GrubHubMike

Why have core values for a company?

One of my coworkers mentioned to me about a year ago that it was really hard to make decisions of a moral nature in a company because each person in the company has a different value system.  The problem is compounded because pretty much everybody unconsciously assumes that everyone else around them is working from the same system.  Expectations and reality are way different. 

But does it matter?  I talked to CEO's, employees, friends, family about this. I got a huge range of answers as to why it matters. Here's a sample:

• You want to make sure that when an employee is making a decision in the middle of the night, and nobody is around to discuss it with, they have a good framework.
• Doing the right thing is important so that it comes back around to you.
• You need to act according to values because if you don't your customers might find out.

Wrong!  These are TERRIBLE reasons for defining core values.  The problem we are trying to solve is what do we all think constitutes "right".  Not why we do the right thing. Its a process of disambiguation.  Here is correct answer for why we do the right thing.

    Our company does the right thing because it is the right thing to do. 

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VC stands for Vindication from Comments

Fred Wilson wrote this in his post today:

But just because something is simple to build doesn't mean it won't be a good venture capital investment. I've heard many people say they could build twitter in a weekend. I don't doubt it. But twitter is more than code, it's a popular communications service ...A VC, Mar 2009

I had a visceral reaction to this because my company GrubHub.com  just recently experienced this kind of comment stream on an article about closing our most recent round  Take a look at the comments.  Its almost exactly what Fred is describing.

Fact is, the concept behind GrubHub.com is actually pretty simple: provide a more convienient, accurate and comprehensive way for at home diners to order delivery food.  

We've been accused of not being a real business for a few reasons:
1) we make real revenue.
2) other people are doing it.
3) it isn't very complicated

*sigh*  I guess we'll figure out how to get up in the morning and struggle past these insightful accusations. *sigh*

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April Goal: Minesweeper at work

One universally held truth is "I'm too busy."  I've been thinking a lot about this quite a bit over the last months.  It's a trend that is heightened with GrubHub.com's recent series B funding.  A natural outcome of funding is to think about the possibilities we have to put those resources to work.  This is entirely appropriate.  Its also entirely appropriate to be very selective about the things that we actually move forward on. Its a tension that should exist in the mind of any executive (presidents creating national budgets are not exempt from this )

One of my goals at work is for us to work smarter, not harder (washing machines work hard, but they don't create disruptive technologies).  In direct opposition to this edict is the fact that I hate being inactive at work.  If I have a single spare moment, I'll code up some new prototype or proof of concept. Or, I'll fix the next bug in the priority queue. In engineering principles, this is called having a tightly constrained system.  Works well under known stress, but fails catastrophically outside those parameters.

So, while I probably won't actually play a lot of minesweeper, I do think I'm going to try to have more intentional breaks throughout the day.  The goal will be simply to take my hands off the keyboard, keep my mouth shut and think about stuff.

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Whisky Wednesday: Ardbeg and Highland Park

In a previous post, I mentioned that Scotch ain't Stuffy   I'll stand by that. But, it also ain't snobbery to have a few favorites (or maybe favourites, since its from the UK, who knows)  There are lots of great whiskys out there, but if I want a real treat I usually have Ardbeg or Highland Park

Highland Park is a tasty beverage to quench your thirst.  I think of Highland Park as the standard by which to judge the other top of the line whiskys. Its not necessarily better. Instead, it embodies all of the best qualities of Scotch in moderation.  Its smoky, but not very extremely, the flavor is just perfect.  It's smooth (doesn't burn your tastebuds to cinders) , finishes strong (you can taste it for 10 minutes after you sip some)  and goes perfect with a cigar, or fish, or lucky charms. 

A scotch lover would say Ardbeg is very smoky and peaty.  Anybody else would say it smells like rotten socks and burnt leather.   Ardbeg distillery closed down in 1981, but reopened in 1997.  I would say that Scotch gets really good around 12 years. Which means, I'm waiting with baited breath for Ardbeg 12 to come out sometime in the next year.   I have had the fortune to taste an Ardbeg 30.  It was marketed as "Lord of the Isles". It cost $35 a shot, but was like tasting a smooth and smoky piece of heaven.  I'm looking forward to an Ardbeg tasting tomorrow night at Delilah's , which has the best whisky selection I've seen at any bar in Chicago

Don't forget to get a ticket to Whiskyfest Chicago.  See you there.

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Bootstrapped revenue models are good for first time entrepreneurs

The traditional approach to attracting venture interest is to present a high impact and  game changing concept. At the same time, one needs to convince potential investors about the competency and drive of the management team.  It's extremely hard to accomplish the latter as a first time entrepreneur.  The best way to do it is by presenting a fait accompli: wow your investors with an existing, bootstrapped business.

The key is to make sure that your existing revenue represents the opporunity from the unit model perspective.  I was repeatedly advised to build a business plans from the bottom up with the unit model clearly defined and then extrapolated.  The reasoning works well from an analytical perspective. It works even better when presented as empirical data as opposed to speculation. 

The next step is figuring out the growth paths for the business; then picking one as the winner. You gotta bet on your horse to win, don't spread your recommendations around a selection of possibilities.  In the end, being strategic is about choosing what NOT TO DO and keeping focus.  If you don't believe me, try modeling out multiple possible growth paths in a single excel spreadsheet. If you can't do it analytically, think how much harder it will be trying to do it in real life!

Even very agile companies look very brittle in the short term.

 Even very agile companies look very brittle in the short term. At GrubHub.com We have a weekly product update cycle. We keep very aggressive deadlines, try to keep meetings short and generally don't screw around.  Sometimes we take a step back and say "Damn! we get a lot done" 

So why is it that we look at the stuff we want to get done and despair that some of the important projects are always just over the horizon?  We do a pretty good job of keeping things lean.  So what gives?  Well, its a matter of scope.  When you are looking at implementation on too short a time scale, expectations grow out of whack.  So I'm coming up with a new rule:

My implementation calendar is on a weekly basis.
My evaluation calendar is on a monthly basis.

Hopefully this will keep my strategery from experiencing the phenomenon known as thrashing in Computer Science.  I'll let you know how it works out.

A strategic business changes exactly 1 user behavior

Changing consumer behavior is utterly difficult. It can also be very rewarding.  Some of the biggest winners of the last 10 years of web businesses are the ones that get consumers to adopt a new way of doing a single thing and stick with it.  Amazon, Google, Opentable, Ebay.  Each of these companies have changed exactly one aspect of a consumer's behavior and made it part of their background process.

It's all about easy adoption.  The thing that we want to change about a consumer's behavior at GrubHub is that they think of us first.  Not the yellowpages. Not their menu drawer.  Not their mental list of favorites.  Once somebody does that, everything else is an option. Want to order by phone?  Ok.  Like a restaurant that doesn't pay us? Go ahead, order from them!  Like using coupons? We got em.

The opposite of this is a company without focus. One that tries to change everything about the way a consumer interacts with the world.  Facebook is a good example.  They want to be social network, messaging platform, address book, microblogging platform and company branding engine. They are the exception that proves the rule. I'm not saying it doesn't work, just that its a longshot. Facebook got it right.  Friendster, iVillage, myspace, and Yahoo didn't.  I'd rather just go to Vegas. Lot less trouble. Same odds.

Whisky Sunday: blends vs single malts

In celebration of my upcoming visit to Whiskyfest Chicago  I'm continuing my series on Scotch.  Sadly, I'm a bit behind because of a nasty 4 week flu I'm finally getting over. Time to start whetting my whistle again!

Knowist: What is a single malt? 

Knowist: In technical terms, it really isn't very complicated. A single malt comes from a single distillery and process. A blended whisky comes from a mix of different distilleries.  The age on the single malt is pretty simple, the only real rule is that scotch needs to be aged at least 3 years in barrels after the distilling is done.  For blended malts, the same rule applies, and the age on the label must be the youngest aged whisky in the blend.

Knowist: But really, what is the difference? Why all the snobbery about single malts? 

Knowist: Interestingly, up until about 40 years ago, most scotch whisky aficionados viewed the blending of different whiskys as the true art form of enjoying scotch.  Most distilleries sold their spirits to larger distilleries and producers.  The leftovers were usually sold to second tier producers.  To make those second hand single malts more attractive, several producers tried interesting things like aging their whisky longer and in differently flavored bottles.  In the early 80s, consumption of single malts in the US shot up.  Because of their historical unimportance, the supply wasn't their to meet the demand.  The effect snowballed. Single malt production has never really caught up with the demand. So, there is a whole pile of snobbery around the stuff. 

Knowist: So, blends are pretty good, but which is best?

Knowist: There are two blends I like a bunch, but really only one choice for which to purchase.  The first is Johnny Walker Black.  The second is Famous Grouse.  Johnny Walker is one of the largest selling blends. You can find it anywhere. I bought it in Zambia at a bar once!  The are two things about JWB that gives me pause: first, its blended  from about 40 different whiskys. Second, it is a mix of barley and grain, as opposed to solely barley.   In contrast Famous Grouse is blended from exactly three whiskys: Highland Park, Glenturret and Macallan.  FG is the most popular whisky sold in Scotland. In the US, its usually on the bargain bottom shelf at the liquor store. Which is awesome!  Its usually the best blend there. 

Leadership Style: Da Coach

One of the guys I works with has a brain that works completely around sports.  If I were to give him a non sports analogy, his head would explode.  Works for him though; so who am I to judge.  Well, I guess technically, I'm the Big Boss.  So thats who I am to judge, Biatch!   The most important aspect of this style is the desire and commitment to your peoples.  You urgently want them to improve themselves personally and professionally.  There's always a next level to reach for.

The key to a well oiled coaching machine is in the recruiting.  It all starts from the first interview.  This attitude says: Its OK if we don't get the perfect skill set. I'd rather have a great person who works hard that can learn the skills rather than an experienced employee who is less than totally motivated.  One hires with the intention of bringing people up to the next level or "raising the boats" as I heard Chuck say earlier today.

There's a gotcha here.  You gotta be careful about getting the wrong kind of person reporting to a coach.  Overqualified or Undermotivated individuals are poison for the team spirit and sense of opportunity that a coach fosters.  The only way to make this work is a hire slow/fire fast mentality.  You can't rush into getting the wrong person, and you can't keep the wrong person around a second longer than necessary.

Hard work is the unspeakable defensible position

My co-founder at GrubHub and I have engaged about 30 venture capitalist firms over the last 2 years.  As a result of that process we've learned quite a bit about things you absolutely never say. These are trigger words that get you mentally thrown out the door before the meeting is physically over. Here's a short list:

-These numbers are conservative
-We don't have any competition
-This budget has some padding in it
-The founders were looking to get some liquidation this round
-It's an execution play (if you are a first time investee)

There's probably a bunch others. But the one question we've always had a really hard time answering is:

What is your defensible position?

The problem is this:  Can a larger funded entity with this exact same idea execute this better than you and take the market.  Unfortunately the natural answer to this question is yes.  There are a few things that can prevent this: patents, trade secrets, private data.

So, what is defensible?  Hard work.  That is, if you are willing to (or better yet already have) put the focused energy into building something that is inherently difficult to build odds are that nobody else is going to bother.  Or at least very few people are going to bother.

One example of this would be building a model with network effects.  The classic example is fax machines. Everytime somebody else buys a fax machine it makes my fax machine more valuable.  This was especially true when only 500 people had fax machines.  Now every office needs some device that works on the fax machines' protocol even though we have better technology to do the same thing.  Another example is data collection. Look at some of the big data aggregators like InfoUSA.  They supply sales and content data to some huge percentage of businesses.  Its just too darn hard to go out and collect all that data manually.

Now obviously, you need to have something in place to protect the results of your hard work being easily copied from you.  But, that is really just a matter of more hard work ;)

Photo Credit Dawn Nakashima

Biking isn't just for frigid Chicago winters

The springlike weather is infecting me.  It may be time to stop ridiculously long runs in the freezing cold and start ridiculously long bike rides in the nice weather!  In celebration, I thought I'd post some cycling pictures from around the world!

Cycling Past Vineyards in Austria



Critical Mass Poster in Budapest



An unfortunate situation in Christchurch, NZ



Stopping for a picnic on the Danube in Austria

Interview with Adam Rodnitzky of ReTel

Adam Rodnitzky is CMO and co-founder at ReTel Technologies, an advanced retail video analytics company. He started ReTel with two other classmates, George Aspland and Scott Roberts, while he was at business school at the University of Chicago. Before business school, he co-founded CompleteCar.com and TixNix.com.

See ReTel Technologies at reteltech.blogspot.com

Knowist: Tell me a little bit about your work.

Adam: To date, video analytics technology has not delivered on the promise of turning video cameras into advanced data gathering and reporting devices. Generally speaking, most video analytics developed to date have been able to perform simple tasks like noting that movements have occurred, or that an object is placed where one shouldn’t be. That has worked to a limited extent for physical security applications, but it has been a challenge to apply current systems to the task of gathering retail business intelligence (BI).

At ReTel, we’ve focused on building the first video analytics process specifically for retail BI. We can deliver information from video that few other companies can, and it is information that is useful and valuable to retailers and restaurant operators. We can tell retailers where consumers spend the most time in their stores, what products they interact with, specific breakdowns in gender and age range, how efficient their service processes are; and we’re adding new capabilities continually.

Knowist: What special technical challenges exist in arranging new information that originates from legacy systems?

Adam: In our world, there are a few specific challenges. We’ve had to design our system to essentially be input agnostic so as to work with the widest set of video feeds. Security systems currently in place run the gamut in both age and format. Generally speaking, most surveillance systems that are currently in place are either standard analog or IP video, but some have proprietary video formats that require banks of codecs to process.

The other challenge is that, in some instances, we simply don’t have the proper video coverage or field of view to capture decent levels of intelligence. In these cases, we can supplement existing equipment with low cost, off-the-shelf IP cameras to fill in the gaps. From our perspective, we don’t want to work under compromised data conditions, as it can diminish the value our solution delivers.

Knowist: How do you sell the idea of a "new trick for an old dog" to business owners?  Does resistance to change come from technology or a customer's mindset?

Adam: I read an interesting term for what we are doing the other day: we’re creating value from exhaust. That is, the data latent in security system videos is a byproduct of their primary function, which is to provide after-the-fact verification that an event has or has not taken place. When I think of how we do what we do, we’re turning a cost center into a profit center.

If the equipment is already in place, why not leverage it to discover opportunities for added efficiency in your operations, to learn what engages consumers the most, or where opportunities exist to improve sales? Once we’re able to show the potential for ROI on an incremental technology spend, we see that resistance fade.

Whisky Tuesday: Scotch ain't Stuffy!

I've really come to love Scotch and Whisky (and Whiskey, but more on that later) So, I'm starting a new series called Whisky Tuesday leading up to Whiskyfest Chicago.  To be fair, it might not always be on Tuesday, and I might continue writing about whisky after the fest, so the whole moniker is kind of messed up before I even get started.  A quick whiksy primer:

Whisky is distilled beer fermented from grains.
Scotch is whisky made in Scotland.
Bourbon is whiskey made in Bourbon Cty Ky.
Everything else is just whiskey. (or whisky)
You can read more about the difference.

At a party last week, I heard the comment: "People who drink Scotch are so stuck up about it"  That struck me as kind of a shame.  I just got back from Scotland a couple of months ago. Whatever the connotations of Scotch are here in the states, I take a different view.  Scotch reflects some of the best parts of the people of Scotland!

Point #1: The people of Scotland are very warm, and so is Scotch!
During my trip, I was amazed at just how friendly everybody was there.  In bars, cafes, shops, at the hotel.  Pretty much everywhere we got into some great conversations about hiking, the land, politics, and of course Scotch.  It was amazing.  Some of the best people on Earth!

Point #2: The people of Scotland are very down to earth and so is Scotch!
In Scotland, folks drink Scotch because they enjoy it. They don't drink it because it's a status symbol.  Actually, I'm pretty sure nobody does anything for status in Scotland.  Well, actually, we did run into a kilt clad wedding party, and everybody knew they were awesome because of it.  That ain't stuffy, its heritage!

Point #3: The people of Scotland invite you to slow down and enjoy life and so does Scotch!
Nobody we talked to was in a rush.  One gentlemen was stopping in a cafe for some tea in the course of his work day and ended up giving us a long chat on the history of the town of Aberfeldy.  Which, interestingly enough, is completely gung ho about fair trade.  Which is awesome!

I think I'll probably be doing a small Scotch tasting in preparation for Whiskyfest  Send me a tweet or an email if you are interested. 

Leadership Style: Execution Expert

Turns out it is pretty important to get stuff done.  I found out something as we went from 1 employee to 30 employees.  Getting things done yourself is a very different skill than helping others get things done.  Sure, there are some similarities.  Being detail oriented and having good time management skills are certainly critical.  But there is something more to it than that with a group of people

You need to be able to provide a definition. There is a wide spectrum of needs among different employees.  Some folks with a lot of drive and initiative simply  need to be given a framework within the larger company goals.  Other folks are less experienced and so need more detail.  The important thing here is to avoid micromanagement.  The only thing I've found that works is to avoid comments on How and focus on What  To that end, the Socratic method works pretty well.

The second pillar in managing execution is measurement and feedback. An ongoing process works well. Personally, I'm a big fan of defining metrics in a collaborative manner.  As a team, you and your employee try to determine what metrics measure success within the larger strategic framework. After that exercise its the employee's responsibility to give regular updates.  This provides transparency and clarifies responsibility.

One of my regrets at GrubHub.com has been not having this figured out earlier.  Its probably been my biggest growth area.  One of my personal goals is to continue to improve this until I get to be the kind of execution expert described here