Matt Howard, the CEO of EatStreet, a successful website and app, thinks the best time to launch a business is while you’re still in school. And he should know: Howard and his friends Eric Martell, the company CIO, and Alex Wyler, CTO, founded their company while at the University of Wisconsin-Madison.
And it all started because Martell got hungry.
Alex Wyler. (Photo: EatStreet)
First bite
It started back in 2009 in Madison, Wisc., when Martell used campusfood.com to place an order for delivery. The delivery driver informed him that he would be better off ordering food over the phone rather than using that website, as it charged 75 cents for placing the order — so if he had just called the restaurant, it would have been cheaper.
Martell told his roommate Wyler — who, like him, was a computer science and computer engineering major — about his experience, and they decided to create their own food delivery website.
They were convinced that if they made it free for people to use, it would be more popular than their competition. (Grubhub announced it was acquiring campusfood.com in Sept. 2011.) Both were confident they could handle the technical issues that went into making the website, but they needed someone who could convince businesses to use it.
With this in mind, they enlisted the help of their friend and fellow roommate, Matt Howard, an economics and political science major with experience selling cars. Howard agreed to help — and EatStreet was born.
Matt Howard. (Photo: EatStreet)
Nearly bit off more than they could chew
At first, convincing restaurants to use their service was more challenging than the three 20-year-olds had anticipated. Restaurant owners told Howard that they would use the website only after it had been proven to work for other restaurants.
“You have this kind of chicken and egg problem that restaurants don’t really want to sign up with you until you can show them you can get orders,” explained Howard. “But you can’t get orders and get diners using the service unless you have restaurants.”
One of the first restaurants Howard convinced to use the service was Silver Mine Subs in Madison. Owner Ken Brenner still remembers when he first met the young salesman. “Howard just kept coming by and wanting us to get on. So we said OK, and we’ve been on there since,” Brenner said.
Brenner was impressed with the fact that they were all in college and figured that there wasn’t too much risk on his end because customers could always call in to order if the website didn’t work. Brenner really liked the company and was impressed by their product and customer service.
After a while, Howard was able to convince a handful of other restaurants to use their service. Eventually 10 restaurants began using the website, and from there things escalated quickly. Within a year, 100 Madison restaurants were on EatStreet.
(Photo: EatStreet)
Too much on his plate
At this point, EatStreet was starting to look like a success. And the now-seniors were off to a smoking start.
Martell and Wyler continued innovating and improving the company’s technology, like implementing a rewards system to incentivize people to order food through EatStreet.
Howard, on the other hand, who was in charge of sales, suddenly found himself in charge of customer support, marketing and serving as the liaison between participating restaurants and EatStreet. “About 30 to 40 phone calls a day were coming in,” he said. “Answering them was definitely challenging. And then when you’re taking an exam, obviously you can’t be running out to go take a phone call,” explained Howard. He went on to say, “I got through it, but if I had another year of college after that, I don’t think I would have been able to (continue). The business was really taking over my life at that point.”
The founders had to juggle company growth on top of their course load. “My senior year of college is really when it started to blow up, and we started getting a lot more diners using the service,” Howard said. “It was definitely challenging because I would get calls from restaurants during my classes, and I had to run out of class to answer the calls. So, to be completely honest, I did my research and found classes that you don’t actually have to go to,” he admitted.
Piece of cake
Amid the craziness, the founders entered and won the Burrill Business Plan Competition at the University of Wisconsin, winning $10,000 and a free office to work out of for a year. They also won a $3,000 seed grant from the university and the NEST competition, put on by the university’s computer science department, netting them another $3,000.
Along with the money, Howard says the most valuable part of the competition was meeting seasoned entrepreneurs. “When we won the Burrill Business Plan Competition, the judges reached out to us and helped mentor us for the first year of the company. They’re kind of what I call ‘the been-there, done-that entrepreneurs,’ and they helped us grow the company,” he said.
The founders also regularly sought the advice of professors — many of whom, to this day, Howard still keeps in contact with. Another big help was the university’s Law and Entrepreneurship Clinic, which provided the young startup with pro bono legal services and counsel.
EatStreet Headquarters, Madison, Wis. (Photo: EatStreet)
The sweet taste of success
The EatStreet founders graduated in May 2011, and one month later they hired their first employee.
Today, EatStreet employs 150 people, has raised over $40 million in funding, according to Howard (CrunchBase says the company has raised $27.13 million), and has more than 15,000 restaurants in approximately 250 cities and more than 30 states.
Though most of EatStreet’s online reviews are positive, the most common complaint revolves around slow delivery times. In response, EatStreet recently acquired a delivery company called Zoomer. Before, EatStreet had never dabbled in delivery, leaving restaurants to take charge of delivering food to customers. Acquiring Zoomer enabled them to launch delivery service in 10 markets across the country.
Howard thinks this is the big next thing for EatStreet. “Consumers want to know that it’s going to take 35 minutes to get their food. And if we don’t control the delivery part of the equation, we weren’t really able to give accurate ETA’s in tracking,” he said. “Now with this technology that we’ve acquired, it will allow us to do that.”
They may have a few kinks to iron out. One of the first restaurants to use EatStreet’s delivery service is Goomba’s Pizza in East Lansing, Mich. Owner Gail Sutton says she got a lot of customer complaints about delivery, including a lack of adequate drivers during her busy times. “My sales dropped off quite a bit — I would dare to say 50% down from last year,” she said.
When Sutton found out Zoomer had been acquired by EatStreet, she was relieved because she had been using their online ordering service for years and liked the way they do business. “EatStreet took over, I think, about four weeks ago, and it’s been a 100% percent turnaround. They’re very customer service-oriented,” Sutton said.
In fact, since EatStreet took over, Sutton said she hasn’t had a singe customer complaint. “I really love EatStreet. They’ve done wonders for my business in just these few weeks,” Sutton said.
EatStreet Headquarters, Madison, Wis. (Photo: EatStreet)
The secret sauce
EatStreet attributes part of its success to the fact that the founders started it while still in school. According to Howard, “The time to start a company is when you’re in college. Because, first of all, there’s not a lot tying you down. You don’t have a house. You don’t have a mortgage. You don’t have kids. You’re not married yet. So it is a little bit easier when you start a company in college.”
Another benefit to starting a company while you’re in college is that you can use your school’s resources. “Use the university to your advantage. You’re only a college student for four or five years and the university wants to help you. So use those resources because they’re going to be very valuable,” Howard advised.
Having committed cofounders can make all the difference too. “I do think getting cofounders is a really smart thing to do. You know, the reason EatStreet is where it is today, is my cofounders focused on the tech, and I was able to focus on everything else, and I feel very strongly that you want your cofounders to be very in it, just like you are,” explained Howard.
Finally, Howard has this advice for startup founders:
“You just have to commit to an idea and run with it. A lot of people are very hesitant on well—the technology’s not perfect or we don’t have enough clients signed up yet to launch it. You’ve just got to get out there and do it. You’ve got to jump in headfirst, start the company and start running. Because you’re going to learn a lot once you launch the company and get it going.”
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