The founders of Bodega, the new vending machine startup that wants to replace convenience stores, probably didn’t expect the internet to immediately and vociferously hate them. But they should have. The headline of their launch-day article in Fast Company—“Two Ex-Googlers Want To Make Bodegas And Mom-And-Pop Corner Stores Obsolete”—isn’t unfair. FC quotes co-founder Paul McDonald directly: “Eventually, centralized shopping locations won’t be necessary, because there will be 100,000 Bodegas spread out, with one always 100 feet away from you.”
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Bodega is a chain of internet-enabled vending machines located in gyms, dorms, and apartment buildings. Each five-foot “pantry box,” unlockable with a mobile app, contains non-perishable items that you purchase simply by grabbing.
The startup probably doesn’t have a chance, in part because most startups don’t have a chance. (But who knows! No one knows anything.) Still, whether or not they succeed, they will temporarily be in charge of a lot of money, as a reward for presenting a certain vision to a certain set of people.
And to most onlookers, Bodega’s vision seems distasteful; it’s one where we leave our house less, where our day includes one less human interaction. And unlike other “disruptive” technologies, the only seeming innovation here is fewer trips to the corner store. That’s the sum total of the new value Bodega brings to the world. (Bodega also promises “customized items” that vary from location to location—this is what bodegas already do.) It’s not nothing! But what does it ask in return?
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For Bodega to succeed, to make the kind of money Silicon Valley investors demand, it would need to take money away from the stores that currently sell these items. Mostly that’s grocery stores and CVS. In certain major cities, it’s the real bodegas that Bodega named itself after, seemingly an attempt to co-opt the positive and “authentic” associations we make with the friendly corner bodega in service of corporate profit.
Besides being in shockingly poor taste (and attempting to re-route your cash from a local, likely immigrant-owned business and back to Silicon Valley), this is also a questionable-at-best business plan. As all of Twitter pointed out, besides keep your money local, real bodegas are much more than giant vending machines; they might sell you a loose cigarette, a dirt-cheap coffee, or a fresh egg sandwich. They might hold your spare key or remember your usual order or say the first “hello” you hear that day. They might chase away the man trying to follow you home. And even as vending machines, they’re much better at storing your favorite brand of toothbrush, or 12-packs of Cottonelle, or fresh produce.
All these advantages mean that bodegas probably can’t be beat this easily. The swift backlash is probably overstating the threat. But it’s not overstating what Bodega, its founders, and its investors wish would happen, or the troubling fact that over and over again, Silicon Valley investors pour money into companies like Bodega, which don’t create value but merely shuffle it around. Among the recent crop of unicorns, even those that provide new value to the customer are destroying major value elsewhere. Uber isn’t just a better way to handle taxi rides, it’s also a monopoly that will eventually dump its workforce in favor of self-driving cars. Airbnb isn’t just helping people make an extra buck or find a place to stay; it’s also pushing up rents and eroding the tax base.
This isn’t shocking. About ten years ago we all started getting mobile internet, a technological innovation so massive that Silicon Valley is still finding all the economic implications. But by doing so, they’re de-prioritizing the next technological innovation. They’re behaving like hedge funds, extracting and redistributing value by reworking existing industries, while demanding to be seen as genius philanthropists fighting to make the world a better place. (See also: Lyft essentially re-inventing... the bus.)
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But, as BuzzFeed’s Ben Smith recently wrote, we’re all starting to see through that: “The tech industry has also benefited for years from its enemies, who it cast—often accurately—as Luddites who genuinely didn’t understand the series of tubes they were ranting about, or protectionist industries that didn’t want the best for consumers. That, too, is over.” Now political figures on the left and right see these companies, and their investors, for what they are: just another round of Gilded Age robber barons riding high on the once utopian promise of their main innovation, now squeezing the last breath out of the rest of the economy.
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With their fatuous appropriative marketing and their explicit threat to the business owners they want to mimic, the founders of Bodega walked right into this characterization. Bodega wants to kill your bodega, and they will almost definitely fail; don’t worry about that. But do worry about why they didn’t even think you would be mad, and who gave them all that money in the first place.