BUSINESSWEEK ONLINE : DECEMBER 11, 2000 ISSUE
BUSINESS WEEK E.BIZ -- UPSTARTS Leave It in the Box Can a new digital appliance solve home delivery dilemmas? It was the kind of logistical nightmare that busy professionals dread. One night last spring, tech-support staffers were still fiddling with Jeff Stonerock's laptop computer when the Washington, D.C., lawyer had to rush to a dinner meeting. Stonerock needed his laptop for a business trip the next day, so his office hired a courier to take it to his Vienna (Va.) home after the work was finished. Trouble was, neither Stonerock nor his wife would be there to receive it. And leaving a $2,000 laptop containing sensitive client files on his doorstep was unthinkable. Luckily for Stonerock, he had a Brivo Systems Inc. Internet-linked lockbox next to his garage. With the proper entry code, the courier could leave the laptop in the secure box. Sure enough, in the middle of dinner, Stonerock's pager buzzed with a message from Brivo saying his laptop had made it. ''It was a real relief,'' he says. Stonerock is one of 100 consumers testing Brivo's Smartbox, a steel-and-plastic container about the size of a travel trunk with a wireless link to the Web. By building a box that notifies users when packages are dropped off or picked up, Brivo aims to take the hassle out of delivery for harried professionals, online shoppers, and small businesses. After trials in the Washington metro area and Silicon Valley, Brivo will start selling its service in January in those areas for a monthly fee of $10 to $20, plus several hundred dollars for the box. It's a market that other entrepreneurs are eyeing, too. In December, San Francisco's zBox Co. will begin promoting a similar service in the Bay area. Unlike Brivo, its box isn't linked to the Web. Instead of sending an e-mail, an indicator light on the box shows when a package has arrived. ''We don't believe that immediate notification via e-mail is something consumers are willing to pay for today,'' says Tina Shah, co-founder and CEO of zBox. If such services catch on, they could make shopping online next holiday season less frustrating for millions of cybershoppers--and help boost sales for e-tailers. For small businesses, the lockbox could make it cheaper and easier to ship and receive documents, supplies, and other urgent materials. In one measure of the potential market, Forrester Research estimates that 34% of homes in North America are ''digital dens,'' or online households where someone may telecommute or run a business. Delivery dilemmas aren't new. Every year, catalog shoppers peel millions of ''sorry we missed you'' sticky notes from their front doors. The problem is getting worse, though, as e-commerce explodes. Forrester expects the number of packages shipped to homes to jump to 2.1 billion by 2003, more than double the number last year. Doorstep lockboxes ''fill a need,'' says John Nolan, deputy postmaster general at the U.S. Postal Service. Pickups and deliveries to Brivo and zBox units have so far been a breeze for mail carriers. ''Our people took to it readily,'' says Nolan. Here's how Brivo's system works. Say a Brivo customer buys a DVD player on Amazon.com. At the site's checkout page, the customer clicks on the Brivo pop-up window, types in a user name, a passcode, the item purchased, and the merchant. Brivo instantly sends back a purchase code that the customer adds to the Amazon address field, which is then included on the shipping label. The courier enters the code to open the Brivo box, which then sends a wireless message to Brivo, which instantly alerts the customer via e-mail. The shopper uses the personal code to open the lockbox. ''You can send and receive packages whenever you want from wherever you are,'' says Carter H. Griffin, Brivo's co-CEO. Still, analysts question whether enough consumers will be willing to pay for a lockbox service on top of delivery charges. ''We get calls every day from consumers and companies saying they want to buy it,'' says Griffin. Initially, the company will aim its marketing at upscale consumers who are heavy catalog or online shoppers, and later pursue small- and home-office workers who send and receive products daily and travel extensively. Griffin also plans to move the technology beyond the lockbox and into commercial and industrial applications. For example, a Brivo-ready garage-door keypad could let online grocers deliver food to refrigerators in customers' garages at any hour. Small businesses could use the Brivo system for nighttime deliveries to loading docks or mini-warehouses. Says Griffin: ''Our system isn't just a solution for Amazon purchasers ordering books.'' Griffin and co-founders Mark A. Stein and Timothy J. Ogilvie didn't start out with such grand visions. Or any vision at all. The three left the Washington, D.C., office of consulting firm Kaiser Associates in May 1999 without a specific business plan. They had all worked in consumer marketing and logistics, so they planned to use that expertise on the Internet. A month later, they had their idea when they noticed that the medical clinic next door kept metal boxes outside for pickups of blood and urine samples and hazardous materials. The trio sought out IDEO Product Development, the Silicon Valley industrial-design powerhouse responsible for the Palm V organizer, to design the 90-pound Smartbox. But in July, 1999, they almost had to ditch the idea when they learned that a Kansas City inventor had patented a lockbox. Instead, they bought the rights to the technology for an undisclosed sum. With patent in hand, Brivo reeled in more than $20 million from investors. Of that, $17.5 million came from Duchossois TECnology Partners, a Chicago venture-capital firm. Though initially doubtful about the founders' consulting backgrounds, Duchossois senior investment officer Dan Phelps has become a believer. ''These guys have done a great job of executing a business plan,'' Phelps says, referring to strategic partnerships like the one with IDEO, which also is a Brivo investor. Brivo hopes to link soon with a major home-appliance firm that would make and help market the Smartbox through retail outlets. But at $10 to $20 a month, its service will cost at least double what zBox will charge. Shah says that zBox's market testing showed that ''above $10 a month, demand drops off significantly.'' Some analysts agree. The Brivo system ''is an interesting solution, but consumers have repeatedly demonstrated that they're more sensitive to cost than convenience,'' warns Jupiter Communications analyst David Schatsky. Not all consumers, though. ''I'd definitely pay for this,'' says Stonerock. He has come to view his Smartbox as another household appliance. Now Brivo has to convince thousands more like him that a doorstep lockbox, like a dishwasher, is something no home should be without. By AMY BORRUS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					e.biz Contents for Dec. 11, 2000 issue RELATED ITEMS Leave It in the Box TABLE: Brivo Systems INTERACT E-Mail to Business Week Online

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