The Everything App, GoPuff X Grubhub
X – The Everything App
Elon Musk seemingly did an about-face this week, offering to buy Twitter again at the original price he proposed. On Twitter, he claimed that the acquisition would accelerate the development of “X – the everything app” by 3 years. I have no further value to add to the discussion of the Twitter acquisition. Putting aside that the “X” narrative could be a smoke screen, I have to question whether “the everything app” is a good idea.
The precedent for an everything app is from China. The Chinese tech giants may actually be more universal and dominant within their borders than the US giants. WeChat is a messaging app that also offers government services, mini-apps, movie tickets, and much more. The idea makes sense as a sort of digital Swiss Army knife. The question becomes why hasn’t an American version emerged if the idea is so obvious?
One explanation is path dependence. Much like the Chinese market leapfrogged the US in payments because we have credit cards and the ACH network as a reasonable baseline, the US market developed multiple, dominant apps. There was no room for a universal app because the US market is different and the competition is too fierce. Snapchat was probably the closest attempt. Facebook is retreating in commerce. Uber and Doordash are broadening but within the logistics space primarily. China is isolated from much of the world’s app ecosystem. It is not inherently a mental model to apply elsewhere.
Another explanation is US regulations and societal feelings towards concentrations of power. The big tech companies are already under substantial scrutiny. I cannot imagine the US public or government tolerating “one app to rule them all”.
Grubhub and GoPuff partnership
GoPuff is entering into a partnership with Grubhub to fulfill some grocery and alcohol orders. This is a smart move. GoPuff has built out logistics centers to offer extremely rapid delivery to nearby younger audiences at a competitive price. GoPuff, like other rapid delivery companies, is under a lot of pressure with the changing macro environment. GoPuff also lacks a natural way to expand beyond the early 20s crowd. The market is very crowded, mature, and expensive. Grubhub is falling behind and lacks the sophisticated logistics operation of Uber Eats and DoorDash. They still have a sizable audience but also lack the financial flexibility to bet big.
Grubhub can rapidly offer alcohol and groceries to its audience. GoPuff can better leverage its fixed costs and start to build a business fulfilling for other companies, not just a consumer brand for the youth. I like this move, though it does suggest weakness from both.