Have No Fear, Parachute is Here!
Davidson University, a liberal arts college in North Carolina, was the only college that offered free laundry service and delivery for its students from 1919 until 2015. But in May 2015, Davidson canceled it’s free laundry service, and Davidson students joined their peers in other schools in needing ranks of students who need to figure out a way to get their laundry done by themselves. For the many students who have never had to do their own laundry, this is quite the daunting task as many students have never been tasked with doing their own laundry and thought that clothes wash themselves. If your dreams were shattered when you saw your first washing machine, not to worry Parachute might be the best up and coming company to help you. A startup called Parachute, which has recently exploded in popularity, especially on the YU campus, i is the simplest and easiest way for college students to get all the things they need, brought straight to their dorm room. The company employs students and turns them into Parachute Pilots—--friendly and responsible students who deliver all the things you need stress free. By hiring current students, Parachute has access to parts of campus such as dorms, lounges, and lecture halls that no other company can reach. They operate currently on 6 campuses across New York including Yeshiva University, Stern College for Women, Columbia, Barnard, NYU, and FIT and employ over 70 students.
Parachute was the idea of Zev Lapin, who created the company alongside Ryan Haigh and Ryan Worl. Zev majored in marketing at YU, and graduated in 2011. He was born in Netanya, Israel but lived in San Jose, California from the ages of 5-18 and attended YULA high school for boys. Zev created his first startup while he was still at YU. He began his first startup initiative, called Storage Bucket LLC, with Jonathan Farazmand after they won the Sy Syms annual business plan competition. The winnings gave them some capital to test out the business and it ended up working out pretty well. Storage Bucket is a summer storage business for college students whose universities force them to move off campus for the summer. Since you can’t leave or store your belongings in the dorms or residence halls, Storage Bucket picks up your packed belongings and then delivers them the next semester to your newly assigned room. Zev was then hired as the first employee for a venture-backed startup called MakeSpace, which was a similar storage-by-the-bin concept to Storage Bucket except not limited to only college students. MakeSpace currently offers storage space to city dwellers in NYC, Chicago, and Washington, DC.
In January 2015, Zev graduated from one of the top business incubators in the country, called AngelPad. A business accelerator is essentially a “boot camp for startups” - a program that concentrates an MBA curriculum into an intense four-month experience. Accelerators will typically select a small group of companies—in Zev’s case he was one of twelve companies selected out of 2,500 applicants—that they’ve assessed to have a high potential for growth and provide them with mentorship, capital, office space, and a network of investors in exchange for an equity stake in the accepted companies. Some of AngelPad’s biggest successes are Postmates (now valued at $500M) and MoPub (sold to Twitter for $800M in stock). While at AngelPad, Zev came in with a startup idea called CourseLoads and through the program’s intense focus on rapid iteration, evolved his concept to what is now Parachute. While CourseLoads was focused on being the most convenient laundry service for college students, Parachute was focused on being a marketplace between students seeking flexible income on campus and students who want things conveniently delivered to their dorm room. CourseLoads only lasted a semester and through the testing Zev ran at AngelPad, he realized something critical to the launch of Parachute. The value of the business he was building was not in the service itself (laundry), but the infrastructure that facilitated the service; the student workforce. Businesses that deliver to not have the necessary clearance to enter dorms, which means delivery personnel must wait at the complete discretion of a (sometimes flakey) college student to meet them outside to accept their order. Additionally, many dorms don’t have unique addresses, which means more time spent on coordinating the delivery and less time delivering. As the phrase goes “time is money”, and there was a tremendous amount of time being wasted on deliveries to college campuses. Parachute is the solution to that problem. By hiring a network of students seeking flexible, on-campus work, Parachute is able to easily deliver various services and goods directly to student dorm rooms.
When Zev decided to pursue his new business venture he recruited two partners to help him found the company, Ryan Haigh and Ryan Worl. Zev met Haigh at MakeSpace, where Haigh was moonlighting as MakeSpace’s first designer. At the time, Haigh’s full-time job was working at iHeartRadio as their Director of Product Design where he led three different product teams. Shortly after getting accepted to AngelPad, Zev convinced Haigh to leave his job at iHeart Radio and join him as a co founder at Parachute. Worl, Parachute’s CTO, attended Purdue University where he developed an app similar to the popular app Postmates except limited to Purdue. He is a talented programmer who has been coding since he was a kid, having sold a number of his popular iOS apps. Worl joined Parachute as a cofounder shortly after Haigh. All three decided to start working full time on Parachute this past summer when they raised a seed round of capital. They raised an undisclosed round from some of the same investors in companies such as Lyft, Instacart, and Slack. They plan on raising their next round of financing this summer to fuel growth into new markets.
How does Parachute work? Parachute’s Campus Pilots (current undergrad students who work for Parachute on campus) are notified via the Campus Pilot App of any opportunity to accept a “Mission,” a task or series of tasks that currently entail making a pickup or delivery of laundry (for now) and distributing flyers. Similar to the Uber driver app, Pilots are able to see what a Mission entails, its payout, and estimated completion time before deciding whether to accept or reject a Mission. It provides one of the most flexible jobs on campus as Pilots only accept Missions when they are available to work and value the payout as worth their time. Parachute currently has a network of 70+ Pilots and aims to provide students with the most-flexible, highest paying job on campus. There are no extra costs for pickup from and delivery to the customers’ dorm room as it comes as part of the service. Parachute washes your clothing by teaming up with a local laundry partner, which also handles laundry for American Airlines, DELTA, and the NFL, that separates all of your whites and colors for you, so that you don’t have to. The standard wash is whites are washed in hot water with bleach, while colors are washed in cold water. But there are additional laundry services available such as low heat or delicate drying, unscented/hypo-allergenic detergent, or hang-dried clothing. Parachute will supply the customer with laundry bags that are designed to hold about 15 to 18 pounds of laundry. They don’t cap the weight of the laundry but they do require that the bag be fully cinched closed without any clothing hanging out in order that clothes are fully protected. After a student creates an account on the Parachute website, the student can view available time frames for pick-up on your campus spanning from Monday to Thursday evenings. According to their website, Parachute’s services are 25% cheaper than local Laundromats and obviously more convenient with the door to door pickup and deliveries. They have two pricing options: A flat fee of $18 per load for a pay-as-you-go option or $29 for two loads on their monthly plan with additional loads also being discounted. In addition, the only additional service that costs extra is hang drying, which is an additional $3 per load, while all other preferences are free. In addition, they have a refund policy of up to $30 per article of clothing.
This writer asked Zev why he started with laundry as their first service and why NYC was their first college testing ground. Zev explained that the company started with laundry for two main reasons. First, there are two touch points, pickup and delivery, in a short 24-hour period. This is valuable because each one is a chance to bundle in additional services such as food or other essentials that students might need. Secondly, laundry is a very scheduled routine, which isn’t extremely time sensitive by nature (laundry doesn’t spoil), so the timing is very flexible. He told me that NY is the perfect testing ground because schools vary in terms of physical layout and relative levels of affluence on campus. For instance, housing at some schools is comprised solely of concentrated dorms, while other schools have both dorms and apartments, and still others have only apartments, as well as differences in whether these apartments are more concentrated versus spread out. The wide range of affluence present in various NYC schools will hopefully show results that this service is affordable and sensible for most college students. In addition, NYC has an abundance of local Laundromat options so if Parachute can exhibit that it is valuable to students in this market, it’ll be that much easier when they enter less saturated markets. He hopes that their success will prove their business plan can work across America to new potential investors.
There are many opportunities and possibilities in the future for Parachute. In the next two to three weeks they plan on growing to over 100 Campus Pilots, and in the next 4-6 weeks they plan on adding two more campuses to their operating roster: Fordham University and Pace University. After proving their concept in NYC and then approaching larger investors for capital over the summer, Parachute plans to keep expanding with their eyes set on Boston next year. After Boston, Zev wants to expand to Washington, DC as their third market. He sees Parachute as an infrastructure that can team up with local merchants, restaurants, and food services as well. Parachute provides merchants with both increased sales to a typically hard to reach market in addition to reducing a merchant’s delivery cost by aggregating multiple orders to the same location; both value-propositions that merchants find appealing. They charge the same 15% for service as all delivery services do for the extra benefits they bring to the table. Zev doesn’t want to replace competition of delivery services but he believes Parachute can make the delivery process more efficient. For most dorm deliveries you have to wait outside for the customer to come and pick up his item which is a huge waste of money. Now their delivery people can team up with campus pilots who can do the rest. In addition, Parachute would order in larger demands and bunch different dorm orders together so it would only require one pickup for the Campus Pilot for multiple vendors at the same time. They will offer a few meal options based on the most popular dishes at a few local restaurants which will mean the food will be even cheaper than if you went yourself and ordered from the store because of the bulk ordering.
Students spend over 23 billion dollars on takeout food a year and the addition of Parachute is a win win for vendors and students alike. Another business venture that Zev told me about is distributing samples for new restaurants who want to enter into a marketplace. He envisions laundry, food, and promotional distribution as their first three services they will provide. It is amazing how much one of our very own YU alumni has been able to accomplish in less than 5 years. He has founded two startup companies, been selected by a top business incubator, raised a significant round of seed funding, and developed a future business plan that is very promising.