Vetting a New Business Idea in Public: WeShip

by Jason -- April 3, 2014

WeShip

I’ve been thinking about this business idea for a couple years now. Reading a recent interview with Marc Andreessen spurred me to start looking into it further (more on that below).

For my first step I’ve decided to share my thought process and get your feedback.

What is WeShip?

WeShip is a technology company that helps you ship packages & letters. We use the extra space in people’s cars to pick-up and ship the items to their final destination.

What’s the problem we’d solve for our customers?

I want to ship a package for less.

Supply Problem

You can’t help but notice all of the extra space in people’s cars. What if we put packages in there?

How I would start

In a very simple example, if you’re shipping a package from San Francisco to LA, there are 3 steps in the process –

  1. The package goes from your home/business to a sorting facility in SF (First mile)
  2. Next it travels from the sorting facility in SF to a sorting facility in LA (Middle miles)
  3. Finally, from a sorting facility in LA to the final destination (Last mile)

Forget the first mile or last mile — that’s really difficult. I would start with the “middle miles”.

Specific Use Case

You’re driving from San Francisco to LA. WeShip will cover your gas.

On the way out of San Francisco, you pull into a gas station near the freeway. You fill-up on gas and packages, then you continue your already planned drive to LA.

As you enter LA, there’s another WeShip gas station that you pull into. You drop off the packages, fill up on gas again and you’re on your way.

The two big questions here are how do the packages get to that initial gas station (first-mile)? And how do they get delivered to their final destination (last mile)?

Other startups in this space

First mile:
Shyp – http://shyp.com
Rickshaw - https://gorickshaw.com/ (they do last mile as well)

Last mile:
Doorman – http://www.doorman.it/
Runner – http://runner.co/
Postmates – http://postmates.com

The Lean Startup Approach

The Lean Startup approach says to come up with assumptions around the most challenging parts of your business and then determine fast, efficient ways to test them. Here are the three I plan on testing.

Assumption #1 – We can find packages to ship.
Finding packages that need to be shipped shouldn’t be too much of a challenge. However, if I’m starting with the “middle miles” I need to either do the first and last miles myself, pay someone to take care of them, or find a partner that can help.

Assumption #2 – We can find drivers to move the packages around during the middle miles.
The place I plan on starting is Craigslist Rideshare. Folks are looking to fill up their car in exchange for a bit of cash. We’ll see if they’re willing to fill it up with packages instead and how much cash we would need to give.

Assumption #3 – We can charge less than USPS & FedEx, pay the drivers a reasonable wage and have enough margin left over for this to be a business.
This is the biggie. Basically, is this a viable business?

Validation from Marc Andreessen

I recently read an interview with Marc Andreessen (famous entrepreneur & VC) where he mentions this exact business. Here’s what he had to say:

Speaking of cars, you’ve talked about a shared economy where people will share cars. They won’t own cars. You see a little bit of that today, but is that really the way the world’s going?

So this is when I get really excited. This is another example of the impact of information transparency on markets. We are 90 years or so into cars. And we drive our cars around. And we own our cars. And then when we’re not in our cars they sit parked. So the average car is utilized maybe two hours out of the day. It sits idle for 90% of the time. The typical occupancy rate in the U.S. is about 1.2 passengers per car ride. And so even when the car is in motion, three-quarters of the seats are unfilled.

And so you start to run this interesting kind of thought experiment, which is what if access to cars was just automatic? What if, whenever you needed a car, there it was? And what if other people who needed that same ride at that same time could just participate in that same ride? What if you could perfectly match supply and demand for transportation?

Taken a step further, what if you could bring delivery into it? Two people were going to drive between towns, and there was also a package that needed to go. Let’s also put that in there so we can fill a seat with a package. Just run the thought experiment and say, “What if we could fully allocate all the cars, and then what if we could have the cars on the road all the time?”

And of course the answer is a whole bunch of things fall out of it. You’d need far fewer cars. The number of cars on the road would plummet by 75% to 90%. You’d instantly solve problems like congestion. You’d instantly solve a huge part of the emissions problem. And you’d cause a huge reduction in the need for gas. And then you’d have this interesting other side effect where you wouldn’t need parking lots, at least not anywhere near the extent that you do now. And so you could turn a lot of parking lots into parks.

Questions for you

  1. What do you think of WeShip?
  2. Are there potential challenges I’m missing?
  3. Is there someone you recommend I speak with?
  4. Have a better name for the business? I don’t like WeShip!

My Next Steps

  1. Send this blog post to smart people to get their feedback.
  2. Talk with people more familiar with the shipping industry.
  3. Do research into potential partners for the first & last mile.
  4. Begin testing each assumption.

I’ll post updates as I make progress.


Be awesome and help us share:


3 Responses to “Vetting a New Business Idea in Public: WeShip”

  1. What do you think of WeShip? I have used a lot of the sharing community (and I work for one) but I personally do not think I would use a sharing economy shipping service. Reason why in answer 2.

    Are there potential challenges I’m missing?
    Trust and safety. There is an awful lot of trust riding on the person getting your parcel from A to B without losing it, stealing it etc. Would you offer insurance like Fedex etc does?

    I would also be extremely concerned about what is IN the parcel – how can you verify the contents are not drugs, weapons, or some other illegal substance. Even if the contents are technically legal – say wine, some states its not legal to ship it out of state.

    I hate to be negative but overall I think it wouldn’t be worth it from both sides. Amount you save vrs cost to do so.

  2. Thanks for the comment and feedback Clare, really appreciate that!

    I’ve been thinking about trust & safety. For simplicity I took it out of the post.

    A few thoughts –

    1) I would definitely get basic insurance and offer additional insurance. WeShip’s offering would have to be at least comparable to what USPS/UPS/FedEx offers if we’re going to compete (and hopefully the offering would be better).

    2) Another idea a friend recommended is that higher value items get shipped with more trusted shippers. Just like Ebay or Uber, drivers would have a profile and get rated. As people build up their profile we could give them more highly valued items and pay them more since they’re trusted.

    3) As for verifying the contents aren’t illegal, I have no idea :) . Somehow USPS/UPS/FedEx do it (or perhaps don’t), so I’d just have to look into it and figure it out.

    Thanks again!

  3. I LOVE this idea and think it’s totally viable if done right.

    My only concern would definitely be vetting what’s in the packages. I could see this becoming the next Silk Road…. now there’s a business name for you.

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