We recently caught up with the founding team of Drizly who are the creators of an online platform to order beer, wine and liquor. The platform is customized to each customer, making it easy to order on the go.
Nick Rellas, Justin Rubinson, Cory Rellas
Headquarters in Boston
45 in Boston; 65 total
The Exception Interview
How would you describe your company and its product to someone who has never heard of it?
Drizly makes it possible to shop for beer, wine and liquor whether you’re at home or on the go. From one screen, you can browse the selection of multiple local retailers to locate the best price on tens of thousands of different kinds of alcohol. We give customers the power to prioritize selection, price, and place (offering delivery, pick-up, and shipping). The customers gets to decide what’s most important to them and Drizly makes the rest easy.
How did you come up with the idea for your company? How did you validate the concept early on?
Justin Robinson, Co-Founder & SVP of New Business: The inception of the idea was one that has probably played out tens of thousands of times between friends, but it was the steps that followed that allowed us to get to where we are today.
Drizly started with a text message. Nick sent Justin a text at 1am from his dorm room that read “I just got pizza delivered, why can’t I get beer delivered?”
Justin’s response: “Cause it’s illegal, duh.”
Needless to say, this answer wasn’t acceptable.
After a night reviewing the Massachusetts Alcohol Code and endless discussion, we realized it wasn’t illegal at all, it just had never been done the right way. The next steps were important. We spoke with experts in the industry, attorneys, regulators, liquor stores, distributors, and suppliers to understand what would need to be done to allow for online sales and delivery of product in such a regulated industry.
As a result, we gained a deep appreciation (and subsequent knowledge base) for liquor law and what it meant for our business model. Equally as important, we got a thorough understanding for the economics and politics that drive the alcohol industry. Collecting this information and dedicating ourselves to the upfront research was as core to validating our concept as our first customers were.
What does your ideal customer look like?
Cory Rellas, President and Chief Operating Officer: The early adopters of Drizly have been very profitable consumers from the perspective of loyalty and word of mouth. These customers are largely urban based with an average age in the low 30’s, they drink ~40% wine and are comfortable using technology to shop outside of the physical retailer. However, as we continue to build up the “marketplace” shopping experience, we are broadening our target customer.
As an example: The consumer who wants a large craft beer selection that he/she can “pick up” on their walk home from work versus the suburban mom who wants to schedule a wine delivery for dinner with her husband. The Drizly technology allows us to service varying use cases. This broadens our view of an ideal customer to someone who is looking for access to an incredible product selection, someone who is looking to price compare in a familiar marketplace shopping experience (think Kayak and Amazon) and especially for those looking to add convenience to their lives through multiple order and delivery options (delivery, pickup, shipping).
Where would you like to see your company in 5 years?
Cory Rellas: Drizly is focused on continuing to expand its ability to help consumers find what they want, when they want it, with the best retail partner network in the country. Given the fragmentation in the retail space, there is work to be done to elevate and standardize a digital shopping experience. The Drizly experience should make you a smarter shopper, through price transparency, through personalization and recommendations that allow you to discover brands, and ultimately, through the social experience that is sharing a drink with friends.
Even more interesting, the opportunity to use our digital knowledge to inform the in-store experience now becomes possible. In 5 years, the physical retail world should enjoy many of the advantages of the digital experience but the with important distinction of catering to all of our consumer senses. With advances in the supply chain, the physical retailer can eventually become a portal into multi-sensory shopping experience, that could look completely different from what we know today.
What broader trends are driving interest in the food tech sector?
Cory Rellas: The largest point of interest is simply market size–“TAM” as known in the investment world. Since before 2000, companies have been focused on how to shift the huge market of beverage alcohol online. With the rise of mobile giving new life to its interest. Food is a consistent and frequent purchase therefore a lot of the tech focus has been on “on-demand” delivery through utilizing the already established infrastructure of large retail chains.
While this is a huge opportunity, Drizly enjoys a bit of a luxury in that we are building technology for a commodity industry — Tito’s Vodka is the same liquid regardless of retail outlet. This allows Drizly to build for a future serving more than just the on-demand use case and allows consumers to choose across retailers using the same forces that dictate in-store purchases — place, time, price, etc…
What excites you personally about working in food tech?
Justin Robinson: There is so much room for efficiency. The traditional players in beverage alcohol – suppliers, wholesalers, and retailers are as critical to our infrastructure as roads and bridges, but they’ll be the first to admit that there are always efficiencies to be had every minute of every day. That provides massive opportunity for companies like Drizly to fill the void quickly and help enable and accelerate growth and improvement for industry players and ultimately make the best shopping experience possible for our customers.
What are the biggest risks for your business in 2017?
Cory Rellas: It’s pretty much the Achilles heel of every startup: focus. We believe we have a unique value proposition within a regulated market that affords us many opportunities. When we’re able to look back at 2017, I believe our success will be dictated not by what we did do, but by what we consciously decided not to do in an effort to stay focused.
Do you believe your city/state supports its food tech startups?
Justin Robsinson: The Boston tech community is very a supportive community in general. Our observation however, has been that food tech startups are probably not supported with as much fervor as other tech industries. (Boston is particularly known for healthcare, enterprise, education, and big data.) Boston has a ways to go when it comes to growing a more niche community around to B2C and food tech startups.
What other companies or founders do you follow for inspiration or advice?
Cory Rellas: One of the first things we did was surround ourselves with investors, mentors and people in the Boston community who have started and built successful companies. The path of starting a company from scratch is a unique one and while you can read all the books in the world about pitfalls and mistakes, the easiest way to avoid mistakes and learn is to actively solicit involvement from those who have done it before. This means a lot of networking time and putting yourself out there.
Our advice is to always be prepared to pitch your business, you never know when you’ll be in an elevator with someone you’ve been trying to get a lunch meeting with for months. On a more general level, it’s easy and useful to follow the Brian Cheksys, Elon Musks, and Jeff Bezos’ of the world. When you hear them speak or read about them, it’s a great reminder of not letting the day to day dictate your thought process. It’s so important to step back and articulate a larger vision and how your company’s path fits into that future.
What words of wisdom would you like to share with the next generation of food tech CEOs?
Cory Rellas: It’s essential to have a clear vision of your long term business model. Even today, you still hear about ideas that require “scale efficiencies” to drive a sustainable business. We are past that point and you are seeing some of that fatigue from the investment community as well.
In the same vein, your thought process must assume that many of the novelties happening today (an example is the logistics solutions with on-demand delivery) are going to become commoditized. Ideas in today’s rapidly innovating tech climate are not necessarily hard to come by, but an idea with sustainable value is built on something bigger than just one fulfillment method or aspect of the customer journey.
Photo courtesy of Drizly
Email editor [at] exceptionmag.com if you operate a food tech startup and would like to be profiled.