Alex Wyler and Matt Howard, two co-founders of the Madison, WI-based food ordering startup EatStreet, were named to Forbes’ annual “30 Under 30” list, in the consumer technology category.
Launched in 2010, EatStreet has raised more than $40 million from investors and currently has about 1,000 employees. The software company serves about 1.7 million customers across 250 markets. Facebook (NASDAQ: FB) and Uber are among the companies that have partnered with EatStreet, which PitchBook recently named Wisconsin’s most valuable venture-backed company.
Wyler, who is also EatStreet’s chief technology officer, spoke with Xconomy on Tuesday by phone. We discussed what he learned from working in Silicon Valley, EatStreet’s 2017 advertising blitz, and more. Our interview has been condensed and edited for clarity.
Xconomy: What does winning this award mean to you, Matt Howard, and others at EatStreet?
Alex Wyler: I’m super grateful for the recognition. Obviously in our space, there’s a lot of really big names. Everyone’s always wondering what the news is going to be from Uber, Amazon (NASDAQ: AMZN), and GrubHub (NYSE: GRUB). News tends to be focused on [companies that target] the big cities, and that’s never been our strategy.
We believe that our long-term winning strategy will be to focus on tier-two and tier-three cities. This is good visibility and good recognition that that strategy is paying off. I feel honored to receive this on behalf of … not really the little guys anymore, but what at one point would’ve been kind of a strange place to see Forbes “30 Under 30” awards being given out in technology.
X: You co-founded EatStreet as a student at the University of Wisconsin-Madison before moving to California and working at Facebook for a couple years. What prompted that decision?
AW: When we started EatStreet [the startup’s original name was “Badger Bites”], we didn’t have any money to pay ourselves. I took an internship with Facebook to sort of pay my own bills, while still working nights and weekends on EatStreet. And then Facebook offered me [a full-time position] straight out of the internship.
It was really no change going from school with nights and weekends working on EatStreet versus a job with nights and weekends working on EatStreet. So we agreed that that was reasonable for me to do.
X: What about leaving Facebook in 2014 and moving back to Wisconsin? What was the story there?
AW: Our Series B [funding round] was really when we got into the big leagues, from our perspective, where [investors] said, “Wait a second, your chief technology officer, the main architect of your product, is not a full-time employee? That’s not going to fly.”
So they kind of put the choice to me: jump on this or it’s not going to work out. That was actually good for me to sort of make a decision. If I’m already spending tons and tons of my time … if I’m working two 40-hour workweeks on two different teams, I should really make a choice. So I made the choice to [join EatStreet] full-time. I was the third of the three co-founders to do so.
But in retrospect, what I learned from actually being in industry for those two-plus years was invaluable to being able to scale [EatStreet]. In some ways, we’re very lucky that we were able to have this weird moonlighting scenario for the company to succeed.
X: What’s an example of something you learned at Facebook that helped EatStreet?
AW: I worked on social login at Facebook. At the time, it was dominated by Zynga (NASDAQ: ZNGA) games and FarmVille and things.
Now it’s kind of the number-one way that people [can log into websites or apps and not] have to remember their passwords. One of the first things I did after working on that team was integrate EatStreet with Facebook login.
X: Did you observe a drop-off in the level of technical talent around you after moving from Silicon Valley back to Wisconsin?
AW: I think the talent that is homegrown in [Silicon Valley and other tech hubs] is not any different [from Wisconsin]. You find that there’s a concentration of talent that’s moving to those places. If there is a talent gap, it’s only because the companies that are headquartered there are able to attract the good talent from around the nation.
What we tried to do is give the same attractors to someone who might … want to stay near their family in the Midwest, or might prefer the Midwest instead of a coastal town. We try to provide [competitive pay and] benefits, so that someone might come to EatStreet instead of Google (NASDAQ: GOOGL) or Microsoft (NASDAQ: MSFT).
We’ve found that it hasn’t been all that difficult to recruit talent if we’re looking for college graduates. It gets a little harder for people who have been in industry for a while. Typically, people are going to stay wherever they started their first job. I would say the talent gap probably widens as experience goes up, just because the pools are smaller.
X: What advice do you have for entrepreneurs who want to position their startups to partner with a big company like Uber or Facebook?
AW: We recognized early on that we’re not too good for partnerships. Partnerships [are] a potential side bonus that you could have for following your core mission.
Our core mission involves being the best partner, being a platform-based food ordering company. Being a platform is going to be attractive for people who want to incorporate food ordering and food delivery into their already existing apps.
My recommendation would be: If you really want to be a good partner, bake that into your mission and bake that into your strategy from the very beginning. Otherwise you’re destined to have alignment mismatches if you’re not in it for the long term.
X: I live in Madison and over the past year, I’ve started seeing EatStreet’s logo a lot more around town. First, it was on flags and magnets attached to your delivery vehicles. Then I began to see ads: on billboards, television, the radio, and elsewhere. Why was now the right time to increase your marketing beyond word-of-mouth and the local tech scene?
AW: We didn’t invest a lot in brand awareness before now, because we thought that the base of total users and the amount that we would need to spend to increase the brand awareness was not worth it.
[Last year] we hired an expert in brand building from Duluth Trading Co, [Suzanne Harms]. We decided to invest a large portion of our marketing budget into [ads and marketing campaigns], realizing that having a strong brand will increase order frequency and basket sizes long-term.
X: Your company’s partial acquisition of Zoomer earlier this year increased EatStreet’s headcount significantly, to approximately 1,000 employees—though only 150 are considered full-time. Do you still consider EatStreet to be a startup?
X: What would it take for that to no longer be the case? Is it a matter of hiring additional employees, growing revenue, more time passing by, or what?
AW: It really depends on the definition, [but] we’ll always be a startup in my mind. It’s going to be difficult for me to forget those nights where we were up all night drinking beer, eating pizza, listening to Kanye West, trying to get the website to work—those will be ingrained in my mind forever.
But also, we’re going to take the culture of being scrappy, being the underdog, and we’re going to apply that wherever we go. We have a lot of big competitors, [so] it’s not that hard to cultivate the underdog mentality that startups often have.
Even though we have a large number of employees, the underdog mentality is not likely to change. When the policies that we put in place to maintain the culture of being small, being scrappy … when those policies [can no longer] be scaled to the number of employees that we have, then maybe that’s when we’ll say we’re not a startup anymore.