Q&A: GrubHub at the Forefront of Online Food Delivery
Online food ordering has established itself as a viable business model, packed with potential for growth. GrubHub proves it. Based in Chicago, GrubHub is a venture-backed company founded in 2004 by software engineers Matt Maloney and Mike Evans. Last month, the company raised $50 million in venture funding and acquired DotMenu, another online food ordering and delivering service with extensive roots in the college-aged userbase. Susanne Dawursk, brand marketing director for GrubHub and an MBA graduate of the Kellogg School of Management, took some time to answer a few questions from NBR about GrubHub’s business plan and expansion as well as her own experience in brand marketing.
NBR: Could you tell me about GrubHub’s business strategy and concept?
Dawursk: The website shows consumers all of the local restaurants that deliver to them and allows diners to order directly online, by phone or through the GrubHub iPhone and Android app. Both apps are free from their respective app markets, and it is also free for diners to order online at GrubHub.com.
GrubHub currently serves Chicago, New York, Los Angeles, San Francisco, Boston, Philadelphia, Washington D.C., San Diego, Oakland, Seattle, Portland, Denver, Boulder, Miami, Dallas, Fort Worth, Houston, and Phoenix, with plans to add more cities in the immediate future. In other words, watch out.
NBR: How does the acquisition of DotMenu help GrubHub in terms of expansion and gaining greater hold of college-aged diners?
Dawursk: The acquisition of Dotmenu – home to both Campusfood.com and Allmenus.com – allows us to accelerate GrubHub’s current growth and solidify our position as the leading online ordering company in the U.S. by increasing our overall number of markets and the number of restaurants a diner can order from online and through mobile applications.
In purchasing Campusfood, we have acquired the leading online ordering website for the collegiate market. We see this as a great opportunity to develop the GrubHub brand with this audience as most college students move to major metropolitan areas upon graduation where GrubHub is the market leader. Allmenus is the leading menu directory in the U.S. with over 230,000 menus listed on the site. It’s a great site with a significant amount of traffic and great content. We are thrilled by the opportunity this presents.
NBR: I read recently that part of GrubHub’s recent funding round will go towards mobile development. Could you expand on GrubHub’s mobile ordering service?
Dawursk: GrubHub’s mobile strategy simplifies the connection between hungry consumers on the go and restaurants. We want our mobile channel to be as feature rich as our consumer website and to take full advantage of mobile specific functionality. Our focus is iPhone, Android, HTML5 Mobile Web Browsers and Tablets, iPad and Android Based. The evolving mobile space and technologies make it a rich environment for experimenting with innovative ideas.
People want to order from wherever they are. So, if you’re at a friend’s house, you don’t want to have to borrow their computer when your phone is in your hand. Also, when you’re on your way home, you can go order so the food gets there when you get home and not have to wait. With our apps, our users can now save credit card information and leave their wallet at home or not even have to get off the couch to pay for their food. Our mobile apps really simplify the ordering process.
Over the past 6 months alone, the company has seen a 300% increase in its mobile app install base. After launching our updated iPhone app in October 2010, we saw a 330% increase in mobile food orders. Mobile orders comprised of 1 percent of our total revenue in 2009. With the growing popularity of our mobile apps, mobile orders comprised of 10 percent of our sales by the end of 2010, roughly $7 million. We project mobile orders to make up 25% of our total food sales by the end of 2011.
NBR: GrubHub has established itself as one of the big names in Chicago tech. Are there any big upcoming plans for GrubHub in the future such as going public or further expansion?
GrubHub will continue to evaluate opportunities to expand our services more aggressively to our restaurants and diners. Our strategy continues to be about scaling our business to bring more orders to delivery and takeout restaurants across the country. We’re focused on being the best we can be – our diners deserve that.
NBR: Could you give some advice to Northwestern students trying to enter brand marketing?
Dawursk: The best advice that I could give is simply to listen. I realize that this seems ridiculously obvious, but even the most seasoned marketers can get caught up in the strategic frameworks and analytics and end up with no better consumer insight for their efforts. Ultimately, for us at GrubHub, it’s about creating space every day to let our diners talk to us, and for us to listen very closely. We work very hard to nurture that conversation and based on that, we act on our commitment to make our services bigger, better and brighter. I learn the most from sitting with our Customer Service team taking calls, emails and chats from our restaurants and diners. The analytics are certainly helpful – of course you need to know if you’re getting a solid ROI – but they aren’t the end all be all. The power of your brand is squarely in the hands of your customers. Becoming a better listener makes you a better marketer.
About Matthew Wong
Matthew Wong is NBR Editor-in-Chief. He writes primarily about tech start-ups and entrepreneurship. This summer he will report for Dow Jones VentureWire in San Francisco.
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