While we keep mentioning Uber as the first disruptive solution in the on-demand space, there is one startup that was ahead of Uber in terms of implementing technology but it joined the on-demand wagon only after Uber launched. The name of the startup that has now become a million dollar company is Grubhub.
On one of the hungry late nights at work Matt Maloney found an opportunity. He and his co-worker Mike Evans launched GrubHub, an online food-ordering service, in Chicago in 2004.
Grubhub is the leading online and mobile food-ordering marketplace with the most extensive network of restaurant partners. It has over 80,000 restaurants registered in over 1,200 U.S. cities and London. Grubhub has acquired major brands including Seamless, Eat24, AllMenus, and MenuPages. Here is quick growth trajectory of the disruptive food platform.
Grubhub showcases a perfect journey of a startup that took informed decisions, chose the right time and tapped the right audience. There is a lot that food startups can learn from Grubhub and this blog has all the takeaways from Grubhub’s journey.
The idea of launching a food-ordering portal striked when Mike and Matt faced a problem. They were working late night and wanted to order food. Tired and sick of the process where the restaurant owner narrates the whole menu and the customers reads his credit card digits, they decided to make something that could solve this problem.
They found the solution in their job as they were working on the rental real estate search website. So, they thought why not have a similar solution for the food industry. They got all the local restaurants of Chicago on their platform. Thus, they disrupted the food industry from phone ordering to online ordering.
It is important to focus on your strategy but it more important to pay close attention to your competitors. There is always food for thought for your business methodologies. While Grubhub was doing its thing, it also kept an eye on Seamless, one of the key competitors. The company learned about different marketing activities and implemented the same in their promotional strategies. As a result, Grubhub acquired Seamless in May, 2013.
For any startup, it is crucial to understand the nature of the business and decide which marketing channels would be the most profitable. Comparative analysis helps in learning about the efforts of competitor companies in your domain and how they are making progress with their strategies. Learning is the key, even if it is from somebody else’s mistakes.
Just when the company was planning to expand to other cities, it required investments. The founders went to different investors but they were indirectly rejected. Money is important but so is time. Grubhub founders definitely focused on the value of time and expanded to San Francisco before somebody else stole their idea. So this risk worked in the favor of Grubhub as it received its first funding in the next month.
Startups focus on getting the funds but often forget that they are also losing time. There should be a strict time-period that you should entirely focus on pitching to investors. If you fail, you should not sit back with no motivation. Instead, you should have more conviction to prove your idea to the ones who rejected you. There is nothing like overnight success.
Grubhub started as a restaurant listing platform that later on launched a user app and then a restaurant app. With the changing world, Grubhub changed its business model as well. The team knew when to launch its mobile app and when to develop a solution for restaurant owners. Grubhub also learned from its mistakes. Initially the revenue model required restaurants to pay half yearly prices to get listed on the platform. When the Grubhub founders realized that it was not working, they introduced the commission based model that is effective even today. The business model of Grubhub was flexible enough to incorporate modifications and it was also scalable which made the expansion across 1100+ cities easier.
Customer experience can make or break your business. Investing in customer services for a great experience is always a great move. With food ordering platforms, the customer expectations differ as they expect their food to be delivered in an hour or so. Thus, a robust customer support should be in place to ensure smooth customer experience. When it comes to food, people are more emotional and there are more attributes on which the whole customer experience is based. Grubhub had a huge customer support team that resolved all customer issues proactively.
Grubhub story is inspiring in all aspects for every entrepreneur. The primary reason for its phenomenal success is the conviction and the determination to explore new possibilities in different challenging phases.