Postmates founder Bastian Lehmann is again within the enviornment with TipTop: “My forte and what pursuits me is constructing issues, not cheering from the sidelines.”
Jonpaul Douglass / TipTop
Billed as “reverse postmates,” TipTop has launched its first app, TipTop Money, with the promise of serving to clients resell merchandise like used iPhones.
Bastian Lehmann spent 10 years constructing the on-demand supply service Postmates into a well-liked manner to purchase extra merchandise, shortly. Now he is again with a brand new startup known as TipTop that wishes to do the alternative: make promoting them simpler and extra worthwhile.
“Postmen introduced the entire metropolis to you in a very easy manner,” Lehmann stated Forbes. “Right here, we’re placing all our effort into promoting and making these items go away.”
The issue, in keeping with Lehmann, is straightforward: shopping for is now simpler than promoting. And whereas companies like eBay and Fb Market provide methods to get this stuff made, set and re-purchased, the trouble and uncertainty of getting a good worth means many people do not trouble. “In the event you go to totally different web sites, do all of the work your self, that is nice,” Lehmann stated. “However for those who do not, and you continue to have an outdated iPhone in a drawer someplace, or a child stroller that you simply promised to promote to a good friend however by no means did, sooner or later, all these items grow to be junk.”
With TipTop, Lehmann is betting huge on a brand new strategy that makes use of software program to foretell product values to supply the patron immediate money, an unprecedented sight. Its first app, launched throughout the U.S. immediately and known as TipTop Money, connects to your Gmail or Amazon accounts to scan previous purchases and predict a good worth bid for every eligible merchandise — then pay for it and ship somebody to take over. One other service launching in November, TipTop Pay, will transfer that course of ahead, providing you a reduction on the quantity you pay for one thing in trade for a promise to return the product after a set time frame. TipTop will then resell that stock to wholesalers or on different third-party marketplaces equivalent to eBay.
“Lots of people have advised me they’d by no means use meals supply sooner or later of their lives.”
“Lots of people have advised me they’d by no means use meals supply sooner or later of their lives.”
It is no coincidence that Lehmann launched TipTop Money per week after Apple introduced its new flagship smartphone, the iPhone 15. He hopes to supply an identical system to Apple’s iPhone improve program. On TipTop Money, you may merely purchase an iPhone at its retail worth minus, say, the $400 that TipTop predicts it is going to be in a position to resell in two years. Then, when these two years are up, flip it in and do it once more. If the app’s mechanics work, he stated, it ought to make it simpler for individuals to improve to a brand new telephone and no matter comes after. The trick is to create a liquid market the place homeowners understand how a lot cash they’re getting, patrons perceive the worth they’re paying, and Lehmann will get a reduce.
If the mannequin appears too good to be true — with numerous on-line resellers, tech giants and marketplaces providing nothing prefer it — that is as a result of Lehmann’s new enterprise comes with lots of threat. TipTop’s fashions do lots of work, from predicting whether or not a buyer will be trusted handy over an unseen product to guessing the market worth and demand for that merchandise months or years down the road. When reselling its stock, TipTop should discover a margin that additionally makes it cash with out being so exploited that its clients really feel exploited.
Lehmann harbors no illusions on the contrary. However his experiences with the Postmen additionally make him calm, even nervous, about making an attempt. “Lots of people have advised me they’d by no means use meals supply sooner or later of their lives,” he added. “Then it grew to become fully acceptable to push a button and ship one thing.”
After the ‘supply wars’
In January 2021, a month after Uber accomplished its acquisition of all shares of Postmates for $2.65 billion, Lehmann was proven the door together with a lot of his former executives and colleagues. Based in 2011 in San Francisco earlier than transferring to different markets like New York with nice pace, Postmates reached 10 million clients and quarterly income of greater than $100 million in 2020. It took greater than $900 million from enterprise capitalists at an estimate of $2.4 billion, and even filed for public disclosure.
Postmates Service provider Badge 2018
Getty Pictures
However fellow startup DoorDash has no less than partially eaten its supply lunch, surpassing it in market share by the point it went public in March 2021 (the corporate reached market capitalization on the primary day of $59 billion, however now trades for simply over half of that). Postmen have teamed up with Uber’s UberEats unit in an alliance to outlive. “We did not win the meals supply wars, however we had been a improbable model and an organization that was virtually worthwhile on the time,” Lehmann stated now.
“We had been too silly to spend money on Bastian’s earlier firm, Postmates, so we’re excited to lastly proper our improper!”
After a number of months spent specializing in his two younger daughters, Lehmann met with former Postmates backers in late 2021 to debate his subsequent transfer as a enterprise capitalist. However he was haunted by choices he made at Postmates that would have modified its trajectory, equivalent to getting caught up within the hyper-competitive meals supply race as a substitute of sticking to a bigger “grasp plan.” He additionally realized that he was happiest constructing startups, not advising them. “Investing in corporations bores me greater than the rest,” Lehmann stated Forbes.
So when Netscape co-founder and former Midas Record investor Marc Andreessen requested him in regards to the concepts he was fascinated about, it wasn’t arduous to get again into startups. Andreessen’s agency, a16z, led a $23 million Sequence A funding spherical in TipTop, as reported by TechCrunch final March, and was joined by Silicon Valley stars like Sam Altman and Naval Ravikant. TipTop skipped the primary spherical, Lehmann defined, regardless that it initially invested $500,000 of its personal. (As one among a complete of 13 workers, Lehmann stated he would not even receives a commission.)
“We had been too silly to spend money on Bastian’s earlier firm, Postmates, so we’re excited to lastly proper our improper!” Andreessen wrote Forbes in an emailed assertion.
Invoice assortment
Lehmann has thus far remained silent in regards to the TipTop product. It was beforehand rumored to be a crypto shopper mission. Lehmann admitted that the crypto angle, which refers to consolidating an individual’s purchases from numerous sources right into a single ledger, was thought-about. However TipTop did not pursue that plan, Lehmann stated, and now has no crypto part. As an alternative, the app that TipTop truly constructed appears to take inspiration from Affirm and buy-now-pay-later corporations, vogue resellers like The RealReal and Thredup, and Postmates itself.
TipTop expects iPhones to be the primary first sellers.
Prime man
About 1,000 beta testers have tried TipTop Money prior to now few months, and the startup has secured $1 million in acquisition presents. Whereas shopper electronics is the corporate’s preliminary focus, it has been testing different classes and can enable clients to request money presents on any merchandise they’ve a receipt for, Lehmann stated. TipTop Pay is at present in beta with retailers, the manager added, however declined to offer additional particulars.
In a crowded class, Lehmann pointed to TipTop’s comfort and transparency as methods it could actually stand out. Authorized transactions on TipTop Money are deposited virtually immediately to debit playing cards, or inside three days to financial institution accounts; no supply required, because the DoorDash courier picks up the product the identical day. (“That is humorous Tony [Xu, DoorDash’s CEO] and I’ll work collectively once more,” Lehmann stated.) Costs, in the meantime, are generated in actual time and offered alongside previous and projected, so patrons could make what Lehmann argued is a fairer selection than they’d face in the event that they obtained low bid after going by the difficulty of delivery the merchandise first. “It is designed to be a rigged recreation for the client,” he stated.
TipTop fashions can solely make such presents as a result of whenever you join, it’s important to give it entry to your Gmail or Amazon account so it could actually view your buy historical past, nonetheless, elevating potential privateness and safety considerations. Lehmann stated clients sad with such an association may manually load receipts for one-off offers, although they won’t get pretty much as good a worth, or as shortly. He declined to touch upon what metadata TipTop collects in Gmail to confirm an individual’s digital “fingerprint” or whether or not it seems past emails marked as receipts. “It supplies the best comfort, however it will also be off-putting to some,” Lehmann stated extra broadly.
The entrepreneur freely admitted that the blue-chip retailer that makes what is going to probably be one among TipTop’s flagship merchandise — Apple — might by no means must associate with TipTop due to its personal financing and substitute plans. A whole lot of stock will nonetheless come from third events like Finest Purchase even then, he argued. “Possibly to win Apple, we now have to work actually arduous. We might not win Apple as a retailer. We can provide everybody else an Apple-like expertise,” Lehmann stated.
There are various such unanswered questions for Lehmann this early in TipTop. It could launch TipTop Groups, a 3rd app, for startups seeking to purchase MacBooks and {hardware} in bulk. Increased-end stock is likely to be packaged in fancy containers or include a handwritten be aware. Simply what can be eligible for resale is already some extent of pleasant competition: Gokul Rajaram, CEO of DoorDash and an angel investor in TipTop, stated he requested Lehmann to assist resell his unused Peloton, solely to be turned down as a result of its weight and delivery prices. Rajaram stated Forbes that Lehmann is “relentlessly resourceful”, maybe hoping to unload his bike in any case.
The upcoming vacation season most likely comes too early for TipTop to study a lot about how clients reply to its apps, Lehmann stated; he hopes to have the info to study extra in a yr. “I am not smug sufficient to say I can predict the long run, however I feel that is attention-grabbing,” Lehmann stated. “I am not saying whether or not it will work. We are saying we need to determine if we will make it work, and that is an enormous distinction.”