Many people assume that the food delivery game was mastered decades ago, when dinnertime TV ads began to promise a hot meal (usually lacking in the nutrition department) on your doorstep in “30-minutes-or-less.” And while there’s no shortage today of restaurants that take orders by phone or online, ubiquitous mobile connectivity has created a new opportunity for companies and apps that have leveled-up the convenience factor of food delivery, opening up a new wave of choice for hungry customers.
One company in this space is Galley (“Eat well on your schedule”), a small company that delivers heat-and-eat meals in the DC and Baltimore areas. Galley places an emphasis on freshness, nutrition, affordability, and locally-produced, organic ingredients. In fact, they source many of their ingredients from the same suppliers as several of the city’s trendiest restaurants.
I recently spoke with Alan Clifford, Ian Costello, and Chris Anderson, Galley’s respective co-founders and chief engineer, at their offices in downtown Washington D.C. All three previously worked for the local e-coupon/social commerce company LivingSocial, where they developed their operations and tech know-how. The conversation covered everything from tech and development, to small business management, to (of course) food. The following interview has been edited for length and clarity.
Lesson 1: “Action is better than inaction. Full stop.”
Libby: You’re all LivingSocial alumni, and you were all there at the height of the “daily-deals” craze. What did you learn there that helped you launch and grow Galley?
Alan Clifford: We learn like any young company. You make mistakes as you go along, and you figure out how to correct those mistakes or change them. We learned a lot of key skills that made it easy for us to get off the ground but also think about familiar problems in a different way.
From my personal perspective, one of the biggest things I’ve learned at LivingSocial is that there are times when you have to make gut decisions, but you should only make gut decisions when data is not available! We try to use data on literally everything we do here.
The other thing we learned at LivingSocial is that there are always challenges. Nothing comes easily, and that’s one of the things you have to remember when you’re starting a company. Anytime you think it’s going to be easy… Literally, that NEVER happens! I can promise, universally, across the board, that that never happens.”
We started a lunch business thinking it was exactly like dinner, but the reality was it’s nothing like dinner. The customer expectation was very different. For example, everyone wants you to come up to their office floor and drop off lunch at the front desk. From a delivery perspective, that adds 7-8 minutes per delivery. We pulled out of the lunch business because we couldn’t figure out how to meet customers’ expectations without charging them $22 for lunch. Anytime you’re going out and trying something new it’s going to be harder than you think. A lot of the companies get hung up on one problem, and you’ve got to make a decision about it and move on, not get hung up on one mistake or one issue that’s not going the way you thought it would.
Ian Costello: One thing LivingSocial taught all of us is that action is better than inaction, no matter what. Full stop. Making a decision with the best information at hand, and then moving forward, has proven to always work for us better than just pausing for more time, gathering more information.”
Lesson 2: Keep it simple for the customers; hide the complexity
Libby: Tell me about the technology behind the company, customer experience and operations. What’s “under the hood?”
Chris Anderson: First, we’re a food company, not a tech company. The tech can be as flashy or well designed as possible, but if the food isn’t good it doesn’t matter.
Our stack is all ours; we rely on some 3rd-party services but for the most part our website, our app, it’s all in-house work. We have our website and app where customers order food, but the other side, which is the much larger technical challenge, is the back-end. Managing of deliveries, managing orders, that stuff. If someone can’t order food for a couple of minutes during the day, it’s not a great experience. It’s much worse if during delivery the driver can’t see the next delivery address, because that costs time. We do a lot of work to make that as efficient and smooth-running as possible. We’re always looking to make that better.
Ian: I like businesses and products that seem very very simple to consumers, even though you know they’re horrendously complex. Uber’s that way: you press the button and the car picks you up. Amazon is that way: you push a button and get a package 2 days later. You know there’s so much going on to make that happen. We’re like that.
We try to make it two or three clicks… the back-end app is probably 10 times bigger than the front-end, and there’s a lot that goes on from tracking meals, to ordering, to getting in trucks, to cooler bags in cars, and ultimately to the customers.
It would be a lot easier if we made the site more complex for consumers, but we try to protect that part of the simplicity of the app, and put all the complexity behind the scenes.
Chris: One of the good examples of hiding complexity is when you go to place an order. If the meal is available for purchase, you can buy it. We’ll have that meal for you. With other e-commerce or food delivery sites you might be able to place an order for a meal and then maybe you get a call or an email later saying “we’re sold out of that.’ If they see something they can buy it. That requires a ton of work on the back end.
Lesson three: Give your employees a reason to care.
Libby: Unlike many other young companies with a delivery component, your drivers aren’t contractors – they’re employees. Was there a business decision behind that?
Alan: We pay our drivers an above-market wage. Everyone who works for the company is a w-2 employee, we don’t have any contractors. We try to make sure we’re taking care of our employees, all the way down to benefits and everything else.
When we started, it was the height of the 1099 contractor vs. the w-2 employees’ debate. We decided it was better to build our business on a more expensive cost structure, and then if regulations changed we wouldn’t be that adversely affected by it. The other thing we’ve seen is that by making people employees, they feel much more connected to the company, there’s more ownership of the product. The driver turnover rates are actually pretty low… Part of that is because we treat our employees well overall. The industry average of burnout is somewhere around 60-70% every quarter for drivers, and we’re not even close to that.
Ian: It helps on the customer side too. With low driver turnover, our customers know the same guy is coming every night this week. The driver knows which door to knock on, or which house to go around back. So it helps on both the customer and the driver side.
Chris: They know how to get through an apartment or say to the front desk. Once you eliminate that minute, minute and thirty seconds from the delivery it adds up.
Alan: The thing that people forget about last-mile delivery is it really comes down to a human’s knowledge. The computer systems are not aware that the apartment next door has a concierge who needs to call the customer – those things that can make you speedier. Those are just things that don’t exist in software today, and so a lot of the challenge of building a last-mile business is that you have to trust in your drivers to know those rules.