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 that one of the biggest challenges involved the collective time spent transporting children 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 children’s taxi service, the budding entrepreneurs were led to another but nearby idea.
What about a company that could take care of all the non-kids running around and free up families in a way that would make parenting duties more stress-free?
It turned out that the answer was in the question, and in January 2022, Errand was born.
Beginning of era
Errand co-founder Claire Larsen said the company launched with some pretty rudimentary technology, just a website where you could submit a request for an errand, identify pick-up and drop-off locations and when you needed it. The rest of the process was mostly manual and done in a small service area.
The approach was part of a very deliberate plan to pull a reverse step on the more typical tech start-up process of fundraising on an idea that is later tested for practicality. The do-it-first path, Larsen said, allowed her and other co-founders to approach potential investors with a proven concept rather than an unsupervised business plan.
“We knew we would need funding to build an app, but we recognized that we were a group of students with no experience and no business background,” Larsen said. “We ended up running over 3,000 errands for people, using guerilla marketing tactics and using only our own money.”
The idea and go-get-em attitude proved 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 company is off and running along the Wasatch Front with plans to grow throughout the state and soon into neighboring states.
Larsen said Errand is finding success on both sides of its business model, attracting customers who need an easy and affordable way to cross things off their to-do lists and gig economy drivers who are signing up in droves. to make these errands happen.
“When the app went live, we would have just moved current customers over,” Larsen said. “But within the first week, we tripled our goal and had about 6,000 drivers signed up.”
The quick response from the driver side of the equation was likely helped by a gig economy that has seen a surge of interest in the past few years, with the number of those working on flexible, short-term contracts soaring.
In a recent report, Assets noted that the number of gig workers in the United States has grown from 55 million in 2020 to a record 60 million today, according to a recent examination by freelance recruiting site Upwork. Nearly 40% of the U.S. workforce has performed contract work in the past year, according to the survey, adding about $1.35 trillion to the economy.
On the customer 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, adjunct professor at BYU’s Rollins Center for Entrepreneurship and Technologyhas served as a consultant and supporter to Errand’s founders and noted that the company’s business model and launch timing hit all the right marks.
Church said he interacts with a lot of budding entrepreneurs, teaches about 350 students each semester and 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 who are starting a lot of great businesses,” Church said. “Many ideas fail and a few succeed. It turns out what’s more important than the idea is the founder behind it.
“Once in a while these great visionary founders get paired 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 away from the specialized spaces occupied by companies like DoorDash or GrubHub and instead embracing an all-encompassing approach.
“Errand comes at it with a broad approach and an idea that’s really about making people more productive,” Church said. “It’s just the right kind of generic, the same service and value, regardless of whether the customer is a busy parent or a busy manager in a work environment.”
Church likes all of 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 construction materials 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 could order something from Home Depot’s website, designate a pickup next door, and then send an Errand- driver that can do it for under $10. It’s smart and economical.”
Larsen said Errand’s internal finances also make sense, and the company has been profitable from the start.
How does it work?
Customers pay a flat fee of $7.99 for pickup and drop-off within a six-mile radius, a distance Larsen said was determined in their early operations, with 90% of their trips falling within that mileage.
Do you want to go a little further afield? Errand charges an additional 85 cents per mile outside of their base area. On the driving side, runners are paid both in terms of mileage and time and, according to Larsen, can earn an average of 25-30 dollars an hour. In addition, she said, Errand drivers have earned twice the tipping amount of what is typical for Uber or DoorDash drivers.
While the Errand can’t transport your kids or other people, it can handle almost all the standard running around, including picking up your dry cleaning, running donations to DI, or even doing some light shopping or picking up to-go orders at customers’ favorite restaurants .
Larsen said Errand is beating the prices of the popular food delivery services and will do so with a model that does not 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 was at the airport last month, but realized before they were leaving the country that they had left their passports at home. An Errand driver was able to make the trip to the customer’s home, collect the passport and deliver it to the traveler in time for their flight.
“Of course, not all of our trips are like that,” Larsen said. “But we save our customers time and make their lives easier with every trip we make.”
To learn more about Errand and how to get the app visit goerrand.com.