HomeRuns.com

» see homeruns.com as it lived, on the wayback machine

~ the obituary ~

Ordering groceries over the internet was not a category Turkey was waiting for in 2001. If you wanted food brought to the door you called the bakkal on the corner and a kid arrived with it in ten minutes. No venture capital was involved at any point in that process. The summer HomeRuns died is remembered here for the February crisis and what happened to the lira, not for anything happening to American web companies.

HomeRuns started in 1996, which is early enough to be worth pausing on. Hannaford Bros, a supermarket chain with stores across New England, wanted to know whether people would buy groceries through a browser, and Boston was the test. This was a year before Webvan existed as a company. The web that HomeRuns launched into was one where a large share of its potential customers had never bought anything online at all.

It grew into an independent operation headquartered in Burlington, Massachusetts, running deliveries in Boston and later in the Washington area out of a warehouse in Landover. The model was the sane one. Pick from a warehouse rather than from store shelves, then grow one metropolitan area at a time instead of taking the whole country at once. That is roughly where the surviving grocery services landed fifteen years later.

It was also the approach that could not raise money in 2001. Warehouses and vans are capital, and after Webvan the phrase online grocery had stopped meaning opportunity to anyone writing checks.

~ the case file ~

~ the slide ~

Grocery delivery has a margin problem that no amount of software fixes. A supermarket keeps a few percent of what you spend. Somebody picking your order and driving it across a city costs a great deal more than that, and no customer will pay a delivery fee big enough to close the gap. Every company in that wave hit the same wall, and the ones with the biggest warehouses hit it hardest.

HomeRuns was smaller and more careful than Webvan, and that bought it time rather than a different ending. Two markets instead of seven meant lower burn and less to unwind, but it also meant no story big enough to attract the money that a company burning cash needs to keep going.

~ what got buried with it ~

Webvan announced on 9 July 2001 that it was ceasing operations and filing for bankruptcy. HomeRuns said late on Thursday 12 July that it had stopped service in both of its markets and was beginning an orderly winding-down, after efforts to raise the capital it needed came up short. Orders placed after that day were canceled without charge. The Landover staff were laid off the following week.

The idea did not die with the wave. It sat unfunded for a decade while the pieces it needed arrived, and what arrived was the phone in everyone's pocket rather than any change in the grocery math. HomeRuns had the warehouses and the routes in 1996, and the thing it was actually missing had not been invented yet.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »