If you've been on a CTA train lately, you may have seen ads for local start up, GrubHub. CTR spent time with one GrubHub's co-founders, Matt Maloney, and dug deeper into what makes the site tick. Read on as Matt talks about outside funding, the need to support local startups and GrubHub's future growth plans.
CTR: For those CTR readers that don't know what you do, what exactly is GrubHub?
GH: GrubHub.com shows all of the restaurants that deliver to you. Type in your address and our site returns all of the restaurants that deliver to that address. You can view their menus, read/write reviews, view available coupons, and of course order the food online or by phone
CTR: Is the service free?
GH: The service is 100% free to all
CTR: How many restaurants are in your Chicago network? How many more do you plan on adding?
GH: We have about 1,500 restaurants listed in Chicago, and about 600 of those we work with directly.
CTR: You recently launched in other cities, can you tell us where you are now?
GH: We're in San Francisco, Boston, and New York City as well. We've recently gotten the ball rolling on Philadelphia as well, so you should see that city launch on our site around March.
CTR: You are one of the successful Chicago start-ups that raised capital. How has this changed your business?
GH: Outside capital has allowed us to grow much faster than we would have on revenues alone. Our business model requires a significant amount of upfront investment before launching a new city. For example, we have to collect all the delivery data, hire sales people, and start buying ads all before people start ordering food online. Bringing in investors to fund this growth pushes our company to grow as fast as we are capable.
CTR: Do you think Chicago area investors are slow to discovering 'a good idea'?
GH: Midwest investors are not slow by any stretch. I feel that our VC's investment choices reflect their investment opportunities and their world does not revolve around web startups and online marketing. We are competing against really innovative local nano and financial firms that typically have experienced management teams. If we could increase the tech startup deal flow for investors, they would invest in more of our ideas. Unfortunately, our region lacks experienced career entrepreneurs who come up with new ideas, raise capital, hire local launch teams, build local talent, grow, exit, rinse, lather and repeat. There are locals doing this, but not enough to build a startup community where someone could move here and reasonably expect to build a career out of local tech startups. Because of this shortage, I feel that many investors don't have the confidence to risk their portfolios on new tech ideas with typically unproven entrepreneurs. Obviously this creates a downward spiral where top unproven talent take off to either coast, earns success and then talks trash about our risk adverse VC's.
Basically, support your local web startups and build community!
CTR: How large is your staff?
GH: We have 25 people right now and are looking to add a couple more soon.
CTR: Any new site developments you'd like to share?
GH: Sure. We recently launched live chat software on the site, which has been a big hit with our users. Now, whenever someone has a question about how the site works or their order, it's easy to get in touch with our customer service team to receive a quick answer.
We also recently launched gift cards, so now users can give the gift of free food from hundreds of restaurants to their friends and family, and those people can order from places they LIKE.
CTR: What is your most popular category on GrubHub?
GH: Pizza definitely, as you would expect. We also receive a ton of orders for sushi, Chinese, and Thai food.
CTR: Anything interesting/funny you've noticed from your users? Anything quirky you'd like to share? Do you have the same person ordering pad thai every night, for example?
GH: We actually do have a quite a few people that order on average once a day. It's kind of crazy. But what's really funny is that EVERYONE includes special instructions. Well, just about everyone. And every once in a while, someone tries to use the special instructions to their favor by including "add steak dinner at no charge" or something similar. I don't know why they think this will actually work, but it doesn't.
But I'd say the coolest thing is watching all of the different orders coming in and seeing who is placing them. For example, one of our customer service representatives noticed that Harmonix, the makers of the Rock band video games, just ordered from us. Now, we take our Rock Band very seriously in the office. We have a set up for the game in the main room of our office, and most of our employees are on the Hard/Expert level. So we emailed them basically saying how awesome we thought they were and thanks for the business, and they told us how much they like GrubHub for when they're working late, and sent us some cool Rock Band t-shirts and pins.
Another interesting thing to note? No one's buzzer's work and everyone wants ranch as a side.
Thanks, Matt for taking the time to let us get to know you better!!
I love Grub Hub. It's a great service and I use it all the time. Matt is a really cool guy. Had the pleasure of meeting him once at an outing.
Posted by: Jeff Smith | January 23, 2009 at 09:54 AM