By SUSAN LAHEY
Reporter with Silicon Hills News
Restaurant delivery, excluding pizza, grew by 33 percent since 2012, according to NPD Group’s food service market research.
With food delivery skyrocketing, delivery companies are duking it out over contracts with top restaurants, with the hot breath of Amazon and Uber on their necks, as those behemoths ramp up their own delivery services.
Harvest Delivery has a different approach. The Austin-based startup plans to just slip into these highly competitive, fragmented markets and embrace them all in its user-friendly platform…like a big hug.
Harvest Delivery aggregates restaurants and delivery services, similar to GrubHub, but unlike GrubHub they don’t charge a fee to be in their platform. Nor do they charge customers. Harvest will show you all the restaurants that deliver to your address broken out by type of food, delivery time, delivery cost, and number of stars customers gave them. Since they don’t only list the restaurants that pay them, they think of themselves more like the Kayak of food delivery.
Without their permission
Founders Jake Bailey and Blake Ellingham are big fans of Alexis Ohanian’s book Without Their Permission: How the 21st Century Will Be Made, Not Managed about how some of the most successful companies—such as Uber—bypassed channels and focused on customer needs. That inspired the idea for Harvest. While other companies sign agreements with restaurants and delivery services for a cut of the order, Harvest just added these restaurants to their platform.
“What are they going to do?” Bailey asks. “Say, ‘No we don’t want this business you’re sending our way? We don’t want to fill this order?’”
So they’re restaurant agnostic. They can include everyone—including, one day, Amazon and Uber. They launched in Austin in February and plan to be coast-to-coast by year’s end.
Advisor Brandon Coleman III, former chief marketing officer for Romano’s Macaroni Grill, applauds their business model.
“They’re trying to go into markets where it’s highly competitive and that is their trump card…they can bring everybody together. They don’t have to fight.”
Of course, that means they’re not monetizing either. Bailey said they’re not going to worry about that right now. Once they’ve achieved scale, they’ll figure out a way to monetize. Other companies’ models—like taking a cut of the orders—has created a lot of resentment in the industry. One option might be to capitalize on the data Harvest collects through aggregating so many restaurants. For example in Austin, Bailey said people order a lot of Asian food during the weekdays. He assumes that’s because they want to at least believe their eating more healthfully. On the weekends people also order a lot during mid-day, but they go for tacos. Down the road, Bailey said, they might add a recommendation engine.
All the moving pieces
“A lot of our customers are young professionals…overachievers,” Bailey said. “They’re not working 9-to-5, they’re working 8 to whenever. They skipped lunch, they haven’t grocery shopped in two weeks and they’re thinking ‘All I have are some Hot Pockets.” Other customers include college students, office managers ordering food for the team and busy parents.
Victor Sverdlin, founder of dimeSocial, says he’s used Harvest more times than he can count.
“If you want to order out without Harvest,” Sverdlin said, “You can depend on opening five websites to figure out what you want, find the time of delivery, and order. By the time that’s gone down you’ve spent 45 minutes and now you have to wait for your food. With Harvest, it’s boom, I see exactly what’s around me. It’s even better since they launched their app because I can get in the car and by the time I get home the food will be there.”
But as an aggregator, Harvest has limited control. On a recent order (mine) there was a snafu about a change in the menu that didn’t get worked out until the restaurant’s kitchen had closed. Normally, Bailey said, a kitchen that’s about to close would get dropped off the options before a customer had a chance to order from it. Generally, Harvest lets the customer resolve issues like that with the restaurant or delivery company. Occasionally they jump in.
“We do it…to learn what it takes from customer support to handle refunding, canceling orders, replacing missing menu items, dealing with slow delivery times, incorrect orders, etc.,” Bailey said. “The more we learn, the better we can make the customer experience…we are creating ways to automate customer service so that we can maintain a solution that grows with us.”
They met in a cafeteria
Bailey and Ellingham met in the seventh grade cafeteria and were inseparable growing up. In college, Ellingham came to Austin, eventually ending up in the computer science program at UT. Bailey went to Emerson College in Boston to study marketing. There he started his first company–an online clothing store–and then went on to intern for Wefunder and Ditto Labs in marketing before co-creating the Emerson Launch accelerator program during his senior year. In their junior year Bailey and Ellingham started Recommenu Inc., a recommendation engine for restaurants. Ellingham learned iOS and got an internship at Rocksauce Studios. They got support from Longhorn Startup and Dorm Room Fund, a fund through First Round Capital that lets college students become investors in other students’ startups.
But restaurants only want to invest in things that show the immediate ROI, Bailey said, and they pivoted for “a much bigger opportunity.”
Harvest advisor Cullen Newton is attorney, investor and former vice president of corporate development at OrderUp, a company that handles delivery and payment services for “quick service” restaurants. A New Yorker, he said he gets a dozen emails a day from several food delivery services he’s signed up for.
“This idea resonated with me immediately,” Newton said. “It was the cleanest, simplest possible experience…as the competition ramps up you’re going to see things get increasingly fragmented with more and more delivery companies pushing for exclusive deals…. This is the right way, the right time, the right industry.”
That’s one reason he’s involved. The other reason is Bailey and Ellingham. “They’re essentially brothers,” he said. “They’re so persistent and earnest and passionate…within five minutes of talking to them I just trusted them. I trusted that they’re going to do whatever they need to do to see this through and do it the right way.”