No Stack Startup

No-Stack Startups + Specialization: This merges a bit with the concept of a “no-stack” startup. http://blog.aweissman.com/2015/05/no-stack-startups.html

The idea here is that emerging small businesses are starting to focus more on their core competency, and outsource the rest of their work to various platforms (Facebook/Instagram/Pintrest for marketing/front-end, Stripe for credit card processing, Shippo for postal shipping, etc.). I think the break-up of eBay and PayPal points further in this direction with platforms focusing more and more on a specific niche (eBay on marketplaces, and PayPal on payment processing).

This gets me thinking about the concept for Distio that I pitched at Startup Weekend last year. At the time I was focused on solving a particular use case, how can these new small businesses get cheap and easy distribution for their products. This was a real problem with the people I talked to at the farmer’s market who were starting to expand their business.

““I do marketing, sales, social media, accounting, tech support, and I spend one day a week doing deliveries. If I could economically outsource delivery and be sure that my product was on the shelf, I would.” - Matt Choi, Choi’s Kimchi

At the time I was focused on building more of a ‘full-stack’ startup, with a both a retail marketplace, and a distribution marketplace, where distributors could bid on delivery jobs that came out of the retail marketplace. As I looked at the ecosystem, one of the things that made me the most hesitant was the ease with which incumbents in this market could enter (e.g. Uber). In fact, we are already see Uber addressing the B2C delivery market with Uber essentials: http://blog.uber.com/essentials. The other issue were around dealing with a three-sided market place (buyers/receivers, distributors, sellers/senders) and the regulation around distributor on-boarding/vetting.

Another startup has slimmed down this concept with Roadie: http://techcrunch.com/2015/01/27/roadie-launches-as-the-uber-for-shipping-and-delivery/, by connecting only shippers and distributors. However, they are still performing two functions, on boarding/vetting drivers and providing a marketplace for shipper/distributor interaction.

As I think about the ‘no-stack’ startup idea, maybe there is an opportunity to go one step further, and provide only the platform/exchange for the distribution market place. Essentially you could provide a very simple API for consumers/corporations that would integrate a variety of different distribution services, USPS, FedEx, Uber, Lyft, UPS, local couriers, Roadie, Amazon, eventually Drone services, etc. to provide shipping at the lowest cost. That way you outsource the onboarding process and focus on easy distribution platform.

In China, private firms in the express delivery market made $25B, and were 75% of the sectors revenues. http://postandparcel.info/64833/news/chinas-express-delivery-market-is-booming/

Unfortunately, the quality of these deliveries are pretty low, “Such complaints plague China’s fragmented but booming express delivery industry, where delay, damage and outright loss of packages persistently erode Chinese operators’ reliability and reputations.” http://www.reuters.com/article/2012/01/23/us-china-express-delivery-idUSTRE80M04V20120123