Is this just an illustration of the difference between a "startup" and a "new business"? If I started a business, I'd probably use a home office or crappy cheap rented space, pack a sandwich, etc, and wait until I had enough revenue to do nicer things. Seems like startups are about getting and burning money from Day 1, hoping to take off but maybe crashing.
ZeroCater's minimum order size is 10, if I recall.
Imagine you could get an extra half-hour of productive conversations out of people for ten bucks each. That's paying people $20/hr! What a good deal for engineers in the Bay Area.
"Imagine you could get an extra half-hour of productive conversations out of people for ten bucks each. That's paying people $20/hr! What a good deal for engineers in the Bay Area."
It is, and it isn't.
I might be an oddball, but I prefer to get away from the office for an hour a day. It's become conventional wisdom in the valley echo chamber that catered lunch is a "productivity win", but there's a lot to be said for the change in perspective that getting out of the office provides. When I go out for lunch, I feel more relaxed, more creative, and calmer about my work. And don't forget -- just because I'm sitting around a table eating with my co-workers does not mean that I'm talking about work (in fact, I suspect it's a net-neutral benefit, if you're only looking at worker productivity).
Last, but not least, there's a health component: carry-out for lunch, every day, is a good way to kill yourself. My cholesterol levels (and body weight) shot up dramatically when I was eating take-out on a daily basis. Google cafeterias serve healthy food; cheap restaurant food doesn't measure up. Once I went back to finding my own lunch, my cholesterol levels dropped back to normal.
Not to mention that it's a really nice perk that people talk about positively. It can be basically cheap PR. Free lunch may not be a reason to work somewhere, but it's something that current employees will mention and anything that gets them to paint your business in a positive light is worth something.
1) The cost of good engineers in the Bay Area is ridiculous. Bringing lunch in, say, once a week, will be less than a 1% difference in your compensation budget. And you are competing with places like Google which have free awesome food daily.
2) People are not robots. In theory, it should make no difference who orders or pays for food. In practice, it's swell to just have something tasty show up so that everybody can have lunch together with no hassle.
The best way to profit from the gold rush is to sell shovels and pickaxes.
Reminds me of the story of a saloon during the original California gold rush that would sell a bowl of soup for an astronomical sum. The people who stuck it rich would buy it so they could brag about how much they paid for a bowl of soup. Not sure how true it is, but believable.
Reminds me of a joke about Russian oligarchs in the late 90s (when Communism collapsed, a lot of state industries were privatized, and a lot of people got rich very quickly and messily).
Two 'new money' Russians are riding in a limousine in Moscow, and one says to the other "You know, I paid $1000 for this tie". The other guy says, "Idiot! I know a shop where you can get that tie for $2000!"
I appreciate all the work ZeroCater is doing to create a better catering experience. We use ZeroCater at our SF Rackspace office. Their customer service is very responsive. The website is great. My biggest complaint is how variable the food quality is. Sometimes it is pretty bad, in which case you can rank the quality low and leave a comment and ZeroCater will get back with you, which is great.
Also variable is the labeling. I'm a vegetarian, often I have to play the guessing game of "is that meat or not?" Just last week I bit into a meat filled burrito that was in a bagged marked as 'vegan'.
So they'll have to work on the quality of the restaurants they make available, but the service itself is great.
Hey, this is Yoshi over at ZC. I handle the Rackspace account. I'm very sorry to say this is the first I've heard of your burrito incident, and I'm amazed that you don't sound more upset about it. Would you mind dropping me an email at hello@zerocater.com? I'd like to discuss how we can make it up to you. Thanks!
"So they'll have to work on the quality of the restaurants they make available, but the service itself is great."
Their product is food. That's the important thing. All the CS and effort in the world is meaningless without the food quality being better than just acceptable and certainly not "pretty bad".
In the non-startup world a restaurant serving bad food would only survive on a toll road rest stop or where there are no other alternatives.
Both of my companies www.sincerely.com & www.xobni.com are ZeroCater customers. The quality and diversity of the food we get is better with ZeroCater than when we ordered it ourselves. Also, the vendors show up on time. They know if we complain they won't just lose 1 customer - they may lose all of ZeroCater. Arram has found a true market need. His story of hustle is inspiring. I'm so genuinely excited by this perfect story of entrepreneurship. And I wish I would have invested.
> On the vendor side, working with ZeroCater means regular business for a number of food service operators... In exchange for volume discounts, ZeroCater provides a steady stream of orders for a number of local businesses.
This is so cool. Running a restaurant is extremely difficult and the margins are low. ZeroCater is helping them operate a different kind of business in an efficient way (like catering but with way less overhead and sales).
It's really amazing to see how Arram is transforming the local restaurant economy.
I've gone out and talked to restaurants that work with ZeroCater. ZeroCater has become a significant source of revenue for many of these small businesses.
very nice but I don't see the disruption, at all. In fact I'm getting really tired of all the startups who call themselves disruptive, 99% of them aren't (and I'd argue you are disruptive when others call you so, not when you do it yourself)
"dealing with catering was a huge pain for everyone who handle such things" Here you have it folks, catering isn't just a little inconvenient or cumbersome at times, it's a HUGE PAIN.
I see "disruption" as either removing middlemen (disrupting supply chain) or changing consumer expectations in a market. Adding a middleman in the supply chain isn't disruption so much as making it more efficient for producers to reach consumers.
If you go by the Clayton Christensen definition, a disruptive company is basically one that starts off selling a product that is inferior to the accepted standard along most dimensions, but not all (usually it is much cheaper). Eventually the dimensions that were previously considered important erode or become altogether irrelevant, and suddenly the company focused on the lower-end segment finds itself in a position of dominance, while the former heavyweights are playing catchup.
I agree that it is an often overused term and one which is too often used to describe innovative business models or small startups. I don't see how it applies here. That said, a business certainly does not need to be disruptive to be successful. Disruptive companies are extremely rare and only come along once in a while.
I once had a professor who said that a great way to spot the potential for a disruptive product is to look for situations where you find yourself using a hybrid model- that is you use two or more solutions to solve a single problem. One meets a single need but not enough to replace the others.
It might seem like a productivity win, but it may also be a creativity loss. A recent book by Jonah Lehrer http://www.amazon.com/exec/obidos/ASIN/0547386079/theeconomi... (I found out about it via The Economist http://www.economist.com/node/21550235) describes how creativity is most likely to happen at times of calm relaxation, such as a relaxed warm shower or a casual walk. There are times when I eat lunch at my desk to get more done, but I have found a casual stroll and lunch outside to be well worth the time and mental state it provides for thinking and creating.
Expanding ZeroCater will involve solving tremendous quality and logistical problems when attempted in the real world at "typical" companies.
At the risk of sounding like the person who predicted the need for only 100 computers worldwide (or whatever that small number was) I don't see how this idea can be expanded to offer a similar service in the legacy corporate world where companies are not trying to be "mommy" to their workers to squeeze out ounces of extra productivity.
Food service is really hard even if you operate the food service place and the people come to you. Here you are maintaining quality among multiple food places with many chances for things to get screwed up. Additionally the typical workplace is not filled with a young forgiving workforce.
I disagree. As an employee in the legacy corporate world who has to suffer through crap every time lunch or dinner is catered in for a meeting, I would welcome healthier, better, more consistent options. I don't see many big businesses setting up daily deliveries en mass, but even if it was just weekly or at the group or departmental level, I can see a significant market for ZC.
I am not saying that there isn't a market for what they do.
I am saying that maintaining quality with this is extremely difficult.
You are dealing with food service and rag tag food service at that.
Having owned (non food service companies) that employ the type of workers that are essentially the same as in food service with an equivalent amount of variables (that can go wrong because of human error) it is my feeling that this is difficult to scale.
And while it is true that zero cater will be an important customer to any of their vendors, they don't have control over hiring and food quality as well as other things that will impact their customer base. And they can't just switch to a supplier in another state. They are limited by the existing suppliers in their market.
Now of course if they want to operate the food suppliers (with their own canteen) that would give them the control they need. But that is an entirely different business.
Sounds like a great idea, I would just be worried about getting sucked into the habit of having them cater everyday, and end up blowing more money than I could afford. Regardless, it's great seeing problems like this solved (:
Google and Facebook don't feed their employees because they're naive. At a $65k salary, the meal is fully paid for if you can save employees 20 minutes by having it brought in.
I mean as a new startup to Silicon Valley, not an already established, large company. In the long run, I definitely see how this saves a company money, but for startups where money is tight, I would be wary.
