About This Episode
Every business begins with an idea; a creative thought sparked by anything, really. It can occasionally be something as simple as feeling hungry, irate, and exhausted while riding the bus home—so exhausted that you'd prefer to order food than prepare it. That is how Grubhub began. Mike Evans, today’s guest on Brilliant Thoughts, a SUCCESS podcast, wrote about his journey building Grubhub from scratch in his book, Hangry: A Startup Journey, which is available on pre-order on Amazon.
In this episode, Mike tells us the struggles most entrepreneurs deal with at the early stages of a startup; how to make sure your business stays true to its roots as it grows; what makes a business a cut above all its competitive differentiators; and the one thing most entrepreneurs have difficulty doing—knowing when to quit.
After Mike left Grubhub post-IPO, he went on a 90-day bike ride from Virginia to Oregon, and is now the founder of Fixer.com, an on-demand handyperson B-corp that trains its employees from scratch.
Starting (and then quitting) Grubhub
Grubhub began as a directory of restaurants that delivered in the area, which eventually evolved into an online ordering company. Developing the website was easy for Mike; he had a background in writing software as his degree from MIT, but he struggled a lot with sales in the early stages.
“Learning how to sell to restaurant [owners] was hard. I failed many times. I got a Sales for Dummies book,” Mike shares. “During the early stages, one of the things that throws the balance off is that not only do you have to do everything, some of those things are gonna be things you are not good at, and you have to do it anyway. That could be really hard,” he says.
“...You got to kind of buckle down and just do it, even if it’s unpleasant.” – Mike Evans
But Grubhub managed to scale, and Mike improved his sales pitch from “begging” independent restaurateurs to “take a chance on him” to actually being able to show the value of his product during his pitch.
In fact, in the 12 years Mike was with Grubhub, it grew from a $140 paycheck to a $2.5 billion IPO, and they managed to outlast all the competitors that popped up along the way. Grubhub’s biggest evolution was more subtle than shifting from a simple directory to becoming an online ordering platform. It was their focus on giving their customers (both the restaurants and the hungry diners) the best quality product and service possible—making sure that the food that got delivered to the homes was good, taking responsibility from a customer service perspective, even though they weren’t the ones cooking (or delivering) the food to the consumers.
“Making money is not the primary activity of a business,” Mike says. “It is a secondary activity and completely incidental to the primary activity, which is creating value for customers. Businesses exist to create value for their customers. Full stop. They just happen to make money because of it.”
That was the secret to getting 70,000 independent restaurants to sign up to their service and what got this startup to an IPO in April 2014.
So, if things were going well, why did Mike decide to leave Grubhub post-IPO?
Mike is a huge proponent of defining “success” for yourself and “what it looks like shouldn’t look exactly like anybody else’s success.” When he began Grubhub, his goal was to level the playing field for independent restaurateurs against the big mega chain restaurants.
“...One of the maybe obvious, or not so obvious, consequences of being intentional about setting defining success for yourself and setting goals for yourself is that it becomes very obvious when you’re not working towards those goals, [and] are not working towards that success,” Mike says.
“It also became obvious after the IPO, the pressure from the public markets to make quarterly earnings were going to make it impossible to reach that goal of helping independent restaurants as our primary mission. So, my effort was no longer aligned with my goal,” he adds.
And for Mike, when your efforts no longer align with your goals, you only have two good options (and one bad one) —change the goal, or quit; OR continue doing it anyway, which is a bad idea.
“I think a lot of people like the idea of changing your goal, but there's stigma around this idea of quitting,” Mike shares.
Quitting, in Mike’s definition, isn’t giving up, but “going in a different direction of intention.” He was making a lot of money, but that wasn’t what success looked like for him, so he decided to quit and went on a bike ride—the story he relates in his book, Hangry.
Why do entrepreneurs find it hard to quit?
Mike believes entrepreneurs should be good at quitting. Starting something entails doing a lot of experimenting and making mistakes.
“And if you can't turn away from those mistakes and try something new, then you're not going to be a good entrepreneur,” he says. “I think entrepreneurs can be really good at doing that in small ways or even pivoting a business. But I think that we're pretty bad at like throwing in the towel and just trying something totally new.”
For Mike, humans in general are bad at quitting because “we’re bad at sunk-cost thinking.”
“The idea that “I've already invested a lot of time or money or effort into a thing means I should keep doing it is a natural way for everybody to think,” Mike says. “And when you combine that with sort of a pretty typical American attitude of ‘if I just hustle more and work harder, that's the thing that's going to make the difference.’ Sometimes it’s not,” he adds.
Entrepreneurs find it harder to quit than most because they invest so much time, money, and effort—so much of themselves—into their ventures that it makes sunk-cost thinking much harder.
But it is a necessary skill to develop, and it is what Mike has learned along the way.
Starting something new
After grounding himself and riding his bike across several states, Mike returned home refreshed and antsy to start the next thing.
He started impact investing—the idea of investing in businesses that not only generate profit but also have some good social impact. And Fixer.com, his new business, is an impact business.
“Fixer is an on demand handyperson service where you can go online, have somebody show up at your door in an hour or you can schedule them to come later in the week. And we communicate via app, we show up on time. Then we’re highly skilled, and we clean up after ourselves and the billing is automatic… So modern day what you'd expect out of a handyperson service,” Mike shares.
Before starting Fixer, Mike saw the reason why such services didn’t exist: there was an undersupply of skilled tradespeople and the economy couldn’t support the demand. Plus, the problem is getting worse because the trade schools are closed.
That is how he got the idea to create a business that both trained people from scratch and provided the much-needed handyperson services to the homeowners, marrying both profit and social impact.
They also wanted to make trade education more gender-inclusive. That is why they chose an ungendered name, “Fixer.”
“And our customers love it. And our employees love working with us. It’s sort of like a win for everybody,” Mike shares.
It is a much more challenging venture than what Grubhub was, but it is also an exciting thing for Mike. Fixer is now operating in six cities: Chicago, Denver, Seattle, Phoenix, Dallas, and more recently in Minneapolis.
To hear more about Mike’s journey as a startup entrepreneur and to learn more tips about how to make your startup successful, listen to the rest of the podcast.
Where to follow Mike:
His book, Hangry, will be out in November 2022 and can be pre-ordered on Amazon and Barnes & Noble.
DISCLAIMER: The people interviewed are well-trained experts and highly skilled in their areas of practice. They take many safety precautions prior to attempting the activities described. The activities or research discussed in these podcasts should not be attempted without qualified supervision and training with professionals.