When GrubHub started, it was just a pair of hungry guys with an idea.Now the website (and mobile app), which allows users to find delivery and takeout restaurants nearby and order the food online, is a multi-million dollar company.
Back in 2004, Matt Maloney and Mike Evans were both working as developers at Apartments.com, a site that helps you find apartments and condos to rent. The job required a lot of late nights at the office.
“We were hungry, and sick of ordering the same pizza all the time,” says Maloney, who is now CEO of the company. “It’s kind of funny that it really was hunger that inspired [GrubHub].”
At the beginning, they just thought it was a cool business idea. It was a simple, quick look-up site for restaurants in your neighbourhood.
But then, they started expanding.
In 2007 GrubHub secured its first round of funding, totaling $1.1 million, from Amicus Capital, Origin Ventures and some angel investors. Now, it has raised a total of $84 million in venture capital and cracked the top 250 on the Inc. 500 list.
While all that growth has been exciting, it brought its own plethora of problems. Early on, Evans quit his job to work on GrubHub full-time, which was a big—and stressful—move. He went from a senior developer at a big-time website to earning $140 his first month as a salary.
And they had to start hiring people—a big, intimidating moment for any company beginning to scale up.
“Mike and I aren’t artists,” says Maloney. “I can’t draw for $%&*. So we had to hire somebody and put some graphics together to bring more diners and restaurants to [our site].”
At first, Maloney and Evans hired through referrals. Then, they went through a period where they hired solely through Craigslist, because they found that it was where you could find lots of “scrappy” people with an “entrepreneurial mindset,” Maloney says. “Now we’re at a place where we’re hiring people at the top of their game with years of experience but still have that innovative mindset”
Job openings stay vacant for long periods of time and the acceptance rate is lower than ever, because Maloney can afford to wait for the perfect person to fill the spot, which keeps the company’s employee retention rate high. “We call them unicorns,” says Maloney. “The one person that fits the bill.”
When you’re hiring new people at the rate Maloney and Evans were, you fill up office space in a hurry. GrubHub now has more than 200 employees.
“This is our fourth office and at every point we’ve said, ‘there’s no way we’re going max out this office,” says Maloney. “Every time we’ve been wrong.”
It’s particularly hard to find a new office when you’re a rapidly growing startup. The typical process can take anywhere between 18 and 24 months, says Maloney, and when a company is doubling heads in half that time, it creates problems. Once all the leftover conference rooms fill up, you have to move on, but it’s not always that easy.
“Corporate real estate is the bane of my existence,” says Maloney. “In the startup world, life moves fast. In the corporate real estate world, life moves really slow.”
With all that growth, GrubHub has still maintained much of its company culture. Employees have to be passionate about food, and most importantly, be in touch with its customers. GrubHub is so devoted to this idea that every new employee has to spend the first two days at the company at a customer service desk answering phones.
For GrubHub it’s also important to have fun. Its office orders in lunch every week and has a party, and when it’s nice out, workers have a barbecue.
Now, it’s all about the future and finding better ways to serve the folks that use the service—both restaurants and diners. That’s where the potential is, says Maloney.
For instance, GrubHub works with a restaurant advisory board to figure out what restaurant owners really want, and figure out the best way to provide more value to them.
As for diners, GrubHub has more than 250,000 menus and can be found in upwards of 300 cities across the country. The company has also successfully expanded to the mobile world. Its mobile app now supports 20% of its orders. “Using it is pretty insane,” says Maloney. “It’s something that I never imagined when we started.”
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