Can This Guy Beat Bezos?
WHY YOU SHOULD CARE
Brzoska is showing how Poland can make the leap from a promising emerging market to an advanced economy.
By Emily Cadei
The first years after communism in Poland were a disorienting mix of optimism and tumult, a roller-coaster ride Polish entrepreneur Rafal Brzoska knows well. In 1993, his parents gave him company shares to invest in the Warsaw Stock Exchange. Two weeks later, the country’s fledging stock market nose-dived, and the teenager had “lost 90 percent of my family’s money,” Brzoska recalls woefully, in heavily accented English.
But when it came to risk, Brzoska’s appetite was only whetted. (It helps that he rebuilt Mom and Dad’s nest egg within seven years.) Now the balding, square-jawed 37-year-old is one of Poland’s richest 100 people, and he’s done it by taking on a relic — the state-run postal monopoly. In the process, he’s become a poster child for the nation’s fast-expanding startup scene. To admirers, Brzoska epitomizes the crafty spirit and sheer bull-headedness Poles pride themselves on after decades of oppression from outside powers. He intends to crack the American market, too — but that represents another nut entirely.
Brzoska’s current baby is a parcel delivery service that his company, InPost, launched in 2010. Already, it maintains more than 6,000 machines (both its own and those it has sold to partners) in more than 20 countries: most in Europe, but also in Australia, Saudi Arabia, Chile and Canada, as well as Hong Kong. The concept is simple. InPost operates a network of parcel lockers — paczkomaty in Polish — where customers can pick up and drop off packages, accessing the lockers with codes sent via text message. The lockers themselves are in public spaces, like gas stations and mall parking lots. This means customers can pick up parcels whenever, and, according to Brzoska, they do — nights and weekends are most popular. Sure beats waiting in line at the post office or waiting around for the DHL guy.
In some countries, InPost provides the courier service. In others, it works with the state-run postal agency or with private couriers. For private delivery services, the partnership incentive is cost savings, according to Brzoska: Whereas a delivery man going from home to home can drop off roughly 60 parcels per shift, Brzoska estimates, a delivery man can drop off 80 parcels at 10 sets of InPost lockers, or about 800 in a shift.
The parcel locker system is just one in a series of innovations — high- and low-tech alike — Brzoska has used to attack Poland’s postal service, an 800-pound gorilla known as Poczta Polska. During his third year at the Kraków University of Economics, he took $6,000 of his own money and built a company that delivered bulk mail advertising leaflets, the kind you get in the mail for, say, pizza parlors or business services. Within three years, the company had become the largest leaflet distributor in Poland.
But Brzoska wanted more. Until a couple of years ago, the state postal service had a monopoly on all mail weighing less than 50 grams. So to enter that market, Brzoska attached small metal plates to the letters InPost delivered, weighing them down. The strategy worked as branding, too: When letters with little plates arrived, “it always put a smile on my face,” says Ewa Chronowska, a Polish investment adviser and partner at Symfonie Capital. The battle between Poczta Polska and InPost went on for years, with at least one case settled in court. Brzoska won.
Brzoska, who’s invested in Poland startups to the tune of $12 million, is tech conference royalty.
Brzoska, however, predicts letter delivery will be obsolete in a matter of years. InPost’s parcel lockers stand as a testament to his relatively vanguard belief that the future of the delivery business is in e-commerce. Despite the big international players in the space, like UPS and FedEx, the concept has taken off like wildfire. And it’s distinguished Brzoska as an early pioneer in a country just now catching startup fever.
A decade ago, Poland focused on large corporate ventures, turning itself into a hub in Europe’s supply chain. The strategy has worked — its economy has grown fast in Europe in recent years — but Poland isn’t known for producing its own brands, and relatively few Polish companies have any sort of international footprint. Now the government and the European Union are investing money in the “innovation” sector to help Poland make that leap. And Brzoska, who’s invested in Poland startups to the tune of $12 million, is tech conference royalty.
But Brzoska’s global ambition will bring global competition: not just other delivery services but online giants like Amazon and Google as well as Silicon Valley’s own passel of startup delivery firms. In the U.S., e-commerce “requires a huge investment,” says Tomasz Czechowicz, managing partner at the Warsaw-based private equity firm MCI Management. “And also you have to be on the level of competition and management” as U.S. companies, no easy thing for firms from an emerging market like Poland. Brzoska has proven he has the guts and hard-nosed business instincts. But he’ll again be David, this time going up against even bigger Goliaths.