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ENTREPRENEUR SERIES: HELL HATH NO FURY LIKE A COLLEGE KID OVERCHARGED

ENTREPRENEUR SERIES: HELL HATH NO FURY LIKE A COLLEGE KID OVERCHARGED

We value curious minds. We love learning from people who are doing cool things out in the world, so we’ve made it a regular pursuit. The Entrepreneur Series is a GoKart Labs-hosted guest speaker event focused on startups and the individuals who built them. We invite a business founder to share their startup story, and some of the challenges and lessons they have encountered along the way.

Name: Eric Martell

Startup: EatStreet (2010)

Title: Co-Founder and Former CIO

Story: What started as a side project for a trio of University of Wisconsin, Madison undergraduates is now one of the largest independent online and mobile food ordering and delivery services in the U.S. EatStreet was sparked when Eric Martell became frustrated with an online food ordering process on the second day of a computer engineering internship. In his words, “hell hath no fury like a college kid overcharged.” Martell and two of his peers, Matt Howard and Alex Wyler, set out to build a better online food ordering tool, thinking that it would be a great post-college resume-booster. Before they knew it, things got real. After only 9 months, EatStreet was fulfilling 100-200 orders from 70-80 Madison restaurants every day.

Two years later, the freshly-graduated team was working on EatStreet full-time and looking to expand with the help of outside capital. Enter, the newly-founded startup accelerator, gener8tor. Within a year of gener8tor’s program, EatStreet had assembled a $3M Series A, a team of investors, and a board of directors. Early on, Martell and team realized that although the idea of EatStreet is relatively simple, the marketing side is vastly complicated. Their operations needed to be highly data-driven in order for them to survive, focused on consumer behavior to inform what levers they should pull. Once EatStreet got into the Series B, C and C Extension, investors—who had originally bet based on the consumer model and the fact that they liked the team—wanted and needed to get into real numbers. Luckily, Martell and company had already been seriously collecting data and understanding consumer behavior, even the points that seemed trivial at the time. As a result, they were able to course-correct some of their bad business practices and show their investors growth in numbers and operation.

Today, EatStreet employs 1,000 people and serves over 250 cities—totaling 15,000 restaurants, 1.7 million active users and $38.5 million raised in venture capital. Martell left the company in August 2016 realizing his passion lies in building companies. In February of 2017, Martel joined gener8tor Minneapolis as Managing Director to help mentor high-growth startups and pursue his own ideas.

Learns:

Good enough is sometimes enough. When pitching the business idea to the first restaurant they pitched with a sample DVD e-commerce database. They told the restaurant to imagine that Blade Runner is spaghetti and Matrix is chicken alfredo. It took a lot of convincing but eventually they were driving 50-100 orders a day to that restaurant.

Consumer data is king. Data can solve big problems. For instance, there was a certain EatStreet consumer that would only order under an aggressive promotion, at a cost to the company. The team realized that there was a statistical inflection point where if you reengaged this consumer shortly after with offer of a tangible benefit from ordering, it spurred behavior that would not only cover the cost of that promotion but ultimately create a very profitable return-consumer.

Rally mentors. Finding mentorship in gener8tor early on was critical for the team. This lead them to land an initial investor at PayPal who gave them expert insight on building digital commerce. Since then, they’ve continued to gain invaluable leadership from investors and industry heavyweights.

Get comfortable with uncomfortable. Because there’s really no such thing as a “not-scary” moment. Flying by the seat of your pants is sort of a fundamental in the startup world. Even adjusting to healthy growth can be tricky with an expanding the team, newfound challenges and responsibilities.

Find tension. EatStreet has been able to sustain a healthy, growth-promoting tension investing in short-term and long-term strategies. This can be attributed to the respect that the leadership team has for one another, “different people worry about different problems, and they know how to keep each other in check—resulting in the best strategies.”

Firing a friend is awkward. So, be a little wary of hiring them.

Future:

Of EatStreet? Martell is confident that a lot of great things are on the horizon. In fact, EatStreet recently acquired three companies as a systematic roll-out of online food ordering and delivery in secondary college-town markets. Who knows, the company could stay private, go public, or be acquired. By consistently meeting their goal of doubling in size every year, anything is possible.

Of Martell? We bet that he’ll eventually be at the reigns another successful startup. For now, he’s killing it at gener8tor, helping others grow into their potential.

 

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