Danny Newman is 23. Twenty-three. Yeah. And already, he has been the proprietor of four businesses. Can you attest to anything like that? Me? No. Business number four is none other than zuvo.com, an online storefront for deliverable goods in the Denver Metro area. Once you place an order and click 'SUBMIT,' the delivery staff at zuvo.com will bring to your doorstep anything from movies, snacks, lip balm and booze.
We met on a sweltering August day for a sandwich where we had the following conversation:
|Danny Newman, founder of zuvo.com, with his puppy, Pica. (Yes, that kind of pica!)|
Heather: How did this all start? How did you start
Zuvo and why?
Danny Newman: I had just finished high school and was trying to think of some kind of business I could do when I got to CU [Boulder]..
Why did you want to start a business right off the
bat when you started college?
I had been doing business type stuff before, anyway.. [Pica, his dog starts barking..]
I am not interviewing you, puppy..
I have been a serial entrepreneur, I have been doing business type stuff since I was very young. I made friendship bracelets when I was in kindergarten and first grade and then I started hiring kids to make them for me. I would pay them 50¢ per bracelet they made and then sell them for a dollar. I actually had a pretty good business for a second grader. Then, that year I learned how to make hackey sacs and that actually was a really good business for quite a while. I had some kids make those for me also; taught my little minions how to sew.
You upgraded your little friendship bracelet makers?
Yeah, some of them were the same. And I actually sold quite a few to Into The Wind here in Boulder. I would take the bus up here and sell them off. I had my own little business cards and my own little instruction booklets that went along with them. I did a bunch of other stuff through the years and I guess it was in '92 I started doing computer stuff and in '93 I started doing web design and development, which was really nothing back then.
Gray backgrounds, horizontal rules...
Exactly. Lots of stuff like that. I built that into a pretty successful design shop by the time I was in high school and was living pretty well for little high schooler. Had some pretty cool clients. Did the Colorado School of Mines website when I was a junior in high school. So, I was thinking about what would appeal to college kids; what would go well with the scene. I was actually interviewing some of my cousins who had just gone through college or were in college and I was kind of getting into the idea of a pizza and movie delivery service.
Just pizza and movies?
That was the initial idea. The first idea was just to facilitate to existing companies like Blockbuster and Pizza Hut and Dominoes, something like that; something pretty small. It went through a ton of different variations. I had a little thing called Online Grub for a while which was a listing with all of the restaurants that deliver and their menus and you could see what was open at the time that you logged on. So, that was kind of a first iteration and then after running through all of those ideas I came to a final one which was to warehouse all of our products and sell them that way. It makes the most sense, you can make the most money that way.
When did that start?
November of 2001 I starting putting everything together, started contacting vendors, getting all of the licensing ready to go. We launched in April of 2002 up in Boulder.
How is it going now?
It's going very well. We opened our second store in Denver in August of 2002 and we ran them simultaneously for just under a year. We put the Boulder store on hold while we focused on the Denver store because it was growing too rapidly to have only one manager down there. My friend, John [John Stranske is Newman's business partner] managed the Denver store.
How big are your warehouses?
They're about the size of a 7-11, but since we don't have to accommodate customers, the aisles are really close together and the shelves are really high.
I had a friend who worked for WebVan in
San Francisco and I remember the last time I saw him, he was standing outside
this coffee shop talking about what he's going to do next because WebVan
was gone! What are your feelings about opening a business in the wake of
so much failure?
I think it's actually really good timing. Kosmo [another web based delivery company] was just going through their closing procedures while we were opening and WebVan had shut down just a couple of months after that and we were able to take a look at their entire business and figure out what they did right and what they did wrong.
Why do you think they failed?
They were land-grabbing. They were doing everything they could to get a national network and acquire customers because there was a lot of competition, and they blew through three hundred million dollars in eight months and didn't spend it so wisely. The approach that we're taking is growing organically and growing on real profits. We're building with real money; we take the profits and reinvest them rather than getting lots of investor money and haphazardly throwing it at places.
But you're also investing a lot of money from other
work that you're doing.
Yeah, absolutely. There's an initial personal investment that both John and I put in, but as far as really growing the business, it's all about taking the profits from Zuvo and putting them back into Zuvo.
So, you just started delivering alcohol. Tell me
That's obviously something that we have been wanting to do since the beginning. It was a pretty long process, but once it came together, it went really quickly. Colorado allows liquor delivery and we did a lot of investigation into the legality of it and came up with some pretty cool solutions. We're going to be pretty high-tech hopefully pretty soon, as far as how we manage IDs and things like that. We will have a hand-held device where they scan IDs and have them sign right on there so we can have it go directly to our database for logging purposes.
It's totally overkill, but it's fun.
So are your guys going to have to wear little tech
Yeah, very Tron-like. They'll have like lights running through them...very cool.
[laughter...ha ha ha!]
Tell me about how your logo was developed.
I wanted to have a fun look for the company, wanted it to be sort of futuristic. I had this idea to have a little dude with a jet-pack and I had one of my amazing illustrator friends do it.
How does the system work, starting with the initial
point where they go to the website?
They go to the website and they need to set up an account; it requires a credit card to secure the account for any kind of movie late fees or anything like that. So, they set up their account then they start adding stuff to their cart and all of the prices on the site include tax and delivery. Five bucks gets you a movie – that's it – there's no extra delivery fees or taxes because they're all built in. So, they add what they want and then check out. Then the following times they come to the site, they can just log in and start ordering and you can really order stuff, literally, in under a minute and have it there in under an hour, which is pretty cool.
On our end, we've got a system that tells us when we get a new order. It comes to all of our cell phones of the people who are working that night and we can also make it based on where their zip code is so just certain people get the message. Then we have somebody package the orders, so they go and get all of the stuff off the shelves and throw it into a bag. We have tamper-proof opaque bags that seal so they have to rip it open to get into it. It's private, so anytime somebody gets something that...well maybe they are uncomfortable getting porn and condoms or something like that, so the delivery driver doesn't know what's in the bags. Yeah, so we hand it off to the delivery driver and they deliver it. It's a pretty simple process.
What do you forsee in the future?
Ideally, we would like to perfect this model here and take it nationwide. That's our plan.
What about expanding merchandise?
Yeah, that's all part of it. The ultimate goal is to be able to get physical goods delivered in under an hour, so anything that is something that you would impulsively buy and would want delivered in under an hour is the product line that we want to do. We started with this product line because it's easy to try. Denver is definitely not as delivery-centric like New York or Chicago would be and people are a little leery of trying new things. So getting easy products where people are completely familiar with a movie and soda or whatever else; they can try it, test it out, see if it works.
It's working and you've got business...
Absolutely. And I think there was kind of a hurdle where it was too small and not everyone knew about it yet; not that everyone knows about it now, but a fair amount of people know about it and know that it works because they've got friends who have done it.
How are you marketing?
Right now we're just doing a lot of guerilla-type stuff. Just street promotion. Chalking on campus is huge for us; stickering is also huge. We have an ongoing ad in The Onion which is probably most tied in with our clientele.
Are you going to stay focusing on the college students
or do you think you will expand the market?
That's another thing. We started with the college students because we were college students and we knew how to market to ourselves. We are working with an advertising agency right now and we're going to really analyze all of our markets and get focused advertising for each of them. I think that we've got a lot to offer different groups of people.
What has been the most difficult thing in doing
I think age is a big hurdle in this particular business. When I was doing my web design, people liked having a young punk kid because they trusted that kind of stuff. But I think we have grown a lot and matured a lot in being able to communicate with the business owners and CEOs that we get to talk to.
Was it hard going into a store and asking some business
if you could deliver their stuff for them?
Yeah, absolutely. I think we aimed really high and kind of had to back down a little bit and start a little smaller, or at least prove the model more thoroughly. Now we have people calling us that want us to deliver their product. That's a good turnaround.
Do you have any good delivery stories?
Yeah, I've got a few... I was delivering I think a bunch of snack food and maybe a movie or a video game and this guy opens the door and just massive amounts of smoke came pouring out of the door and the guy at the door turned around to his friends and said, "Duuuude it worked!" and they were all high-fiving each other. Yeah, that was a funny one.
Another funny one...it was really late, it was close to our closing time, so it was probably right around three o'clock [am] and this guy called up, ordered, and I went to make the delivery. He was in an apartment and the door to his apartment was open. He was laying in the opening with money in his hand, which was the right amount. He was passed out, gripping money in his hand. So, I took the money and left his order near him.
Very nice! So, how many people are working in the
delivery and the warehouse?
It kind of varies. We've got up to six others, besides John and myself, on call.
What is your best piece of advice you can give to
some eighteen year old who wants to do something similar to what you are
Just do it. Just try it. Getting out there and trying to make businesses happen, that works really well. You're not going to learn any of this in school, even remotely. You're going to have to go out and try it and even if you fail, or especially if you fail, that's probably good. I have had many businesses: some moderately successful, some completely unsuccessful and I definitely learned a lot from everything. I think that this [Zuvo] is on track to be a good business and it wouldn't have happened if I wouldn't have kept trying.
Zuvo.com is currently undergoing huge site renovations where they are adding to and upgrading all of their services. Be sure to check it out in early 2004, it's going to be HOT!