Careers at Postmates
Postmates’ mission is to be the on-demand delivery infrastructure for every major city in the world.
Bastian Lehmann launched his first startup in Germany after dropping out of college. It was for an online retail site that listed hard-to-find, discounted products, and was one of the earliest flash sales sites. Unfortunately, it did not gain traction and lost a lot of money, so Lehmann shut down the company. Not long afterwards, he met fellow aspiring entrepreneurs Sam Street and Sean Plaice.
Brainstorming together, the three came up with the idea behind Curated.by, a website that would crowdsource content and then edit it according to users’ interests. The concept enabled them to place in the early rounds of an incubator program called AngelPad. However, when they moved to Silicon Valley to raise money, they were told it was a bad idea, and ended up short of funds.
The guys went back to the drawing board. Lehmann thought about his life back in Germany. One time when he was moving he’d hired a service to transport his things to a new address. They forgot to include his snowboard, and the difficulty he had in shipping it afterwards made him think. Why wasn’t there a way to use local people traveling to a destination to transport things there?
Using this question as a springboard, the team founded a startup for a service in 2011 that would enable consumers to use locals (called “couriers”) to transport things (including purchases from merchants) for or to them when needed. The offering would be called Postmates -- a combination of “postal” and “mates”, a British word for “friends” that reflected the peer-driven approach.
The guys began partnering with messenger firms in San Francisco to use their workers. Unfortunately, most of the alliances failed and they had to recruit their own staff. They had an easier time signing up merchants to have their items delivered, as well as consumers. They also built a mobile app through which consumers could place their orders and receive them within an hour.
Couriers would buy customers’ orders, deliver them, and then charge customers through the app. Postmates was initially meant to be used for non-food deliveries. However, customers kept placing food orders anyway (from restaurant and grocery stores), to the point that the company acquiesced. Its success, driven by word of mouth, enabled it to raise funding, sparking a number of imitators.
Benefits at Postmates
Business model of Postmates
Postmates has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate: consumers who need items transported or delivered and merchants from whom they purchase those items.
Postmates offers four primary value propositions: convenience, cost reduction, performance, and brand/status.
The company offers convenience by making life easier for customers. It enables consumers to receive all types of deliveries from stores and restaurants within a short space of time (an hour). Users can order the service from wherever they are as it is provided through a mobile app. Postmates creates convenience for businesses by enabling them to sell their goods to consumers even if they do not have an existing delivery service or they cannot deliver items within a reasonable amount of time. Furthermore, it offers an app for businesses called Postmates Order, which allows them to adjust ready times or go offline completely if they are too busy, and easily handle item substitutions.
The company reduces costs through various features. It offers a one-month trial for its subscription service, Postmates Plus. The trial offers free delivery for all orders whose cart sizes are over $25, as well as no service fees. People who are existing Postmates Plus customers can upgrade to Postmates Unlimited; doing so guarantees free delivery for all orders whose cart sizes are over $25.
The company demonstrates strong performance through tangible results. It claims that on average, its corporate customers see a 4x increase in orders after they partner with Postmates.
The company has established a strong brand due to its success. It completes over 1.3 million deliveries in 200+ cities and 40 U.S. markets per month, from over 56,000 merchants. 5,000 of these merchants are part of the Postmates Plus subscription program. In five years, it has served over 146,000 unique merchants, and it has seven million items than can be delivered through its app. Specific businesses it serves include 7-Eleven, Pinkberry, Juice Press, Chipotle, Walgreens, Starbucks, and Apple. Lastly, it claims to have the largest on-demand delivery fleet with 18,000 couriers.
Postmates’ main channel for consumers is its mobile app, while it communicates with businesses through its direct sales staff. The company promotes its offering through its website, social media pages, advertising, and participation in conferences.
Postmates’ customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of e-mail support.
Postmates’ business model entails maintaining a common platform between two parties: consumers and merchants. The platform includes its mobile app.
Postmates does not maintain any formal partnership programs.
Postmates’ main resource is its proprietary software platform, which serves over 1.3 million consumers and 56,000 businesses monthly.
It depends on human resources in the form of engineering employees that maintain and update the platform, couriers that make deliveries, and customer service staffers that provide support.
Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $238.01 million from 26 investors as of September 2016.
Postmates has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost. Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.
Postmates has two revenue streams:
Subscription Revenues – Revenues generated from fees charged for access to the company’s monthly subscription services. Subscription plans are as follows:
- Postmates Plus – Charges a flat fee of $3.99 per month for basic service.
- Postmates Unlimited – Charges a flat fee of $9.99 per month for service; offers free delivery from all Postmates Plus merchants and no service fees for any Plus orders.
Advertising Revenues – Revenues generated from fees charged to third parties for advertising their goods and services on the company’s platform. The parties collect non-personally identifying information from customers when they visit the platform.
info: Bastian Lehmann enrolled in college but left early to launch his first company. He previously served as the Co-Founder of Curated.by, the VP of Product Development at Zensify, as a German Country Manager at Refresh Mobile, and as an Account Manager at 12snap.
info: Sam Street previously served as the Co-Founder and Web Developer of Curated.by, as a Web Developer at Brightleman London, as a Co-Founder and Developer at Picli, as the Founder of Wirah, and as a Database Designer at Wunderman Interactive.
info: Sean Plaice previously served as a Software Engineer at EggCartel, as a Co-Founder and Engineer at Hug Energy, as the Director of Operations at Ruby, as a Senior Systems Administrator at Yelp, and as a Co-Founder of Host Collective.
info: Holger Luedorf earned a German Diplom in Business and Japanese at Hochschule Bremen and an MBA at Duke University. He previously served as VP, Head of Business Development at Foursquare and as a Senior Director of Strategic Partnerships at Yahoo! Mobile.
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