A Q&A with Deliv co-founder and CEO Daphne Carmeli. The Palo Alto–based company was founded in 2012 and raised $1 million in Seed funding in late March. Investors include General Catalyst, Redpoint Ventures, Trinity Ventures, Operators Fund and PivotNorth.
SUB: Please describe Deliv and your value proposition.
Carmeli: Deliv is a crowdsourced same-day delivery service for large national multichannel retailers. We were founded to do one thing and one thing only—to seriously make online shopping simpler and more convenient.
For retailers: we’re a ‘same-day button’ on their website or mobile app checkout. Once a transaction between the retailer and the consumer is complete, delivery information is sent to us and we take care of everything necessary to make sure customers get what they want when they want it—in as fast as one hour.
For customers: we are the no-brainer shipping option. They can choose the same-day delivery option for the same price, or less, than any other shipping option. Customers can choose where and when they want their orders delivered that day in as fast as one hour.
SUB: Who are your target markets and users?
Carmeli: We target large national multichannel retailers who have ‘pick up in store’ capabilities, or what’s called in the industry BOPIS—buy online, pick up in store.
SUB: Who do you consider to be your competition?
Carmeli: Ultimately, we compete with carriers who offer current shipping options on a retailer’s website like FedEx and UPS, focused on local same-day SLAs.
SUB: What differentiates Deliv from the competition?
Carmeli: Our differentiators are threefold.
We allow retailers to retain their crown jewels—their direct customer relationship and data. We are not a third-party site and we are not a middleman. We are simply the carrier and come into the picture after the transaction has been completed.
We can scale more quickly and profitably than any other business model. Given that we plug directly into the retailer’s website, we are not in the demand creation business. Thus, when launching in a new city, we are not burdened with all the sales and marketing costs of creating consumer demand. Once we launch with a retailer, we plan out a nationwide rollout which quickly enables us to scale with them.
We can ensure a consistent, high quality customer experience nationwide. Unlike competition who weaves together thousands of couriers across the country in an attempt to create a consistent experience, we have built and continue to grow our own ecosystem of high quality labor. Our drivers are not typical full time, poorly educated drivers; our drivers are college-educated professionals with sales and customer service experience. Through a consistent process of onboarding, certification and auditing, we can ensure a consistent quality experience nationwide.
SUB: What was the inspiration behind the idea for Deliv? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Carmeli: About seven years ago, I fell in love with the crowdsourcing business model, and have since joined the advisory boards of a few. Along the way, I learned a few lessons:
It’s really hard to build a two-sided marketplace, especially as a startup; and building up supply and demand at the same time is equally as hard.
If you do have a marketplace, it’s important to first focus on the demand. If you focus on the demand, the supply will follow. People follow money.
With these two learnings, my co-founder and I spent a lot of time looking for where there was an industry ready for disruption, while at the same time finding one where we could literally plug into demand. We came to Deliv—offering a crowdsourced same-day delivery service focused on multinational retailers. We would simply plug into their ecommerce sites and focus on the supply. We validated this model with several retail executives and confirmed our hypothesis that this is: a.) a market ready for disruption; b.) retailers have a sense of urgency; and c.) we can leverage a crowdsourced model.
Amazon’s fear is motivating every retailer to figure out a way to ‘out-Amazon’ Amazon. They all realize that they have one thing Amazon doesn’t: their inventory lies within five miles of 90 percent of the population. They also know that 75 percent of all shopping happens within 15 miles of a person’s home. Retailers have invested in BOPIS technology which makes them ready to enable same-day delivery from each store. GPS-enabled smartphones are everywhere, thus we can simply deploy real time dispatch labor pools.
SUB: How did you come up with the name? What is the story behind it?
Carmeli: Deliv equals ‘delivery.’ Shortened.
SUB: What have the most significant obstacles been so far to building the company?
Carmeli: Like building any new startup, we are faced with all the challenges a startup faces. From building a rock star team of professionals, executing on our early customers, and proving our unit economics. We are very excited and proud that we have that under our belt and are poised to scale.
SUB: You just raised $1 million in new Seed funding. What are your plans for the funds?
Carmeli: Following the completion of our trials, this will help fund the next stage of our roll out.
SUB: Why was this a particularly good time to raise outside funding?
Carmeli: Companies that are targeting big markets can generate high growth revenue and margins are always in high demand from investors. Deliv is no exception. Investors understand the trends in ecommerce and they recognize that same-day delivery is a huge opportunity. They also understand a ‘killer app’ in ecommerce and why our business model is the appropriate one for this market. All the trends point to the timing for this—retailers need ways to compete with Amazon and customers demand more and more speed and convenience.
We’ve seen lots of success with same-day in other parts of the world, like China. Same-day has transformed ecommerce there partly because of the economics involved. Crowdsourcing makes that possible here—and we are at the forefront of that, ready to win.
SUB: How does the company generate revenue or plan to generate revenue?
Carmeli: Our revenue comes from the difference between what retailers pay us for each delivery and what we pay drivers.
SUB: What are your goals for Deliv over the next year or so?
Carmeli: We’re focused on rolling out in various markets around the country, including the San Francisco Bay Area, Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Phoenix, Indianapolis, Miami, New York, Philadelphia, Seattle, and Washington, D.C.
Deliv – www.deliv.co