The eCommerce revolution has turned the “traditional” supply chain on its head. New customer expectations regarding time to deliver, overall delivery experience, and open communication have forced delivery startups to invest in new technological solutions to manage their delivery operations. Consumers now want to have full, real-time visibility over their deliveries. In particular, they want to see the entirety of the last mile – that is, they want to be able to see where the driver is and exactly when they will arrive. Creating a frictionless delivery process requires technology that enables all of the above. By doing so, you lessen the likelihood of a customer calling in and having to deal with a customer service representative, who will then have to go through their system to find information about the delivery.
The success of companies like Postmates, Doordash and Deliveroo has paved the way for on demand delivery and urban logistics, but the journey hasn’t been smooth. On demand has penetrated every industry and business (related reading : Business Models for On Demand Food Delivery), and logistics is no exception. Dealing with these new challenges requires investing in a solution that helps businesses manage their deliveries.
When Alfonso approached us to build an on demand delivery platform for Eiya, we knew the challenges that developing this solution would pose. The technology solution needed to streamline efficiency and cut costs. In an interview with Alfonso, we asked him about his motivation to start Eiya, its business model and his experience of developing a solution with Next Juggernaut.
Starting an On Demand delivery platform is definitely a great idea. Tell us something about Eiya and your personal motivation for starting this service?
It all started with a “what if” moment at a friend’s house. A group of friends and I gathered to hang out, but we were missing some beer and that’s when someone said “What if there was an app that could bring us beer and some snacks” Everyone quickly disregarded the idea. The next morning, my curiosity kicked in. So I did some research for beer delivery. Shortly my research escalated to the on demand industry and urban logistics; that is when I found out that delivery under an hour and last mile logistics was the next big thing. I had worked as a delivery boy years before, so the idea of having a delivery business was not so crazy. I don’t recall having a “motivation”, every day I took one step and in about 6 months I had created an MVP, validated, raised money and took the idea to a whole different level. One thing led to another.
Could you shed some light on Eiya’s Business Model?
Eiya App offers delivery service from any restaurant or store in Mexico City. Users search for results near their location and place an order. Uber-like drivers receive the request and deliver the order in the shortest time possible. Drivers are paid for their time and the distance covered. Eiya currently has one revenue stream which is the processing fee added to the user’s total purchase but we are now testing two more revenue streams with drivers and businesses. Two other revenue streams are on the waitlist to be tested by the end of 2016
What is the value proposition that you offer?
Our value proposition is ideal for Mexico City. On a daily basis, 40 million hours are lost in the city due to traffic. With some research we found out many of the drivers spending time in traffic can be removed by offering efficient last mile logistic services. We started with delivery services, but we found out that by optimizing routes and the driver’s time, we can offer additional services within the app because many fit the same logic such as delivery – messenger service, taxi, laundry delivery, grocery delivery, among others. We are imagining and working towards redefining ride sharing. In short, our value proposition is to optimize routes as efficiently as possible, so drivers earn more buck for their time and users pay less for services. We’ve launched delivery and we are now testing bike messenger service.
How did you solve the initial egg and chicken problem to get customers and delivery personnel on your platform?
We’ve come to learn that last mile logistics is a very intensive business. It takes smart decisions to move ahead and cash infusion to grow your fleet until demand picks up enough to take over. In our prelaunch stage we studied two to three different launch strategies, some involved starting with a dozen drivers throughout the city and marketing enough to attract users. It was too costly. What we ended up doing is this – we launched with one user and one driver and shortly began adding one user and one driver at a time, as needed. This allowed us to test our app, databases, servers and business model one user and one driver at a time. It also allowed us to receive feedback and quickly pivot and adjust if needed. If we had launched to the public, adapting to the market’s needs would have been close to impossible. The hardest thing we have learned about Eiya App is growing the offer and the demand at the same time. If they grow unequally, then we have no business. We are still in the alpha stage and will stay this way until we launch Eiya App 2.0 in the next few months.
How is Eiya different from other on demand delivery platforms?
A lot sets us apart from the few delivery apps that exist in Mexico City. I can tell you that we are working on awesome, futuristic features, which we are by the way! But we believe our customer service and customer relationship can outcompete any other business on the long run. We have seen the potential competition interact with the city and users, and there is still so much room for improvement. Another thing that sets us apart is one feature – live tracking. You would think this technology is being used in the Mexican market, I was also very surprised when I found out we are the only ones using it. We found out users prefer to see their order in real time than be told an ETA and be late by one minute.
How has the experience with Juggernaut been?
After many months of hard work, we were able to develop a prototype that we are now building on top of. The tech stack has given us a competitive advantage, node.js and mongodb is still somewhat expensive and unknown in Mexico, so businesses invest rather less money on other technology. This tech stack has saved us time to develop future features while the competition tries to catch up.
Are you satisfied with your technology platform as it exists today?
We are not. Not because it isn’t great but because we already see Eiya App 3.0, Eiya App 5.0, and getting there is not the easiest thing. We have a strong tech stack, we know that, but there is still a lot of room left to grow and innovate.
What is one particular Marketing Tool or process which you swear by, that has helped you gain more users on the platform?
We have not launched any marketing campaigns or tools for Eiya App, and we probably won’t do so until we have a solid customer acquisition strategy. How are we getting users? Remember we started with one user and one driver, we have now given access to our friends and they have recommended us to their friends, it has mostly all been word of mouth. The other strategy is that Carlos and I, Eiya App’s founders, started a Youtube and Facebook Vlog called #ChevesConPonchoyCarlos in which we talk about our entrepreneurial journey, Eiya App, and the problems we see in Mexico and how technology can fix it all. This has given us exposure and has been driving users to Eiya App’s Facebook page. We currently see no use for spending in marketing campaigns when social media gives us the exposure for free.
Are you planning to expand Eiya to tap more geographical locations? If yes, what would be your strategy?
We currently have no plans to expand outside of Mexico City. There’s approximately 25 million people living inside and on the outskirts of the city. There’s another 10 million visitors on an annual basis. When the new airport is completed within the next decade, another 30 million visitors will be coming in and out. Smartphones will double in the city to 20 million within the next 5 years. With this rapid growth, and the poor city infrastructure, we have enough problems to solve. Of course, like all businesses, if we can we will expand to other major Mexico cities, but for now the capital is our main and only focus.
What do you feel is the future of the On Demand economy and how can it help people and businesses alike?
I do believe there is a point where purchasing online will take seconds, and delivery will take minutes. But I also see people taking their time inside an app to play ‘dress up’ with their avatar; intelligent apps will search, feed and recommend accurate results in milliseconds, and these apps will give you the best of what YOU need. Personal assistants will come to play for our convenience. Just look at what Operator, Messenger, and Alexa are doing. And in many years, even decades down the line, we will be able to put on some glasses and virtually do the shopping ourselves without leaving the comfort of our home. E-commerce in Mexico is just getting started. Eiya App, among others, is building the infrastructure for these ideas to happen.
How do you see Eiya evolving in coming years?
It’s hard to tell. The Mexican market is a tough one and it’s not easy to predict because the country and the politics that surround it are still developing. We have written down and discussed many future ideas. One is growing our fleet within the capital for other companies to use as well. Another is expanding to major cities in the country to build a network between them; connecting the cities. And another one is expanding from border to border and develop an autonomous fleet that can distribute demand from inside the capital to the borders and vice versa. We envision so many things, and it’s hard to tell where we will pivot. Right now the vision is to grow Mexico City’s largest, most intelligent fleet.
Any advice for startups trying to make it big in the On Demand space?
The on demand space is a very cash intensive industry. It takes money, resources and time. Be patient. Also, before starting an on demand business, do all the research possible. Reach out to potential customers and ask for their needs. When you think you’ve finished asking, ask some more. This will, hopefully, show you what people are wishing for. The hardest part about the on demand space is knowing what the market needs and developing a mobile solution for that need. Always serve and work for the user.
Get in Touch with us if you are looking to create the next big disruption with your on-demand business idea! We have got your tech covered, no worries.
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