Postmates' founders discuss how they picked cities like Seattle and LA, leveraged Hollywood's cultural reach to build brand awareness, and used rapid expansion across markets to fuel fundraising. They explain the playbook for launching new cities and competing against Uber and Lyft.
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You briefly mentioned it as far as, you know, the note of competition. But I think, you know, when it relates to marketplaces, as far as, you know, competing for markets and, you know, thinking about expansion and growth, you know, how did you think about that with Postmates and expansion?
Well, we thought maybe cities where there is Uber could be great cities for Postmates because Uber had launched like a year earlier. And I think Zimride, which would turn into Lyft, was trying to launch as well.
And what we thought was like, well, there is sort of at least maybe there is an idea of what this on-demand thing means and how to position it.
Well, the first city we launched in after San Francisco turned out to be a complete mistake was Seattle. And I don't like Seattle ever since because it's just, it's just, it was just so such a mean city to us. And it was, we put so much effort into it and we really tried to Have them like us. But it was like, I don't know, it was like Apple coming to Seattle, you know. It was there was nothing good at that time that you could that they thought were the kids from San Francisco, and and almost like immediately like there was a there was like a vibe that that that that that didn't feel right. So so we were like, well, that wasn't so wasn't so good, was it? But then I think out of intuition, the next place we launched in was LA. And that was just the bomb. I mean, I think when Uber bought Postmates, we still had almost 80% market share there.
And like, I think LA single-handedly is what, first of all, there's 2 realities. So there is the reality of Knowing Postmates anywhere in the United States and you know of it. And then there is living in LA and you understand what it, what it means for LA. But what happened is because it became popular in LA and because the creative crowd, the people that write movies, the people that work in the industry started using it and it was so ubiquitous in LA. They started writing it into movies and TV shows.
So, so you would, you have references, hundreds of references, thousands probably at this point to Postmates.
And you would have that in, in major movies and you would watch that, but you would be somewhere where maybe someone else is the leader and you had never even downloaded the app. And people would be like, that is so strange. How is this? How is the verb so ubiquitous? But at the same time here, so That happened because obviously in LA, we took great care of being large way before anyone else was there. And as I said, I think the people there accepted it as part of their lifestyle. And this is, by the way, why movies from Hollywood, why they look a certain way, right? They look how the schools look in Hollywood. They look how the streets look. They look— so if you— but it makes sense, right?
You're not going to travel everywhere just to You know, so certain things just look Hollywood and we got very lucky that this became one of those things where people in Hollywood like, yeah, just Postmate it, right? So then it's okay if Clooney says it and it doesn't matter if, you know, so yeah.
Other than that, we tried to grow every city that we launched in faster than the previous one.
And for a long time that worked at least initially. And that was a great chart to show during fundraising because we thought that that would— the outlier was Seattle, believe it or not. It looked so sad on that chart. We, but most of the other cities ultimately started to grow faster than the previous city we launched in. And obviously was that we wanted to prove our playbook is working. We sort of get better at it. The flywheel is working as in sort of we know what we need to do in every city to sort of spin up certain things. And ultimately to sort of, you know, instill confidence into the people that would invest eventually in the next round.
