What some guys won't do for a slice of good pizza — take the Grubhub founder for example.
Mike Evans came home late one rainy Chicago evening, cold and hungry after a long day at a boring job. Exhausted from going to his normal go-to delivery joints, Evans turned to the Yellow Pages for help, but found little relief.
Restaurants were listed alphabetically, with little if any information about where or even if they deliver. So what's a Massachusetts Institute of Technology educated computer programmer to do? Found Grubhub, one of the largest food ordering businesses.
Turn Unhappiness Into An Asset Like The Grubhub Founder
At the time, late 2002, Evans was a software developer for HomeFinder.com, an early real estate classified ads site. His wife was in the last few months of law school and the couple faced several hundred thousand dollars of student debt.
While the six figure salary he earned at HomeFinder was nice, the job was unfulfilling. It turns out though that unhappiness can be a good thing. As he writes in his memoir, "Hangry," "Discontent is a feature, not a bug. Entrepreneurs aren't happy people."
He began tinkering with a website, working on a system that allows users to pinpoint the location of a store. He knew the idea had potential. Even in its primitive state, it garnered a top Google listing for food delivery and 1,000 clicks a day. But it wasn't making money.
At some point in early 2003, Evans realized there is "a world of difference between a website that makes zero dollars and a website that makes one dollar," he told Investor's Business Daily.
It was the proverbial aha moment. He had to get a customer, one who pays real money. "It's the difference between a hobby and a business," he said.
Jump In With Both Feet
A HomeFinder co-worker (and ultimately Grubhub co-founder) Matt Maloney, went out and scored Grubhub's first client. He did not get as large a fee for the listing as Evans hoped, but it was enough to energize him.
What started as a "side hustle," Evans said, "became something more." If this was going to work, he could no longer do it part time. "It's important to jump in with both feet and really commit yourself to make things come alive," he said.
So shortly after Maloney's breakthrough sale, Evans quit both his job and making payments on the family's student loans. "At some point I just decided I can't let this debt dominate my life," he said.
He took a 2003 year-end $11,000 bonus matched by $11,000 from Maloney and founded the company in 2004. By 2018, he says, that investment would be worth $13 billion. The company went public in 2014 under the symbol GRUB. Just Eat Takeaway bought the company for $7.3 billion in 2021.
Turn Yourself Into A Salesperson
Getting more restaurants to sign on to the service was the next task. Unfortunately, selling was not Evans' strong point. So he consulted an expert: "Selling for Dummies."
"I still have the original book around here somewhere. I didn't know anything about sales. That's the thing about starting a company. There's always something you know nothing about, that you just make up as you go along," he said.
"But then you either get good at it or mediocre at it or you fail. If you get mediocre at it, you might live long enough to hire someone who's good at it, which is what I did," he said. "I did sales long enough until I could hire somebody who was good at it."
Early on, Evans admits, "I just asked people to take a chance on me because I was an entrepreneur. You can't use that line and be successful (long term)."
He learned, "There's an order to sales. The first step is you have to listen to the potential customer. You have to start there. And then you have to tell them how you can solve their problem. And then you have to ask for the money."
"If you do those in the wrong order, you'll never make the sale. Too many start by telling people what their product is and how valuable it is. You have to begin by asking the customer what he's struggling with," he said.
Grubhub Founder: Stress Loyal Customers
But Evans soon had another epiphany. He discovered it cost him $400 to close a $300 deal — but renewals are pure profit. This spurred him to come up with a high-tech way of routing phone calls through Grubhub to restaurants and tracking sales.
"That realization was what started me moving forward and not just being a hamster," on a wheel, he said.
But not everything was copacetic. Evans says he put in 80-hour weeks while his 50% partner worked part time. In retrospect, Evans notes "every partnership goes through friction like that, where you are trying too figure out who does what and how much they work."
Evans didn't allow his displeasure to fester. "Part of partnerships is being explicit about your needs and to talk about the things that are and aren't working like we did," he said. "Everything changed after that conversation. If I hadn't brought it up, it wouldn't have changed. You can't expect partnerships to work perfectly without conversation."
Prioritize Expansion
To speed Grubhub's expansion, Evans tried everything. He stuck magnets to parked cars. He placed ads on Chicago Transit System rail cars. And he tried postcards, billboards and radio ads. "There are no silver bullets in marketing. The answer is to try everything. Always keep experimenting," he said.
It took time, but Grubhub evolved. He moved from charging restaurants a subscription fee to a per order basis. And, in another moment of epiphany, he realized he should have introduced online ordering much earlier.
To grow, Grubhub needed capital. The company won the $50,000 first prize in the University of Chicago New Venture Challenge. The prize money bought them time and brought them to the attention of venture capitalists. However, it wasn't until 2007 that the company landed its first investment.
Don't Ignore Your Personal Life
Meanwhile, Evans' wife was in India on a fellowship. And they'd been apart for months. So Evans took his laptop and joined her there for six weeks. It turns out the semi-break (he did have his laptop) was good for the soul — and his perspective.
"I think it's really easy to get mired in the details and not realize how much you're doing just to prop up the business — stuff that isn't necessary or that you can get somebody else to do. You see it by leaving for six weeks and coming back," he said.
But giving up control isn't easy. At one point, he asked the tech department to adjust the "suggested tip" column. And when he didn't get a response he wanted, he did it himself. That created tension in the department because he violated the procedure he set up.
Evans was ticked off when one of his employees forbade him from doing that again. And yes he considered firing the engineer, but realized it was better to let it go. "You know what's worse than a know-it-all who's wrong? A know-it-all who's right," he said.
That's typical of Evans, says Josh Evnin. Evnin worked with Evans for six years at Grubhub and now again at Fixer, a home improvement site.
Know How To Find Superstars
"One of the things he's great at is detecting talent," Evnin said. "Once you've hired someone and he or she is on the team and clearly talented, he's good at letting them run. He provides guidance and feedback, but he's perceptive enough to know when to say you're the skilled person, I'm going to let you do your thing."
Around the time of the Grubhub IPO (which valued the company at $2 billion), Evans decided to leave.
"After starting a business, you go through the steps where you give up a piece of it and then you give up another little piece of it until the very final day, when you sell the last piece, and you own none of it. But it doesn't all happen at once. It's part of a journey. And I think, holding on to any of that too tightly can really impede your progress personally, and for the business."
It's in line with a philosophy he picked up on his many long-distance bike rides:
If you are gonna quit, do so when you're rested — "so that you're making choices based on whether or not your efforts line up with your goals as opposed to I'm just sick and tired of doing this thing."
Grubhub Founder Mike Evans' Keys
- Founded Grubhub, a food delivery service that was valued at $2 billion at its IPO.
- Overcame: Nervousness about leaving a salaried job for the unknown.
- Lesson: "Everything you learn about business — sales, marketing, technology — is 49% of success. But 51% — more than half — is simply starting."
