WEBVTT 00:00:00.000 --> 00:00:01.639 I want you to do something for me right now. 00:00:02.399 --> 00:00:07.919 I want you to mentally walk into your garage. 00:00:08.199 --> 00:00:10.320 Okay. Or maybe it's your basement or that weird 00:00:10.320 --> 00:00:12.140 crawl space under the stairs where you just shove 00:00:12.140 --> 00:00:13.939 things you don't know what to do with. I have 00:00:13.939 --> 00:00:17.620 one of those. I want you to look for a bin. Specifically, 00:00:17.859 --> 00:00:22.780 a very, very sturdy colored plastic tub. Oh, 00:00:22.820 --> 00:00:24.359 I know exactly the one you're talking about. 00:00:24.519 --> 00:00:27.300 It's probably a dull red or maybe a forest green 00:00:27.300 --> 00:00:30.820 or a deep blue. It has these interlocking teeth 00:00:30.820 --> 00:00:33.500 on the lid, kind of like a zipper. Yep. I think 00:00:33.500 --> 00:00:35.280 I have three of them holding holiday decorations 00:00:35.280 --> 00:00:39.159 and, like, a mess of old cables I'm too afraid 00:00:39.159 --> 00:00:41.600 to throw away. Everyone has them. They're practically 00:00:41.600 --> 00:00:43.539 indestructible. I mean, you could probably drop 00:00:43.539 --> 00:00:45.359 one off a roof and it'd be fine. These stack 00:00:45.359 --> 00:00:47.340 perfectly, too. Honestly, they're probably the 00:00:47.340 --> 00:00:49.380 best storage containers ever made. They really 00:00:49.380 --> 00:00:52.719 are. Yeah. But here's the thing. Those tubs aren't 00:00:52.719 --> 00:00:56.179 just Tupperware. They are ghosts. They are the 00:00:56.179 --> 00:00:59.740 physical debris of a corporate explosion. Exactly. 00:00:59.880 --> 00:01:01.920 They are the archaeological artifacts of Webvan. 00:01:02.039 --> 00:01:04.700 And today, we are going to do a deep dive into 00:01:04.700 --> 00:01:06.980 how those plastic tubs represent one of the most 00:01:06.980 --> 00:01:09.799 spectacular, most expensive, and frankly, just 00:01:09.799 --> 00:01:11.799 confusing failures in the history of the Internet. 00:01:11.959 --> 00:01:14.260 It really is the ultimate cautionary tale. We 00:01:14.260 --> 00:01:16.700 are talking about a company that incinerated 00:01:16.700 --> 00:01:19.060 nearly $1 billion of capital. And that's the 00:01:19.060 --> 00:01:21.250 mystery we need to solve today. We have a whole 00:01:21.250 --> 00:01:23.329 stack of research here, financial filings, old 00:01:23.329 --> 00:01:25.890 interviews, postmortems from the early 2000s. 00:01:25.930 --> 00:01:28.230 And the question isn't just how do they lose 00:01:28.230 --> 00:01:31.290 so much money? It's how did a company backed 00:01:31.290 --> 00:01:34.170 by the absolute smartest venture capitalists 00:01:34.170 --> 00:01:36.450 in the world, I mean, the royalty of Silicon 00:01:36.450 --> 00:01:39.989 Valley. How did they go from a valuation of over 00:01:39.989 --> 00:01:43.810 $4 .8 billion to absolute zero in roughly 24 00:01:43.810 --> 00:01:46.069 months? It's a story about hubris, absolutely. 00:01:46.329 --> 00:01:48.230 But it's also a story about physics. You know, 00:01:48.250 --> 00:01:50.549 the physics of moving atoms versus moving bits 00:01:50.549 --> 00:01:53.030 and why really smart people so often confuse 00:01:53.030 --> 00:01:54.950 the two. So let's set the scene. We need to go 00:01:54.950 --> 00:01:57.450 back in time. It's 1996. The Macarena is on the 00:01:57.450 --> 00:01:59.840 radio. Independence Day is blowing up the White 00:01:59.840 --> 00:02:02.659 House and theaters. And in Silicon Valley, people 00:02:02.659 --> 00:02:04.780 are just losing their minds. You have to understand 00:02:04.780 --> 00:02:06.859 the atmosphere of the late 90s. This was the 00:02:06.859 --> 00:02:10.240 era of irrational exuberance. That was the phrase 00:02:10.240 --> 00:02:12.740 Alan Greenspan used. And it was absolutely perfect. 00:02:13.159 --> 00:02:15.379 Netscape had gone public just a year earlier. 00:02:15.719 --> 00:02:18.860 The internet felt like this wide open frontier. 00:02:19.479 --> 00:02:23.319 And there was this... pervasive, almost religious 00:02:23.319 --> 00:02:26.759 belief that the old rules of business, you know, 00:02:26.780 --> 00:02:29.280 profit, margins, physical assets, that they were 00:02:29.280 --> 00:02:31.560 all dead. Right. Brick and mortar was basically 00:02:31.560 --> 00:02:33.819 a slur back then. Right. If you owned a building, 00:02:33.900 --> 00:02:35.659 you were a dinosaur. If you owned a domain name, 00:02:35.719 --> 00:02:37.919 you were the future. Precisely. The feeling was 00:02:37.919 --> 00:02:40.099 that the Internet would frictionlessly connect 00:02:40.099 --> 00:02:42.900 buyer and seller, eliminating the middleman and 00:02:42.900 --> 00:02:45.620 just, poof, creating infinite value. And into 00:02:45.620 --> 00:02:49.020 this fever dream steps a man named Louis Borders. 00:02:49.340 --> 00:02:52.090 Now, that name, Borders. as in the bookstore. 00:02:52.389 --> 00:02:54.569 The very same. Louis Borders was a legitimate 00:02:54.569 --> 00:02:57.189 retail titan. He co -founded Borders Books back 00:02:57.189 --> 00:03:00.210 in 1971. And this is really important. He wasn't 00:03:00.210 --> 00:03:02.330 just some book guy who liked literature. He was 00:03:02.330 --> 00:03:04.930 a systems genius. Okay, so he's not just some 00:03:04.930 --> 00:03:07.629 kid in a garage hacking code together. This is 00:03:07.629 --> 00:03:09.930 a guy who built a physical empire. He was a math 00:03:09.930 --> 00:03:13.539 guy. A huge math guy. At Borders Books, he developed 00:03:13.539 --> 00:03:16.199 something called the Borders Expert System or 00:03:16.199 --> 00:03:19.800 BES. It was this incredibly sophisticated piece 00:03:19.800 --> 00:03:22.460 of software that could track inventory turnover 00:03:22.460 --> 00:03:25.340 at a really granular level. What do you mean 00:03:25.340 --> 00:03:28.280 by granular? I mean, it could predict which specific 00:03:28.280 --> 00:03:31.219 spy novel would sell better in Ann Arbor versus, 00:03:31.300 --> 00:03:34.219 say, Austin. It gave them this massive advantage 00:03:34.219 --> 00:03:36.240 over all the independent bookstores because they 00:03:36.240 --> 00:03:37.879 always had the right stock at the right time. 00:03:38.319 --> 00:03:42.300 So he builds this empire on code, on data. He 00:03:42.300 --> 00:03:44.639 sells his stake in borders, makes a fortune. 00:03:44.900 --> 00:03:48.300 He's sitting pretty. Why on earth does he then 00:03:48.300 --> 00:03:50.599 look at the grocery industry, which is notoriously 00:03:50.599 --> 00:03:53.159 miserable, low margin and just messy, and say, 00:03:53.199 --> 00:03:55.280 you know what, I can fix that? That is the billion 00:03:55.280 --> 00:03:57.479 dollar question, isn't it? I think he fell into 00:03:57.479 --> 00:03:59.840 a classic trap that we see with highly intelligent 00:03:59.840 --> 00:04:02.460 engineers. He thought that because he had solved 00:04:02.460 --> 00:04:04.699 the logistics of books, which are drugs. Their 00:04:04.699 --> 00:04:07.240 square, non -perishable shelf sta - Right, easy. 00:04:07.439 --> 00:04:09.000 He thought he could just copy -paste that same 00:04:09.000 --> 00:04:11.520 logic onto groceries. But a book doesn't bruise. 00:04:11.879 --> 00:04:13.639 The book doesn't melt if you leave it in the 00:04:13.639 --> 00:04:15.900 van too long. And a book definitely doesn't smell 00:04:15.900 --> 00:04:18.639 like fish if it sits there for two days. Precisely. 00:04:18.939 --> 00:04:21.160 But Borders looked at the grocery supply chain 00:04:21.160 --> 00:04:23.980 and all he saw was inefficiency. He saw middlemen. 00:04:24.100 --> 00:04:27.339 He saw wasted shelf space. He saw customers wandering 00:04:27.339 --> 00:04:30.240 up and down aisles pushing carts. Right. To an 00:04:30.240 --> 00:04:33.160 engineer's mind, a supermarket is just a disaster 00:04:33.160 --> 00:04:35.720 of inefficiency. He thought, I can centralize 00:04:35.720 --> 00:04:37.860 this whole thing. I can build the giant automated 00:04:37.860 --> 00:04:40.360 warehouse, use my software to manage the flow 00:04:40.360 --> 00:04:43.250 and deliver. directly to the consumer. It sounds 00:04:43.250 --> 00:04:46.050 so logical on paper. It's the classic disintermediation 00:04:46.050 --> 00:04:48.970 play. Cut out the store, keep the margin. And 00:04:48.970 --> 00:04:51.930 that was the entire pitch. In 1996, he founds 00:04:51.930 --> 00:04:54.810 Webban in Foster City, California. And the promise 00:04:54.810 --> 00:04:57.350 wasn't just we deliver food. It was about precision. 00:04:57.649 --> 00:04:59.629 You'd log on via dial -up. Remember, you'd pick 00:04:59.629 --> 00:05:01.829 your cereal, your milk, your eggs, and then you'd 00:05:01.829 --> 00:05:04.709 select a 30 -minute delivery window. Wait, hold 00:05:04.709 --> 00:05:08.089 on. A 30 -minute window. In 1999, I ordered from 00:05:08.089 --> 00:05:11.290 Amazon today. And I'm lucky if they hit a four 00:05:11.290 --> 00:05:13.949 -hour window. A 30 -minute window is insane. 00:05:14.230 --> 00:05:17.009 That's how ambitious this was. They weren't just 00:05:17.009 --> 00:05:18.889 trying to catch up to the current standard. They 00:05:18.889 --> 00:05:22.129 were trying to leapfrog it by 20 years. And to 00:05:22.129 --> 00:05:25.490 do that, they needed money. A staggering, staggering 00:05:25.490 --> 00:05:27.689 amount of money. This is where the story gets 00:05:27.689 --> 00:05:30.230 really wild for me. Because usually when you 00:05:30.230 --> 00:05:31.990 start a business, you test it outright. You open 00:05:31.990 --> 00:05:34.029 a lemonade stand. If people buy the lemonade, 00:05:34.209 --> 00:05:36.230 maybe you buy a second pitcher. You prove the 00:05:36.230 --> 00:05:39.079 model. Yes. Webvan didn't do that at all. They 00:05:39.079 --> 00:05:41.500 went straight to industrial scale. They subscribed 00:05:41.500 --> 00:05:44.240 to a strategy that was absolute gospel at the 00:05:44.240 --> 00:05:48.459 time. Get big fast. Or just GBF. Get big fast. 00:05:48.459 --> 00:05:51.060 It sounds like a bad bodybuilding supplement 00:05:51.060 --> 00:05:53.120 or something. But this was a serious economic 00:05:53.120 --> 00:05:56.560 theory. It was treated as a law of nature. The 00:05:56.560 --> 00:05:59.500 theory was based on this idea of first mover 00:05:59.500 --> 00:06:02.379 advantage. The thinking was that the internet 00:06:02.379 --> 00:06:05.019 is a winner take all market. So if you are the 00:06:05.019 --> 00:06:08.040 first online grocer, you grab the customer. And 00:06:08.040 --> 00:06:10.519 they stick with you. Exactly. Once the customer 00:06:10.519 --> 00:06:12.860 has entered their credit card and saved their 00:06:12.860 --> 00:06:15.220 shopping list, they become sticky. They won't 00:06:15.220 --> 00:06:18.079 switch. So the goal isn't to make a profit. The 00:06:18.079 --> 00:06:20.519 goal is just to grab the land. So it's a land 00:06:20.519 --> 00:06:23.040 grab. You worry about making money later on. 00:06:23.360 --> 00:06:25.420 First, you just plant the flag everywhere you 00:06:25.420 --> 00:06:27.339 can. That's it. And because of that pressure, 00:06:27.579 --> 00:06:30.199 Webvan didn't start small. They didn't just service, 00:06:30.259 --> 00:06:32.540 you know, Foster City with a couple of vans to 00:06:32.540 --> 00:06:34.899 see if the math actually worked. They immediately 00:06:34.899 --> 00:06:37.500 planned for world domination. But hold on a second. 00:06:37.920 --> 00:06:39.560 Groceries aren't a social network. There's no 00:06:39.560 --> 00:06:42.600 network effect. If I buy milk from Webvan, it 00:06:42.600 --> 00:06:44.699 doesn't make the milk any better for you. Does 00:06:44.699 --> 00:06:47.800 first mover advantage even apply to selling bananas? 00:06:48.519 --> 00:06:50.819 That is the critical flaw that almost nobody 00:06:50.819 --> 00:06:53.439 seemed to ask at the time. In software, you have 00:06:53.439 --> 00:06:55.920 network effects. In groceries, you just have 00:06:55.920 --> 00:06:58.399 a truck stuck in traffic. But the investors, 00:06:58.560 --> 00:07:00.100 they didn't care. They were just terrified of 00:07:00.100 --> 00:07:03.000 missing out. So who's feeding this beast? Because 00:07:03.000 --> 00:07:06.339 Louie Orders had money, but he didn't have this 00:07:06.339 --> 00:07:08.319 kind of money. He brought in the absolute heavy 00:07:08.319 --> 00:07:11.300 hitters. We're talking Benchmark Capital, Sequoia 00:07:11.300 --> 00:07:13.420 Capital. And for anyone listening who doesn't 00:07:13.420 --> 00:07:16.699 track VC inside baseball, Sequoia is the gold 00:07:16.699 --> 00:07:18.100 standard, right? They're the biggest name there 00:07:18.100 --> 00:07:21.240 is. Sequoia is Mount Olympus in Silicon Valley. 00:07:21.399 --> 00:07:24.800 They backed Apple, Google, Oracle. If Sequoia 00:07:24.800 --> 00:07:26.939 writes you a check, it's not just money. It's 00:07:26.939 --> 00:07:28.779 an anointing. It tells the rest of the market, 00:07:28.920 --> 00:07:37.360 this is the one. This is the winner. Backing 00:07:37.360 --> 00:07:39.199 up a dump truck full of money to anyone with 00:07:39.199 --> 00:07:42.579 a big idea is in. How much cash are we talking 00:07:42.579 --> 00:07:44.899 about here? In the private round, so before they 00:07:44.899 --> 00:07:47.500 even went public, they raised nearly $400 million. 00:07:48.259 --> 00:07:51.800 $400 million. SoftBank alone put in over $160 00:07:51.800 --> 00:07:54.959 million of that. What's that in today's money? 00:07:55.100 --> 00:07:56.680 Close to a billion. Something like that, yeah. 00:07:56.819 --> 00:07:58.759 Just in private cash. And they hadn't really 00:07:58.759 --> 00:08:01.279 sold any groceries yet. They had sold some. They 00:08:01.279 --> 00:08:03.399 started their operations in the Bay Area in June 00:08:03.399 --> 00:08:07.199 of 1999. But the revenue was, it was a rounding 00:08:07.199 --> 00:08:09.519 error compared to the investment. But it didn't 00:08:09.519 --> 00:08:11.259 matter. The hype train had left the station. 00:08:11.379 --> 00:08:14.120 They went public, the IPO, in November 1999. 00:08:14.720 --> 00:08:17.139 I looked up the numbers for the IPO, and I actually 00:08:17.139 --> 00:08:18.740 thought it was a typo in the source material. 00:08:18.879 --> 00:08:20.519 I had to double check. It's breathtaking, isn't 00:08:20.519 --> 00:08:22.759 it? They went public, and the market valued the 00:08:22.759 --> 00:08:26.939 company at $4 .8 billion. Billion dollars with 00:08:26.939 --> 00:08:30.660 a B. $4 .8 billion. Okay, I need you to anchor 00:08:30.660 --> 00:08:33.740 us in reality here. At the exact moment, they 00:08:33.740 --> 00:08:38.139 were worth $4 .8 billion on paper. How much money 00:08:38.139 --> 00:08:40.500 had they actually collected from customers? What 00:08:40.500 --> 00:08:44.740 was their cumulative all -time revenue? $395 00:08:44.740 --> 00:08:49.700 ,000. Wait, say that again? $395 ,000. That's 00:08:49.700 --> 00:08:52.350 the revenue of a decent neighborhood deli. Or 00:08:52.350 --> 00:08:54.909 like a busy Starbucks for a few months. Successful 00:08:54.909 --> 00:08:58.730 deli, yes. And against that $395 ,000 in revenue, 00:08:59.029 --> 00:09:01.629 they had already lost over $50 million. So for 00:09:01.629 --> 00:09:03.690 every single dollar they brought in, they were 00:09:03.690 --> 00:09:06.269 burning. What's the math on that? Something like 00:09:06.269 --> 00:09:09.330 $125? Roughly, yes. And the market looked at 00:09:09.330 --> 00:09:11.009 that and said, this is fine. This is the future. 00:09:11.419 --> 00:09:14.200 It really just highlights how completely disconnected 00:09:14.200 --> 00:09:17.460 the dot -com bubble was from fundamental economics. 00:09:17.879 --> 00:09:20.500 Investors weren't buying the business as it existed. 00:09:20.600 --> 00:09:24.259 They were buying the story of what it could become 00:09:24.259 --> 00:09:27.740 if it took over the entire U .S. grocery market. 00:09:27.820 --> 00:09:30.460 They were betting on that get -big -fast dream. 00:09:30.840 --> 00:09:33.240 Okay, so they have the cash, they have the valuation, 00:09:33.559 --> 00:09:35.899 they have the mandate to expand at all costs. 00:09:36.080 --> 00:09:38.440 Now they have to actually build the thing. Yeah. 00:09:38.830 --> 00:09:41.009 And this is where that Borders philosophy kicks 00:09:41.009 --> 00:09:42.990 in again. They didn't just want to rent a warehouse 00:09:42.990 --> 00:09:46.250 and put up some shelves, did they? No. Oh, no. 00:09:46.370 --> 00:09:48.230 And this is where we have to talk about the infrastructure. 00:09:48.830 --> 00:09:51.070 Because this is where the money really, really 00:09:51.070 --> 00:09:53.789 vanished. Borders believed that the only way 00:09:53.789 --> 00:09:55.870 to make the margins work was through extreme 00:09:55.870 --> 00:09:58.549 automation. He didn't want humans walking around 00:09:58.549 --> 00:10:01.649 picking cans of soup. He wanted robots. So he 00:10:01.649 --> 00:10:05.429 hires Bettel. Yes. The massive global engineering 00:10:05.429 --> 00:10:07.190 firm. You know, these are the people who build 00:10:07.190 --> 00:10:09.330 nuclear power plants, airports, the Hoover Dam. 00:10:09.529 --> 00:10:11.450 Webb Van hired them to build their distribution 00:10:11.450 --> 00:10:13.730 centers. And when you say distribution center, 00:10:13.809 --> 00:10:16.590 I'm picturing a warehouse, a big shed with some 00:10:16.590 --> 00:10:19.690 forklifts driving around. You need to erase that 00:10:19.690 --> 00:10:22.110 image completely. These were not warehouses. 00:10:22.129 --> 00:10:25.429 They were food factories. There were 330 ,000 00:10:25.429 --> 00:10:27.730 square feet. That's about eight football fields 00:10:27.730 --> 00:10:31.309 under one roof. And inside. They were an absolute 00:10:31.309 --> 00:10:33.950 marvel of engineering. Walk us through it. What 00:10:33.950 --> 00:10:36.450 was inside one of these places? Okay, so you'd 00:10:36.450 --> 00:10:39.929 have miles of conveyor belts, massive rotating 00:10:39.929 --> 00:10:41.870 carousels. They looked like giant dry cleaning 00:10:41.870 --> 00:10:44.289 racks that would bring the product to the picker 00:10:44.289 --> 00:10:46.710 so the human didn't have to walk. Wow. They had 00:10:46.710 --> 00:10:49.570 complex server farms just to manage all the different 00:10:49.570 --> 00:10:52.110 temperature zones. They had specific climate 00:10:52.110 --> 00:10:54.629 -controlled rooms just for bananas, different 00:10:54.629 --> 00:10:56.870 rooms for chocolate, different rooms for frozen 00:10:56.870 --> 00:11:00.700 goods. It was... Unbelievably complex. It sounds 00:11:00.700 --> 00:11:02.860 amazing, honestly. It sounds a lot like an Amazon 00:11:02.860 --> 00:11:05.080 fulfillment center looks today. It does. That's 00:11:05.080 --> 00:11:07.019 the great irony. The technology itself was actually 00:11:07.019 --> 00:11:09.820 brilliant. The problem was the cost. Each one 00:11:09.820 --> 00:11:12.240 of these centers cost about $30 to $40 million 00:11:12.240 --> 00:11:14.960 to build. Each one? Each one. And remember the 00:11:14.960 --> 00:11:17.620 get big fast strategy? Don't tell me. They plan 00:11:17.620 --> 00:11:20.639 to build 26 of them. 26? That was the rollout 00:11:20.639 --> 00:11:26.379 plan. Seattle, Portland, Atlanta, Chicago, Dallas. 00:11:27.320 --> 00:11:29.600 They were signing leases and breaking ground 00:11:29.600 --> 00:11:32.220 in multiple cities at the same time before they 00:11:32.220 --> 00:11:34.419 had even proven that the first one in San Francisco 00:11:34.419 --> 00:11:38.179 could make a single dollar of profit. This feels 00:11:38.179 --> 00:11:41.200 like watching a car crash in slow motion. They 00:11:41.200 --> 00:11:44.419 are literally scaling their losses. If you have 00:11:44.419 --> 00:11:46.500 a machine that loses a dollar every time you 00:11:46.500 --> 00:11:49.179 turn the crank, building 26 more machines just 00:11:49.179 --> 00:11:51.480 means you lose $27 every time you turn the crank. 00:11:51.580 --> 00:11:53.539 That is exactly what happened. But they were 00:11:53.539 --> 00:11:55.840 completely convinced that volume would fix it. 00:11:55.879 --> 00:11:57.860 They thought, once we are processing a billion 00:11:57.860 --> 00:12:00.299 dollars worth of food, the overhead per order 00:12:00.299 --> 00:12:02.929 will drop to nothing. But they just ignored the 00:12:02.929 --> 00:12:04.830 upfront capital expenditure. And it wasn't just 00:12:04.830 --> 00:12:06.330 the buildings. It was the trucks. I remember 00:12:06.330 --> 00:12:07.710 seeing pictures of these things. They weren't 00:12:07.710 --> 00:12:10.649 just standard delivery vans. No, these were custom 00:12:10.649 --> 00:12:13.330 -designed logistics vehicles. They looked a bit 00:12:13.330 --> 00:12:16.370 like space capsules on wheels. They were cute 00:12:16.370 --> 00:12:19.649 in a way. Very distinctive. But they were incredibly 00:12:19.649 --> 00:12:21.450 expensive. They had to be insulated. They had 00:12:21.450 --> 00:12:23.870 special racking systems for those plastic tubs 00:12:23.870 --> 00:12:25.610 we talked about at the beginning. Let's talk 00:12:25.610 --> 00:12:27.409 about the tubs for a second because that's where 00:12:27.409 --> 00:12:29.570 the whole cold chain idea comes in. Right. If 00:12:29.570 --> 00:12:32.049 a customer orders ice cream and toilet paper, 00:12:32.190 --> 00:12:34.450 you can't just throw them in the same box. The 00:12:34.450 --> 00:12:36.549 ice cream melts. The toilet paper gets soggy. 00:12:38.250 --> 00:12:42.190 Webvan designed these color coded bins. Some 00:12:42.190 --> 00:12:44.309 were for ambient temperature things, some were 00:12:44.309 --> 00:12:46.809 chilled, some were for frozen. They used dry 00:12:46.809 --> 00:12:49.789 ice and passive cooling. It was an engineering 00:12:49.789 --> 00:12:52.529 triumph. But again, expensive. Incredibly expensive. 00:12:52.690 --> 00:12:55.149 And the sheer complexity of managing those tubs, 00:12:55.210 --> 00:12:57.750 getting the right tub on the right truck in the 00:12:57.750 --> 00:12:59.950 right order so the driver isn't digging around 00:12:59.950 --> 00:13:02.610 for 10 minutes at every single stop. It was a 00:13:02.610 --> 00:13:04.509 logistical nightmare. So they are bleeding money 00:13:04.509 --> 00:13:06.730 on construction. They are bleeding money on custom 00:13:06.730 --> 00:13:08.950 trucks. They are bleeding money on robotics. 00:13:09.429 --> 00:13:11.590 And then in the middle of all this, in the year 00:13:11.590 --> 00:13:14.090 2000, they make another move that just seems 00:13:14.090 --> 00:13:17.610 baffling to me. They buy a competitor. The home 00:13:17.610 --> 00:13:19.929 grocer acquisition? Yeah. Right. They bought 00:13:19.929 --> 00:13:23.990 home grocer for $1 .2 billion in stock. Now, 00:13:24.049 --> 00:13:28.429 was home grocer the profitable, stable alternative? 00:13:28.889 --> 00:13:31.269 Were they buying a working business model? No. 00:13:31.710 --> 00:13:34.309 Not at all. Home Grocer was another online delivery 00:13:34.309 --> 00:13:36.750 service that was also losing money hand over 00:13:36.750 --> 00:13:38.429 fist. So let me get this straight. You have a 00:13:38.429 --> 00:13:40.610 company that is actively drowning, and to save 00:13:40.610 --> 00:13:43.009 itself, it grabs onto another swimmer who is 00:13:43.009 --> 00:13:45.539 also actively drowning. It's like tying two rocks 00:13:45.539 --> 00:13:48.279 together and hoping that they'll float. The logic, 00:13:48.279 --> 00:13:50.799 ostensibly, was to expand their footprint faster. 00:13:51.399 --> 00:13:53.919 Home Grocer had operations in the Pacific Northwest, 00:13:54.259 --> 00:13:56.940 and Webban wanted those customers. They thought, 00:13:57.000 --> 00:13:59.679 if we combine, we'll be too big to fail. But 00:13:59.679 --> 00:14:01.480 financially, it must have been disastrous. It 00:14:01.480 --> 00:14:04.019 was. They took on Home Grocer's leases, Home 00:14:04.019 --> 00:14:06.019 Grocer's employees, and most importantly, Home 00:14:06.019 --> 00:14:09.259 Grocer's losses. The burn rate. The amount of 00:14:09.259 --> 00:14:11.059 cash they were spending every month just to keep 00:14:11.059 --> 00:14:13.299 the lights on it skyrocketed. You know, when 00:14:13.299 --> 00:14:16.419 things go this wrong, this spectacularly, you 00:14:16.419 --> 00:14:17.799 have to look at the people in charge. We talked 00:14:17.799 --> 00:14:19.980 about Louie Borders, the founder, but he wasn't 00:14:19.980 --> 00:14:22.019 the CEO during the big collapse, was he? No. 00:14:22.179 --> 00:14:24.559 And this is a crucial piece of the puzzle. The 00:14:24.559 --> 00:14:27.080 investors, you know, Sequoia and the gang, they 00:14:27.080 --> 00:14:29.639 wanted what they called adult supervision. So 00:14:29.639 --> 00:14:33.340 they hired a professional CEO, a man named George 00:14:33.340 --> 00:14:35.259 Shaheen. And where did he come from? Was he a 00:14:35.259 --> 00:14:37.559 grocery guy? Did he run Kroger or Safeway? Nope. 00:14:38.399 --> 00:14:41.100 George Shaheen was the head of Anderson Consulting, 00:14:41.100 --> 00:14:43.720 which is now known as Accenture. He was the ultimate 00:14:43.720 --> 00:14:46.700 consultant, a very high powered, very successful 00:14:46.700 --> 00:14:49.620 strategy guy. OK, so he knows strategy. He knows 00:14:49.620 --> 00:14:52.029 how to talk to Wall Street. But does he know 00:14:52.029 --> 00:14:54.289 what happens when a pallet of strawberries sits 00:14:54.289 --> 00:14:57.289 on a hot loading dock for four hours in July? 00:14:57.549 --> 00:15:00.210 He did not. And this was a critical, critical 00:15:00.210 --> 00:15:03.070 flaw. In fact, almost none of Webvan's senior 00:15:03.070 --> 00:15:05.450 executives had any management experience in the 00:15:05.450 --> 00:15:07.929 supermarket industry. There were tech guys and 00:15:07.929 --> 00:15:10.190 consultants playing store. That seems like such 00:15:10.190 --> 00:15:12.409 a glaring oversight. The grocery business is 00:15:12.409 --> 00:15:14.990 famous for having razor -thin margins. It's a 00:15:14.990 --> 00:15:17.289 penny business. You fight for every single cent. 00:15:17.470 --> 00:15:20.879 It is a game of pennies. If you don't understand 00:15:20.879 --> 00:15:24.759 spoilage, inventory turns, and the brutal economics 00:15:24.759 --> 00:15:27.620 of perishable goods, you are dead in the water. 00:15:28.240 --> 00:15:30.700 Shaheen was used to high -margin consulting contracts 00:15:30.700 --> 00:15:33.700 where you bill someone $500 an hour. He wasn't 00:15:33.700 --> 00:15:35.659 used to a business where if you drop a single 00:15:35.659 --> 00:15:38.179 carton of eggs, you've just wiped out the entire 00:15:38.179 --> 00:15:40.480 profit for that whole order. And getting him 00:15:40.480 --> 00:15:43.200 to leave a place like Anderson Consulting couldn't 00:15:43.200 --> 00:15:45.820 have been cheap, was it? No. At Anderson, he 00:15:45.820 --> 00:15:48.580 was making about $4 million a year. So to lure 00:15:48.580 --> 00:15:51.840 him away to this risky startup, Webvan had to 00:15:51.840 --> 00:15:54.019 offer him a compensation package that became 00:15:54.019 --> 00:15:56.340 legendary for all the wrong reasons. What was 00:15:56.340 --> 00:15:58.600 in the package? Well, there was the stock, obviously, 00:15:58.720 --> 00:16:01.059 a ton of stock options. But there was a contract 00:16:01.059 --> 00:16:03.700 clause, a golden parachute that promised him 00:16:03.700 --> 00:16:08.149 $375 ,000 per year. For life. For life. Just 00:16:08.149 --> 00:16:10.629 for taking the job, even if he got fired. Essentially, 00:16:10.750 --> 00:16:12.730 it was a retirement package guaranteed by the 00:16:12.730 --> 00:16:14.990 company. It just shows you how supremely confident 00:16:14.990 --> 00:16:16.730 they were. They thought this company will be 00:16:16.730 --> 00:16:18.870 around for 100 years. Paying this guy is just 00:16:18.870 --> 00:16:22.190 peanuts. That is audacious. So Shaheen is at 00:16:22.190 --> 00:16:24.629 the wheel. They're building $40 million warehouses 00:16:24.629 --> 00:16:26.629 in Atlanta. They're buying a fleet of custom 00:16:26.629 --> 00:16:30.450 vans. And then the year 2000 rolls on. The dotcom 00:16:30.450 --> 00:16:34.000 bubble starts to hiss. The Nasdaq peaked in March 00:16:34.000 --> 00:16:36.940 of 2000, and then it just started a long, painful 00:16:36.940 --> 00:16:40.000 slide. And suddenly, investors stopped caring 00:16:40.000 --> 00:16:42.899 about eyeballs and growth metrics, and they started 00:16:42.899 --> 00:16:45.539 asking about profits. A novel concept. And when 00:16:45.539 --> 00:16:47.500 you looked at Webvan through the lens of profitability, 00:16:47.899 --> 00:16:50.759 it was a complete horror show. So what did the 00:16:50.759 --> 00:16:53.230 financial picture look like at its peak? If we 00:16:53.230 --> 00:16:55.409 look at the full year 2000, they had sales of 00:16:55.409 --> 00:16:59.730 $178 .5 million. So real money was coming in. 00:16:59.789 --> 00:17:01.750 People were using it. Okay. But their expenses 00:17:01.750 --> 00:17:05.569 were... $525 .4 million. Oh my. For every dollar 00:17:05.569 --> 00:17:07.309 of revenue they brought in, they spent three. 00:17:07.609 --> 00:17:09.869 The burn rate was completely unsustainable. They 00:17:09.869 --> 00:17:11.549 were running out of cash. And because the stock 00:17:11.549 --> 00:17:13.190 market had crashed, they couldn't just go back 00:17:13.190 --> 00:17:15.369 to the investors and say, hey, can we have another 00:17:15.369 --> 00:17:18.109 $100 million? The well was dry. So the crash, 00:17:18.289 --> 00:17:20.849 how fast did it happen? Frighteningly fast. By 00:17:20.849 --> 00:17:23.650 April 2001, Shaheen sees the writing on the wall 00:17:23.650 --> 00:17:26.109 and he resigns. Does he get his lifetime payout? 00:17:26.289 --> 00:17:28.730 And that's the karmic twist in the story. When 00:17:28.730 --> 00:17:31.029 the company filed for bankruptcy just a few months 00:17:31.029 --> 00:17:34.289 later, He became just another unsecured creditor. 00:17:34.410 --> 00:17:37.730 The contract was worthless. Wow. He had to get 00:17:37.730 --> 00:17:39.829 in line with the guys who sold them the cardboard 00:17:39.829 --> 00:17:43.390 boxes. He lost the golden parachute. So even 00:17:43.390 --> 00:17:46.309 the exit strategy failed. The plane crashed too 00:17:46.309 --> 00:17:48.910 fast for the parachute to even open. Walk us 00:17:48.910 --> 00:17:53.680 through the final days. June, July of 2001. Well, 00:17:53.759 --> 00:17:55.799 they tried to retrench. They pulled out of Atlanta 00:17:55.799 --> 00:17:58.259 and Dallas to try and save the core San Francisco 00:17:58.259 --> 00:18:01.220 operation. But the fixed costs of those massive 00:18:01.220 --> 00:18:03.519 warehouses were just too high. You can't just 00:18:03.519 --> 00:18:06.400 turn off a $40 million facility. It's like having 00:18:06.400 --> 00:18:08.099 a mortgage on a mansion while you're suddenly 00:18:08.099 --> 00:18:10.119 working a minimum wage job. The math doesn't 00:18:10.119 --> 00:18:13.420 work. Exactly. On July 9, 2001, it all ended. 00:18:13.500 --> 00:18:16.079 They ceased all operations. Just like that. Did 00:18:16.079 --> 00:18:18.400 the customers know it was coming? No. People 00:18:18.400 --> 00:18:20.619 logged on to their computers to order dinner 00:18:20.619 --> 00:18:23.579 and the site was just gone. Drivers who were 00:18:23.579 --> 00:18:25.640 out on their routes were told over the radio 00:18:25.640 --> 00:18:27.779 to stop delivering and return the trucks to the 00:18:27.779 --> 00:18:29.660 depot. What happened to all the food? That's 00:18:29.660 --> 00:18:32.019 one of the few nice details in this whole mess. 00:18:32.420 --> 00:18:34.839 The warehouses were still full of fresh food. 00:18:35.180 --> 00:18:37.440 As part of the shutdown, they donated all the 00:18:37.440 --> 00:18:40.680 non -perishables to local food banks. So something 00:18:40.680 --> 00:18:43.460 good came of it. But 2 ,000 people lost their 00:18:43.460 --> 00:18:46.099 jobs that day, and investors lost everything. 00:18:46.880 --> 00:18:49.180 So the tubs are left. The vans are auctioned 00:18:49.180 --> 00:18:51.500 off. I think I read somewhere that the vans were 00:18:51.500 --> 00:18:53.680 sold for just pennies on the dollar. Oh, yeah. 00:18:53.740 --> 00:18:55.440 You can still see them even today sometimes. 00:18:55.660 --> 00:18:57.819 They have a very distinct shape. Plumbers bought 00:18:57.819 --> 00:19:00.839 them. Electricians bought them. The ghost of 00:19:00.839 --> 00:19:02.819 web van is probably parked in front of a house 00:19:02.819 --> 00:19:04.799 in your neighborhood right now fixing a sink. 00:19:05.059 --> 00:19:07.299 Okay, we've told the tragedy. Now we need to 00:19:07.299 --> 00:19:10.579 do the autopsy. Yeah. Why did it fail? Because, 00:19:10.660 --> 00:19:13.039 and this is the key. I can pull out my phone 00:19:13.039 --> 00:19:15.720 right now and order groceries. Instacart exists. 00:19:16.000 --> 00:19:19.000 Amazon Fresh exists. The idea wasn't wrong. People 00:19:19.000 --> 00:19:21.299 clearly want grocery delivery. So why did Webvan 00:19:21.299 --> 00:19:23.519 fail so badly where others eventually succeeded? 00:19:23.799 --> 00:19:26.119 Analysts have spent 20 years dissecting this. 00:19:26.339 --> 00:19:28.759 And it really comes down to three main failures. 00:19:28.900 --> 00:19:30.980 But the biggest one, the one that really killed 00:19:30.980 --> 00:19:33.240 them, comes down to two words, unit economics. 00:19:33.740 --> 00:19:36.059 OK, let's break that down. Specifically, it's 00:19:36.059 --> 00:19:38.180 about delivery density. That's the magic word, 00:19:38.319 --> 00:19:41.279 density. Why is density so important? Okay, think 00:19:41.279 --> 00:19:45.220 about the mailman or a UPS driver. A UPS driver 00:19:45.220 --> 00:19:48.779 stops on a single street and delivers five packages 00:19:48.779 --> 00:19:51.980 to three different houses. He walks maybe 50 00:19:51.980 --> 00:19:55.630 feet between stops. That is high density. The 00:19:55.630 --> 00:19:58.569 cost of his truck and his salary is split across 00:19:58.569 --> 00:20:01.150 those five deliveries. Makes total sense. Web 00:20:01.150 --> 00:20:03.910 van had no density. They were driving across 00:20:03.910 --> 00:20:06.450 a 30 minute radius to deliver one order, then 00:20:06.450 --> 00:20:08.750 driving another 20 minutes across town to the 00:20:08.750 --> 00:20:11.230 next single order. So the truck is just driving 00:20:11.230 --> 00:20:13.710 around empty, burning gas and paying the driver 00:20:13.710 --> 00:20:16.190 just to carry one bag of groceries. Exactly. 00:20:16.369 --> 00:20:19.490 This is the famous last mile problem. The cost 00:20:19.490 --> 00:20:22.529 of that driver and that truck is fixed. per hour. 00:20:22.710 --> 00:20:25.029 If you can't spread it over multiple orders in 00:20:25.029 --> 00:20:28.230 that hour, the math never, ever works. Webvan's 00:20:28.230 --> 00:20:30.430 model required a density of customers that simply 00:20:30.430 --> 00:20:32.589 didn't exist yet. They were trying to service 00:20:32.589 --> 00:20:35.529 an entire metro area with a scattershot approach. 00:20:35.789 --> 00:20:37.230 And this connects to the second big failure, 00:20:37.349 --> 00:20:39.750 right? The target demographic. Who are they trying 00:20:39.750 --> 00:20:42.369 to sell to? They wanted to be the everyman supermarket. 00:20:42.789 --> 00:20:45.549 They wanted to replace Safeway or Kroger. They 00:20:45.549 --> 00:20:48.569 targeted price sensitive mass market consumers. 00:20:49.109 --> 00:20:52.000 And why is that a mistake? Everyone eats. It's 00:20:52.000 --> 00:20:54.299 a huge market. Because the everyman cares about 00:20:54.299 --> 00:20:58.700 price. If a gallon of milk is $3 at the store, 00:20:58.900 --> 00:21:03.480 they won't pay $4 .50 on Webvan. So Webvan couldn't 00:21:03.480 --> 00:21:05.180 charge a high delivery fee and they couldn't 00:21:05.180 --> 00:21:07.819 mark up the prices of the food itself. They squeeze 00:21:07.819 --> 00:21:10.079 their own margins to death. So who should they 00:21:10.079 --> 00:21:12.099 have targeted instead? They should have targeted 00:21:12.099 --> 00:21:15.380 the time poor, cash rich demographic, you know, 00:21:15.380 --> 00:21:18.039 lawyers, doctors, tech executives, people who 00:21:18.039 --> 00:21:21.119 would have happily paid a $20 delivery fee to 00:21:21.119 --> 00:21:22.920 avoid going to the store on a Tuesday night. 00:21:23.500 --> 00:21:26.579 If they had started as a niche luxury concierge 00:21:26.579 --> 00:21:29.299 service, established that density in a few wealthy 00:21:29.299 --> 00:21:31.819 neighborhoods and then expanded, they might have 00:21:31.819 --> 00:21:34.269 actually survived. They tried to be Walmart before 00:21:34.269 --> 00:21:36.150 they were even a boutique. That's the perfect 00:21:36.150 --> 00:21:38.289 way to put it. They wanted the volume of Walmart 00:21:38.289 --> 00:21:40.349 with the cost structure of a limo service. It 00:21:40.349 --> 00:21:42.289 was never going to work. And the third failure. 00:21:42.809 --> 00:21:45.210 Infrastructure overload. Yeah. The build -it 00:21:45.210 --> 00:21:48.269 -yourself trap. Contrast this with how a company 00:21:48.269 --> 00:21:51.250 like Instacart started. Instacart is the anti 00:21:51.250 --> 00:21:54.289 -web ban. Instacart built zero infrastructure. 00:21:54.509 --> 00:21:57.289 No warehouses, no trucks, no inventory. They 00:21:57.289 --> 00:21:59.970 just built an app. That's it. That's it. They 00:21:59.970 --> 00:22:02.670 sent a gig worker into an existing Safeway who 00:22:02.670 --> 00:22:05.329 picked the food off the existing shelves and 00:22:05.329 --> 00:22:08.210 drove it to the customer in their own car. Asset 00:22:08.210 --> 00:22:11.509 light versus asset heavy. It's the ultimate example. 00:22:11.890 --> 00:22:15.130 Webvan tried to rebuild the entire grocery infrastructure 00:22:15.130 --> 00:22:17.630 of the United States from scratch. Instacart 00:22:17.630 --> 00:22:19.950 just skimmed a service fee off the top. It was 00:22:19.950 --> 00:22:23.470 infinitely cheaper and faster to scale Instacart's 00:22:23.470 --> 00:22:25.369 model. It's amazing when you put it like that. 00:22:25.470 --> 00:22:28.089 Webvan spent a billion dollars to build warehouses. 00:22:28.650 --> 00:22:31.769 Instacart spent maybe, what, $100 ,000 to build 00:22:31.769 --> 00:22:34.430 an app and then leveraged billions of dollars 00:22:34.430 --> 00:22:36.970 of Safeway's real estate for free. That is the 00:22:36.970 --> 00:22:39.519 lesson. Don't build what you can rent, especially 00:22:39.519 --> 00:22:41.359 if you don't know for sure if the business model 00:22:41.359 --> 00:22:43.819 even works yet. But and here's where it gets 00:22:43.819 --> 00:22:46.960 really interesting for me. Webin didn't completely 00:22:46.960 --> 00:22:51.519 die. The DNA, the idea, it survived. It did. 00:22:51.660 --> 00:22:54.160 And the connection to Amazon is absolutely fascinating. 00:22:54.460 --> 00:22:56.539 Tell me about that. Well, first off, Amazon actually 00:22:56.539 --> 00:23:00.089 resurrected the brand name. In 2009, when Amazon 00:23:00.089 --> 00:23:02.890 started Amazon Fresh, in some markets, they literally 00:23:02.890 --> 00:23:06.470 used the web van URL for a while. It was sort 00:23:06.470 --> 00:23:08.450 of a little nod to the pioneer. But it's deeper 00:23:08.450 --> 00:23:10.549 than just the name, right? Oh, it's much deeper. 00:23:10.549 --> 00:23:12.970 A lot of the former web van executives, the guys 00:23:12.970 --> 00:23:14.529 who were in the trenches when it all collapsed, 00:23:14.609 --> 00:23:16.710 they went to work for Amazon. They took those 00:23:16.710 --> 00:23:19.170 hard -learned, painful lessons about density 00:23:19.170 --> 00:23:21.710 and warehousing and logistics straight to Jeff 00:23:21.710 --> 00:23:23.750 Bezos. And what about the robots? You mentioned 00:23:23.750 --> 00:23:26.650 the carousels and the automation. The concept 00:23:26.650 --> 00:23:29.349 of automated warehousing didn't die at all. It 00:23:29.349 --> 00:23:32.430 just evolved. A company called Kiva Systems developed 00:23:32.430 --> 00:23:34.690 these amazing little orange robots that move 00:23:34.690 --> 00:23:38.269 entire shelves around warehouses. And in 2012, 00:23:38.569 --> 00:23:43.630 Amazon bought Kiva for $775 million. The robots 00:23:43.630 --> 00:23:45.910 you see in Amazon warehouses today are the spiritual 00:23:45.910 --> 00:23:48.869 successors to the Webvan automation dream. So 00:23:48.869 --> 00:23:51.039 Webvan was right about the robots. They were 00:23:51.039 --> 00:23:52.779 right about the Internet changing how we shop. 00:23:52.900 --> 00:23:55.579 They were just being too early is the same thing 00:23:55.579 --> 00:23:57.960 as being wrong. They were a decade ahead of the 00:23:57.960 --> 00:24:01.039 technology, especially smartphones, and a decade 00:24:01.039 --> 00:24:04.779 ahead of customer behavior. In 1999, people were 00:24:04.779 --> 00:24:06.759 still genuinely scared to put their credit card 00:24:06.759 --> 00:24:10.059 information online. In 2020, we don't think twice 00:24:10.059 --> 00:24:12.779 about it. Speaking of 2020, this brings us right 00:24:12.779 --> 00:24:16.539 to the modern era. The pandemic hits and suddenly. 00:24:17.039 --> 00:24:19.380 What do we see popping up everywhere? We see 00:24:19.380 --> 00:24:22.220 the dark store explosion. Companies like Gatier, 00:24:22.279 --> 00:24:25.539 Gorillaz, GoPuff. Yes. Ultra fast delivery. 15 00:24:25.539 --> 00:24:28.619 minutes or less. They raised billions and billions 00:24:28.619 --> 00:24:31.079 of dollars in venture capital. And they operated 00:24:31.079 --> 00:24:33.319 out of these small mini warehouses right in the 00:24:33.319 --> 00:24:35.880 middle of city center. It sounds incredibly familiar. 00:24:36.140 --> 00:24:38.819 It's deja vu all over again. They burned cash 00:24:38.819 --> 00:24:41.079 to acquire customers. They subsidized the delivery 00:24:41.079 --> 00:24:43.480 costs. And guess what happened to a lot of them 00:24:43.480 --> 00:24:46.470 in 2022 and 2023 when that... Venture money started 00:24:46.470 --> 00:24:48.829 to dry up. They crashed. Many went bankrupt. 00:24:49.269 --> 00:24:51.430 Others consolidated or pulled out of markets. 00:24:51.710 --> 00:24:54.410 It turns out the physics of delivering a $2 bag 00:24:54.410 --> 00:24:57.170 of chips to someone's door in 15 minutes is still 00:24:57.170 --> 00:24:59.250 really, really hard to make profitable. It's 00:24:59.250 --> 00:25:01.849 the web van curse. It is. It's the siren song 00:25:01.849 --> 00:25:04.509 of the grocery business. It looks like this enormous 00:25:04.509 --> 00:25:07.690 trillion dollar market, but... The margins are 00:25:07.690 --> 00:25:11.250 a minefield. So what is the final takeaway here? 00:25:11.369 --> 00:25:13.190 If you're a listener, maybe you're an entrepreneur, 00:25:13.410 --> 00:25:15.509 or maybe you just invest in stocks on the side, 00:25:15.650 --> 00:25:18.769 what should you learn from the humble plastic 00:25:18.769 --> 00:25:21.869 tub? I think the biggest lesson is to beware 00:25:21.869 --> 00:25:25.250 of smart money. Just because Sequoia or Goldman 00:25:25.250 --> 00:25:27.349 Sachs is investing, it doesn't automatically 00:25:27.349 --> 00:25:29.970 mean the business makes fundamental sense. They 00:25:29.970 --> 00:25:31.549 can get caught up in the hype just like anyone 00:25:31.549 --> 00:25:34.069 else. They often drive the hype. And secondly, 00:25:34.309 --> 00:25:36.630 unit economics are undefeated. You can have the 00:25:36.630 --> 00:25:38.930 best vision, the best logo, and the coolest app 00:25:38.930 --> 00:25:41.869 in the world. But if you lose money on every 00:25:41.869 --> 00:25:44.589 single order, you cannot make it up in volume. 00:25:44.910 --> 00:25:47.769 Gravity always, always wins eventually. I think 00:25:47.769 --> 00:25:49.430 that's the perfect place to leave it. Next time 00:25:49.430 --> 00:25:51.089 you go into your garage and you see that sturdy 00:25:51.089 --> 00:25:54.069 green or red plastic bin, give it a little salute. 00:25:54.190 --> 00:25:56.650 It cost a billion dollars to make. Inexpensive 00:25:56.650 --> 00:25:59.670 souvenir from the dot -com era. Thanks for listening 00:25:59.670 --> 00:26:02.670 to this deep dive into Webvan. If you enjoyed 00:26:02.670 --> 00:26:04.970 this, share it with a friend who thinks they 00:26:04.970 --> 00:26:07.470 have a can't -miss business idea. We'll catch 00:26:07.470 --> 00:26:08.130 you on the next one.