Ifelayo, the founder of GrubSquad, a web-based restaurant delivery service, was referring to picking up food for his family’s gatherings, including his brother’s wedding.
“We probably had food from about 10 different caterers,” Ifelayo said. “So I was like, ok, and I was bringing some equipment stuff back to the event, to the people who’d cooked the food, and I wondered, man, I wonder if this is a business.”
In turn, Ifelayo said he contacted a couple of African caterers that he knew, and asked if people ever ask them for delivery.
“They were like yeah, some people they just don’t have time, they have things going on,” Ifelayo said. “I was like look, here’s my number, and if you ever need anything, just call me. I did that for maybe 8, 9 months. It would only be on the weekends, because I had a full time job then. Usually, they would tell me ahead of time, so it worked out well. If it was a lot, I’d call up a friend, and I’d charge them like $40 or something like that for the delivery, because they were usually really big orders.”
Ifelayo said he did not do this for the money. Rather, he did this to figure out if this type of work and see if it was interesting enough.
“I thought it was interesting enough, but all of them were mostly on the suburbs of Houston – really far distances. I thought, hey, I wonder if you could do something more on demand, where somebody could be like, I want food, and they’d get it within an hour.”Ifelayo, who lives in Sugarland, started coming to the city to talk to restaurant owners.
“I said, do you do delivery?,” Ifelayo said. “And most of them said no. I asked them why, what are some reasons. And a lot them, they’ve tried it before, or it just didn’t really work out. It takes them away from the kitchen, that’s what they’re good at, they don’t want to be dealing with managing drivers. Or paying somebody when on average they might get two deliveries per day. They don’t want to be paying someone for that, when instead they could say if you want us, you can come to our restaurant.”
Enough restaurants agreed to try GrubSquad, Ifelayo said.
“I said, what if you had somebody that did delivery for you,” Ifelayo said. “You don’t pay them per hour, you just have access to them. I got eight restaurants to say yes. That’s kind of how GrubSquad started.”
Ifelayo said GrubSquad offers restaurants delivery, as well as a channel to reach new customers – either those who’ve never heard of them before, or have, but don’t have the ability to get to them at the times they want.
“They literally are just getting customers who otherwise wouldn’t come to them because of time, or sometimes people are tired on the weekends, or things like that,” Ifelayo said. “It’s mostly that a lot of people are busy nowadays.”
According to Ifelayo, new customers GrubSquad brings in includes people who have moved to the city and want to discover new places to eat, and people who are here for a short period of time, such as those who come to the Medical Center.
Ifelayo said that probably 30% of GrubSquad’s business is corporations.
“A lot of busy workers, their companies, especially investment banks and law firms, pay for their dinners if they’re working past five,” Ifelayo said. “Some of them do order lunches, but mostly it’s dinner. These are big orders that restaurants are dying for, they want to make more money, but a lot of restaurants, their kitchens can service a good amount, but their space to have people is limited,” Ifelayo said. “So what we do is basically, in essence, we’re expanding their restaurant, without them having to put more seats or pay more waiters. Also, they don’t have to pay somebody to sit around to do delivery, when they can have access to a delivery person anytime they want.”
In addition to GrubSquad sending orders to restaurants, restaurants also sends orders GrubSquad’s way – the process works both ways, Ifelayo said.
According to Ifelayo, there are a few reasons why delivery is not as prevalent in Houston.
“In a city like Houston, the thing to do is to go out to eat,” Ifelayo said. “So, I think that’s one, it’s not really in the culture, as opposed to places like New York, or San Francisco, or just more like DC – people are more open to that. And then also, Houston, in terms of the corporate side, a lot of companies here in Houston are energy companies, and the schedule isn’t crazy hectic per se, as opposed to, say, somewhere like New York, where there’s a lot of financial companies and law firms, where the hours are nuts, and people, because they want to make the most out of their time, they sit at their desk, they eat, so they just order in. And then because it’s so spread out, it’s kind of difficult for restaurants to manage that. Because some restaurants, the ones that do, they’ll offer delivery for like a mile.”
As far as expansion goes, Ifelayo said that with GrubSquad being such an operational company, and the nature of the industry itself, it takes quite a bit to hone down and figure out a business model and operations. GrubSquad wants to get to a point where 90% of what it does is replicable for every city, and 10% of what it does is catering to that specific city.
“Nothings ever going to be perfect, but you want to get things down to where, at minimum, its relatively easy to scale, because you don’t want to go so fast through a new market when you’re experiencing different things here, and then you’re like, oh wait, we haven’t figured this out, we haven’t figured [that] out,” Ifelayo said. “Once you’re able to figure that out in Houston, then it’s a lot easier to do that in new places. And I think that’s where we are now. I think we’ve done a pretty good job of figuring those things out, but I think we’re still having a little bit of a way, not too far off, but I think we’re getting closer to where we’ve figured out enough that I think it’ll be easier to really get some experience in a new city.”
A lot of figuring out these nuts and bolts, so to speak, is theory, and to figure out if those theories work, you have to use trial and error, Ifelayo said.
“For example, you might think about how long it takes a restaurant to cook food,” Ifelayo said. Then you figure out, ok, it depends on what type of food. So if it’s sushi, it takes longer, if it’s a beef product, chances are its probably 15 minutes or less, if its chicken, it takes a little bit longer. These are things that you would never just know, until you just did it. We’ve been around for just a little over two years, and I think we’ve gotten to a point where we’ve learned quite a bit. Now, it’s more about building our product to match what we’ve learned., and then that way it’s easier to scale.”
Additionally, Ifelayo said that logistics are always a work in progress.
“Part of what we’re doing is building software strictly focused on statistics,” Ifelayo said. “First, the version that we have now was outsourced to a developer here in Houston, who I met through the startup community. And now we have a developer that works for GrubSquad.”
All of GrubSquad’s drivers are independent contractors, according to Ifelayo.
“They use their own cars, they’re responsible for their own gas,” Ifelayo said. “We pay them on a weekly basis, tarn anywhere from $10 and up per hour. They currently kind of work in a shift model, but we’re fine tuning that to be able to make it easier for people, to make it more flexible. Also our crowd-sourcing deal is where we’re focusing for our delivery agents – we don’t call them drivers, we call them delivery agents.”
Ifelayo said that one thing GrubSquad knows is a benefit to Houston is that its a complex city, both in terms of size and getting around.
“It’s much more complex than cities, for example, like San Francisco and New York,” Ifelayo said. “Those cities are much more concentrated, whereas Houston is all here. So what we did, we tried to squeeze as much as Houston inside the loop. But even inside the loop of Houston, if I’m correct, I believe is bigger than most of San Francisco. Which tells you, if we can do a good enough job of we can a good enough job of figuring out how to do things in central Houston, I think it makes it easier to go into cities that are not as big. You look at cities like Austin, you look at cities like New Orleans, Dallas of course, these are markets that we’ve looked at. But even outside of the state, I think there’s cities that we’ve looked at that I think would benefit of our service, and that we could be very successful [in]. I think one of the things that has been super great with GrubSquad is that we do have a custom order. If people are eating in a city, whether a city has a little diversity or not, they’re going to still want to eat from those restaurants.”
Ifelayo got help from people in different circles of Houston’s startup community.
“I think meeting different circles – like I met, in the startup community, Jeff [Reichman], and he was super helpful,” Ifelayo said. I don’t even know how I met him for the first time, but I just remember the next morning we had breakfast. We talked and he was super helpful, he gave me some tips. So even in the Houston area, in the startup community, people can be very helpful. Even some research I was able to do through the University of Houston Small Business Development Center was pretty helpful. Roberta Skeebo was helpful, and Mark Streich, who’s not longer there, was super helpful as well, and I’m still in communication with him. So just reaching out, and then also reaching out to people in my network, like family friends. A lot of them are outside the state, and they’re in areas where this industry is booming a little bit to an extent, you can get advice from people, whether they’re in the investor community or they’re in the startup world in general.”
Ifelayo says people in Houston are helpful.
“The thing about Houston is, there are a lot of people that are helpful, because of the culture of Houston,” Ifelayo said. “People in Houston are just not uppity. If you meet somebody, and they’re willing to help, and they know, they’re willing to help.”