GrubHub : Coding at Night Side Hustlers → Multi-Millionaire founders

Read time: 4 minutes

Hello Rebels

Fun one-liner 🏖️

Why do entrepreneurs love storms? Because after every storm comes a rainbow of opportunities!

Onto Today’s story….

This is the story of GrubHub, a tale of two programmers who turned a side hustle into a tech empire.

It's a journey filled with late-night coding sessions, door-to-door sales pitches, and enough determination to make even the toughest restaurant owner cave.

So, hungry for success?

Pull up a chair, grab a snack (maybe even order it online), and dig into the mouthwatering story of how GrubHub went from a napkin sketch to a $3 billion IPO.

The Geeks Who Came in from the Cold 🤓🥶

Mike Evans and Matt Maloney weren't your typical food industry moguls-in-waiting.

They were geeks, through and through—web developers who spent their days coding at a company called Classified Ventures.

But as we all know, it's often the outsiders who see the gaps in an industry ripe for disruption.

Mike's lightbulb moment came on that bone-chilling Chicago evening

One day, on a cold winter January evening, Mike Evans was taking the number 151 bus in Chicago to his home.

The bus was late, and packed, and he found himself in alarming proximity to the armpit of the dude standing next to him.

There was this nasty slush from the recent snow everywhere. When he arrived home, exhausted, he walked into his apartment with barely enough willpower to pour himself a bowl of lucky charms.

But he was craving for something else.

Something hot, delicious, and delivered right to your door?

With a heroic effort he managed to crack open the massive yellow tome of business listings yellow pages book deposited at his doorstep.

There was no useful information.

He called seven restaurants before he found one that would deliver to him.

That is when he knew there had to be a better way to order food delivery.

He was frustrated by the lack of restaurants which can deliver, as well as the pain of calling restaurants and reading his credit card every time he called them.

For Mike Evans, this all-too-familiar scenario wasn't just an inconvenience—it was the spark that ignited a multibillion-dollar idea.

Little did he know that his growling stomach and fruitless hunt through the yellow pages would lead him to revolutionize the way America orders food.

After pondering over this idea for a couple of days, he called his friend Matt Maloney and told him about his idea.

The next day, Mike and Matt , met at a restaurant called Moody’s after work to talk about the idea.

Little did they know, that casual after-work meetup would be the first unofficial board meeting of what would become a billion-dollar company.

Napkin Economics 101 📝💡

Picture the scene: Two programmers hunched over a greasy pub table, scribbling their business plan furiously on a napkin as their burgers grow cold.

This wasn't just any napkin—it was the birthplace of GrubHub.

"We'll list all the restaurants that deliver to a particular address," Mike explained, his burger forgotten as he sketched out their plan.

"And get this—we'll charge them a small fee to be featured prominently."

Matt nodded, his mind already racing ahead.

"We could use the geographic lookup searches we've been working on at our day jobs. Apply it to food delivery instead of real estate."

As they fleshed out their idea, fueled by beer and possibility, they realized they were onto something big.

"That original idea has gone through a lot of refinements," Mike would later reflect, "but it's still at the very core of what we do.

We send orders to restaurants that want orders and are willing to pay for them."

The first problem was how to get the initial restaurants into their system.

One of the things Mike thought early on was not to keep the idea a secret, because he assessed that nobody else was going to be crazy enough to actually call 20,000 restaurants, because that’s a lot of work.

He was a little concerned that Google may become his competitor.

But when he analyzed it deeper, he knew that Google’s not going to do it because he knew they don’t like calling people.

“They’ll ask us for the data, but they’re not actually going to do it themselves,” says Mike.

It was a gamble, but one that paid off.

Their willingness to do the grunt work that others wouldn't touch became their secret weapon.

Dial 'M' for Menu ☎️🍽️

With their idea sketched out (quite literally) on a napkin, Mike and Matt faced their first major hurdle: how to get restaurants which deliver food into their system.

Their solution? Good old-fashioned elbow grease.

While Mike built the website in the evenings, Matt hit the phones.

"Early on, it was just hammering the phones, doing the extra work," Mike recalls.

It wasn't glamorous, but it was necessary.

But they weren't just collecting phone numbers.

Oh no, these guys were after the holy grail of food delivery data.

They wanted to find out where they deliver to.

They found the exact, down to ten feet of what spaces they would deliver to and which place they wouldn’t deliver, and that was a really big piece of the call.

This wasn't just busywork—it was creating a moat around their business that would be nearly impossible for competitors to cross.

After all, who else would have the guts (or the caffeine tolerance) to make thousands of calls just to find out if a pizza place delivers to a specific street corner?

The $140 Reality Check 💰😱

In 2004, GrubHub was officially born.

But it wasn't all smooth sailing from there.

Oh no, this is where our story takes a turn that would make most people run screaming back to their cushy day jobs.

Mike, fired up by the advice of a mentor, decided to take the plunge.

He quit his stable job to focus on GrubHub full-time.

His goal? To transition this from a hobby into a real, honest-to-goodness business that actually made money.

The result of his first month of full-time entrepreneurship? A whopping $140 in revenue.

Let that sink in for a moment.

Most people would see that number and start updating their resumes faster than you can say "would you like fries with that?"

But not Mike. For him, it was a challenge—a gauntlet thrown down by the universe.

"This isn't going to be a hobby," he told himself.

"I'm not going to do this for free for two years. If I can't support myself within the first two months, I'm going to quit."

Talk about lighting a fire under your own behind.

The Accidental Salesman 🕴️💼

Now, here's where things get really interesting.

Mike and Matt were software developers.

But sales? Marketing? That was a whole different ball game.

But necessity, as they say, is the mother of invention.

And in this case, it was also the mother of some pretty unconventional sales tactics.

Mike, in a move that would make most MBAs frown, went out and bought the book "Sales for Dummies."

Yes, you read that right.

The co-founder of what would become a multibillion-dollar company learned sales from a bright yellow book.

But here's the kicker: it worked.

"The key insight to selling a restaurant," Mike explains, barely containing his laughter, "which is just walk in and say, 'I've got a product that you should buy' and just believe it."

Armed with this newfound "expertise" and a healthy dose of chutzpah, Mike hit the streets.

He walked door-to-door, coming up with clever ways to meet restaurant owners and sell them on using GrubHub's system.

One of his tactics? Entering through the back door.

"That's where you'll find the owner," he grins, sharing one of the pearls of wisdom from his trusty "Sales for Dummies" book.

The Word-of-Mouth Wildfire 🔥📣

As Mike and Matt continued their two-man crusade to revolutionize food delivery, they faced a new challenge: how to get customers to actually use their service.

They had the restaurants on board, but without hungry customers, GrubHub was just a really complicated digital phonebook.

Their solution? Build something so good that people couldn't help but talk about it.

"One of the big things which helped us was word of mouth," Mike explains.

"People loved our website and they, in turn, told their friends and it kept growing."

It sounds simple, almost naive in today's world of growth hacking and viral marketing campaigns.

But here's the thing: it worked.

And not just a little bit—it worked spectacularly well.

GrubHub's Net Promoter Score, a measure of how likely customers are to recommend a service to their friends, was off the charts.

People weren't just using GrubHub—they were evangelizing it.

The Journey to $70 Million 🚀💵

From 2004 to 2009, GrubHub experienced exponential growth.

They refined their business model, shifting from a subscription-based service to a per-order fee structure for the restaurants.

By 2007, they had secured their first round of funding, which allowed them to expand beyond Chicago.

They focused on adding more restaurants and improving their technology, making it easier for users to find and order from local eateries.

In 2009, five years after their humble $140 start, GrubHub's gross food sales hit $70 million.

This translated to roughly $8.3 million in revenue for GrubHub.

The growth wasn't just good for GrubHub—it was transformative for their restaurant partners.

Some restaurants grew their business so much because of GrubHub that they had to hire additional staff just to keep up with the flood of orders.

The Merger That Changed Everything 🤝🔄

As GrubHub continued to grow, they found themselves facing an unexpected challenge: competition.

Another company, Seamless, had been quietly building a similar service, focusing primarily on the East Coast market.

Mike and Matt had a decision to make.

They could try to outcompete Seamless, pouring resources into a potentially costly market share battle.

Or they could do something more audacious.

In May 2013, they chose audacity.

GrubHub merged with Seamless, creating a food delivery powerhouse with national reach.

The merged company had around 700 employees—a far cry from the two-man operation that started in Chicago.

"It was like putting together two pieces of a puzzle," Matt would later say.

"GrubHub was strong in the Midwest and West, Seamless owned New York and the East Coast. Together, we could offer a truly national service."

The $3 Billion IPO 📈💰

In April 2014, almost exactly a decade after Mike's frustrating experience trying to order dinner on that cold Chicago night, GrubHub filed for an initial public offering (IPO).

The response from investors was nothing short of ravenous.

Shares priced at $26 for the debut were quickly snapped up, with the stock price surging more than 50 percent soon after the opening bell at the New York Stock Exchange.

By mid-day, shares had settled at about $36, pushing GrubHub's value to more than $3 billion.

It was a stunning validation of Mike and Matt's original vision.

As GrubHub rang the opening bell at the New York Stock Exchange, it was a far cry from the $140 first month that Mike and Matt had experienced a decade earlier.

The company was now facilitating over $1.3 billion in gross food sales annually, with their revenue representing a healthy slice of that pie.

The Next Course 🍽️🌎

In the years following the IPO, GrubHub continued to expand its reach and services.

By 2020, the company had entered the international market, including cities like London, showcasing its global ambitions.

Now, GrubHub's service was available in over 4,000 U.S. cities and London, partnering with more than 300,000 restaurants.

It boasted 34 million active users, processed over 745,000 orders per day, and reported annual revenue of $2.4 billion.

Mike says “Take care of your customers first. Everything else will work itself out.”

He adds “Make a product. Go sell it. Don’t wait till it is perfect. It won’t get perfect until you’ve tried to sell it.”

Lessons from the Kitchen 🍳📚

As we near the end of our journey through the GrubHub story, let's take a moment to digest some of the key lessons that Mike and Matt's experience offers:

1. Solve a real problem: GrubHub started because Mike was frustrated with ordering food. What everyday annoyances in your life could be the seed of a billion-dollar idea?

2. Do the work others won't: Mike and Matt personally called thousands of restaurants to build their database. What unsexy, hard work are you willing to do to give your business an edge?

3. Revenue first, scale second: GrubHub focused on making money from day one. How can you ensure your business model is viable before chasing rapid growth?

As for aspiring entrepreneurs looking to follow in their footsteps, Mike offers this advice:

"Make a product. Go sell it. Don't wait till it's perfect. It won't get perfect until you've tried to sell it. It's a long journey from the idea to the first dollar.”

“This involves solving a real problem well enough that somebody will pay for it. As soon as you sell something, you've got customers. “

“And once you've got customers, you have the most valuable data available about how to make your product better."

The GrubHub story is more than just a tale of two programmers who struck it rich.

It's a testament to the power of identifying a problem many people have, working tirelessly to solve it, and never losing sight of the customer's needs.

It's a reminder that with enough grit, creativity, and willingness to adapt, a simple idea scribbled on a napkin can indeed change the world.

So, the next time you're staring at your phone, trying to decide what to order for dinner, remember: you're not just getting a meal delivered.

You're participating in a revolution that started with a hungry coder on a cold Chicago night.

And who knows? Maybe your own frustrations could be the seed of the next big idea.

The only question is: are you hungry enough to pursue it?

Keep Zoooming! 🍹

Yours “Anti-hustle” Vijay Peduru