I recently moved into a new apartment. It’s a new mid-rise complex building in a medium-sized downtown.

It’s nice, clean, and full of amenities.

Before I moved, I toured all of the different complexes in the city. I analyzed all the things you’d expect: rent price, available units, floor plans, amenities, utilities, etc.

But there was one thing that stood out as unusual to me that each one of them had: the mail system. Each complex had this package delivery service that was required for all residents of the building.

It’s a service called Fetch, and it functions as a middleman between the company you order packages from (like Amazon) and the apartment complex you live in.

When you order a package, instead of entering your own address, you send it to the Fetch warehouse. They receive the package then bring it to your door at a time you schedule.

While most tenants complain about the effectiveness of this service (damaged packages, late deliveries, etc.), I’m more interested in the business model and how they got this to permeate throughout every apartment building in the city.

The reason this service exists is actually pretty simple.

• Apartment complexes don't want a pile of packages sitting in the mailroom.

• Consumers don’t want their packages stolen.

• Apartment complexes don't want to be liable for stolen packages.

So they decided they could step in the middle and sell this service to the properties to solve these problems.

From there, residents can sign up (or be forced to) and Fetch makes recurring revenue from every tenant in the building.

It’s a win-win for both parties. They became a world-class middleman.

They didn’t have to come up with anything completely new. They just decided to solve a problem in the middle of a customer experience that was occurring and charge for it.

There are a two main things I believe they did really successfully:

1. Solving a problem that clearly exists

Many new companies try to solve a problem they see in the market. Whether it’s B2C or B2B, every company solves a problem.

And some problems are obvious. Consumers understand these and know they need a solution to it.

But many companies are trying to solve problems that consumers are not completely aware of.

A good example of this is Slack, the messaging platform. In the early days, Slack was trying to make a mark, but prospective buyers weren’t receptive to the problem that it solved.

In a famous memo called We Don’t Sell Saddles Here, written by Slack CEO Stewart Butterfield, he wrote:

“However, almost all of them have no idea that they want Slack. How could they? They’ve never heard of it. And only a vanishingly small number will have imagined it on their own. They think they want something different (if they think they want anything at all). They definitely are not looking for Slack. (But then no-one was looking for Post-it notes or GUIs either.

Many consumers didn’t even know they wanted Slack. They couldn’t understand what problem it was solving.

This made it much harder to sell.

But obviously, solving these problems can have a massive payoff. Slack is now a top-tier technology company and is worth billions.

But solving a problem that clearly exists is just much easier. Consumers know they want it, understand how it works, and see its value immediately.

2. Adding value within an existing transaction
   

They didn’t have to come up with anything completely new. They just decided to solve a problem in the middle of a customer experience that was occurring and charge for it.

Thousands of companies operate this way and either charge users directly or take a cut of the money flowing.

Think of distributors - Fetch is hardly any different. 

They stepped between two parties (the vendor and the consumer) and partnered with a third (the apartment complex) to implement it.

Commerce was already occurring between the vendor and the consumer. High-value items were being moved from one place to another.

That a tiny step in between the delivery and receipt by the end-user was an issue.

It’s a small gap physically - the mailroom and the tenant’s front door, but it causes massive headaches and financial loss, which people are willing to pay to avoid.

Most people would be willing to pay it, but they went even further and managed to get the apartment complex to require it. What a win.

It’s much easier to stand in between a buyer and their goal than it is to convince them they need to achieve the goal in the first place.