Swimming with the sharks: survival tactics for On-Demand delivery startups

Nuotare con gli squali: tecniche di sopravvivenza per startup di consegne ultra-veloci

From Wikipedia: The pilot fish (Naucrates ductor) is a carnivorous fish that congregates around sharks (…) where it eats ectoparasites on, and leftovers around the host species.

This most peculiar species serves as a good metaphor for the present and future state of many same-day and on-demand delivery startups trying to survive and prosper around the world.

Think about Deliv, who received a $28 Million Series B funding round from UPS. As Louis DiJianne, director of retail and consumer products at UPS, told Retail Dive: “We invested in Deliv to take a look at that model, monitor it, understand it, look at how sustainable it is and look at its opportunities. Ultimately, we want to be able to meet our customers’ needs however they develop.” The article goes on by saying that: “Deliv is not taking over any delivery of UPS packages, but if UPS is engaging with a retailer that wants to support same-day delivery, the giant brings the start-up into the conversation”.

Then there’s Shutl, a UK-based marketplace that uses a network of couriers to deliver local goods within a couple of hours of an online purchase. It has been acquired by eBay because, as President Devin Wenig says: “approximately 75 per cent of what people buy is local, found within 15 miles from their home. Traditional retail isn’t going away. But it is transforming, and that creates enormous opportunity within the $10 trillion total commerce market.”

These are only a few examples of a trend that, in the last two years, has become widespread: Mail Boxes etc. has bought Italian startup Pony Zero, Veeqo has bought ParcelBright, and Australia Post has made a deal with Shippit; Groupe La Poste has backed Stuart.

As funding rounds for still-independent non-profitable ultra-fast delivery startups are drying out (Postmates had to sweat before signing the last $140 million round and there’s early talk of a delivery-tech bubble in India) it seems the future will see, as usual, few big players thrive, monopolize and use “pilot fishes” to adapt to this new eCommerce environment and then make deals with weaker retailers, as Amazon did with Morrison’s. It’s possibly a win-win scenario: the big fish doesn’t have to enforce a in-house same-day policy and the smaller one is kept breathing by the first’s money.

For those who don’t feel compelled to find a shark to associate with, one solution is to not rely on same-day and on-demand only but to differentiate services between more tech-wise re-imagined traditional models (B2B with an owned fleet, time-windows, ETA’s, extra communication with the customer, etc.) and same-day (or less).

This double identity will speed the project towards profitability, with one head feeding the other AND also attract the attention of a shark. It will then be up to you to decide if it’s better to swim free and risk it or to hopefully get fat under the shadow of a big predator. It was often said by sailors that sharks and pilot fish share something like a “close companionship”.

As Herman Melville put it:
“They have nothing of harm to dread,
But liquidly glide on his ghastly flank
Or before his Gorgonian head;
Or lurk in the port of serrated teeth
In white triple tiers of glittering gates,
And there find a haven when peril’s abroad,
An asylum in jaws of the Fates!”

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