JetPack is a hyper-local on-demand startup that is working towards a simple goal: deliver your urgent needs in less than 15 minutes.
Fatima Dicko founded Jetpack out of Stanford’s dorms in early 2017. On Slack and WhatsApp, she would receive multiple e-mails and text messages every day starting with the word: DAHA … (short for Does Anyone Have A …).
Requests were quite random ranging from mobile chargers to plastic plates. Having worked for P&G’s innovation team, Fatima saw an opportunity: a new marketplace for students leveraging local communities. The distribution channel?
“There are moments when people need things right away. But, stores are too far and there is no easy way to share with people nearby.” Fatima Dicko, Founder and CEO of Jetpack
A jetpack stocked with essentials
Across campus, jetpacks were pre-stocked with popular items in specific locations (e.g. energy drinks at the law school). Students who wanted to make money, would then carry those jetpacks around campus. Jetpackers would be notified if a request was within a 15 minute walking radius. Upon delivery, they were paid a $5 fee per transaction that generated a mere $3 (i.e. Jetpack was losing $2 per delivery). Nevertheless, Jetpack succeeded in generating profits from partnerships (advertisers who paid Jetpack in cash and free samples to market their products such as coffee cubes).
After many conversations with investors, Fatima realized the lack of a large number of predictable demand that justified the cost of human runners meant the current model was not scalable.
“People were asking for the weirdest stuff that we didn’t have,” Fatima noticed. From chewable coffee to bottles of wine, demand was far from predictable. Pre-stocking in jetpacks would not be viable in such conditions. “If you do not know what customers want, how can you stock it?” It was time for a change.
Fatima started studying in more detail how students met their urgent requests, until she stumbled upon an insight: While she couldn’t pre-stock the random items students needed, other students on campus did! “What if I create a location-based platform to connect those sides?” she thought.
Towards a Community-Centric Model
Jetpack has since pivoted to create a platform that connects students across college campuses with each other to facilitate the process of meeting urgent and random needs. This business model change, in Fatima’s mind, is perfectly aligned with the macro trends in the sharing economy.
“People care less about owning an item, and more about having access to an item. I believe people are becoming more open to sharing things. We have seen this trend with cars, homes and I think that we will see it even with shampoos. My view is that people want to share things; there is just no easy way for them to do that now.” Fatima Dicko, Founder and CEO of Jetpack
Under the new business model, Jetpack will charge a simple 10% fee on all transactions on its platform, where it connects customers (students in urgent need of random stuff) and suppliers (students who have the random items and are willing to share or sell them away). As soon as a request is made, all students within a 15 minute radius are notified.
On the customers side, students making requests specify how much they are willing to pay in return for a product being delivered within 15 minutes. For example, if I have friends over for dinner, and forgot to buy drinks, I can send out a request: “Does anyone have plates or drinks? I am willing to pay $10.”
On the supplier side, all students within that radius are notified, and are awarded redeemable points the quicker they respond and deliver. Given that they are within a 5-10 minute walking distance, they are incentivized to deliver the goods themselves in return for a small fee ($5-10) and the gratification of helping someone in their community.
To cater for “suppliers” who are only looking for the gratification (and not the monetary reward) of helping someone in the community, suppliers have the option of foregoing a payment, in case of which they receive “karma” points that enhance their social credit, and can be redeemable in future orders.
While Jetpackers still exist, Fatima expects the bulk of the business to be peer-to-peer. Only when predictable demand patterns are identified, can Jetpack begin to scale the “Jetpackers” business.
Under this model, not only is Jetpack expected to be profitable and scalable on a unit basis, but it should be able to develop deep insights on the demand patterns of hyper-local communities. Thus, in the future, Jetpack should be positioned to reduce the randomness in demand behavior, and deliver products to students before, not when, students need them.
Market and Differentiation
Based on Jetpack’s research, the college campus sharing market is estimated to be worth $5B from 2018 – 2021 in the US alone. Jetpack has been growing at a constant ~6% week on week in Q4 2017, and is now present in six college campuses.
I asked Fatima why the new business model was defensible. She responded, “what makes us different is that we are built on speed and community.” In recent years, there has been a rise of many giant delivery services, such as Amazon and Instacart, all of which are trying to solve the last mile problem.
None, however, focus on both speed and community. Amazon and Instacart cannot deliver in less than two hours, do not cater for urgent requests and are not based on a sense of social community. Recently, Amazon launched Lockers, which is an attempt to be closer to their end customers. But, lockers are often more than 20 minutes walking distance and are hard to be pre-stocked with items you might “urgently” need. There is also no community element.
An example of a startup that combines both speed and community (to some extent) is JoyRun. JoyRun brings down the price of delivery and reduces the time you spend on making an order, by leveraging the people around you who are going to buy food.
However, JoyRun is different in two ways. First, it is focused on food delivery, so is considered a direct competitor of DoorDash; not so much to Jetpack. Second, its model is based on buying food from restaurants (i.e. makes money from charging the delivery person and the restaurant), while Jetpack’s model is based on leveraging goods that are already available within your direct community.
Jetpack has raised $0.7 million to date and is raising close to $2.5 million in Q2 2018. Further, Fatima reports that Jetpack was just accepted into the Spring 2018 cohort of StartX, one of the top accelerator programs at Stanford (and the US). There, she plans to resolve how Jetpack can create a new peer-to-peer marketplace in college campuses across the US.