Grover raises €37M Series A to offer latest tech products as a subscription
techcrunch.com
techcrunch.com
A) You don't own the product. B) The product will likely require more contracts to be signed than physical count of objects being handed over. C) Creates a new opportunity for an insurance submarket. D) Only looks feasible due to increasing centralization of capital E) Yet another attempt at creating a company based around a recurring revenue stream F) Absolutely stupid name G) Is reliant on poor technology use habit H) Doesn't really solve any problems for the end user
Go home, tech. You're rent seeking again. Come back with an actual idea that solves a problem. The trend toward -- as a Service is really getting a bit grating. The -aaS bubble will pop sooner rather than later I hope.
This is not a novel concept, there are already companies serving these markets. I don't think it's ridiculous to try to become the default option for all of them at the same time.
VR, AR, 3D printers - basically anything at the cutting edge of the tech experience would be a good candidate. I can't justify spending $1,000 on a VR rig. But I don't mind paying a few dollars every month just to try the thing out.
see pretty much every point in the original comment but specific bad tech habit use.
If you're not really sure you need this stuff then you don't need it. Plain and simple.
If you don't have the disposable cash to pay for it outright then you can't afford it anyway.
With that all said you can try out the three examples you cite at your local Best Buy, Microsoft Store, Maker Space, Home Depot, etc etc.
If the argument is that you're in rural Idaho without access to this stuff then the business model is broken.
This is not true at all. Often times people want to try out a new tool or process and are unsure of how it will actually perform. And it will take awhile -- not a couple of hours.
> and are unsure of how it will actually perform
I'm sorry, this is argument (and I hate to be hyperbolic on HN) is simply laughable from both how consumers actually make purchase decisions on the whole and also from a business model.
"I'm not sure if a 3D printed part will work if I wanted a custom cell phone holder for my car?"
2 seconds later, looks like it can: https://www.youtube.com/watch?v=Fgbxgz5S2dc
Modern consumers have grown accustomed to leveraging collective knowledge shared on various internet sources. They watch youtube reviews, read trusted review sites, take online courses.
For example, within a few minutes you can ascertain the pros and cons of the various VR headsets available on the market. You can understand the limitations of the tech in general. All without having to rent the equipment.
Then, in my experience, after having performed research they go try the tech out or just purchase it outright.
"But I only want to print a few things out" Then you just paid how much in rent for what you could get for a fraction off the shelf?
For example, within a few minutes you can ascertain the pros and cons of the various VR headsets available on the market. You can understand the limitations of the tech in general. All without having to rent the equipment.
To be fair - businesses know this is true and thus as the internet as grown, all of those avenues have been wrought with fake / illegitimate / disingenuous claims...hence why there is a "I need to see/feel it myself to believe it's true".
> both how consumers actually make purchase decisions
Let's play fair then - source?
https://www.bloomberg.com/news/articles/2009-10-15/amazon-tu...
Goodbye software demos
You're conflating people who can't afford it with people who can afford it, but aren't certain that they want to buy it.
I think it might be valid to say that if you can't afford to buy it outright then you shouldn't lease it.
I can afford a VR headset, but what if I'm not sure which headset I would prefer for long term use?
> With that all said you can try out the three examples you cite at your local Best Buy, Microsoft Store, Maker Space, Home Depot, etc etc.
This is not the same thing as trialling something for hours/days in the comfort of your own space.
Also, what if I know I will only need an expensive item for 3 months?
Can you give an example?
Media production gear for an art show
Hardware to demonstrate a proof of concept for a startup
Using a 3D printer to prototype basic hardware at a company that doesn't expect to have more hardware products in the near future
Renting multiple VR/AR headsets for an extended customer demo
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It might be worth mentioning that I'm one of the founders of EquipmentShare, which is sort of similar but in the construction industry, so this type of business only seems natural to me. In our industry, the more variability in the equipment requirements of your jobs, the more difficult it is to be efficient with your capital. In construction nobody owns _all_ of the equipment they use; it would require far too much capital, and a large chunk of your fleet would sit idle most of the time. It's far more efficient to have a blend of owning and renting.
The 3D printing can be contracted out. Consumer grade 3d printers wouldn't be a wise investment in that case.
You're doing business in VR/AR development. If you are going to be anything over a one-man operation, youshouldalready have multiple VR/AR sets for development and testing purposes.
I appreciate the candidates, and can better appreciatewhere you are coming from. In construction, however, you have already transcended the "consumer grade" level of investment. You're now dealing with industrial grade equipment which is a completely different ballgame.
Several of your examples somewhat contradict the stated intention of the company from my understanding. They were looking to break into the market for consumer grade cutting edge tech, NOT for primarily business level customers.
The article paints a picture of a company not looking at other companies as customers, but the general public.
If they intend to focus on the Enterprise level, your arguments make sense. Not so much for private customers. The niche they are trying to fill is a symptom of a lopsided economy, not a healthy one.
You may want to rent a drone for a holiday.
You may want to rent an Apple watch to find out if its something for you.
You may want to rent a projector for the world cup to watch games with your friends.
You may want to rent a Nintendo Switch just to play Mario Odyssey for a month.
Furthermore, things like 3d printers suffer from "tool markup" the idea being that if you're just looking to make a thing or two, find someone else who has them and try theirs out to see if it works for your use case.
Virtual Reality hasn't really caught on in the non-industrial sense so as to have a large impact in the everyday life of a person. It can be invaluable for information rich design and analysis, and simulation purposes as well as entertainment, but the adoption is still in the nascent phase, likely held back by the price of the equipment itself, and limited talent pool. Could renting solve that by getting it in front of more people? Absolutely. In the same way giving out free samples of Cocaine/heroin to first time customers can. More advanced and efficient manufacturing of hardware, and increases in the flexibility and software utilized by the platform are the key to increasing uptake.
It may look good on the surface, but if you dig down deeper, it only seems a good model in the light of artificially suppressed wage growth decreasing the buying and ownership power of a majority of consumers.
If you want to make money off of expensive things, convince the market to pay people more. Don't rent seek.
Now if we were talking Lab or advanced scientific equipment, I could see the potential. This company, however, wants to focus on consumer grade tech which is already nearing ubiquity in the market (iDevice, insert chiq brand here). You aren't doing anything but changing the tech purchase from a 1 time investment in a tool to increase productivity into a recurring revenue stream.
I have access to laser etching machines that cost $50k, 3D printers, metal fabrication shops, woodshops, all sorts of cool makerspaces, and my local library has a full blown virtual simulation centers / audio recording studio / photography studio / circuit labs. I didn't even know half this stuff was openly available to me until 2 months ago
It's great if you
- need the equipment for the next trade fair or vacation and give them back after that
- know you will switch to the latest model that will come out in 6 months but need something until then
- are a cash-strapped startup and are fine with paying extra as long as you don't have to provide money upfront
Especially the last category might be a major market.
> - are a cash-strapped startup and are fine with paying extra as long as you don't have to provide money upfront
This is where the legitimate value of VPS and cloud computing for early startups.
The price premium (i.e. a multiple, rather than merely a percentage) is comparable. That implies a high degree of waste/risk with unused/unreturned inventory is baked into the price.
What I have yet to read, when reading about this benefit, is what happen when the startup is no longer cash-strapped. In practice, I've seen many remain "fine with paying extra", with the benefit being not having to transition to the cheaper option. It's a subtle form of lock-in.
This service, however, appears to be aimed at consumers and only considering B2B in the future, so perhaps it's all academic.
Everything else just seems like its not a worthwhile investment. Either the item offers next to no value short term (speakers) or offers little value because I can window shop it at a store (Laptop, ipad, phones, etc)
Also, I wouldn't want to rent a macbook pro either. Especially considering how awful the keyboard layout & lack of legacy ports are for 2016,2017, and 2018 editions are compared to 2015. You'd probably won't get a choice in what edition you get, that'd be really hard to track
I can definitely see some younger millenials buying into this. Getting new shiny tech is always a hot conversational topic, but older generations I can't see this flying by.
If your rental cost goes 3 months beyond the retail price, you'll own the devices.
I basically do the same thing now with my iPhone X through Apple's subscription plan.
For example, I run a digital agency, and we're 100% mac based for everyone. I would definitely consider renting a super top of the line windows laptop and trying it out as my primary machine for a month or two to see how it compares. I'm not committed to the concept so I don't want to pay a lot of money, but comparing an entry level PC to my top of the line MBP is a pointless exercise.
There are lots more examples, you could think of dozens. Like I want to see if I would use a drone much after the first week or two if I had one. And on and on and on.
I'm not convinced they're going to thrive as a business, but at least as a basic concept the premise isn't ridiculous.
> “if Grover’s subscription model becomes compelling enough, it’s hoped that purchasing many tech products will become so unattractive as to create Netflix-level changes in consumption behaviour. Or, at least, that’s the aim. In my case, that would mean spending far less time recycling things like smartphones and music technology gear on eBay as I tread a well-trodden and perpetual upgrade path.“
Questions to consider:
1) This business requires upfront capex into depreciating hardware with the hope that users are sticky. And users would be sticky partially because they would succeed in changing general attitudes towards ownership. Does this seem plausible?
2) If this works, there is going to be a gold-rush style copycats (since TAM is big). How could they fend off copycats? ie another company giving iPhone X at $x/mo, where x is 50-cents lower than Grover.
3) Out of General curiousity, does an average person have this problem? (Of wanting consumer electronics on $x/mo, so they can upgrade?).
4) All leasing businesses have an end of life value problem — I always thought that consumer electronics has a big EOL problem (worse than cars, say) in that they don’t have a second-hand market. It’s either recyclers or landfill. In that scenario, isn’t consumer electronics the worst place to start a leasing business. (They mention laptops for businesses; that makes more sense, because first, it’s B2B (TCO and cash flow matters) and there is some secondary market). What am I missing?
Also there is a second hand market for iPhones.
3) I am as average as it gets, and I only upgrade every couple of years or so. They should definitely make this a yearly subscription model only.
4) They definitely have a second-hand market in poorer communities, who are willing to pay for older versions if they are cheaper. Old electronics are not completely useless and are way, way easier to repair than old cars.
does an average person have this problem? (Of wanting
consumer electronics on $x/mo, so they can upgrade?).
Its viability is dependent on a market where people's income is reliable enough to rent these things, not quite reliable enough to get them cheap consumer credit, and not quite enough to save up for them.
I'm very curious to know if product come in a generalist box with the company logo on it or if it's sent with the original box that is sold with product ?
Aside from that, I just don't get it. For example in the UK you can bundle the price of a mobile-phone into the contract payments. Laptops/iPads etc always take knocks etc and who wants to risk personal data by handing back such a device.
I work in banking and we shred drives when we are done with them for this reason.