Instacart operates a four-sided marketplace balancing grocers, shoppers, customers, and advertisers. The core tension: using grocery stores as free fulfillment centers drives incremental sales but risks cannibalizing in-store purchases and squeezing retailer margins. Few large grocers and CPG advertisers dominate each side, shaping how the whole platform works.
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So Instacart's, you know, very operationally complex, you know, with 4 sides as a marketplace, you know. So could you maybe show a little bit more about, you know, what you were working on at Instacart, maybe some of the specific challenges with it as a more complex marketplace?
Yeah, I think, you know, as you mentioned, it's 4-sided and the more sides there are, the more kind of needs and incentives that one needs to balance and pressures that come along with it. I think the other thing that's also interesting about Instacart is, The dynamics of marketplace, as you know, will change depending on the liquidity and consolidation on each side. And Instacart has multiple sides that are highly consolidated. There aren't that many retailers, grocery retailers in the US that capture most of the market share. And similarly, the number of large CPG advertisers is relatively limited in the grand scheme of things. And And separate from that, there was inherent tension and continues to be always inherent tension in Instacart's business model, which is that, you know, the part of the reason why Instacart worked and some of the previous versions of this didn't work, like Webvan, Peapod, FreshDirect, for those who lived in New York or live in New York, is that having inventory close to the point of delivery that's, you know, refrigerated and the range of SKUs that you need for grocery. has always been challenging. This is why Amazon has also had a hard time in the grocery category. And so the innovation that Instacart came up with, which is a business model innovation, but is that, hey, actually there are warehouses near people's houses. They're called grocery stores and they're refrigerated, they're easy to use and they're free to use. So why don't we take advantage of that and create a logistics network based on that. As you can imagine, this is good for the retailers if it's incremental demand. And, but it's potentially conflicting to the retailers if it's capturing, you know, in-store volume because it can potentially be lower margin depending on what the, you know, what they choose to mark up on the platform and what their net fees end up being via Instacart and different retailers have. They have different strategy there. So anyway, that's more about the business. I'm happy to talk about the specific things that we worked on. So I'm happy to tell you a little bit about the ads work that I did, you know, that I helped lead at Instacart.
