Founding: Kozmo.com was founded in 1997 by investment bankers Joseph Park and Yong Kang with $4.5 million in early financing from private investors including grocer Bob Miller and Taco Bell co-founder Rob McKay.
History: The company began as a service that delivered videos by bicycle messenger to Manhattan customers who ordered them online. The company boasted “from the Internet to your door in under an hour” and its attractive rates helped rapidly draw thousands of customers.
As it expanded to several cities and began offering a convenient, store-like inventory of deliverable goods, Kozmo also garnered a prominence few other dot-coms could match, including being profiled in the documentary film e-Dreams.
What Happened: Kozmo.com's aura helped it raise more than $250 million, but the company was unable to generate enough revenue to cover costs. In 1999, it had $3.5 million in revenue, compared to $26.4 million in net losses. Basic problems with its business model included offering a costly home-delivery service for free, even on very small orders on which it was impossible to turn a profit. Last-ditch efforts to boost orders and stop the delivery losses by charging $1.99 for orders under $30 helped, but couldn't deliver the company.
Mounting losses led to Park’s ouster in 2000. The new leadership couldn’t turns things around or pull off the long-delayed IPO. In April 2001 the company ran out of money, shut down operations and laid off its employees.
“We built out a delivery system that worked,” recalls former Chief Operating Officer Skip Trevathan, who came to the job with experience as managing director of logistics for delivery goliath FedEx. “We were profitable in four of our cities. But we had seven more that we couldn’t make profitable, and then the funding dried up.”
Where Are They Now? Park co-founded Askville, an Amazon.com website where users ask and answer questions. A LinkedIn profile lists Yong Kang's current occupation as investment banking at Lehman Brothers.
Trevathan is executive vice president of worldwide production and engineering for Memphis-based on-demand document printing and distribution company Mimeo.com. In an unexpected coda, former Chief Technical Officer Chris Siragusa started a New York City-based company, MaxDelivery, that delivers DVDs, food, and other goods to addresses in lower Manhattan.
Today the Kozmo.com website is inactive.
Were you an employee, customer, or client of this service? Then share your memories below! What did you like about the company? What didn't work? What other factors contributed to its success or failure?
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Comments
I loved kozmo when they started and used them a lot. Then UrbanFetch started delivering the same stuff while refusing tips and giving away a ton of sweet free stuff with each order. It was an unsustainable business and everyone knew it but I sure did take advantage of it while it lasted :) Rest in peace UrbanFetch and thank you for all the cookies and swag.
I loved Kozmo and was so disappointed when they finally pulled up their roots and closed. I still have some of their swag (along with webvan's) in my office as a memento to the dotcom era. it was so convenient to be able to get cds, ice cream and magazines delivered to my workplace, especially on those weeks where I barely left the office!
Kozmo was legendary. I remember one time i had a dj gig and my CDjs were still not returned to me from a previous event. So i logged onto Kozmo and ordered 2 discmans that showed up in under an hour. it was awesome. To this day, i really wish someone in the seattle area would pick up this idea and run with it.
the only thing Kozmo was good at was stealing money from its investors.
LOL at Kosmo and Urbanfetch, I remember getting cheap goods delivered to my door in manhattan with no handling charges and free crap thrown in and thinking "No way am I buying this IPO, these guys are just batshiat crazy".
I stopped using them once I realized I was just taking money from some institutional investors pension portfolio.
I remember a good way to tick them off was to order a pack of skittles delivered to the top floor of a high rise. Every day.
I remember them in NYC. I used to work overnight shifts at a DataCenter during which I would back up an ancient HP3000 MPEiX system. My girlfriend would place a Kozmo order for me before she went to bed. It was a much needed care package delivered at 1 in the morning (candy, dvd, microwave popcorn).
Kozmo and Urbanfetch were awesome, and one of those things that make you ask "man, how can they make money at this?" It was the ultimate in instant gratification, and something which I would use if it came back. I hope these types of services return someday (e.g. as "Amazon Express" or something), at least in places with a dense enough population to make it a sustainable business proposition.
At the very least, considering that rapid food (e.g. pizza, chinese) delivery works and is highly profitable, why can't convenience store/bookstore/video store item delivery work as well? Can I get a PS3 game, a DVD, and a magazine with my large pizza? Please?
Interesting that Kozmo still has so many fans that remember it after all of the years. Kind of surprising that MaxDelivery or one of the other companies hasn't bought the URL and the brand ...
What's funny is a worked at a local dollar store back in 2000 to like 2003. We got most of the bags / sacks from kozmo.com and sold them for like $10 each. I still have one myself, and it makes a great xbox360 holder for going to friend's houses.
Anyone tried Maxdelivery or FreshDirect or Peapod (outside NYC) and have an opinion?
I worked for Kozmo.com - I still have two jackets and a shirt with the company logo. I enjoyed being able to use the company's services for free (for video rentals).
We were all anxiously anticipating the big IPO which never came. They constantly announced successes, but apparently the bottom line didn't agree with that. I was laid off in the first big round of cuts, in June 2000.
My wife and I were heavy users of Kozmo.com for videos in NY and DC. We even stayed with them went they went to a $5 minimum order, getting fat on all the Ben & Jerry's we were ordering with every movie. We actually had one of their videotapes in our possession when they went under.
Kozmo was awesome, but in the end, unsustainable.
I, too, ordered sandwiches all the time from Kozmo.
Great heydays of the year 2000.
http://movies.nytimes.com/movie/345221/The-Genius-Club/overview
I loved Kozmo. Manhattan Sunday mornings, the Times, a movie, coffee and Ben & Jerry's.... ahhhh the good old days!!
I worked at Kozmo right from the beginning when they had double digit employees. I worked in the corporate office and there was a lot of work to be done. I was putting in 12 hours everday for 6 days for a year. The new CEO brought in some lazy bums from his old job at Ethan Allen. One of them, Jeff Sullivan, was the worst controller I have ever worked for. It was frustrating seeing these guys taking credit for all the hard work that a couple of us had done from the beginning. I was eventually laid off in the first round. The CEO and the owners are probably enjoying venture capital money somewhere.
Wait! Yong Kang's current occupation is listed as investment banking at Lehman Brothers!!!!!!!!!! Can someone put this guy in a location that doesn't effect my 401K!!!
i was working there from pretty much the start. Lets just say management couldn't make proper decision when it was snowing
I worked as the Ops Manager at Kozmo San Diego. When they shut us down, I was promoted to GM in San Francisco. Was there long enough for a cup of coffee as we shut down three months later.
Kozmo expanded too fast. The battle cry in the dot com boom was "First to market or you're road kill". The burn rate was unbelievable as the company expanded into areas less densly populated than NY and SF. I even overheard a strategic growth manager say "You can't spend it fast enough".
I believe that if managed properly, and the business model proven before expansion, Kozmo would be alive today. Los Angeles was a joke, San Diego (even though I worked there) was equally nuts. Things were too far away, not enough population density to carry the project to profitability.
I hope Chris makes it in NY with maxdelivery.com I still think it can work with the right product mix, and careful fiscal planning. Good luck to him and everyone in NYC.
Jim
I WAS ONE OF THOSE KOZMO BIKERS IN NYC THAT DELIVERED THE DVDS, POPCORN, ETC IN UNDER A HOUR. I STARTED THERE IN THE FALL OF 1999 AND THEN MOVED TO WALKER ST. MY BEST MEMORY WAS ACTUALLY DELIVERING A ORDER TO "BEN AFFLECK" RIGHT NEXT DOOR AT OUR WALKER ST. LOCATION IN 2000/01, I DELIVERED HIS ORDER AND ASKED TO SIGN THE MANIFEST, HE TIPPED ME AND TO THIS DAY, ALOT OF CUSTOMERS RENTED "REINDEER GAMES". IF BEN AFFLECK REMEMBERS WALKER ST., JUST REMEMBER THE BLACK GUY THAT ACTUALLY DELIVERED YOUR ORDER AND WAS HAPPY THAT YOU WAS VERY NICE TO ME IN DOING SO.
Kozmo was my favorite thing in the world. I used it all the time in Boston and was sad when they didn't have it in Brooklyn. I would rent movies and buy video game systems and snacks and advil. It's very sad that it's gone. Sorry to everyone who lost all their money so that I could periodically get chips, sci-fi movies and medicine.
I worked for Kozmo. I was hired as a dispatcher and was moved up to Corporate Trainer. Hired in L.A. and worked the valley and West L.a....Kozmo was a blast and I loved everyone there. We all put in lots of blood, sweat and in the end tears for something we gave our all to and still failed..Sorry to have seen it go. They tried too much too fast and blew themselves up. Should have stayed in NY and a few other MAJOR cities and left it at that..
I remember Steve Yates and all the awesome employees, after all that happened, I must say working at Kozmo remains one of my most favorite jobs of all times...
Susan Wrigle, ex Kozmo Trainer
In NY in the 90's Kozmo could do no wrong. They saved me from the Black Friday chaos and saved me money to boot. I bought 6 Sega Dreamcasts for basically BOGO. Ditto on the DVD/CD box sets. My entire fremily's stockings were stuffed for a couple of years until the internet bubble poofed and I lost my gig. Thankfully, Kozmo was still there for my personal indulgences. Great times!
Regards,
Nyco
PS: I would seperate my items into different orders from Urbanfetch and they would swag up each bag. Nice!
Please excuse the Clinton St. house party drunken stupor comment above. The Dreamcasts came from Urbanfetch. I truly miss them both. The 2000 refrigerator white-board calander magnet I still have up, that only my besties can tag with permink is testament to that. As is the green on gray Urbanfetch tshirt I am wearing while I replace the ssd in my hacked Dreamc♥st as I wait for my turn in our Gears tourney. Umm...were still drinking though. We're still getting rid of the left over St. Patty's beer stockpile. Yes, we had left overs. :Þ
Regards,
Cisco
PS: Dominican President beer is the goods. Go blog.
We've got http://www.i-booze.com in Seattle. They rock for the sinful stuff!
I worked for nyc kozmo on 12 th st as a bike messenger and then when we moved to the west side on 36th st. I was something of a cross between a clerk and a supervisor. Some of the best days of my life. The place was wild and rowdy, I'll never forget the Og's that worked there. Jim , Blue Rob and my favorite Black Nate and White Nate. I really do miss them cats.
Hello Jim, I too was hit hard in Houston(Operations Manager).
where was the san diego office located? my sister lives in san diego (La Jolla) and I was making plans to visit the Kozmo office when we were in business.
Have a great day
J/
I loved Kozmo.com and was a regular customer. A cute delivery boy gave me the hat once and I treasured it until a house guest stole it. To this day I'm pissed at this thief.
Strange Kozmo incident was they stopped billing with each trip and then suddenly billed me for about 12 visits they did. About a month later they were out of business. I miss them still.. sad someone doesn't bring this back. I would use it.
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