver was never satisfied with its success at home. The company quickly expanded to Japan, and more widely in Southeast Asia. But instead of leading with its core search engine and e-commerce businesses, it instead opted for different strategies in each new country, such as expanding in Japan with its Line messaging app and increasing its footprint in Southeast Asia with its 3D avatar app, Zepeto, and other offerings.

It’s now expanding its e-commerce business — wildly successful in South Korea with 18% of the market — with a consumer-to-consumer (C2C) marketplace model that it aims to offer in North America, Europe and Asia. Unlike many B2C marketplaces, which usually sell large quantities of a few profitable, popular items, Naver’s e-commerce strategy is focusing on long-tail business, allowing sellers to sell small quantities of hard-to-find items to buyers looking for niche products.

It wants to add a social network feature, which allows sellers to receive comments, likes and users in its e-commerce unit. To that end, the company earlier this month said it would buy Redwood, California-based social commerce marketplace Poshmark for $1.2 billion.

Korean internet giant Naver eyes North America, Europe as it grows its C2C marketplace business by Kate Park originally published on TechCrunch