How Favor Turns Strangers into friends
Post can be seen on Wired, here.
Prologue – Creating Community One Favor at a Time
The story behind Favor, a new app-powered delivery service, starts with a daydream. When co-founders Zac Maurais and Ben Doherty worked together delivering pizzas in high school, on-demand and catch-all delivery services didn’t even exist. Even basic delivery services were much more limited and costs were prohibitive, so the two would often fantasize about having their very own “gofer” to fetch them whatever they needed. They dreamt of a world where everything was “delivered by your friends and neighbors,” where resources and opportunities were shared on a grand scale.
The task ahead of them would prove daunting, but their vision was simple. The young entrepreneurs were going to craft a daydream into a multi-million-dollar, super-sized, crowdsourced food delivery service. And they’d find folks to help them along the way.
The Journey – From the Basement to the City Streets
Favor literally started as an underground idea. After college, the pair decided to not get jobs and work on their idea. They locked themselves in Doherty’s parents’ New Hampshire basement and slavishly built code and technology. Early on, Doherty reminisces, “we were working a ton—just, non-stop. We had that big a sense of urgency, even way back then.” Yet despite great commitment, their early launch attempts all failed. It took two years and a move to a new city for Favor to finally see the light of day.
With their move to Austin, they quickly identified a solid, delivery-savvy target audience in the local college sorority system. After learning all they could about their target market of over 10,000 women, they created a brand that appealed directly to this market—what Maurais calls their “value propositions.” “We found that service was important. People wanted it to be high-touch—they wanted to be able to text their runner and ask questions. They wanted it to be fast. They wanted it to feel friendly. Because that was different from the experience that was in the market for delivery at the time.” By pinpointing the fit of product to market, Favor rode the coattails of the bigger brands in Austin’s preexisting “foodie” environment, striking a balance between price and demand.
Favor grew rapidly over the next two years, receiving over $30M in funding and expanding to over 100 core employees and nearly 10,000 runners across 15 cities. The company’s growth strategy mimicked the friends-and-neighbors premise of its business model: find a neighborhood you want to lock into, and then make as many friends there as you can. By learning firsthand what your neighbor-friends like, you can offer them exactly what they want in the ways they want it.
Once they found the formula that worked, they scaled it to enter new markets—one city at a time. The company logged a million favors during their first 28 months in business, and, by keeping customer experience as the focal point, over 90% of those favors rated five out of five stars
Challenges – Picking the Right Friends
During Favor’s early days, Maurais and Doherty learned the hard way that finding help and following the right advice can create the biggest challenges for new entrepreneurs.
As their business took off, they had heard more friendly advice than sound business strategy. Recalling an early pitfall for Favor, Doherty shares some advice of his own. “You can get advice from almost anybody, but entrepreneurs who just blindly take everyone’s advice can easily get distracted and start focusing on the wrong things.”
Through trial and error, the pair came to receive all advice with equal parts diplomacy and self-direction. “Everyone’s a data point,” Maurais cautions. “Everyone’s giving you a sense of the world, and it’s up to you to decide and channel that information into actionable things for your company.”
The same held true for Favor’s fundraising efforts. Many offers came in, but choosing the right investors—the ones aligned as much with Favor’s dedication to service as with profitability—proved to be challenging.
Eventually, this strategy helped them navigate other challenges as well, like investors’ pressures to grow the company more quickly than they were comfortable. By making good hiring decisions, Maurais and Doherty aligned the process of growing the company with their mission to create a company full of trustworthy and dedicated employees who are great at what they do.
The Road Ahead – Expanding the Circle Responsibly
Having established themselves successfully in several cities and across multiple markets, Favor’s initial fundraising strategies paid off. Next steps will focus on ensuring the company hits its profit goals so Favor can continue to expand to new cities and markets on its own, without seeking more investment capital. Ultimately, Maurais wants to make sure that “every single employee—from the runners all the way to those at HQ—is getting paid for not with investment money but with each delivery.”
The new mindset has shifted from growth-at-all-costs to something more sustainable. For Maurais and Doherty, this means turning some attention to internal growth and infrastructure that will allow for continued and well-balanced expansion. As appealing as it is to reach more neighbors, Maurais and Doherty are keen to maintain a strong foundation to keep their model scalable. Because you don’t go from delivering pizzas to “Anything Delivered” without a little help from your friends.