E405: Postmates is Uber for courier service



about this episode

Bastian Lehmann didn’t want to start Postmates. Users demanded it. The company he now runs – and loves – is like Uber for courier service, making it easy to have prepared food, or anything else, delivered in under an hour. The service launched in DC this week and is already rolled out in San Francisco, New York, and Seattle. But that wasn’t the original idea. Now, like Uber, the service is catching on like wildfire in the rapidly-expanding world of on-demand services, and is profitable in two cities.

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3:05 When did you start Postmates and what was the inspiration?
4:15 Did you try to implement your original idea [messenger service for bulkier items within a city]? And how badly did you fail?
5:19 So they were telling you, ‘Go to Starbucks and get me a mocha.’

6:04 So walk us through the app. If a merchant is not online, how do you navigate that?
7:04 If I was here in San Francisco, spilled a cup of coffee on myself, and I need a white shirt. I could just put my measurements in and say, pick me up a white shirt at Brooks Brothers. How do you handle the billing then?
7:53 Do you have my credit card on file? What if you buy the wrong thing or it’s not in stock? There’s all these edge cases that would keep an entrepreneur from pursuing this, and you’re pursuing it anyway.
8:50 You did go after it because it’s so complex. What do you think allowed you the freedom to say, f*ck it, we’re going to try anyway. Did you get a lot of resistance from your team or advisors, saying it’s too crazy and dangerous to let people buy anything?
10:00 You were kind of desperate. You knew that your [prior] company was going to fail?
10:27 What were the signs that it wasn’t going to work, that you had to fight through?
11:37 Do you use other courier companies or do you have your own fleet?
12:20 Thank you Mandrill.com – transactional email from the fine folks at Mailchimp.
14:40 We hear from a lot of entrepreneurs that there’s a moment when they just knew this product or service was going to work. Did you have one of those moments?
15:40 I knew it was going to work when I saw a VC order Starbucks with Postmates at a poker game. Do get a lot of people ordering Starbucks? How do you charge for it? because you can’t do that on a bike.
16:45 Every system has whales – big users – what is your biggest whale in the system, what’s their profile like? How often do they use it?
17:33 Forty meals a month, $10-15 each time…
17:46 How do you make money? Percentage of delivery fee? Percentage of order?
19:52 We had Kozmo and UrbanFetch in New York. They did tremendous volume. But it was all from their warehouse. How much were you influenced by the Kozmo story, and why do you think they cratered so brutally?
21:50 If Kozmo had just charged a delivery fee, do you think they’d still be here? Is there some difference between 12 years ago and today and people’s willingness to pay a delivery fee?
23:00 Free services train the users to devalue them.
23:24 Your couriers – how much do they make an hour?
24:45 They can make double the San Francisco minimum wage, or triple federal minimum? And the other [non-peak] times they can study or do another job.
26:30 Thank you Scott Walker of Walker Corporate Law. Scott loves startups. http://walkercorporatelaw.com
28:36 How hard is it to roll out another city? You’re in SF, NYC, Seattle and soon DC.
29:13 Google is doing a test of last-mile delivery. Is that a direct competitor?
30:55 There’s been speculation that the Yelps of the world would get into this.
31:25 When you have a product that’s working, like you do, how do scale up quickly, to not lost the opportunity, but not so fast that the whole startup comes off the rails?
33:09 Now you have Uber breaking out in a huge way. That must help your story. People are looking at on-demand as Postmates and Uber.
33:29 Do you have a VC firm involved, or only angel investors?
33:47 It would seem logical to me that you need another major blue chip VC firm involved with a big, big check.
34:24 How do you pick, when you basically have your choice, which VC firm to work with?
34:55 What was the most common reason that VCs passed on your series A?
35:30 Would I be correct saying this is something being used by tens of thousands of people?
36:15 How many people are delivering?
36:25 How many cities do you think this scales out to? Do you think you get to 50 cities in a couple of years?
37:34 Are you capable of scaling to 10 cities a year? 20 cities a year?
37:50 What do you think of AngelList syndicates? Is that something you’d consider doing for your startup?

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