While attending Harvard Business School, Marcela Sapone and Jessica Beck inadvertently came up with a startup idea born from their messy apartments.
The two women had hired someone off of Craigslist to come do their laundry and buy their groceries weekly, and then they split the cost.
The woman they hired, Jenny, came to their apartments to take care of errands that would otherwise pile up. This would eventually evolve to become their company, Alfred.
Today, Alfred is a startup that hires employees — Alfred Client Managers, or just “Alfreds” — to run weekly errands: things like buying your groceries, sorting your mail, dropping off packages, and taking care of your laundry for you.
You pay $32 a week for the service, plus the cost of things like your groceries. Alfred has raised $12.5 million from investors including Spark Capital, New Enterprise Associates, SherpaCapital, and CrunchFund.
There are plenty of “last mile” startups — companies obsessed with logistics and delivery, and getting your groceries or packages to your doorstep. But Alfred wants to be a “last meter” startup, operating inside your home. “We are looking at Amazon as our inspiration,” Sapone, the company’s CEO, says. “Alfred as the trusted relationship that brokers every conceivable service past the front door.”
Since launch, Sapone and Beck have been focused on building and maintaining a sustainable and profitable business.
“When we moved to New York, we made this decision that we barely got past our investors,” Sapone told Business Insider. “They finally agreed with us that, yes, we wouldn’t start a customer unless we had a profitable run that the Alfred would go on. So every atom of the business was sustainable.”
Alfred’s founders have deliberately throttled the company’s growth. Alfred has seen 30% per cent month-over-month growth. Sign-ups for the service are 4x that, but Sapone and Beck are focused on “making sure each of the unit economics in each of these atoms of the business — essentially the book of clients that Alfred has — are sustainable, break even, or better,” Sapone says. Alfred isn’t yet net profitable, but it is operating profitable, according to its founders.
Alfred, which launched in 2014, is active in Manhattan, Brooklyn, Boston, and is rolling out in beta in Los Angeles and San Francisco. There are “hundreds” of Alfreds who have handled “just under 100,000” requests from thousands of users, Sapone says.
The average Alfred customer spends $415 per month, or $4980 a year. In comparison, Amazon Prime subscribers spend about $1500 a year.
In its first year, Alfred achieved $1.5 million in revenue. The company has 26 corporate employees in its New York headquarters.
The company isn’t just consumer-facing — Sapone says Alfred works directly with building companies, which include San Francisco building group JS Sullivan and micro-apartment company Stage 3.
When Beck and Sapone were still in Boston, they weren’t sure Alfred was a company that even needed venture capital funding. “We really thought about it as a smaller business,” Sapone told Business Insider. “We created a bunch of postcards with different prices and different bundles of services, and we put them under the doors in all these different neighbourhoods in Boston, and we got our first 10 customers that way.”
Alfred compiles data about you and your preferences to provide a better experience for you. For example, your Alfred would remember that you’re gluten-free, use non-toxic cleaning materials, and travel frequently. This recall ability makes customers trust their Alfreds with requests like, “buy me $20 of organic vegetables.” Your Alfred will also restock products for you automatically, so you’ll never run out of toilet paper or toothpaste again.
Alfred’s specialty early on — and what made it different from delivery services and other courier systems — is that it optimises for standard routes. “It’s kind of like a milkman run where you have one person who’s going to do the errands for everyone at the same time and go on these standard routes, just like a milkman would visit a neighbourhood and would pick up and take away the milk bottles from every door,” Sapone says.
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