Catering To Startups - ZeroCater Story
If you’re one of the growing number of startups in Silicon Valley area that gets regular deliveries of catered food, you’ve probably heard of ZeroCater. And if you haven’t yet, you should: The startup is quickly becoming the go-to place for handling all the logistics of ordering lunch (and other meals). With a flexible delivery schedule and a huge number of food vendors that it’s partnered with, it could be the easiest and most efficient way to make sure your office gets fed.
What I really love about ZeroCater, though, is the story: It’s all about one dude with some entrepreneurial drive that created a business by solving a problem for himself, then offering up a solution to others.
ZeroCater founder and CEO Arram Sabeti moved to the Bay Area after becoming a bit obsessed with Paul Graham’s essays. Sabeti wanted to work in startups, so he saved up some cash, got a place in the East Bay and just started looking for work. He landed at Justin.tv, where he says he handled a lot of the office management, QA and all sorts of other things that no one else wanted to do.
While at Justin.tv he handled daily lunch orders for the startup, which was routinely the most problematic part of his job. From talking to other folks in similar positions, he found out he wasn’t alone — dealing with catering was a huge pain for everyone who handle such things. So he took on another startup client and began outsourcing his expertise to Justin.tv as well.
At first, ZeroCater was just Sabeti, a bunch of hustle, and a spreadsheet with about 500 columns in it. Then he brought on CTO Bill Moorier to build some code to automate some things. Like invoicing, for instance: Prior to getting a software platform in place for managing accounts, Sabeti was spending some 20 hours a week just filing invoices for various companies he worked with. With that simplified, the business began to operate a lot more smoothly and started to grow.
ZeroCater was part of last spring’s YCombinator class and raised $1.5 million last summer from investors like Keith Rabois, SV Angel, Start Fund, Stewart Alsop, Justin.tv founders Justin Kan and Emmett Shear, Alexander Goldstein and Starling Ventures. With financing in hand, it’s been aggressively expanding within the Bay Area: In the past eight months, ZeroCater has grown from three employees to 15, with six account managers and two salespeople now on board.
That’s translated into some real business, as ZeroCater is expanding beyond just word-of-mouth marketing and serving startups, and branching out into other verticals. It serves about 175 companies a month, offering a rotating menu from various caterers, restaurants and food trucks around San Francisco. Those companies range in size and in the volume of business they drive: Some are multinational corporations that you know and love, while others are startups you’ve never heard of; some order just a few meals a month, while others get food catered everyday. For taking care of all their catered food needs, ZeroCater charges just a 7 percent convenience fee on all orders.
On the vendor side, working with ZeroCater means regular business for a number of food service operators that otherwise would be reliant on the whims and fancy of the general public. In exchange for volume discounts, ZeroCater provides a steady stream of orders for a number of local businesses.
While ZeroCater has cut its teeth serving the Bay Area, Sabeti tells me he hopes to take this business worldwide. And there’s plenty of interest: ZeroCater has a waiting list of more than 165 companies in major metropolitan areas around the country. ZeroCater’s next market has yet to be determined, but it’s clear that the lunch problem is pretty universal, whether it’s a matter of feeding a 15-person startup or a large financial services company.
[Via - GigaOm]
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