Been There, Done That

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Been There, Done That

You can imagine the mixed emotions I felt when I saw the news on Curbed that someone is doing Kozmo again.

This time it's called Max Delivery.

My first reaction was "great, when can I sign up?" The Gotham Gal and I were huge Kozmo customers and I suspect we'll be huge Max Delivery customers too.

My second reaction is to offer them some advice.

1 - Don't raise venture capital

2 - Stick to New York City

3 - Keep the number of SKUs manageable

4 - Don't do any big real estate deals

5 - Don't take money from big strategic partners

6 - Don't become the cover boy for Web 2.0

This can be a great business if its done right. Most people don't realize this but Kozmo made money in NYC. It was the 18 other cities that brought the company down.

Good luck Max Delivery. I am rooting for you.

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» If a VC knocks, don't answer the door from Corante New York
After hearing news about the launch of a new urban delivery service in the city, Fred Wilson of Union Square Ventures analyzes how MaxDelivery.com can avoid the pitfalls of forerunners like Kozmo and Urban Fetch. Given that Fred is a... [Read More]

Tracked on Mar 10, 2005 10:07:28 AM

» Deja Kozmo? from Blogging on the Free Web
Fred's last piece of advice to Max is: "Don't become the cover boy for Web 2.0." Which makes me wonder: which firm(s), if any, should become the cover child? [Read More]

Tracked on Mar 10, 2005 11:03:45 AM

» But Will There Be Cookies? from super hanc petram
And tee shirts too, I want a lot of tee shirts with every order. Via Fred Wilson I see that Kozmo/UrbanFetch is being resurrected. No drop boxes for movies, I see. Remember trying to find the Kozmo and UF drop [Read More]

Tracked on Mar 10, 2005 2:21:42 PM

» Rejoice, for Urban Fetch is Back From the Dead! from The Next Hurrah
by Trapper John Well, sort of. [Read More]

Tracked on Mar 14, 2005 12:22:24 AM

Tracked on Mar 14, 2005 1:55:21 PM

Posted March 10, 2005 in Venture Capital and Technology

Comments

Very interesting. I used Kozmo on a regular basis for ice cream and a movie in San Diego - I was very sad when they shut down. Does anybody know if it's the same management team at MaxDelivery? I agree with Fred's advice - I think this can be a great business if done right. I wonder what type of service businesses you could start under this same model?

Posted by: Darren Johnson | Mar 10, 2005 12:30:03 PM

I, too thought it was a wonderful idea. We used it also. What brought it down?

Posted by: ellen | Mar 10, 2005 12:41:02 PM

The brains behind MaxDelivery.com--who were some of the nuts and bolts people at Kozmo--feel exactly as you do. There were a lot of "strategic decisions" that killed the company.

I was a Kozmo employee myself. A lot of us who worked there watched it go down in flames because of overreach. These lessons were learned well.

I wish MaxDelivery luck, and I'm planning to order from them. If you have goodwill toward Kozmo.com, please give it forward to MaxDelivery.com.

Posted by: Rob | Mar 10, 2005 4:28:12 PM

I loved Kozmo too, but i agree a few things to avoid...

7) minimum order size of $20, else min delivery charge of $7. (this is old hat, Amazon showed how to do it right -- you could even join the "free delivery club" for $25/mo.

8) decide whether you're in / not in the porn biz. Kozmo used to provide to-your-door delivery for adult videos, which is probably a great biz for shy voyeur types. However, if you're building a consumer-friendly brand you may want to be careful about that otherwise deliciously profitable segment.

9) dropping off Kozmo movies at Starbucks wasn't such a bad idea, just that the money was going the wrong way (Kozmo paid $100M or some crazy # right?). build your customer base, then go to some Starbucks like franchise and have them pay *you* for the right to bring incremental customers into their stores. ok, so maybe Starbucks won't play that game, but 7-11 might.

10) and now that i think about it, why the hell *isn't* 7-11 doing this business? or at least watching it closely... hmmm.

Posted by: Dave McClure | Mar 10, 2005 10:23:54 PM

Tell them to watch the documentary

Posted by: Bob Struble | Mar 11, 2005 10:11:09 AM

Is there a documentary on the kozmo.com build up / blow up?

Posted by: Ben | Mar 11, 2005 5:34:53 PM

Actually there's a been a profitable version of this in Atlanta for over 2 years now called Zifty.com. This type of business can make it in cities outside of New York, it just takes the right model.

Posted by: Autumn | Mar 16, 2005 11:49:31 AM

I can't wait to see Bankruptcy.

Posted by: nope | Apr 15, 2005 7:13:05 PM

Thanks for mentioning and rooting for MaxDelivery! we appreciate it and your advice is good.

we understand the great challenge involved here. The reason why 1-hour delivery is back in NYC is because it's needed. there's a place for it here.

FYI: Our order minimum is $15 bucks now and we're delivering up to 24th Street on west side and 20th Street on east side.

If you haven't tried us yet, give us a test drive. Use code: MAXBLOGS to get $20 off anything on first order.

If you have additional comments, feel free to email us at service AT maxdelivery.com. Ultimately, we know that it comes down to our customers and if they're happy with our service and value, they'll keep using us.

Best,
Stephen @ MaxDelivey.com

Posted by: Stephen | May 10, 2005 1:43:23 PM

A VC

Musings of a VC in NYC