Building a Fast-Growth Marketplace: Stefania Mallett, CEO of EZCater (Part 5)

Sramana Mitra: How long did it take you to take an MVP out and when did you bring that to market?

Stefania Mallett: We started by leasing software from a consumer residential food ordering platform. We thought, “How different can corporate catering orders be from consumer residential orders?” We were quite naive about that because we discovered pretty rapidly that you have to make quite a lot of  changes. The two markets are very different. We had a product that allowed us, in fall of 2007, our first orders.

By February of 2009, we decided we had to build our own custom platform for corporate catering needs, and broke away from the consumer residential platform. We went and built our own. That was in-house proprietary and a year later one of the regional competitors approached us and said, “I don’t know how you did it but your website is better than anything than we’ve seen. Can we lease your software?” We said no.

Two others came to us. We had three different local competitors asking us if they could lease our software. It was pretty clear that we had launched some platform that was valuable. We kept figuring out what no one else had figured out which was how to be national. We have caterers in every city and town across the United States. These are people who will deliver food at a scheduled time to the standard of quality that a business requires in every city and town in the United States. That’s a huge advantage for a salesperson who has a complex-shaped territory.

Sramana Mitra: How did you manage to get the marketplace to transact? One of the challenges of any marketplaces is to get both sides of the equation to start transacting.

Stefania Mallett: So true. It was a Friday afternoon where I was sitting on my deck. I had my feet up on the railing. I said, “This is ridiculous. We’re growing but it’s too slow. I can’t sign up caterers fast enough to attract enough customers.” Briscoe was pacing around and I was there with my feet on the railing. He says, “You’re right.”

We went back to the data. We looked at the history of all the orders that have ever been placed and said, “Is there something we can learn here?” This is the part where you’re going to get angry now. I have to tell you that we did find something. We did take a couple of clever steps that unfortunately I can’t tell you. We managed to get 20,000 caterers in less than three months. That made a huge difference.

In Tony Hsieh’s book about the early days of Zappos, he talks about having very good customer satisfaction and a well-oiled flywheel, but it was growing too slowly because a lot of the shoe companies wouldn’t do the kind of drop-ship interaction he needed. He finally figured out that if he had a lot more shoes to sell, that would change the equation for him. We figured out how to get a lot more caterers to sell. You put more stuff in your store, more customers come running in.

This segment is part 5 in the series : Building a Fast-Growth Marketplace: Stefania Mallett, CEO of EZCater
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