Startup Errand wants to make life easier by doing your running around
A group of BYU students working to identify a business idea decided to survey families to try to isolate what their biggest pain points were.
What they found, which will come as no surprise to any parent, is one of the top challenges was about the collective time spent transporting kids to school, lessons, sports practices and other various activities.
Quickly recognizing the enormous legal hurdles and daunting liability issues that would accompany any effort to commercialize a kid taxi service, the budding entrepreneurs were led to a different, but nearby, idea.
What about a business that could take care of all the non-kid running around and free families up in a way that would make parent duties more stress free?
Turns out the answer was in the question and, in January 2022, Errand was born.
Errand co-founder Claire Larsen said the company launched with some pretty rudimentary technology, just a website where you could put in a request for an errand, identify pickup and drop-off locations and when you needed it to happen. The rest of the process was mostly manual and conducted in a small service area.
The approach was part of a very intentional plan to pull a reverse move on the more typical tech startup process of fundraising on an idea that later gets tested for practicality. The do-it-first pathway, Larsen said, allowed her and fellow co-founders to approach potential investors with a proven out concept instead of an unvetted business plan.
“We knew we would need funding to build an app, but we recognized we were a group of students with no experience and no business backgrounds,” Larsen said. “We ended up running over 3,000 errands for people, using guerrilla marketing tactics and only spending our own money.”
The idea and the go-get-’em attitude proved to be a hit with a group of investors who participated in a pre-seed round of venture funding for the company that closed in October and raised nearly $700,000.
Just two months later, in early December, Errand went live with its smartphone app. Now, the business is off and running, operating along the Wasatch Front with plans to grow throughout the state and, soon, to nearby states.
Larsen said Errand is finding success on both sides of its business model, attracting clients who need an easy and affordable way to cross things of their to-do lists and gig economy drivers who are signing up, en masse, to make those errands happen.
“When the app went live, we just wanted to get current customers moved over,” Larsen said. “But within the first week, we tripled our goal and had around 6,000 drivers sign up.”
That fast response on the driver side of the equation was likely helped out by a gig economy that’s seen a surge of interest in the past few years, with the number of those who work on flexible, short-term contracts soaring.
In a recent report, Fortune noted the number of gig workers in the U.S. has grown from 55 million in 2020 to a record 60 million today, according to a recent study by freelance recruiter site Upwork. Almost 40% of the U.S. workforce has done contract work in the past year, according to the study, adding around $1.35 trillion to the economy.
On the client side of Errand’s business model, a growing number of consumers are finding new comfort with app-based services, thanks to the proliferation of companies like GrubHub, DoorDash, TaskRabbit and even ride-hailing services Uber and Lyft.
Many ideas fail. Few find success
Corbin Church, an adjunct professor at BYU’s Rollins Center for Entrepreneurship and Technologyhas been acting as a consultant for, and supporter of, Errand’s founders and noted the company’s business model and launch timing are hitting all the right marks.
Church said he interacts with a lot of budding entrepreneurs, teaching some 350 students every semester, and he sees a lot of business ideas. But, he noted, the people behind the concepts are the most critical factor.
“I work with a lot of kids starting a lot of great businesses,” Church said. “A lot of ideas fail, and a few find success. It turns out, what’s more important than the idea is the founder behind it.
“Every once in a while, these big vision founders get coupled with the right opportunity, and I think Errand has found that magic.”
Church said Errand is aiming for a unique niche in the gig economy, staying out of the specialized spaces occupied by companies like DoorDash or GrubHub, and, instead, embracing an all-inclusive approach.
“Errand is coming at it with a broad approach and an idea that really boils down to making people more productive,” Church said. “It’s just the right kind of generic that’s the same service and value whether the customer is a busy parent or a busy manager in a work environment.”
Church likes all the potential verticals for Errand, noting that he can see the service coming in handy for a wide range of individual and business needs.
“Say you’re in the construction industry and you run out of some important building supplies on the job site,” Church said. “A company could send someone to Home Depot and pay them their hourly rate for an errand that will probably take at least an hour. Or, they can order something from Home Depot’s website, designate curbside pickup, then send an Errand driver who can do it for under $10. It’s smart and economical.”
Larsen said Errand’s internal economics also make sense, and the company has been profitable from the start.
How does it work?
Clients pay a flat fee of $7.99 for pickup and drop-off within a radius of six miles, a distance Larsen said was determined in their early operations, where 90% of their trips fell within that mileage.
Need to go a little further away? Errand charges an additional 85 cents per mile outside their base range. On the driver’s side, runners get paid both in mileage and time and, according to Larsen, can average $25-$30 per hour in earnings. Plus, she said Errand drivers have been earning twice the tips than what’s typical for Uber or DoorDash drivers.
While Errand can’t transport your kids, or other people, it can handle almost all of the standard running around including picking up your dry cleaning, running donations to the DI or even doing some light shopping or picking up to-go orders at clients’ favorite restaurants.
Larsen said Errand beats the rates of the popular food delivery services and will do it with a model that doesn’t ding local businesses for its services thanks to the startup’s client-side payment system.
Errand can even get you out of some tough jams.
Larsen said one client found themselves at the airport last month but realized, before they were embarking on a trip out of the country, that they’d left their passport at home. An Errand driver was able to make the trip to the client’s home, retrieve the passport and deliver it to the traveler in time for them to make their flight.
“Not all of our trips are like that, of course,” Larsen said. “But we’re saving our customers time, and making their lives easier, with every trip we make.”
To learn more about Errand and how to get the app visit goerrand.com.
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