Amazon Fresh May Succeed Where Webvan Did Not

Amazon FreshTechCrunch’s Michael Arrington has a post about Amazon Fresh, which is Amazon’s entry into delivering fresh groceries to the home. It’s clear from the comments in the post and the comments from readers that people are skeptical.

Check out Amazon Fresh – a new invite only service from Amazon that looks eerily similar to the quintessential 90’s Internet flameout, Webvan.

Remember Webvan? So Does Amazon

It seems to be easy to bash the failures of that time period and to lump them all together as one great big set of bad ideas. And in my opinion, this would be the wrong call on home delivery of groceries. Webvan was a bloated over funded enterprise with ambitions to build a huge, huge company. It never made money and probably never would have given it’s cost structure.

However, Homegrocer, in which Amazon was a large investor, took a much more cost effective approach. Some one once told me that when WebVan bought HomeGrocer, some people had a meeting to discuss some aspect of the merger integration. One guy from HomeGrocer showed up and five people from Webvan showed up. The Webvan people introduced themselves and asked the HomeGrocer person what he did. His response was that he did what they did. One guy doing the work of 5, or maybe it was a situation of five people doing the work of one.

In any case, HomeGrocer was reported to be breakeven in a number of markets and if Amazon knows what its doing it has a chance to make this big idea work once and for all.

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