Postmates CEO Bastian Lehmann hears the comparisons all of the time: Isn’t his new online delivery service just another version of dot-com darling Kozmo.com?
Of course, getting compared to a defunct company — especially one that disintegrated as fabulously as Kozmo — isn’t the most flattering thing. But Lehmann, who is officially launching the Postmates Get It Now service in Seattle today, doesn’t really mind.
“Everybody and his mother loved Kozmo,” said Lehmann. “It was an amazing thing. It was such a beautiful product that people loved.”
Kozmo, which raised tens of millions of dollars from Amazon.com, Starbucks and others before collapsing in 2001, was about 10 years too early to the market, says Lehmann.
“They were operating at a time when people didn’t even buy much on Amazon, other than books,” said Lehmann.
Kozmo made some other missteps that Lehmann is hoping not to repeat with Postmates, which launched in San Francisco last year and now counts more than 4,000 retail partners.
For one, Kozmo.com held their own inventory at warehouses, using those small dispensaries as a distribution point for product. In the case of Postmates, it is going directly to the business to pick up product — whether groceries from Whole Foods or tacos from La Carta de Oaxaca.
“At Postmates, what we are trying to do is understand the inventory of a city,” he says. “We are trying to understand what is available that we can redistribute.”
That means Postmates doesn’t have to invest a lot of money in warehouses.
Secondly, Postmates charges for delivery, taking a 25 percent cut on all delivery fees. In San Francisco, Lehmann said that the average delivery fee runs at $9.80 per order. “Kozmo didn’t do that early enough,” he said.
Postmates is starting small in Seattle with a handful of about 20 couriers — both bike messengers and drivers. In early tests in the past few weeks, Lehmann said that they are fulfilling about 20 to 30 orders per day, working with customers like Big Fish, Wavii and Startup Weekend.
The back-end system at Postmates works like the private driving service Uber, identifying nearby couriers who might be able to pick up your order and deliver it in less than an hour. (Interestingly, Uber, which is backed by Amazon.com founder Jeff Bezos, also has experimented with some product delivery).
Once an order is placed via Postmates, Lehmann said that someone in its fleet of couriers will take over the order. The courier accepts the order, and then either places it himself or works with customer service at Postmates to execute it.
In some cases, like with Whole Foods, the order automatically goes into the retailer’s back-end system for processing. A courier then is dispatched to pick up the order and deliver it to the customer.
“There are a lot of computer algorithms that go into trying to determine who the most eligible courier is,” said Lehmann. “People always think that the best courier is the one who is closest to where you want to have something picked up. But the reality is that the best courier is the one who is closest at the time when the order is ready.”
About 70 percent of the orders going through Postmates are food related. And most are delivered within the hour. In San Francisco, Lehmann said that the average delivery time is about 39 minutes.
The hour delivery window may change over time, with Lehmann noting that UPS and FedEx each started with express units before offering other types of delivery.
But that’s not who Lehmann sees as the biggest competitor at the moment, instead with the entrepreneur focusing on Amazon.com. That makes Postmates’ Seattle launch even more interesting, since this is the only market in the U.S. where the giant online retailer operates its own grocery and prepared meal delivery service: Amazon Fresh.
Here’s what Lehmann had to say about Amazon:
“We try to understand the inventory in a city the way that Amazon understands the inventory of one of their warehouses. And what we mean by that is that Amazon builds a warehouse outside of a city, and ships things in. We believe that Postmates is poised to be the platform that connects retailers in a city, and understands their inventory and distributes these goods locally. We are basically the exact opposite of the platform that you have with Amazon. We are about those 10, 20, 30,000 local restaurants and retail stores in a city, and we are about empowering them. If we have one competitor in terms of the model that we are trying to do, it is probably Amazon, and anyone who jumps on that same-day delivery bandwagon that Postmates kind of started.”
Lehmann said that he’s excited to expand in Seattle, saying it is similar to San Francisco where they started in May 2011.
“You guys have a lot of tech there as well, and you guys are also foodies. We really like it, and it is the first city where we test our assumptions,” he said.
Next up for Postmates is New York with a launch slated for April. The company, which employs 20, is backed with $2 million from angel investors David Wu, Russel Simmons, Naval Ravikant, Jeff Clavier and others.
[Editor's note: Postmates is a sponsor of tonight's GeekWire Anniversary Bash at the Showbox SODO].