Smart Business Solutions - Finance

What It Takes to Quickly Expand in New Markets

Food.ee’s smart business structure allows the Vancouver-based service to rapidly grow its user base

Written by Megan Ip

From his taco truck, Ryan Spong would stare up at the gleaming glass and steel towers of Vancouver’s Financial District and wonder how he could sell their inhabitants lunch. A former Wall Street investment banker, Spong moved back to B.C. and launched TacoFino Cantina, a well-regarded eatery with two roving restaurants-on-wheels. Since 2013, he’s also been the CEO of Food.ee, a service designed to help restauranteurs make money in their downtime by serving corporate clients.

Food.ee allows users to get delivery from upmarket restaurants on its website, app or through a phone concierge system. It’s primary customers are executive assistants ordering corporate catering for office meals or meetings.  Food.ee has grown over 1,000% over the last two years, and earlier this month, the company won the pitch competition portion of Tech Shuk, a showcase and networking event designed to highlight Canadian and Israeli startups and entrepreneurs organized by JNF Futures.

The Vancouver-based firm has developed an expansion model that will allow them to quickly enter and conquer new markets with minimal resources. Spong and Food.ee co-founder and chairman Jon Cartwright explained the company’s smart expansion strategy.

Go where you can win

The two U.S. markets Food.ee is entering initially are Austin and Philadelphia—large cities both, but nothing on the order of corporate HQ-stuffed metropolises like New York or San Francisco. Size isn’t as important as opportunity, says Spong, noting that San Francisco restaurants likely have food ordering app fatigue and every New York restaurant has a bicycle delivery person. “We’re interested in moving very quickly and not having to wade through any noise in the market on either side,” he says.

Plus, these aren’t exactly small cities, Spong says. “We’re talking about cities that are three to four times as big as Vancouver,” he notes. There are 30 cities with populations of over a million people in the U.S. “Cities like Philadelphia and Denver—these are still top 10 population-wise in the States.”

Start lean

Rather than spend big on infrastructure and hiring, Food.ee enters a new market with a skeleton crew. The company uses a team of three to four employees to sign up restaurants before opening up the service to ordering users. “You have your supply-side first, then your demand,” explains Spong.

Customer service, the concierge desk, product development and management are all handled out of Food.ee’s Vancouver headquarters. “Small, lightweight [city-specific] offices are really the frontline—the sales and city managers for each of the cities,” explains Cartwright.

Own the experience

To convince high-cachet restaurants like Toronto’s Terroni or Vancouver’s Meat & Bread to do delivery, Food.ee had to provide the same high-touch experience you’d get if you sat down at one of those eateries. So Food.ee carefully controls last-mile logistics, doing half the delivery with its own drivers and using highly trained independent contractors for the rest.

“The driver is highly trained on what’s going on inside the boxes, so they understand what the food is,” explains Spong. “White shirt and red bowtie—that’s our look. It’s very much a curated, almost like a waiter experience.”

Learn from the best

Food.ee’s expansion strategy mimics that of 1-800-GOT-JUNK, another Vancouver service which rapidly conquered new markets. The resemblance isn’t accidental—former JUNK COO Laurie Baggio invested in Food.ee last year and pitched in on the operations side as well. “He worked in our office for six months straight, getting our business set to scale rapidly,” says Spong. “He saw us roll out to Toronto and now has us ready to roll out to as many cities as we can fund.”

Think big

Now that the model is in place, Food.ee is poised to rapidly enter any market its leaders set their sights on. “We feel with that the way our business is structured, we can be in 300 cities in North America,” predicts Spong. “We can be in Duluth, we can be in Raleigh, all these places.”

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Originally appeared on PROFITguide.com