Doorman Product Delivery & Fulfillment
DEAL
EPISODE SUMMARY
🕓 Air Date: January 9, 2015
Asking For:
$250,000 for 10%
Investor:
Robert Herjavec
Deal:
$250,000 for 12%
PRODUCT SUMMARY
Doorman is an on-demand mobile service that offers scheduled package delivery to customers' homes, aiming to solve issues related to missed deliveries, package theft, and inconvenient pickup locations.
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Background Story
Doorman Package Delivery, headquartered in San Francisco, California, was founded by Zander Adell, an entrepreneur with a keen understanding of the challenges associated with online shopping deliveries. Adell’s background and experiences played a pivotal role in shaping the innovative solution offered by Doorman. Zander Adell, a resident of San Francisco, identified a common frustration among online shoppers – the inconvenience of missed deliveries, packages left exposed on front porches, or the hassle of retrieving packages from distant pickup locations. Leveraging his entrepreneurial spirit and problem-solving mindset, Adell decided to tackle this issue head-on.
Adell’s journey into entrepreneurship began with a personal investment of $50,000, demonstrating his commitment to addressing the pain points of online shoppers. Subsequently, he secured an additional $220,000 through convertible notes, showcasing his ability to attract funding for his venture. The inspiration for Doorman arose from Adell’s own experiences and the recognition of a widespread problem in the rapidly growing e-commerce market, valued at a quarter-trillion dollars in the United States alone. Doorman was conceptualized as an on-demand mobile service that enables users to schedule package deliveries at their convenience, even until midnight, seven days a week.
The core idea behind Doorman is to provide a reliable and flexible solution to the last-mile delivery problem. Adell envisioned a service where customers could redirect their packages to Doorman’s warehouse, receive timely notifications, and schedule deliveries according to their preferred time frames. The ultimate goal is to revolutionize package delivery, making it more customer-centric and convenient in an e-commerce landscape. Zander Adell’s entrepreneurial journey with Doorman reflects not only a response to a prevalent issue but also a strategic vision for the company’s growth. His commitment to the success of Doorman and the innovative nature of the solution attracted the attention of the Sharks on Shark Tank, setting the stage for a successful negotiation and partnership with Robert Herjavec.
The Product
Doorman Package Delivery offers a revolutionary solution to the challenges associated with online shopping deliveries, providing a customer-centric and flexible approach to receiving packages. Here’s an in-depth look at the product’s features and how it works:
Upon signing up for Doorman, users receive a unique shipping address, redirecting their packages to Doorman’s warehouse. When the packages arrive, customers receive timely notifications on their phones, allowing them to schedule deliveries until midnight, seven days a week. This flexibility is a key feature, addressing the inconvenience of missed deliveries or package pick-up centers.
Doorman’s value proposition lies in its ability to empower users with control over when they receive their packages, eliminating the need to worry about missed deliveries or package theft. The service is particularly beneficial for those who work during the day and prefer deliveries in the evening. The agnostic approach, not tied to a specific carrier, ensures compatibility with various delivery services.
The product’s user-friendly interface and seamless integration with the online shopping experience make it an attractive solution for consumers seeking convenience. As Doorman aims to expand its services nationwide, it presents an opportunity for users across the country to enhance their online shopping experience and overcome the limitations of traditional delivery methods.
How It Went
The company’s position before Shark Tank
Doorman Package Delivery has shown promising signs of success and growth since its inception in May. The company’s health and position are marked by a positive trajectory, with 300 customers actively using the service, resulting in the shipment of 4,000 packages through their platform. This demonstrates a steady uptake in user adoption and a validation of the concept in the market. In terms of funding, Zander Adell, the founder, has made a personal investment of $50,000 into the business, indicating a strong commitment to its success. Additionally, Doorman has secured $220,000 through convertible notes, showcasing the ability to attract external funding to fuel expansion and operations.
The company’s current structure involves renting warehouse space, allowing them to efficiently manage logistics without the massive infrastructure costs associated with major delivery services such as FedEx or UPS. Operating with a lean model, Doorman utilizes drivers who use their own vehicles for deliveries, contributing to cost-effectiveness. As for partners and wholesalers, Doorman does not currently have agreements with major delivery services like FedEx or UPS, emphasizing that the company is not yet large enough for such collaborations. However, the founder expresses the desire to explore partnerships with these major carriers as the company continues to grow.
Customers of Doorman primarily consist of online shoppers in San Francisco, where the service is currently available. The company’s subscription model, priced at $19 per month for unlimited deliveries, caters to the needs of frequent online shoppers looking for a cost-effective and convenient solution. As Doorman expands to additional cities, starting with Chicago as the second city in their plan, it anticipates attracting more customers and increasing its footprint in the rapidly growing e-commerce market. The successful negotiation with Robert Herjavec on Shark Tank further bolsters the company’s financial position, providing the $250,000 investment needed for continued growth and expansion.
The Negotiations:
The negotiations for Doorman Package Delivery unfolded as Zander Adell entered the Shark Tank seeking a $250,000 investment in exchange for a 10% equity stake in his company. The Sharks expressed initial concerns about the scalability of the business, with Mark Cuban suggesting that major carriers like UPS and FedEx could easily integrate a similar service. Despite skepticism, Adell highlighted Doorman’s agnostic approach, differentiating it from carrier-specific solutions.
Barbara Corcoran, Lori Greiner, and Robert Herjavec teamed up to present the first offer, proposing $250,000 for a 20% equity stake. However, Kevin O’Leary, Mark Cuban, and Daymond John opted out, expressing concerns about valuation and the time commitment required. Robert Herjavec then counteroffered, proposing the same $250,000 investment but for a 12% equity stake. This led to a brief negotiation, with Adell ultimately accepting Herjavec’s offer, securing a deal with the Shark. The negotiation demonstrated Adell’s flexibility and strategic decision-making, aligning with Herjavec’s vision for the company.
During the negotiation, Lori Greiner expressed disappointment at missing out on the deal and emphasized her commitment and value as a customer. Despite the competitive nature of the negotiation, Adell left the Tank excited about having Robert Herjavec as a partner, considering the potential risks of further negotiations. The deal marked a successful outcome for Doorman Package Delivery, securing the necessary investment to fuel its expansion and capitalize on the growing demand for its innovative last-mile delivery solution.
