Will Lickety Ship End Differently Than Kozmo?

They are almost certainly taking a hit on the $9.99 deliver charge – LicketyShip outsources delivery to local couriers with extra capacity to make deliveries, which is costly. While the

holiday season is a good time to pick up extra customers for ecommerce companies, Lickety Ship may be sending the wrong signal with the greatly reduced delivery charges.

Kozmo, which offered free deliveries within an hour, flamed out spectacularly in 2001 after burning through $280 million in capital. Real-time deliveries are expensive, and just because

there’s lots of demand to have stuff delivered in a couple of hours doesn’t mean there’s a good business model there. LicketyShip needs to prove that people will pay $20 or more (their break

even cost) to have something delivered in a couple of hours. The company says that 30% of Amazon orders are for overnight delivery, where the cost of shipment often exceeds the cost of the

item itself. If that’s accurate, then there may be a bright future for the company. But Lickety Ship needs to focus their marketing attention on that segment of the market, not last minute

Christmas shoppers.

Michael Arrington most recently Co-Founded CrunchFund after leading TechCrunch to a successful exit with AOL. His venture investments include Uber, Airbnb and Pinterest. Michael was the

Editor of TechCrunch, which he founded in 2005. In 2008 Time Magazine named Michael “One of the World’s 100 most influential people”. Michael also practiced securities law at O’Melveny &

Myers and Wilson Sonsini Goodrich & Rosati.Michael graduated from Stanford Law School and 
Claremont McKenna College.