UCLA undergraduates Brian Le and David Lin hated walking to the store. As most Bruins are well aware, Westwood is infamous for its hilly terrain and scorching sun. Living on the hill or studying on campus meant that the closest meal was always a tortuous hike away. Luckily for them, walking went out of fashion as soon as Bird dropped their fleet of scooters on campus. But it didn’t stop there for these two, and it wasn’t long before they got their gears turning. If scooters are truly the perfect last-mile transport, why can’t we use them to deliver food?
Serendipitously, both Brian and David decided to reverse engineer electric scooters for delivery. Neither of them knew of each other at the time, but they were both building a massive fleet of scooters. Brian, an Electrical Engineering major, used his circuitry experience to super charge the batteries on the Xiaomi scooters to make them twice as fast. David, an Economics major had been building a scrappy online store for students to order delivery. When they met, Brian was trying to sell his fleet of scooters when David pitched to him “why wait for Prime Air for 5-minute deliveries when we can do it now?” The two started to work on Duffl, the fastest delivery service in the world.
Both Brian and David understood there were several important drivers that would make their endeavor successful: 1) There are nearly 32,000 undergraduates on UCLA’s campus, 2) College students were raised in the age of smartphones, 3) Hyper-localized delivery services are the future of retail, 4) The need for “on-demand” is increasing at a frightening pace, and 5) The college convenience store market in the US is estimated to be $15 billion per year.
Duffl was launched in 2019 and immediately gained traction, within 6 months it was earning $33K in monthly revenue. Brian and David turned their dorm room into a small warehouse, and stocked only the most popular items, from chips and sodas, to ice cream and personal hygiene products. Anything ordered on Duffl arrives in an average of 10 minutes. The delivery people, or “Racers,” can make upwards of 20 deliveries per hour, which is an order of magnitude more efficient than existing services like Postmates and UberEats. Since Duffl only employs students who are intimately familiar with UCLA’s campus, the goods can be delivered to the exact location where the order was placed–whether it is a dorm room, library, or even the middle of Janss Steps.
It is no accident that Brian and David ingrained their love for new technology in the product. They leveraged massive amounts of customer data and developed their own proprietary inventory management system to curate a selection of the most popular products from Yerba Mate to Ben & Jerry’s. Each person’s Duffl store is uniquely personalized to them, and it constantly learns from its users to better service their needs.
In late 2019, Brian and David applied to Y Combinator (YC), an exclusive accelerator that has launched companies such as AirBnB, DoorDash, Instacart, Dropbox and Twitch. The two were accepted as part of the Winter 2020 Cohort and pitched Duffl to investors — raising $1.3M in seed financing. They both took semesters off at UCLA to focus on building out the company’s tech infrastructure to meet the demands of scaling their business.
As they continued to grow, they rented a house and retail storefront near campus to serve as their upgraded warehouses. They buy at wholesale prices so they can offer products at the same price as the store. Think about how many Racers are flying around UCLA today, delivering 10-20 orders per hour. What’s more impressive is that Racers can earn up to $30 an hour, how many start-ups are paying students $30 per hour? Not many. Duffl has grown swiftly with $0 marketing spend, as students have been amazed by the delivery times and spread the word to their friends.
The team even implemented a small pilot at USC to test their model’s viability on another campus – and they proved it there as well. They believe, and COVID19 may be reinforcing it, that hyper-localized delivery within a mile radius is achievable anywhere, not only on college campuses. For now, they are focused on perfecting their model across the UCLA campus and then rolling it out to other schools.
Not surprisingly, they are not the only company trying to do this. The biggest player, GoPuff, which raised $750M from Softbank, is creating something similar. GoPuff is building large warehouses in many cities throughout the US and to offer thousands of products to meet what we will call “ultra on-demand” needs. Duffl plans to focus on college campuses and limit itself to a selection of the top products and 10-minute fulfillment. Rather than be the “Wal-Mart” of delivery, it would rather be the “Trader Joe’s” – a curated selection with exceptional customer service at low prices.
It will be interesting to see how Duffl progresses the school year once starts, especially since it is likely that many students will be attending college remotely this Fall. But, when students resume on campus classes, it is highly likely that these intelligent, ambitious, and passionate entrepreneurs will be well-prepared.