Back in 2018, Amazon opened its first cashier-less grocery store. The technology -- which it later branded as "Just Walk Out" -- was intended to allow customers to do exactly that. All you had to do was put items into your cart and walk out of the store. And then, through the magic of sophisticated computer vision, machine learning, and lots of sensors, you would be billed and sent a receipt.
However, this month the company announced that it will be moving away from this technology, and instead focusing on its Dash Carts (more on this shortly). It turns out that the technology wasn't nearly automated enough.
Last year, The Information reported that "Just Walk Out" was relying on at least 1,000 off-site workers in India to constantly review video footage and figure out who had bought what. This is why it apparently took so long to receive a bill sometimes; humans far away were working to figure out if that was a persimmon in your hand, or a tomato.
I'm not an expert on this space, but I'm guessing it is not (yet) feasible to do what Uniqlo and other retailers now do with their supply chains and checkouts. So this was the workaround. Whatever the case, Amazon has now said that it will be focusing on its Dash Carts, which are kind of like roaming checkout counters. They come with screens and scales for weighing things.
Obviously the ideal solution is to not have to do or scan anything. But being able to avoid check-out lines still feels like meaningful progress. I just wonder if these smart carts will encourage or discourage spending. Because now everyone will have a live receipt in front of them. That might discourage spending unless you can offset it with rewards and/or other incentives.
The Information estimates that around $16 billion has been spent over the last few years on developing autonomous vehicles. This is across some 30 companies. But about half of this spending has come from just three companies: Waymo (Alphabet), Cruise (GM), and Uber.
Waymo has been working on AVs for about a decade and the industry seems to believe that they are the furthest ahead. Still, the technology is not yet there and their AVs -- which are operating in Phoenix -- require lots of human supervision.
The sentiment right now is that self-driving cars are going to take much longer than initially anticipated and many more billions in R&D spending. Last year, Waymo was looking for financing from outside investors. Morgan Stanley said the business was worth about $105 billion.
Graph: The Information
Chamath Palihapitiya – founder and CEO of a VC firm called Social Capital – recently penned an op-ed in The Information called: “The Sunk Cost Fallacy and the Future of Silicon Valley.”
Chamath is one of the most outspoken voices in Silicon Valley and is openly critical about the way the industry generally functions today. Here are two excerpts from his op-ed piece:
“Chronic diseases like obesity, diabetes and heart disease are ravaging much of the U.S. and the world. Automation is eliminating the jobs of millions of well-meaning, law-abiding men and women. Weather patterns are increasingly unpredictable, disrupting water and food supplies and displacing millions of people. But despite this trail of breadcrumbs of big problems and big markets, we still find it difficult to fund potentially big solutions. Instead, we keep doubling down on the easy things.”
“Easy short-term growth is now so highly valued in Silicon Valley that we often overlook technical innovation, sustainable long-term growth and meaningful progress in markets that matter. Every week adds to the corpus of press releases from companies with quick, fleeting growth overcapitalized beyond rationalization. And after too many years of this, Silicon Valley is now typecast as a monoculture of coastal dilettantes who float from one meaningless endeavor to another, tone deaf to real problems.”
Social Capital was founded in response to these criticisms. Their mission is to improve society by using technology to solve big problems – problems like the ones mentioned above.
Another firm with a similar mission is Obvious Ventures. They call what they do #worldpositive investing. Their goal is to only fund companies that deliver social and environmental benefits along with every dollar earned.
It’s interesting to think about how capital gets allocated and whether or not it will result in meaningful benefits to the world. Because this is not just about venture capital. You could substitute venture capital for many other asset classes and ask similar questions.