I think (judging purely from the pictures) his point is that they attempted to integrate the whole supply chain instead of sourcing from local stores and delivering.

C'mon that's just not fair.

The point is, in case you truly didn't get it, is that these guys are a scrappy start-up (which, we hope, isn't burning money into a fiery pit of despair), and Webvan is a too-big-for-its-britches lumbering incumbent.

Good luck guys - Instacart seems like it's got amazing potential and I hope you guys do wonderfully.

It is totally fair. People (especially in the valley) tend to think small is better/more efficient than big. But what are the statistics on actual failure rates?

Start-ups that 'succeed' (buyouts, etc) for their founders can still fail before making any real difference in the actual marketplace.

Nothing against Instacart, but that first picture must become like the second before history will call them 'successful'

I think the point of the image is more that starting small makes them less likely to fail SPECTACULARLY. There is zero chance that Instacart will lose $830 million before it sees traction, which is what happened to Webvan. If Webvan had just been a small grocery startup, nobody would have cared if it failed.

Also, "historically notable" is a pretty high bar you're setting.

Finally, I'm sure Instacart hopes to reach that kind of scale eventually. But they don't want to start there because again, that's how you fail spectacularly and lose tons of money without giving people something they want.

The difference is that Instacart is software.