Aspiring Business Founders Get Sobering Look at Entrepreneurship Challenges

Founder of Liquor Delivery App Shares Lessons, Challenges in Starting a Company

4/7/2014

The chief executive officer of a startup company that figured out how to coordinate alcohol delivery from a mobile phone has three words of advice for potential entrepreneurs: Don’t do it.

“At least, don’t right now,” Drizly founder and chief Nick Rellas told a class of Howe School students in a visit where he explained his business, including the obstacles he overcame and the challenges ahead, and his outlook on technology and entrepreneurship.

For Rellas, the journey from Boston College undergrad to full-fledged entrepreneur started about where you’d expect: in the cold light of an empty refrigerator.

“It was a fairly late night, we had an empty fridge,” Rellas, now 24, told the class. “I said to my cofounder, Justin (Robinson), ‘Dude, why can’t you get alcohol delivered from your phone?’

“That sent me down a path that, as any entrepreneur will tell you, is a little bit of a black hole,” he said. “It’s like ‘Alice in Wonderland’ — you jump down, you don’t really understand what you’re getting into. We were just young and naïve enough to say, well, let’s figure out why this doesn’t exist.”

The role of entrepreneurship at Stevens

The resulting company and app, Drizly, was founded less than three years ago, and in January closed a $2.25 million seed round. The app connects liquor stores and their customers — shoppers select what they want using Drizly’s app, which then sends the order to a participating liquor store. A driver, using a Drizly phone with information about the order and the customer, fulfills the order. The emphasis is on speed, he said: When a customer in Boston gets his or her first order within 30 minutes, that person reorders through Drizly 87 percent of the time.

‘A bit of a ride’

The app is compatible with both Apple and Android phones, and the service is live in Boston and Manhattan. The company hopes to be active in more than two dozen cities within the year.

Rellas acknowledged that “it’s been a bit of a ride” from being an undergrad just a few years ago to being the first deliveryman for Drizly. One of the biggest challenges, and one the students in the class asked him extensively about, was how the company handled age verification. Rellas walked students through that challenge, which by creating a mobile ID verification system.

How his company is introducing such technology is a delicate balance, Rellas said. He and his co-founders have had to do so “in a way that doesn’t disrupt the existing industry framework” in a highly regulated environment. “You don’t disrupt a $155 billion-a-year industry that’s controlled by 20 or 30 individuals,” he said. “You basically kneel at the altar and say, ‘Let me in.’ ”

Drizly has done that by showing the value to retailers and distributors, including the opportunity for increased sales as shoppers get accustomed to using the app.

Orders through Drizzly are fulfilled by the store — the company doesn’t touch products or the money, but charges a flat monthly licensing fee for improving, as Rellas puts it, the way in which consumers shop for alcohol.

An interesting opportunity through alcohol

It’s a lot for a guy who describes himself as a fairly moderate drinker. But Rellas was looking for a recession-proof career at the turn of the decade, when a sour economy was a wrecking ball to well-established business. He also was influenced by using Uber, an app that sends a taxi directly to your location at the tap of a screen.

Alcohol, he said, “posed a really interesting opportunity” to take that technology in a new business direction.

The class — Dr. Ann Murphy’s Honors Business Seminar — brings business figures to class regularly, to give short bios and remarks before fielding questions from students. Looking at the assembled crowd sparked a warm response from Rellas, who said “this was my favorite type of class at BC. This was actually the course that set me on my framework of how I look at the world.”

More about studying business at Stevens

But it’s a viewpoint he said students should carefully consider before adopting, suggesting work at a startup might be a suitable alternative in the early going. He urged students to instead take the time to better figure out their passions, understand their weaknesses — and read frequently, to understand the world around them.

And when they do decide to become entrepreneurs, the rewards are thrilling, but sacrifices come with it.

“Frankly, my life is an obsession with Drizly,” he said. “And you have to be prepared to know that if you’re gonna jump down a rabbit hole … it’s going to be your whole life.”