In May 2013, Nick Rellas and Justin Robinson launched Drizly, an on-demand alcohol delivery app. Not even three years later, Drizly is in 18 U.S. markets, and still expanding. The two twenty-something Boston College graduates talk about how they came up with the idea, what it’s like to launch a startup without venture capital funding, and why they consider Drizly the anti-Uber.
1. How did you get Drizly up and running?
Rellas: We launched in 2013—we were proudly Drizly’s first drivers. Our first store was Gordon’s in Waltham. We tried to get it off the ground for about a year. It was a pretty incredible education. We didn’t have any VC funding. We were working in the store, and we were able to learn the business. We were young and just naive enough. We could live off the dollar menu and see if we could make this happen.
2. How did Drizly start? How did the idea come about?
Rellas: As we were starting to get to know each other, [we] had this question about why tech and regulated industries don’t mix. It became an obsession. There was a shared excitement around how Uber had changed the world for us. Phones became a remote control in your pocket. We thought—late night, empty fridge—why can’t you get alcohol delivered? How can you Uberize it?
Robinson: We had each started our own ventures in college that were moderately unsuccessful. I was the head of our event and entertainment department in college, so on the side I started my own event company. That transitioned to my role with a larger events company after I graduated.
3. What did you learn about the alcohol business?
Rellas: We all consume and buy alcohol, but there’s a complicated legal process behind how that happens. After Prohibition was repealed, the U.S. created a three-tiered system. The top tier is manufacturers or importers—people who make or bring alcohol into the country. They sell to wholesalers or distributors. In New England, the largest distributor is Martignetti. And the wholesalers move alcohol to retailers. By and large, that system doesn’t allow you to be in more than one of those tiers. It was important for the industry to know we weren’t trying to change that system.
4. You probably understand a lot more about liquor laws.
Robinson: I deal with states across the country trying to understand the legal framework in each state. Each state is effectively its own country in terms of alcohol laws. We had the good fortune of launching in Massachusetts, which has one of the more complicated legal frameworks in the U.S. If we got it right here, that would make us above board in every other state.
5. Are you glad you didn’t get VC funding from the get-go?
Rellas: It’s a double-edged sword. There are things about having funding and being close to the tech community that would have let us accelerate more. But the trials and tribulations—we wouldn’t be here if we hadn’t spent that year in the liquor store.
6. How much resistance have you faced in terms of the industry and regulators?
Rellas: Having grown up here, I think the respect for how difficult it is to operate in the alcohol business is difficult. We went through the Massachusetts liquor code and everything we needed to figure out and know was there. We realized it was perfectly legal.
7. How often are you compared to Uber? Do you think it’s a fair comparison?
Rellas: Understanding the three-tier system for us helped us form the anti-Uber model. We’re not looking to disrupt anything. I think we have benefited disproportionately from being really thoughtful on this. I think the industry is acknowledging that what we’ve built helps the industry.
8. How do you try to ensure you aren’t supplying alcohol that will be served to underage kids?
Rellas: It’s a good question, especially in a city like Boston with such a large college population. If you’re on the Boston College campus, for example, you’re actually not allowed to order. None of the stores that we work with will deliver to the campus. At the end of the day, the store is delivering and they’re processing the credit card and verifying the age. It’s at the discretion at the store.
9. What parts of Boston use Drizly the most? What do you know about who is using Drizly?
Rellas: There’s a lot of interesting data around this. The business itself has grown quite dramatically in terms of coverage—from Boston proper up into Beverly and Quincy and Wellesley. Essentially the Route 128 belt. We’re also out in Worcester.
The average customer is around 30-32 years old, and about a 60-40 [percent] split male-female. In a liquor store, usually you see closer to an 80-20 percent male-female split.
As far as products, we’re selling 35 percent wine, 35 percent beer, 20 percent spirits, and 10 percent extras like ice or things like vermouth. The average [amount spent per transaction] is right around $70. That’s around three times higher than a normal, average in-store transaction.
10. What’s next for Drizly?
Rellas: Drizly is always going to be a company that helps you buy alcohol. The way we think about it, the liquor store experience of buying alcohol looks a lot like it did in 1933. So we’re thinking about building on that with recipes, recommendations, and personalization. You and I shouldn’t necessarily see the same liquor store as we walk through the digital aisle.
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