January 5, 2023 • 21 mins
In this episode, Shamus Madan chats with Mike Evans about his entrepreneurial journey, starting with his MIT experiences and early startup involvement. They discuss the creation and challenges of Grubhub, its profitability strategies, and Evans' reflections on the company. They delve into the role of leverage in business negotiations, introduce Fixer, and share lessons from Grubhub's success. The episode concludes with Evans' advice for startup founders and a plug for his book, "Hangry".
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(00:01):
All aboard the Embit podcast with Seamus Madan.
Welcome everyone to another episode of theEmbit Pod cast.
I'm your host, Seamus Badan.
And today, we are joined by Mike Evans, who isthe founder of Grubhub.
Today, Mike is going to walk us through hisjourney from wanting a pizza, building a multi
$1,000,000,000 company to now his recentstartup fixer, a technology centric company
(00:26):
providing all in one handyman services for manytypes of home repair jobs.
He's also the author of the book hungry, whichdiscusses his journey, founded Grubhub, from
the beginning stages from just alone to IPO.
So first off, Mike, it's a pleasure to have youon the show today.
Thanks for joining us.
Yeah.
Thanks for having me.
It's fun to be here.
Absolutely.
(00:46):
So let's start off a Ford Grubhub.
You went to MIT, studying computer science andelectrical engineering.
What were some of the most memorableexperiences there that helps create the
learning blocks for your future successes withGrubhub?
Yeah.
I mean, you know, going to school, like, thethe most memorable experience is like the 1st
weekend you're there.
So there's something about the 1st weekend incollege that's a match time where, like, you
(01:09):
meet more people than you will in that weekthan than ever any other time in your life,
than everybody that you meet, is interested indeveloping relationships quickly.
And so the openness of it was great.
And so that that continued on into the collegeexperience.
I mean, the Am I the technical classes that MITwere extraordinarily difficult, but they were
all team based approaches.
Like, we we worked on problem sets and learningand everything together.
(01:33):
And I think that that started paving the wayfor having coworkers later in life in terms of
working towards a goal, figuring out how totake a problem and break it down into smaller
problems that could be ultimately bite sizedthat could be that could be taken on
individually.
And so, yeah, I mean, those are some of themore memorable moments at MIT.
I I also, was, like, tangentially involved witha startup called, oh my gosh, how can I not
(01:56):
remember the name right now?
There was a start.
It was like a precursor to friendster.
And it was like, which was the precursor in myspace, which was the precursor to Facebook.
And so it was called Planet All.
And so, like, a really, really early version ofa of a social network.
And I just had a lot of friends that worked onthat project.
Gotcha.
Now that we transition a little bit, Grubhubcame to be from you wanting to pizza delivered
(02:17):
to your door.
How did Grubhub come to light in your bedroom?
Could you take us behind the scenes of what wasrunning through your mind at the time?
So I wanted a pizza and getting a pizza was apain in the neck.
So you had to go on the yellow pages, which arenot organized in any sort of meaningful way.
Right?
It's alphabetical.
It's the whole city.
The city of Chicago is thirty miles north tosouth.
(02:38):
Or 28 or something like that.
And it's like two miles east to west.
And so the restaurants that deliver on thesouth side don't make it up to the north side.
And so you have this list of all theserestaurants, many of them didn't deliver to
you.
And so that was like a terrible way to find,just discover who delivered to my address.
And so the original plan was I was gonna make awebsite that just listed the restaurants that
(02:59):
delivered to my zip code, not even my address.
It's I had that idea It took me a little whileto get motivated to actually work on it.
I, I played a lot of Xbox.
I didn't really get the, get the job done.
And so then fast forward, had, like, a reallybad day at work, really bad commute home.
I talk about this in the book in hangry.
And then ultimately, that motivated me to writethe first version of the website.
(03:20):
And so that it started out as a delivery guide.
Just find the restaurants that deliver it to myaddress.
Yeah.
And back at the time, you found a Grubhub backin the early 2000s, were restaurants skeptical
in the 1st few years of joining the platformbecause at the time, the iPhone, the first
iPhone didn't even release And there were stillover 41% of Americans that didn't use the
(03:41):
internet.
So how did you persuade the restaurants in thevery beginning to join the platform?
In the very beginning, I failed.
I didn't.
I did not join.
I get them to join.
I after I quit my job, so my my businesspartner, Matt, he sold the first restaurant,
and then I quit my job, like, 2 weeks later.
And then that 1st 3, 4 weeks, I couldn't sellrestaurants.
(04:01):
I couldn't get it done.
And so that I wasn't convincing them to join aplatform.
The the word platform had not entered my mind.
I had a website.
I had a dinky website that was a deliveryguide.
And I wanted them to advertise on the website.
So I tried everything.
I tried printouts.
I tried showing because not everybody had evenbeen on the internet that I was trying to pitch
(04:22):
this idea to.
I tried I tried every I tried shovelinginformation down people's throats about what it
was that was trying to do for them.
I was trying to get them advertising.
And none of that worked.
What actually ended up working was arelationship pitch.
I I I pitched them on this idea.
I was like, Hey, I'm an entrepreneur.
You're an entrepreneur entrepreneur.
Take a chance on me.
Not too dissimilar from how you pitch me onbeing on this podcast.
(04:44):
By the way.
And so, like, it turns out that sales is aboutrelationships first.
And I'm not even talking about, like, bigenterprise sales that takes 2 years.
Like, just talking to a small business owner,is a relationship.
And and leaning on that relationship turns outto be the the sort of number one thing that you
can do to to to start your sales process, salescareer.
Yeah.
You brought up a great point.
(05:05):
A lot of people that have the misconceptionbusinesses are these can be some giant
conglomerates, and they can be in certainscenarios.
But behind those closed doors are a bunch ofpeople that the only way in many cases,
especially in sales that they're getting thingsdone is through relationships And it's probably
the key topic and lesson we've had on thepodcast in the past few years is networking and
(05:29):
building relationships over time is one of themost important things in creating your career
and developing through your career.
And with all the delivery apps rising up manyyears later when you guys went public like
DoorDash and Uber sprouting right up, they havestill struggled to turn a profit, whereas
Grubhub was profitable.
A majority of the time in the very earlystages.
However, recently Grubhub has also struggled tobe profitable What are some of the things that
(05:52):
you did in the early stages to make theplatform profitable that Grubhub could possibly
employ today?
So, yeah, grow up.
I I I started at my apartment.
There was no investment involved.
This idea of, like, friends and family money.
I don't know who those people are.
I don't I didn't have friends and family thatmoney.
And so, and so I just started, and I startedwriting the software myself.
And so there was the technical skill, which isreally important that I learned in school, but
(06:14):
there was the relationship part too.
So the business was profitable up until we tookthe 1st financing.
And then we grew into 4 cities, and we wereprofitable.
Again, we took a second financing.
And that's same thing happened before the 3rd,4th, and 5th financing, and before the IPO, and
then after the IPO for 2 years.
And the the key really was the service wasdifferentiated and and not just differentiated.
(06:35):
It wasn't just different from everybody elseout there because Uber Eats and DoorDash, they
showed up late in the scene.
There had been a 100 competitor prior to them.
There was Groupon living social.
Both of them launched online orderingplatforms.
There was order up and the Shamus food andseamless.
There's there was hundreds of competitors.
And the thing that was different about Grubhubis the the food was better.
(06:55):
And it sounds crazy, but, like, when you gotthe food, It was better.
And, like, we didn't cook the food.
We didn't even deliver the food at the time.
But we made sure through our systems andthrough statistical analysis and understanding
how the experience went for customers andfeedback loops, we made sure that the best
restaurants were the ones delivering the food.
And so we had customers who repeated with usagain and again and again, they would order
(07:19):
twice a twice a week all year long, a 100orders per year.
And when that's how we were profitable.
We didn't have to keep spending money toacquire customers.
We we had loyal, frequent customers.
That's not true for any of the large playersright now.
And so, like, at a at a high level, I can say,well, they need to figure out how to
differentiate so the product is better so thatthey have repeat customers.
(07:40):
That's that's easy it's easy to say.
It's hard to do.
On the bright side, like, the the party is overin terms of there's infinite amount of cash to
just pay for customers.
I mean, DoorDash just laid out 500 people.
Like, the I just am going to spend out the nosefor customers and outspend everybody else.
Door can't do that anymore.
And so it's going to become a matter of who hasthe best product for customers.
(08:05):
And so doubling down on that makes sense.
I think Grubhub's partnership with Amazon isgoing to help a lot in the short term.
In the long term, it will be a prisoner'sdilemma because they're going to be very
dependent on a large player for their business,and that's a very dangerous thing to do.
It's great in the short term, but you gottafind a way to transition off of that.
And so I it'll be interesting to see how itplays out, but I think that the access to easy
(08:26):
free capital has gone away.
And so there there will be a shakeout that'scoming.
Yeah.
That partnership, I think you were right, isvery strategic the short term.
I know that I currently have Amazon Prime, andI saw it on the front page of a of my Amazon
Prime to sign up for Grubhub for premium for afew months or 6 to 12 months free.
There's some sort of time allotment that youhad the premium for free.
(08:49):
And I was like, oh, this is great.
And from then on, for a few months, anytime Idecide to order something, instead of going to
DoorDash or a different service, I would useGrubhub.
So I think that was strategic in the shortterm.
And now You
know, Amazon launched a competitor to Grubhub.
Most people don't know that they had a deliverycompetitor DoorDash and or Uber Eats in
Grubhub.
And
so know.
So they have this partnership.
(09:09):
I mean, it's not that much of a stretch ofimagination to assume that that the the
partnership might be a step towards thedirection of having their own service again.
Who knows?
But, like, I, I mean, I think that that's goingto be a big factor in the shakeout of which of
those 3 parties ends up being the marketleader.
Yeah.
We know with Amazon, they like to do a lot ofstuff on their own.
(09:30):
For example, with the Amazon Basics brands, theSoli Mo, which is their own multivitamins and
stuff like that.
So I think if there's a way to do it on theirown and do it right, they will probably do it.
Yeah.
So you
brought up a good point there.
I mean, Amazon launched at my current business.
Fix which is the on demand handy personservice.
You know, Amazon has launched a competitor tothat too.
So, like, you can't, like, you can't create abusiness without Amazon launching a competitor.
(09:52):
So, like, you can't stress out about it toomuch.
You just have to have a good strategy aroundcreating most value for customers and and you
beat them at their own game.
It it's you have an advantage by doing onething well compared to everything being
everything to everybody.
And the hard part is they have the they canhave a monopoly in many industries.
But that monopoly, they do it so efficientlythat it ends up being better for consumers
(10:15):
majority of the time than if an individualbusiness did it.
I know In terms of home services, they did somesort of cleaning services where they'd have
people come and clean your home for a shortperiod of time.
Not sure if they still do it.
But they do try to explore a lot of differentindustries.
And now transitioning here a little bit in thebook, Hanger, you talk about needing a personal
(10:35):
definition of success.
What was that personal definition for you andhow did it motivate you to build Grubhub to
IPO?
So it started it changed over the course of thetime that I was at Grubhub.
And it started out as I just wanna pay up myschool debt.
Between my degree, my I got 2 degrees in my Mywife got a degree at Boston University and then
a graduate degree at Northwestern.
(10:56):
We had $260 in school debt, which is not likemost of your listeners will be familiar with
it's horrible.
And at the time, so this was 2002.
And I was looking at being paying off schooldebt until 2 1036, a thousand bucks a month
until 2 1036.
It was insane.
Like, it's just this insane amount of money.
And I was like, man, I gotta have a point.
(11:17):
I gotta figure out And so once I startedGrubhub and it was, like, doing well, I was
like, oh, I might actually, like, mightactually, you know, beat that.
I might actually earn enough from this that Ican pay off my student loans early.
It turns out that I shot too low.
I I hit that target and I overshed, but then Ididn't have, like, what is my goal gonna be
now?
And so I took the company all the way throughthe IPO.
(11:37):
Obviously, I sold my stock for a a premium.
I made it up in the book.
I called it a Scrooge McD pile of cash, whichis true.
And, like, But that's those are not reasons whyI think I was successful.
A lot of other people think I was successfulfor those reasons.
I was successful because I created a platformfor independent restaurants and 80,000
independent restaurants on the platform,competed with the big chains, and beat them at
(12:01):
their game.
And they and they didn't have a disadvantagefrom a technology or operations perspective
because we provided that for them.
And I was incredibly success.
I usually say it needs to be 2 things.
1, it has to be explicit.
It can't just be in your head.
(12:21):
You have to say it out loud.
You have to write it down.
You have to, like, it has to be have to youhave to make it explicit.
It can't just be a vague idea in your mind.
The other thing is it should be unique.
When you say it to people, they should disagreewith I tell people I wasn't successful because
I had an IPO, but because I helped 80,000independent restaurants, a lot of people are
like, yeah, that's bullshit.
(12:42):
I don't, I don't believe you.
Like that, like, you were successful becauseyou had the IPO.
If people disagree with your definition ofsuccess, it means you're on to something.
It means that it's unique it means that you'vebeen intentional and thoughtful and explicit
about the way you're gonna go about living yourlife.
And that's incredibly important.
Yeah.
(13:03):
I agree.
And in the book, you talk about with mergingwith other companies.
You go by the rule of how you have to make theother team think that your product or service
is more valuable than theirs.
And I think that it makes perfect sense.
Right?
It's the concept of leverage.
Chris Voss talks about it.
FBI and former FBI negotiator.
How do you build that leverage for maybestartup founders listening in the audience?
(13:23):
How do you build that leverage in businessnegotiations?
The first role of mergers acquisitions is don'tbe an asshole.
It is really important you don't skip the firstrule because you're talking about somebody
going from being from a competitor to acolleague, and they have to like you.
And so the first rule is just it's it's what wesaid at the beginning of this podcast, like
(13:44):
relationships matter, right?
And and actually our initial merger or initialacquisition conversations with campus food
failed because we went straight to what yousaid, which was, like, figuring out like, how
we can show our leverage.
Bill Gerley, who was on our board fromBenchmark Capital, he said, you know, it
becomes this the game of the dueling Blowfish.
(14:04):
Each parties trying to talk about how big andhow great they understanding of each other and
empathy with each other, it just becomes abragging fest.
And the deal doesn't get done.
And so once you start from a place of you trusteach other and you think there may be something
to do here.
You you need to talk about how your stuff isgreat without denigrating, without putting down
(14:30):
the other the other side.
You can't talk about how their stuff is crap.
You just have to be convincing about why you'redifferent and unique and and and bigger.
And, like, that was really important in thecampus food deals.
Now later on, when we merged with seamless,there was another piece of that, which was We
had filed for to go public.
We we, literally, at the time, you had todeliver the the the documentation to the SEC in
(14:53):
in person We literally had someone sitting in acab outside the SEC ready to file the document
as we were negotiating with seamless.
And that is a really good alternative.
Like, you know what?
You guys can either agree to this or we'regonna go in and and turn this in.
Now It was important that we didn't overplaythat hand because you we were we were right on
(15:18):
the edge of being jerks when we were doingthat.
But it was real.
It wasn't a fake.
We were going to do an IPO if we didn't merge.
And and we ended up scrapping that IPO doingthe merger and then doing an IPO later.
But it would but having that leverage was was afor getting the terms that we wanted out of the
deal.
Yeah.
Definitely.
Great point.
And now transitioning here.
Grubhub was a software company.
(15:39):
And you are now building fixer for those in theaudience who might not be familiar.
What is fixer and what's the mission behind it?
So fixer is a handy person service where youcan use your phone as a remote control for your
home.
So you can do that with getting a car, you cando that with getting a pizza, and now you can
do it to get a handy person into your home.
The the fundamental difference between ourbusiness and the others that have tried this is
(16:04):
that we don't use contractors.
The people who do the work are full timeemployees.
And so it has a lot of similarities tomarketplace businesses, like, like, Thumbtack
and Angie's, listen to home advisor andcompanies like that.
But but Employing the supply of workers is avery significant difference.
And it's an expensive difference.
It costs us a lot of money to hire these peopleand we train them from scratch.
(16:25):
And the reason that we made that choice was thenumber of people that are entering the trades
is not sufficient for the demand.
There aren't enough trades people still doingthe work compared to what people want from a
home in the home.
And so you can't get somebody to show uptomorrow for 2 hours because All of those
people would rather book 40 hours worth a weekdoing a remodeling job or something like that.
(16:46):
And so it's very, very hard to get handedpeople to show small jobs.
And so we wanted to optimize towards that.
So we had to train people from scratch to beable to do it.
And there's a mission orientation to this too.
It's not just a profit.
There's a There's a purpose to it.
We are trying to create an entry path into thetrades that's really easily accessible in a
gender, inclusive way.
(17:06):
Women and men can join program, and we and weare targeting a 5050 ratio of that.
And it's all very intentional because we'retrying to increase the number of people in the
trades and then the diversity of people in thetrades.
As we're doing this.
Gotcha.
And with Grubhub, the whole concept behind howyou started it was wanting a pizza, How did you
come up with this idea of founding fixer?
(17:28):
The gutter in my house was broken.
And I wanted to fix it, and I wanted to installa rain barrel.
And I tried to find somebody to do it, and Icouldn't find somebody to do it.
And I literally was, like, in the yellow pagesagain.
And I was like, damn it.
I did this 20 years ago.
I can't believe I'm doing this again.
I'm like, well, I guess that's my nextbusiness.
And so that's, I mean, that was there's a bigpart of that that, it's just a pain in the neck
(17:50):
for homeowners to get a handy person.
Yeah.
Definitely.
Great point.
And what's the current business model forgrowing the platform?
Have you thought about, you know, partneringwith maybe other types of companies like Home
Depot or stuff like that to make it easier toonboard fixers to expand the company quicker.
So we we're we can
get as quick as we want.
It's really we we get we hire people from fromTarget and Starbucks and Whole Foods, and we
(18:14):
train them to have a career instead of a job.
And so it's really easy for us to applicantsand to train them.
And so from the consumer adoption side, that'ssimply like a a standard advertising approach
where we're going out and we're gettingconsumers one at a time through advertising,
through word-of-mouth, through referral,through search engine optimization, through
partnership, through all of the the thumbtackand Angie's lists of the world.
(18:35):
In terms of partnerships, I I have found thatfor consumer businesses, partnerships are
largely a waste of time that, It is far moreeffective to advertise to a consumer directly
and try and convince them to use your productthan to do it through a third party.
And do because doing it through a third party,there They're selling their products, not
yours.
And so I don't find partnerships particularlyvaluable in building a consumer brand.
(18:57):
That might just be because I'm bad atenterprise sales.
I don't know.
But But I I'm doing this 11 customer at a timeis the way we're doing it.
Yeah.
I know Amazon.
I can't remember the company they partneredwith, but a long time ago, they partnered with
a certain company and that company wouldadvertise on their platform that had some sort
of partnership agreement.
But instead, Amazon just promoted theirproducts instead that partnership ended up
(19:20):
falling through and being completely useless.
So in some cases, as you said, they will puttheir own priorities first ahead of, you know,
other companies that they could have partneredwith.
And what were some of the lessons that you tookfrom Grubhub that you're now implementing at
while building fixer?
I
mean, I think one of the biggest ones is justbeing intentional.
Like, we know exactly what it is we're tryingto do from a mission perspective.
(19:43):
We know what our values are.
We know what our goal is every year.
I know what my goal is for next year.
And that idea of being intentional and andfocused is the biggest lesson The other thing
is we just started.
We didn't overthink it.
Like, we knew we were gonna build a trainingprogram.
We knew we were gonna start trainingtradespeople from scratch.
We knew we weren't educators, but we did itanyway.
Like, we just started.
(20:03):
And it takes a certain amount of arrogance todo that, but it also takes a certain amount of
humility to recognize, okay, well, we juststarted, but we're not gonna be good at we have
to learn.
And those two things, the arrogance that ittakes to say I'm gonna create something that
nobody else has created, and the humility tokeep learning, they don't play well together.
It's hard to be both arrogant and humbled atthe same time.
They are, they are mutually exclusiveperspective or attitudes.
(20:25):
And so figuring that out, figuring out how tohave the right amount of, like, we've got this
and the and also the right amount of, like, weneed help with this.
It's a balancing act.
But it's one that I've had a lot of reps on.
I've had a lot of chances to do.
And so those things have really helped.
Obviously, consumer marketing, it's similar inboth businesses.
We're building a national brand.
One consumer at a time.
But the education piece, the w 2 employeepiece, that's all been a learning that's all
(20:48):
been a big learning curve to get to figure thatstuff out.
Totally.
And before we wrap it up here, what would beyour takeaways or key takeaways for starter
founders in the audience?
And where can they find more about your book,Hungry?
Well, and my key takeaway is start.
Start the thing.
Start doing Don't don't wait.
Don't overthink it.
Don't, like, spend a ton of time doing marketresearch.
(21:11):
Just just try it.
See if you can sell a customer on your idea andmake real money instead of asking would you buy
this?
Asking p ask people to actually buy it.
That's, you know, that's the sort of the punchline of the book is be intentional and just
start you find out more about me at, MikeEvans.com, there's links to buy the book,
hangry, right there, or you can go find it onAmazon or Audible as well.
Totally.
And we'll have those links posted in theepisode description down below for anyone
(21:33):
interested in the audience and checking it out.
Alright, everyone.
That wraps it up for today's episode.
If you enjoyed the cast.
Make sure to leave a 5 star review down below.
Share it with a friend, and thank you verymuch, Mike, for taking the time to join the
show.
It was a pleasure.
Yeah.
Thanks for having me on.
Absolutely.
All aboard the Embit podcast with Seamus Madan.
Welcome everyone to another episode of theEmbit Pod cast.
I'm your host, Seamus Badan.
And today, we are joined by Mike Evans, who isthe founder of Grubhub.
Today, Mike is going to walk us through hisjourney from wanting a pizza, building a multi
$1,000,000,000 company to now his recentstartup fixer, a technology centric company
(00:26):
providing all in one handyman services for manytypes of home repair jobs.
He's also the author of the book hungry, whichdiscusses his journey, founded Grubhub, from
the beginning stages from just alone to IPO.
So first off, Mike, it's a pleasure to have youon the show today.
Thanks for joining us.
Yeah.
Thanks for having me.
It's fun to be here.
Absolutely.
(00:46):
So let's start off a Ford Grubhub.
You went to MIT, studying computer science andelectrical engineering.
What were some of the most memorableexperiences there that helps create the
learning blocks for your future successes withGrubhub?
Yeah.
I mean, you know, going to school, like, thethe most memorable experience is like the 1st
weekend you're there.
So there's something about the 1st weekend incollege that's a match time where, like, you
(01:09):
meet more people than you will in that weekthan than ever any other time in your life,
than everybody that you meet, is interested indeveloping relationships quickly.
And so the openness of it was great.
And so that that continued on into the collegeexperience.
I mean, the Am I the technical classes that MITwere extraordinarily difficult, but they were
all team based approaches.
Like, we we worked on problem sets and learningand everything together.
(01:33):
And I think that that started paving the wayfor having coworkers later in life in terms of
working towards a goal, figuring out how totake a problem and break it down into smaller
problems that could be ultimately bite sizedthat could be that could be taken on
individually.
And so, yeah, I mean, those are some of themore memorable moments at MIT.
I I also, was, like, tangentially involved witha startup called, oh my gosh, how can I not
(01:56):
remember the name right now?
There was a start.
It was like a precursor to friendster.
And it was like, which was the precursor in myspace, which was the precursor to Facebook.
And so it was called Planet All.
And so, like, a really, really early version ofa of a social network.
And I just had a lot of friends that worked onthat project.
Gotcha.
Now that we transition a little bit, Grubhubcame to be from you wanting to pizza delivered
(02:17):
to your door.
How did Grubhub come to light in your bedroom?
Could you take us behind the scenes of what wasrunning through your mind at the time?
So I wanted a pizza and getting a pizza was apain in the neck.
So you had to go on the yellow pages, which arenot organized in any sort of meaningful way.
Right?
It's alphabetical.
It's the whole city.
The city of Chicago is thirty miles north tosouth.
(02:38):
Or 28 or something like that.
And it's like two miles east to west.
And so the restaurants that deliver on thesouth side don't make it up to the north side.
And so you have this list of all theserestaurants, many of them didn't deliver to
you.
And so that was like a terrible way to find,just discover who delivered to my address.
And so the original plan was I was gonna make awebsite that just listed the restaurants that
(02:59):
delivered to my zip code, not even my address.
It's I had that idea It took me a little whileto get motivated to actually work on it.
I, I played a lot of Xbox.
I didn't really get the, get the job done.
And so then fast forward, had, like, a reallybad day at work, really bad commute home.
I talk about this in the book in hangry.
And then ultimately, that motivated me to writethe first version of the website.
(03:20):
And so that it started out as a delivery guide.
Just find the restaurants that deliver it to myaddress.
Yeah.
And back at the time, you found a Grubhub backin the early 2000s, were restaurants skeptical
in the 1st few years of joining the platformbecause at the time, the iPhone, the first
iPhone didn't even release And there were stillover 41% of Americans that didn't use the
(03:41):
internet.
So how did you persuade the restaurants in thevery beginning to join the platform?
In the very beginning, I failed.
I didn't.
I did not join.
I get them to join.
I after I quit my job, so my my businesspartner, Matt, he sold the first restaurant,
and then I quit my job, like, 2 weeks later.
And then that 1st 3, 4 weeks, I couldn't sellrestaurants.
(04:01):
I couldn't get it done.
And so that I wasn't convincing them to join aplatform.
The the word platform had not entered my mind.
I had a website.
I had a dinky website that was a deliveryguide.
And I wanted them to advertise on the website.
So I tried everything.
I tried printouts.
I tried showing because not everybody had evenbeen on the internet that I was trying to pitch
(04:22):
this idea to.
I tried I tried every I tried shovelinginformation down people's throats about what it
was that was trying to do for them.
I was trying to get them advertising.
And none of that worked.
What actually ended up working was arelationship pitch.
I I I pitched them on this idea.
I was like, Hey, I'm an entrepreneur.
You're an entrepreneur entrepreneur.
Take a chance on me.
Not too dissimilar from how you pitch me onbeing on this podcast.
(04:44):
By the way.
And so, like, it turns out that sales is aboutrelationships first.
And I'm not even talking about, like, bigenterprise sales that takes 2 years.
Like, just talking to a small business owner,is a relationship.
And and leaning on that relationship turns outto be the the sort of number one thing that you
can do to to to start your sales process, salescareer.
Yeah.
You brought up a great point.
(05:05):
A lot of people that have the misconceptionbusinesses are these can be some giant
conglomerates, and they can be in certainscenarios.
But behind those closed doors are a bunch ofpeople that the only way in many cases,
especially in sales that they're getting thingsdone is through relationships And it's probably
the key topic and lesson we've had on thepodcast in the past few years is networking and
(05:29):
building relationships over time is one of themost important things in creating your career
and developing through your career.
And with all the delivery apps rising up manyyears later when you guys went public like
DoorDash and Uber sprouting right up, they havestill struggled to turn a profit, whereas
Grubhub was profitable.
A majority of the time in the very earlystages.
However, recently Grubhub has also struggled tobe profitable What are some of the things that
(05:52):
you did in the early stages to make theplatform profitable that Grubhub could possibly
employ today?
So, yeah, grow up.
I I I started at my apartment.
There was no investment involved.
This idea of, like, friends and family money.
I don't know who those people are.
I don't I didn't have friends and family thatmoney.
And so, and so I just started, and I startedwriting the software myself.
And so there was the technical skill, which isreally important that I learned in school, but
(06:14):
there was the relationship part too.
So the business was profitable up until we tookthe 1st financing.
And then we grew into 4 cities, and we wereprofitable.
Again, we took a second financing.
And that's same thing happened before the 3rd,4th, and 5th financing, and before the IPO, and
then after the IPO for 2 years.
And the the key really was the service wasdifferentiated and and not just differentiated.
(06:35):
It wasn't just different from everybody elseout there because Uber Eats and DoorDash, they
showed up late in the scene.
There had been a 100 competitor prior to them.
There was Groupon living social.
Both of them launched online orderingplatforms.
There was order up and the Shamus food andseamless.
There's there was hundreds of competitors.
And the thing that was different about Grubhubis the the food was better.
(06:55):
And it sounds crazy, but, like, when you gotthe food, It was better.
And, like, we didn't cook the food.
We didn't even deliver the food at the time.
But we made sure through our systems andthrough statistical analysis and understanding
how the experience went for customers andfeedback loops, we made sure that the best
restaurants were the ones delivering the food.
And so we had customers who repeated with usagain and again and again, they would order
(07:19):
twice a twice a week all year long, a 100orders per year.
And when that's how we were profitable.
We didn't have to keep spending money toacquire customers.
We we had loyal, frequent customers.
That's not true for any of the large playersright now.
And so, like, at a at a high level, I can say,well, they need to figure out how to
differentiate so the product is better so thatthey have repeat customers.
(07:40):
That's that's easy it's easy to say.
It's hard to do.
On the bright side, like, the the party is overin terms of there's infinite amount of cash to
just pay for customers.
I mean, DoorDash just laid out 500 people.
Like, the I just am going to spend out the nosefor customers and outspend everybody else.
Door can't do that anymore.
And so it's going to become a matter of who hasthe best product for customers.
(08:05):
And so doubling down on that makes sense.
I think Grubhub's partnership with Amazon isgoing to help a lot in the short term.
In the long term, it will be a prisoner'sdilemma because they're going to be very
dependent on a large player for their business,and that's a very dangerous thing to do.
It's great in the short term, but you gottafind a way to transition off of that.
And so I it'll be interesting to see how itplays out, but I think that the access to easy
(08:26):
free capital has gone away.
And so there there will be a shakeout that'scoming.
Yeah.
That partnership, I think you were right, isvery strategic the short term.
I know that I currently have Amazon Prime, andI saw it on the front page of a of my Amazon
Prime to sign up for Grubhub for premium for afew months or 6 to 12 months free.
There's some sort of time allotment that youhad the premium for free.
(08:49):
And I was like, oh, this is great.
And from then on, for a few months, anytime Idecide to order something, instead of going to
DoorDash or a different service, I would useGrubhub.
So I think that was strategic in the shortterm.
And now You
know, Amazon launched a competitor to Grubhub.
Most people don't know that they had a deliverycompetitor DoorDash and or Uber Eats in
Grubhub.
And
so know.
So they have this partnership.
(09:09):
I mean, it's not that much of a stretch ofimagination to assume that that the the
partnership might be a step towards thedirection of having their own service again.
Who knows?
But, like, I, I mean, I think that that's goingto be a big factor in the shakeout of which of
those 3 parties ends up being the marketleader.
Yeah.
We know with Amazon, they like to do a lot ofstuff on their own.
(09:30):
For example, with the Amazon Basics brands, theSoli Mo, which is their own multivitamins and
stuff like that.
So I think if there's a way to do it on theirown and do it right, they will probably do it.
Yeah.
So you
brought up a good point there.
I mean, Amazon launched at my current business.
Fix which is the on demand handy personservice.
You know, Amazon has launched a competitor tothat too.
So, like, you can't, like, you can't create abusiness without Amazon launching a competitor.
(09:52):
So, like, you can't stress out about it toomuch.
You just have to have a good strategy aroundcreating most value for customers and and you
beat them at their own game.
It it's you have an advantage by doing onething well compared to everything being
everything to everybody.
And the hard part is they have the they canhave a monopoly in many industries.
But that monopoly, they do it so efficientlythat it ends up being better for consumers
(10:15):
majority of the time than if an individualbusiness did it.
I know In terms of home services, they did somesort of cleaning services where they'd have
people come and clean your home for a shortperiod of time.
Not sure if they still do it.
But they do try to explore a lot of differentindustries.
And now transitioning here a little bit in thebook, Hanger, you talk about needing a personal
(10:35):
definition of success.
What was that personal definition for you andhow did it motivate you to build Grubhub to
IPO?
So it started it changed over the course of thetime that I was at Grubhub.
And it started out as I just wanna pay up myschool debt.
Between my degree, my I got 2 degrees in my Mywife got a degree at Boston University and then
a graduate degree at Northwestern.
(10:56):
We had $260 in school debt, which is not likemost of your listeners will be familiar with
it's horrible.
And at the time, so this was 2002.
And I was looking at being paying off schooldebt until 2 1036, a thousand bucks a month
until 2 1036.
It was insane.
Like, it's just this insane amount of money.
And I was like, man, I gotta have a point.
(11:17):
I gotta figure out And so once I startedGrubhub and it was, like, doing well, I was
like, oh, I might actually, like, mightactually, you know, beat that.
I might actually earn enough from this that Ican pay off my student loans early.
It turns out that I shot too low.
I I hit that target and I overshed, but then Ididn't have, like, what is my goal gonna be
now?
And so I took the company all the way throughthe IPO.
(11:37):
Obviously, I sold my stock for a a premium.
I made it up in the book.
I called it a Scrooge McD pile of cash, whichis true.
And, like, But that's those are not reasons whyI think I was successful.
A lot of other people think I was successfulfor those reasons.
I was successful because I created a platformfor independent restaurants and 80,000
independent restaurants on the platform,competed with the big chains, and beat them at
(12:01):
their game.
And they and they didn't have a disadvantagefrom a technology or operations perspective
because we provided that for them.
And I was incredibly success.
I usually say it needs to be 2 things.
1, it has to be explicit.
It can't just be in your head.
(12:21):
You have to say it out loud.
You have to write it down.
You have to, like, it has to be have to youhave to make it explicit.
It can't just be a vague idea in your mind.
The other thing is it should be unique.
When you say it to people, they should disagreewith I tell people I wasn't successful because
I had an IPO, but because I helped 80,000independent restaurants, a lot of people are
like, yeah, that's bullshit.
(12:42):
I don't, I don't believe you.
Like that, like, you were successful becauseyou had the IPO.
If people disagree with your definition ofsuccess, it means you're on to something.
It means that it's unique it means that you'vebeen intentional and thoughtful and explicit
about the way you're gonna go about living yourlife.
And that's incredibly important.
Yeah.
(13:03):
I agree.
And in the book, you talk about with mergingwith other companies.
You go by the rule of how you have to make theother team think that your product or service
is more valuable than theirs.
And I think that it makes perfect sense.
Right?
It's the concept of leverage.
Chris Voss talks about it.
FBI and former FBI negotiator.
How do you build that leverage for maybestartup founders listening in the audience?
(13:23):
How do you build that leverage in businessnegotiations?
The first role of mergers acquisitions is don'tbe an asshole.
It is really important you don't skip the firstrule because you're talking about somebody
going from being from a competitor to acolleague, and they have to like you.
And so the first rule is just it's it's what wesaid at the beginning of this podcast, like
(13:44):
relationships matter, right?
And and actually our initial merger or initialacquisition conversations with campus food
failed because we went straight to what yousaid, which was, like, figuring out like, how
we can show our leverage.
Bill Gerley, who was on our board fromBenchmark Capital, he said, you know, it
becomes this the game of the dueling Blowfish.
(14:04):
Each parties trying to talk about how big andhow great they understanding of each other and
empathy with each other, it just becomes abragging fest.
And the deal doesn't get done.
And so once you start from a place of you trusteach other and you think there may be something
to do here.
You you need to talk about how your stuff isgreat without denigrating, without putting down
(14:30):
the other the other side.
You can't talk about how their stuff is crap.
You just have to be convincing about why you'redifferent and unique and and and bigger.
And, like, that was really important in thecampus food deals.
Now later on, when we merged with seamless,there was another piece of that, which was We
had filed for to go public.
We we, literally, at the time, you had todeliver the the the documentation to the SEC in
(14:53):
in person We literally had someone sitting in acab outside the SEC ready to file the document
as we were negotiating with seamless.
And that is a really good alternative.
Like, you know what?
You guys can either agree to this or we'regonna go in and and turn this in.
Now It was important that we didn't overplaythat hand because you we were we were right on
(15:18):
the edge of being jerks when we were doingthat.
But it was real.
It wasn't a fake.
We were going to do an IPO if we didn't merge.
And and we ended up scrapping that IPO doingthe merger and then doing an IPO later.
But it would but having that leverage was was afor getting the terms that we wanted out of the
deal.
Yeah.
Definitely.
Great point.
And now transitioning here.
Grubhub was a software company.
(15:39):
And you are now building fixer for those in theaudience who might not be familiar.
What is fixer and what's the mission behind it?
So fixer is a handy person service where youcan use your phone as a remote control for your
home.
So you can do that with getting a car, you cando that with getting a pizza, and now you can
do it to get a handy person into your home.
The the fundamental difference between ourbusiness and the others that have tried this is
(16:04):
that we don't use contractors.
The people who do the work are full timeemployees.
And so it has a lot of similarities tomarketplace businesses, like, like, Thumbtack
and Angie's, listen to home advisor andcompanies like that.
But but Employing the supply of workers is avery significant difference.
And it's an expensive difference.
It costs us a lot of money to hire these peopleand we train them from scratch.
(16:25):
And the reason that we made that choice was thenumber of people that are entering the trades
is not sufficient for the demand.
There aren't enough trades people still doingthe work compared to what people want from a
home in the home.
And so you can't get somebody to show uptomorrow for 2 hours because All of those
people would rather book 40 hours worth a weekdoing a remodeling job or something like that.
(16:46):
And so it's very, very hard to get handedpeople to show small jobs.
And so we wanted to optimize towards that.
So we had to train people from scratch to beable to do it.
And there's a mission orientation to this too.
It's not just a profit.
There's a There's a purpose to it.
We are trying to create an entry path into thetrades that's really easily accessible in a
gender, inclusive way.
(17:06):
Women and men can join program, and we and weare targeting a 5050 ratio of that.
And it's all very intentional because we'retrying to increase the number of people in the
trades and then the diversity of people in thetrades.
As we're doing this.
Gotcha.
And with Grubhub, the whole concept behind howyou started it was wanting a pizza, How did you
come up with this idea of founding fixer?
(17:28):
The gutter in my house was broken.
And I wanted to fix it, and I wanted to installa rain barrel.
And I tried to find somebody to do it, and Icouldn't find somebody to do it.
And I literally was, like, in the yellow pagesagain.
And I was like, damn it.
I did this 20 years ago.
I can't believe I'm doing this again.
I'm like, well, I guess that's my nextbusiness.
And so that's, I mean, that was there's a bigpart of that that, it's just a pain in the neck
(17:50):
for homeowners to get a handy person.
Yeah.
Definitely.
Great point.
And what's the current business model forgrowing the platform?
Have you thought about, you know, partneringwith maybe other types of companies like Home
Depot or stuff like that to make it easier toonboard fixers to expand the company quicker.
So we we're we can
get as quick as we want.
It's really we we get we hire people from fromTarget and Starbucks and Whole Foods, and we
(18:14):
train them to have a career instead of a job.
And so it's really easy for us to applicantsand to train them.
And so from the consumer adoption side, that'ssimply like a a standard advertising approach
where we're going out and we're gettingconsumers one at a time through advertising,
through word-of-mouth, through referral,through search engine optimization, through
partnership, through all of the the thumbtackand Angie's lists of the world.
(18:35):
In terms of partnerships, I I have found thatfor consumer businesses, partnerships are
largely a waste of time that, It is far moreeffective to advertise to a consumer directly
and try and convince them to use your productthan to do it through a third party.
And do because doing it through a third party,there They're selling their products, not
yours.
And so I don't find partnerships particularlyvaluable in building a consumer brand.
(18:57):
That might just be because I'm bad atenterprise sales.
I don't know.
But But I I'm doing this 11 customer at a timeis the way we're doing it.
Yeah.
I know Amazon.
I can't remember the company they partneredwith, but a long time ago, they partnered with
a certain company and that company wouldadvertise on their platform that had some sort
of partnership agreement.
But instead, Amazon just promoted theirproducts instead that partnership ended up
(19:20):
falling through and being completely useless.
So in some cases, as you said, they will puttheir own priorities first ahead of, you know,
other companies that they could have partneredwith.
And what were some of the lessons that you tookfrom Grubhub that you're now implementing at
while building fixer?
I
mean, I think one of the biggest ones is justbeing intentional.
Like, we know exactly what it is we're tryingto do from a mission perspective.
(19:43):
We know what our values are.
We know what our goal is every year.
I know what my goal is for next year.
And that idea of being intentional and andfocused is the biggest lesson The other thing
is we just started.
We didn't overthink it.
Like, we knew we were gonna build a trainingprogram.
We knew we were gonna start trainingtradespeople from scratch.
We knew we weren't educators, but we did itanyway.
Like, we just started.
(20:03):
And it takes a certain amount of arrogance todo that, but it also takes a certain amount of
humility to recognize, okay, well, we juststarted, but we're not gonna be good at we have
to learn.
And those two things, the arrogance that ittakes to say I'm gonna create something that
nobody else has created, and the humility tokeep learning, they don't play well together.
It's hard to be both arrogant and humbled atthe same time.
They are, they are mutually exclusiveperspective or attitudes.
(20:25):
And so figuring that out, figuring out how tohave the right amount of, like, we've got this
and the and also the right amount of, like, weneed help with this.
It's a balancing act.
But it's one that I've had a lot of reps on.
I've had a lot of chances to do.
And so those things have really helped.
Obviously, consumer marketing, it's similar inboth businesses.
We're building a national brand.
One consumer at a time.
But the education piece, the w 2 employeepiece, that's all been a learning that's all
(20:48):
been a big learning curve to get to figure thatstuff out.
Totally.
And before we wrap it up here, what would beyour takeaways or key takeaways for starter
founders in the audience?
And where can they find more about your book,Hungry?
Well, and my key takeaway is start.
Start the thing.
Start doing Don't don't wait.
Don't overthink it.
Don't, like, spend a ton of time doing marketresearch.
(21:11):
Just just try it.
See if you can sell a customer on your idea andmake real money instead of asking would you buy
this?
Asking p ask people to actually buy it.
That's, you know, that's the sort of the punchline of the book is be intentional and just
start you find out more about me at, MikeEvans.com, there's links to buy the book,
hangry, right there, or you can go find it onAmazon or Audible as well.
Totally.
And we'll have those links posted in theepisode description down below for anyone
(21:33):
interested in the audience and checking it out.
Alright, everyone.
That wraps it up for today's episode.
If you enjoyed the cast.
Make sure to leave a 5 star review down below.
Share it with a friend, and thank you verymuch, Mike, for taking the time to join the
show.
It was a pleasure.
Yeah.
Thanks for having me on.
Absolutely.
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