Volume 18 • Issue 6 | July 1-7, 2005

Ex-Kozmo exec tries again in Tribeca

Downtown Express photo by Jennifer Weisbord
Chris Siragusa, former chief technology officer at Kozmo.com, says the firm’s mistake was trying to be the “Wal-Mart of delivery service,” so at MaxDelivery, his new Tribeca company, he offers only basic items that people often forget to buy.

By Lauren Dzura

On quiet White St. in Tribeca, a plain sign marks the headquarters of MaxDelivery.com. The single doorbell and small door of the company lead into a huge open warehouse, with the front bare except for a few chairs and tables strewn about. The back of the warehouse, however, is stocked with enough drug store items to be redolent of a Super Target, a concept alien to the city’s tiny corner bodegas. Now, instead of combing through the local convenience store for necessities, residents of Lower Manhattan can go online to order products and have them delivered in an hour.

This concept has been tried before. Over five years ago, two online delivery companies existed in Manhattan, Kozmo and UrbanFetch. These services worked a lot like personal assistants, jumping at residents’ every beck and call. They delivered the usual grocery and drug store type items such as food and shampoo, but became too ambitious when Kozmo decided to deliver things like DVD players and other items that were not so cost effective. Kozmo was also in other various cities such as Houston and Boston. Due to the rapid expansion and thin profit margins, the businesses collapsed.

After a few years without any of these online delivery services, Chris Siragusa, former chief technology officer of Kozmo, and the founder of MaxDelivery, decided the world was ready for this enterprise once again, but with a few moderations. This time, the delivery company is focusing only on Lower Manhattan and has a more limited menu than the failed services.

“MaxDelivery is an older and wiser version of Kozmo or UrbanFetch,” said Stephen Carl, marketing director for MaxDelivery.

Siragusa is not worried about his business collapsing under the same pressures as the predecessors because he is doing things differently. From past experience, he learned a thing or two about online delivery and why it had not been profitable, which was primarily due to offering too many different products and expanding in too many locations too quickly.

“The basic business model worked well,” Siragusa said of the delivery services. “Kozmo tried to be the Wal-Mart of delivery service, with everything you want.”

Instead of giving customers an infinite amount of products to choose from, MaxDelivery offers basic, practical things people often forget about at the end of the day on the way home from work. The Web site has four categories to shop from: food and drinks, drug store, DVDs and baby products.

“Time-starved New Yorkers have no time for the store, so it’s attractive to them,” Siragusa said.

While MaxDelivery may one day spread to other areas of Manhattan, like the Upper East Side, it is not planning to grow out of the city yet, if at all. The delivery range is below 24th St. on the westside, below 20th St. on the eastside and up to 1st Ave., with delivery hours from noon to midnight seven days a week.

As far as the reasoning behind serving only the Lower Manhattan and Tribeca areas initially, Siragusa said it was the large population of families concentrated in the area as well as the matter of finding a warehouse space for their headquarters and to hold all of the products. Siragusa also said neighborhoods like the Lower East Side and Battery Park City are under serviced and many residents have a long walk to get to the nearest drug store or video rental place. When FreshDirect first came to Manhattan three years ago, executives had the same idea and started grocery deliveries in B.P.C.

Since it officially opened in mid-May, MaxDelivery has attracted about 600 customers. So far the one-hour time guarantee has been manageable. Many deliveries have been completed in as little as 20 minutes, but Siragusa and Carl expect delivery time to be closer to the one-hour mark once volume increases.

As far as people who may criticize the site for promoting couch potato laziness, Siragusa said that is not its purpose.

“It takes care of lower impact errands so people can do the things they really care about,” Siragusa said.

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