Karim Varela of i-Booze [Dan Schlatter photo]

Entrepreneurial inspiration sometimes hits in strange ways and at strange times. For Karim Varela, it occurred while he was sitting in a San Francisco area jail on a DUI charge. From that painful episode, Varela came up with the idea for i-Booze, an online delivery service that transports beer, wine, cigarettes and other sinful necessities to shoppers in 60 minutes or less.

"I was sitting in jail for eight hours with nothing to do besides think, and that's when it came to me," said Varela, adding that he thought an alcohol delivery service might help keep drunks off the road.

For those who remember Kozmo.com and HomeGrocer, i-Booze is a bit of throwback. But Varela said he learned lessons from those spectacular blow ups. For one, i-Booze charges a $2 delivery fee on all orders, with purchases under $10 receiving an extra $2 fee. It's also focused on a select number of products that people really, really desire.

"I-Booze only sells products that people want immediately, which people are addicted to, which people are craving, and which people will pay that extra delivery surcharge to get right away," explains Varela.

When the computer science grad from UC Santa Barbara started kicking around the idea last summer, members of the Seattle startup community thought it was a joke. But it's a real business, managed from Varela's Bellevue garage with two part time employees.

About 300 customers have created accounts on the i-Booze Web site, with the startup getting about 70 orders each month. Varela, a 27-year-old software and systems engineer at AT&T, estimates that he will have to top more than 450 deliveries per month in order to reach profitability at current pricing levels. In order to attract users, the company has been advertising on Facebook and Google. It also is handing out magnets and other promotional items.

He's thinking about lowering prices, but charging more for delivery. After all, i-Booze charges about 20 percent more than a supermarket. A six-pack of Bridgeport Blue Heron Pale Ale sells for $10.07, while a bottle of Yellow Tail Cabernet comes in at $14.54. (That doesn' t include delivery).

At its core, Varela describes i-Booze as an online convenience store. In addition to six packs of beer and bottles of wine, i-Booze sells soda pop, lighters, rolling papers and the herb salvia. In the next two or three months, he hopes to add ice cream, snacks and condoms.

As for regulations, Varela said they are permitted to deliver beer and wine to the doorstep with a specialty liquor license. (Kegs are off limits.) The company's drivers check IDs just like other retail outlets that sell alcohol, he said. And the company only delivers booze between 6 p.m. and 2 a.m.

The average order through i-Booze is $18, with Varela saying customers typically range from their mid-20s to late-40s. Condo dwellers and "the younger party crowd" are typical users of the site, folks who may want to stock up the fridge with drinks after hitting a night club or bar. Peak periods for the site are between 8 p.m. to 10 p.m., with another spike at 1:30 a.m. just before the bars close.

"We originally anticipated that the college crowd would be a huge market for us, but it hasn't been," he said. "Our only thoughts around that is that they just don't have the expendable income in order to afford the delivery charges."

But Varela sees a number of situations where people will pay extra to have beer and wine delivered, including those who are drunk, handicapped or simply don't want to venture out in the rain.

While a number of people may hesitate to pay a delivery charge in this economy, Varela thinks others may stay at home and drink. And that could be good for i-Booze. "They say that alcohol is one of those commodities which consumption increases during a recession, so hopefully that will help us," he said.