Drop Delivery co-founder Vanessa Gabriel on breaking into cannabis and making $1 million in 7 weeksView transcript
The worst piece of advice Vanessa Gabriel ever received was to go back to school. Gabriel found more value in dorm room synergy — she launched two fashion and e-commerce startups in college — than in business seminars. "I left school because I was getting real life experience running a business," she recalls. "I was in an entrepreneurship class, reading things about entrepreneurship in a textbook, and it wasn't aligning with what was going on in my life."
Gabriel co-founded Drop Delivery, the first all-in-one delivery technology solution for cannabis companies and retailers, back in 2019. Her previous startup Greenlight Technologies, an order-ahead and digital loyalty software for cannabis companies, was acquired in 2018 by publicly-traded Leafbuyer Technologies. "Alternative routes to figuring out your path should be normalized," she laughs. "I'm doing okay right now."
Drop recently completed a successful Regulation Crowdfunding offering through Equifund, a private market investment platform that delivers early-stage opportunities to investors. In just seven weeks, it became the fastest offering to hit $1 million on the platform. "I was in a Starbucks pick-up line, and I had seen that we reached the milestone of a million dollars," Gabriel says. "I cried in my car."
And the cannabis company is only getting bigger. Drop's customer base and revenue expanded by almost 300% from Q1 2020 to Q1 2021. We spoke to Gabriel about breaking into the cannabis industry, making her first million, and opportunities at the intersection of weed and tech.
From 19-year-old serial entrepreneur to cannabis industry breakthrough00:00:00
The Business of Business: Can you tell me a little bit about your background and Drop Delivery? From co-founding Greenlight Technologies to your lightbulb moment with Drop...
Vanessa Gabriel: My entrepreneurial journey actually started when I was 19. I started a flash sale e-commerce site out of my dorm with two of my Drop Delivery co-founders, my younger sister Jade [Gabriel] and Marc [Lopez], our CTO. I've always been around business. My dad is a serial entrepreneur as well, so business was always the talk around the table. When I went to college, I knew that I wanted to study business, and so that really was the start of my personal entrepreneurial journey that just led to a couple of different businesses over the past 10 years which I’ve started with Marc and Jade. We've built projects in the social streaming space and peer-to-peer marketplaces, so like we've always had this core of technology, which really drives us.
Our start with cannabis was actually back in 2017. Recreational legalization was on the horizon for California and Marc was living in LA at the time. We were just like, we should be able to pick up or schedule a pick-up for our cannabis at our local dispensary, and nothing was available like that at the moment. We always knew that cannabis should feel and act — as far as consumption and shopping for it — just like any other industry. We were really excited to be the first ones to do that, and that's how Greenlight was born. You can basically find local dispensaries in your area, schedule pick-up for your order, skip the line and earn loyalty points for your purchase. That went really well. We launched it and it went viral and within nine months, we got acquired by a publicly traded cannabis company.
That was just a great start in the cannabis industry because we were able to learn so much about retailers and consumption and the shopping habits of cannabis consumers. But what was really exciting was how we knew that delivery was going to be the next big thing, and this was back in 2019. We started thinking, ‘okay we just did this for in-store pick-up and we know eventually you should be able to order your cannabis and get it delivered to your door.’ So that really kicked off the idea. We launched last January and it’s been really great.
What made you want to go from fashion to cannabis? Was it a natural transition?
Not, it really wasn't. Fashion is my first love and my natural path just led me into a bunch of different industries. I switched to beauty and then Marc was in the vape industry and then different opportunities came up for social streaming or peer-to-peer marketplaces. Like I said, we're not really biased to industries, we just love technology and love building great software, and so that's just what led us eventually to cannabis. You can get your food delivered, you can order a pick-up at your local restaurant, but we saw that you can’t do that for cannabis, so that really sparked the idea for Greenlight and then eventually led us into Drop Delivery. Cannabis has so much opportunity for growth. We've come a long way, but there's still so much opportunity for software and technology to really revolutionize the space.
What are some hurdles you've had to overcome with investors? Is there still a stigma behind cannabis?
100%. I have been trying to raise traditional capital for my various companies ever since I was 19, and never had success with the traditional VC route. I've done a ton of startup pitch competitions and I've won a couple, but it just never panned out with the traditional route. And so with Drop Delivery, we were lucky enough to have a friends and family round initially and then bootstrap it from the acquisition. We knew to really grow this that we wanted to see capital, and it was proposed to us, ‘Hey, why don't you check out crowdfunding? There's a lot of success with companies crowdfunding at this point.’ We hadn't seen any cannabis software companies do it successfully, or even do it at all. So we were a bit hesitant, but honestly it happened to be the best thing.
"I'm a huge believer that every ‘no’ leads you to the right place."
Last summer, we successfully raised, within seven weeks, a million dollars on a crowdfunding platform. I think what was really exciting was that we were able to give the opportunity to investors that look like us. They're all across the nation. We have over 1,000 investors and shareholders today. I think that was a really amazing feat for us, just as a company. We've tried for 10 years and it just never worked out the traditional route. But to have such quick success on the crowdfunding side was really awesome.
Have you run into any obstacles as a female founder?
I definitely have, you know, being young and a woman of color, but honestly, I don't like to really linger on those things. If I hear a ‘no,’ I just always thought, okay, maybe the business isn't where it should be. Even though that could be in the back of my mind, I like me and my team, we always have this stance where our work speaks for itself. We are successful, we sold the company previously. And if it didn't work out, for whatever partnership or investment, it just wasn't the right fit for us. And I'm a huge believer that every ‘no’ leads you to the right place. I don't really like to linger on things, I'm sure, maybe it could have played a part in a lot of situations, but I'm just a type of person that's like, let's keep it moving.
Tech, data, and cannabis00:06:36
Cannabis is now legalized in New York City. But dispensaries and deliveries probably won't happen for over a year. How do you foresee that process taking place?
As far as all the ins and outs of regulations and legalization, I'm not super educated on it. And I have an advisor that I can ask questions, which is great. I think what our stance is going to be is just trying to get connected to the community there and try to make a name for ourselves as far as like, ‘Hey, if you are interested in getting a delivery license, you should check out our software.’ We're excited to build that relationship with the community and hopefully get in early. When that does happen, we will be right there at the forefront, because that's really what sparked our love for technology, New York. I moved to New York from a very small town in California back in 2014. My sister and I were just so amazed at the technology, I could get a doctor to come to my apartment if I was feeling sick, or you can get your groceries delivered and your laundry picked up and delivered. That honestly really sparked our love for apps and technology, it was New York, so we're really excited to hopefully bring that back kind of full circle with Drop Delivery and be a premier software solution for business owners in New York eventually.
There are already some not-so-legal cannabis delivery services with networks of drivers and bikers across New York City. How do you think the dynamic will be between Drop Delivery and those existing businesses after legalization?
I really hope that the bill and all the regulations will account for existing legacy operators and that it can be a smooth transition until legalization. When that does happen, Drop will be happy to support the licensed operators on that side.
Who are some of Drop Delivery’s competitors and how does your business stand apart?
We're the only all-in-one delivery management solution that has pieced together many parts of running a company. As far as competitors go, there could be a company that specifically focuses on SMS marketing for cannabis companies or specifically focuses on the e-commerce aspect, but what's great about Drop Delivery is that we put all these pieces together. So I think niche companies will always exist. But the biggest downfall of that, and what we found was by talking with business owners, was that your data is not connected. That's the biggest thing. If I don't know that Jane over here only loves to buy edibles, but I'm going to mass market flower deals to her, I can lose her as a customer, she can unsubscribe. That's the biggest thing with Drop, is taking all this rich data that these companies are getting, and using that to our advantage to their advantage to really grow their businesses and market correctly. We see it is empowering them with the business tools to compete on that big level with US companies that have millions of dollars, whether you're a small operator or a big operator.
What are some trends you've noticed at the intersection between cannabis and tech?
I think that it's really behind still, just even as far as the whole e-commerce experience. And that's what we really love about us as a team, is that we put experience first, not only for the consumer, but for the business. I think not a lot of companies are doing that. So to be able to take inspiration from other industries, as far as the ease of shopping on your phone and getting things delivered, that's a main point for us. We always say that shopping for cannabis should be just as reliable, convenient and safe as if you were ordering Uber Eats or Amazon Prime.
Cannabis during COVID and the future of delivery00:11:11
How has business been during the pandemic?
You know, we've been really blessed as a company and as an industry to really have a lot of progression in the past year since the pandemic. When everything happened a year ago, companies now had to explore other options like delivery. If they couldn't be open in store, they still needed to service their customers. It's been a really exciting time for just delivery in general, especially in cannabis. If you didn't offer delivery before, now all these business owners are considering it because it is the future of shopping. I think even after the pandemic.
"It said a lot when cannabis companies and retailers were deemed essential businesses. That was a game changer for the industry, because if your local dispensary got to stay open, that meant it was on par with a grocery store."
What are some of your predictions for the future of the cannabis industry?
We still don't know what delivery is going to look like, and it's going to continue to be shaped over the next two to three years. I think delivery is really here to stay, and it's going to be about the companies that do go the extra mile to market correctly and provide a great customer experience to really stand out. And that's our mission at Drop is to really give them the tools and empower them with the right business tools to do that and provide a great delivery experience to their customers.
What are some cannabis startups that inspire you, or innovators to look out for in the space?
I really look up to the Headset and what they're doing with data and analytics, because I think that is so powerful with just the cannabis industry in itself. I really like that company, and just what they're doing and how they're putting data at the forefront of this industry, because I think it's been neglected for such a long time. That's one of the things that we feel really strongly about is using your data wisely to make better business decisions.
What do you wish people knew about cannabis, or a misconception people have about the industry?
The stigma still is around if you work in the cannabis industry or you're a cannabis consumer. I just think that it's just as viable an industry as the food industry or regular e-commerce, and I think it said a lot when cannabis companies and retailers were deemed essential businesses that stayed open [during the pandemic]. That really was a game changer for the industry, because if your local dispensary got to stay open, that meant it was on par with a grocery store, or your regular pharmacy. I think that was a really pivotal moment for the industry.
Dreaming big and dropping out00:14:10
What was your experience like with cannabis before getting into the industry?
I'm not an avid smoker. But if I do consume anything, it's like maybe some Kiva chocolate or some Saka wine, you know, infused with CBD. I like consuming it that way in a very chill environment.
And what's been the most memorable or crazy moment of your career?
I think it was raising the million dollars. I was like, in a Starbucks pickup line, and I had seen that we had reached the milestone of a million dollars. I cried in my car. We have been trying for many, many years, and me specifically having to go talk to so many people and do so many interviews...it makes me want to cry right now. Just because it was a really long journey, and to have people believe in us and give us their investment to say, ‘Yes, you guys are going to go places, and we believe in you and believe in what you're building,’ I think was really special.
What is the best piece of advice you've ever received, and the worst piece of advice?
I think the worst piece of advice has probably been to go back to school. And I don't mean any offense to people that went to school, but I'm a firm believer in experience. I actually left school because I was getting real life experience running a business. I was in an entrepreneurship class reading things about entrepreneurship in a textbook, and it wasn't aligning with what was going on in my life. I think alternative routes to figuring out what your path is should be normalized. I think getting an education is great, especially for certain industries and fields where you need it and it’s a requirement. But the stigma of that...because I do get that sometimes from family members. I'm doing okay right now. Yeah, maybe one day I will finish my degree, but just not at this point in my life.
The best piece of advice that I've ever received, has probably been ‘go big or go home.’ And that's just like, in any part of my life. I think as a team, that's like, always been a motto because no companies exist like us, because it's crazy. We've built five companies into one company, and other companies could have done this, but they just haven't, because it is a monster of a platform. And it's really outrageous what we've built, but we wouldn't be there if we didn't dream big or if we didn't have these really big ideas that we felt confident on executing on.
What’s advice you would have for someone who wants to get into the cannabis business?
I love saying that, you know, they should reach out to people in the industry, and just not be afraid to message them on LinkedIn. What I've learned is that people are really open in this industry, and they want to connect with others, and they want to be able to share their resources and their insights. That's actually how I got a couple of my advisory board members. I saw successful women in a Forbes article like, ‘15 successful women in cannabis,’ and I found a few that I thought were great fits for what I was looking for. I reached out to all of them, and now all three of them are my advisory board members. I literally just sent them a LinkedIn message saying like, ‘I have this business, I would love to hear what you think.’ Today, they sit on my board. So, just go for it. Shoot them a message. You'll never know how people will respond. What do you have to lose?