We’re F*cked, It’s Over. Or Is It?
It had been a long day at London’s Google Campus. I was hungry. Before picking up a rented bike, I opened my own app and asked my neighbors at the apartment block what was cooking. I chose homemade macaroni and cheese from the guy on the floor above. I chipped in £6 and started pedaling. It had taken two years of relentless work to create this experience.
The app, Cookisto, was finally close to perfect.
I should have been flying but I wasn’t.
I was stressed. Deeply stressed.
The numbers I’d been crunching all day were telling me something I didn’t want to hear. Cookisto should have been flying but it wasn’t. Suddenly that extra floor and a few polite words to get my food were a hassle.
I’d thought I understood what it meant to “be your customer” but it takes more than that. You must “be your brutally honest customer.”
You either build a product where you meet your neighbors and socialize or a product that offers you great food. All I wanted from the very beginning was great food, delivered fast. Nothing else.
As I sat there eating (it was good) I realized this was the last supper for Cookisto. This phrase from Ben Horowitz’s book The Hard Thing About Hard Things was on repeat in my head:
“We’re F*cked, It’s Over. (WFIO)”
How had it come to this?
First things first. My name is Michalis, I’m 29 and I’m a terrible cook. This is not something I’m proud of. There was good food around me growing up in Athens, Greece and thanks to my family’s commitment to my education I got to study in the U.S., in France and in China. This taught me plenty about eating but somehow it didn’t improve my cooking.
This has been a pain point for me every day since I was a teenager. I love good food and I value healthy eating and the existing takeaway options just don’t deliver on either of these.
They’re either expensive, like high-end restaurants, or the unhealthy classics, such as pizza, burgers and fast food.
I believe that this is a problem that technology and innovation can and will fix.
The sharing economy was getting into full swing as I embarked on my Masters program in Global Entrepreneurship and these thoughts fused into an idea, which became my thesis and then morphed into a startup.
The idea was simple: the first peer-to-peer marketplace for home-cooked meals. Welcome to Cookisto.
In Athens we were surrounded by neighborhoods of passionate cooks and armies of hungry people who value homemade food but don’t have the time or the talent to cook it themselves. By matching the two we could enable home cooks to make some extra cash, while enabling foodies to enjoy home cooking at affordable prices. Cookisto would show you what was cooking near you, help you place the order and enjoy a real homemade meal.
I needed a co-founder and Petros was the standout choice. A childhood friend, just returned from Paris, intent on continuing his family’s successful tradition in the restaurant business. Here was a great cook, obsessed with discovering new flavors and experimenting with ingredients. And he was ready to properly commit. He joined Cookisto, even though it meant leaving his first bar-restaurant behind.
It was the fall of 2013, we had €10k, an idea and a name.
Dawn of the Cookisto Era
From the outset the idea of Cookisto excited people and we found we could drive interest from cooks and consumers through free media exposure. We boosted this momentum with offline marketing in specific neighborhoods. The goal was to create liquidity in at least in few areas in Athens. The first transactions were completed successfully and feedback was great. What a feeling!
From a crazy idea inside your head, to a powerpoint, to a tech product, to a service that brought people together in the real world and offered them great homemade food. We were so hooked we were our own best customers and were meeting talented cooks all over Athens.
Cookisto was the talk of the town and we secured €200k seed money from angel investors. We grew to a team of six — three engineers, one marketing person and us, the founders. We quickly decided to launch in London as well in order to learn from a more mature market.
Our go-to-market strategy for London remained the same but cold emailing journalists didn’t work like it had in Athens. We were not the only story in town. So we doubled down.
We profiled relevant journalists and tailored our message. We thought through different angles: young Greek entrepreneurs in London during the Greek crisis; startups and youth entrepreneurship; Cookisto and the sharing economy.
We made them feel special. We offered journalists the “exclusive” chance to review our service before we went live and made sure we had amazing cooks near them. The results were astonishing. During our launch we were covered by the BBC, The Independent, The Sunday Times, The Telegraph, London Evening Standard, Daily Mail, CNN… the list goes on.
Media generated more media, which lead to more traffic and free users. We had 40,000+ users, a few thousand cooks and more than 16,000 portions delivered, each paying us a modest cut.
Cookisto Goes Cold
The honeymoon period ended with the inevitable dip in media exposure. Something we could see with through our improved efforts at cohort analysis😃. (Reminder: We were first-time entrepreneurs. No clue about authentic growth back then.)
Total numbers, users, orders were all growing but retention was low. The service was sexy to the media and consumers but analysis showed that most of them would only use it a few times. We acted immediately.
We became experts in analytics and entered a period of hyperspeed tweaking of the product/model. We skewed towards demand-driven (users placing the order), then supply-driven (cooks only accepting pre-orders), then a hybrid. We locked many of the parameters of the marketplace to improve user experience (range of prices, times you could order etc). We made improvements but sadly they were marginal.
We needed a step change. We tried building an instant supply-driven model as a mobile product active only in big residential buildings. In the Cookisto app you would ask your neighbors what was cooking with one tap; they would respond via a simple text; and you would chip in with one more tap.
We became pretty damn good at hyperlocal marketing. We first identified big residential buildings through Foursquare’s API and then users or ourselves could trigger personalized invite postcards to all residents of that building. It worked! In my building in Elephant and Castle, for example, we had 40 Cookisto users.
It was better but still not enough. It could be a lifestyle business but not a mass movement that changes the way we eat.
We had tweaked, sprinted, reinvented our model and we were back at a dead end.
Now I was deeply stressed.
I was pedaling home for the last supper. And we had arrived at the “WFIO” moment.
We had less than four months of runway (€35k in the bank) and no business.
I was experiencing another Horowitz rite of passage, “The Struggle”.
“The Struggle is when you wonder why you started the company in the first place.
The Struggle is when people ask you why you don’t quit and you don’t know the answer.
The Struggle is when your employees think you are lying and you think they may be right.
The Struggle is when food loses its taste.”
What I was starting to see through the fog of detail and struggle was the big picture. Watching Scott Belsky’s video What Are You Willing To Be Bad At? helped me focus.
He argues that when launching a new business you need to start by identifying the key attributes your market values the most. Then you build a product or service that’s 10x better than the competition at that key attribute. This is the only way to break existing habits. In order to get the 10x advantage you need to be willing to suck at other things.
This is what Airbnb did. It didn’t conquer the accommodation space because of the experience it offered or the convenience, it did it by being 10x cheaper. Some people value a unique experience, others don’t. There is nothing convenient about messaging multiple hosts, waiting for a reply and wrangling about keys.
Airbnb did not become a billion dollar business because you want to be friends with your host. It gained market share because it was 10x cheaper than existing options. Promoting the community aspect behind it was great marketing and a shield against regulation but irrelevant to its business success, in my opinion.
At Cookisto, we’d spent too much time thinking about scalability and opportunity and not enough time on the key attributes the customer valued the most. Our customers’ key attributes were:
1. Price 2. Convenience 3. Experience (Homemade/Quality)
Cookisto was a bit better on price, sucked big time at convenience and was very good in terms of experiencing a home-cooked meal. We were the only place that you could actually find food cooked by your neighbor :).
But what was the key attribute our market valued the most? We had learned the hard way that it was convenience.
Not only did this model fail to deliver on convenience, it presented business challenges to which there was no realistic solution. We were trying to deliver a niche service in a hyperlocal, peer to peer marketplace. We would always be struggling with liquidity (sufficient activity from cooks and consumers, in relative proximity, to keep both sides happy). You can try to fix the hyperlocal challenge by figuring out the logistics but only at the expense of price and that will kill you too.
Pivot Under Pressure
Talking to the media, geeking out on the product, hiring, dreaming about the success of your company — this is is all cool stuff. But who is going to figure out what needs to be done now? Who is going to take the painful decisions? Who is going to inform our existing investors that Cookisto isn’t going to work? Who is going to announce to the team that we have less than four months of runway and that we need to start again from scratch? Who is going to throw what we took two years to build in the trash? Things just got real. And lonely.
I was a first-time entrepreneur and still only 26. What I did have was two super powerful quotes that encapsulate my mentality in this situation.
The first is from Sam Walton:
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
The other is Andrew Grove’s question to his colleague Gordon Moore in the book Only the Paranoid Survive:
“If we got kicked out and the board brought in a new CEO, what do you think he would do?” Moore answered without hesitation: “He would get us out of memories.” To which Grove responded, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”
We had to move on. We had to put the customer first. Nothing else mattered. Not our egos nor our fears. It was about survival.
Petros and I committed to figuring this out. We became closer. We went back to why we had started the company in the very beginning. We took all our recent learning and went to work benchmarking different models. We came up with a plan that made sense. I moved back from London and announced our decision to our investors.
To begin with they were disappointed and skeptical. We gave no time to dwelling on emotion or second thoughts. We knew that this was the best decision for everyone.
Relight the Fire
We then announced the news to the team and communicated the reasons behind it. We presented a draft plan and proposed a three-day huddle in the countryside to finalize it.
To my surprise, nobody left the team. Instead I saw them get fired up again. Everyone was super motivated. They knew that things hadn’t been perfect and seeing the founders face the problem head on with a plan boosted the team’s morale.
We decided to bring the whole value chain of the business under our control. We were going to deliver a 10x better experience to the customer.
The plan was simple yet ambitious:
One month to set up a new business (rent a kitchen, hire a chef, hire motorbike drivers, create the menu, design logo, website, build mobile app for drivers, build first version of the routing algorithm plus complete all the legal and admin paperwork).
One month to show traction.
One month to fundraise.
It was war time. For extra motivation I created a WFIO timer on my desktop so I could track how many days of cash we had left.
It was the most productive and intense period of our lives so far.
We successfully launched a new business in a month with less than €35k.
Everything was on one Asana project titled: “Launch Forky.” It meant daily stand-ups with all team members, great ownership and efficiency from everyone. Great creativity to get around obstacles that could hold us up.
In the early days I joined our three motorbike drivers for deliveries, Petros was cooking with the chef (as I mentioned, he’s an amazing cook), our engineers were doing customer support. Whatever it took to reach our goals. To get traction we found/hacked corporate phone numbers from a database and we started cold calling every lead offering them coupons to use our service. Almost everyone was doing phone calls before the lunchtime rush.
Our goals: 1 happy customer, 10 happy customers, 100 happy customers, 1,000 happy customers
Our kitchen hit maximum capacity by August. Anyone who has spent August in Athens will know how empty the city is and how tough that is.
We also managed to extend our runway a bit by living on cash flow and by getting no salaries for a few months. We raised an €800k seed round in January 2015 lead by Open Fund and BlueWire Capital, while our Cookisto investors followed up together with some of the most successful Greek entrepreneurs and angel investors.
What is Forky?
Forky brings you great food in minutes. Your stomach tells you you are hungry now and you don’t want junk food! You go to our website or app and choose from 2 healthy meals 1 salad and few more supplementary items. You place your order in 3 taps. Your meal is in front of you in less than 15 minutes.
In essence, Forky is the first truly scalable food tech company. Its DNA is food, tech and logistics. We’ve developed a business model that is capital efficient and scalable without sacrificing the quality. We love talking in more detail about the backend of Forky but the recipe of its secret sauce is a conversation that has to be limited to investors : ).
When you’re eating Forky it’s modern Mediterranean cuisine with a twist. Our chef creates recipes that our customers can relate to. And they make everyday food exciting by adding an element of surprise: an ingredient, a sauce or a spice inspired by another cuisine that will take the dish to a new level.
In order to offer a balanced diet throughout the week we also take into account the ingredients and nutrition information of each recipe when designing our menu.
For example on our menu you could find steamed cod with boiled vegetables and an Ouzo vinaigrette, turkey burgers with a yogurt & mustard dip, a salad with fresh spinach, slices of oranges, crispy bacon and an olive oil & balsamic vinegar dressing.
We have now created more than 150 delicious recipes and constantly add new ones to our menu. We also offer healthy snacks like fresh fruit, raw energy bars or freshly squeezed juices. For desserts we have partnered with Stelios Parliaros the best Greek pastry chef. You’ll find for example an amazing Milk Valrhona chocolate crémeux on a sponge cake or a traditional Halva with semolina, almonds and cinnamon.
The position graph (below) makes much more sense now as well. We are willing to be bad at variety in order to be extremely good at convenience and food quality.
It took as a long time but we finally made it. We found product market fit! As one of my mentors said:
“Getting to product market fit is like getting high. You can’t really describe it but you know it once you are there :)”
Traction & Achievements
For the past 19 months we ran Forky on limited resources and under highly unfavorable conditions. In case you forgot Greece was close to bankruptcy a year ago and everyone was discussing Grexit — the country’s potential exit from the Euro currency.
The icing on the cake was capital controls.
Paying suppliers and your employees was next to impossible. Daily bank withdrawals were limited to a handful of euros. On top of that the government increased VAT on the food sector from 13% to 23% and then up to 24%. I couldn’t believe this was happening.
We were operating in one of the most demanding businesses and everything worked against us. We had to be creative in order to run basic business operations.
In the summer 2014 we had the pivot, and in the summer of 2015 we had capital controls, currency uncertainty and the VAT increase. Seriously?
But I was not the same. Petros was not the same. Nobody from the team was the same.
The pivot had changed all of us for life. Every obstacle was there to stop others, not us. For us every obstacle was an opportunity to showcase what we were capable of.
Since our seed round in January 2015 and one more internal round we‘ve grown the company >7x, surpassing the 1,000 daily orders milestone while being active in the first few areas of Athens. We have built a unique business model and we’ve been focusing on operational excellence. We developed our own custom-made “thermobox” for motorbike drivers and we are super proud of our routing algorithm, a bespoke software that efficiently assigns and distributes a large number of drivers in real-time, while taking into account both current and future states.
We keep attracting great talent. We’ve partnered with one of the stars of Greek cooking, Christoforos Peskias, who does culinary strategy. We also brought in the CMO from Delivery Hero Greece, George Giannakeas. He joined us after growing E-Food 40x in three years. After its acquisition by Delivery Hero, he made Greece their best-performing market in terms of orders per capita and fourth in terms of order volume.
We currently employ more than 120 people.
Cooking is Dying
The food industry is set to undergo huge changes over the next few years. The way people consume food is changing. Consumer habits are evolving to reflect new ways of living and the impact of new technologies in the food sector is driving this revolution. There has never been a better time to be a food tech entrepreneur.
Cooking is dying. Some people find it hard to digest but it’s true. We are getting more and more busy. Going to the supermarket is a drag, cooking for one or two people isn’t efficient in terms of food waste or money. Workaday cooking to eat is on its way out. In future we’ll only cook to be creative. It will be something to do because you feel like it, not because you have to.
Junk food is also dying. We can already see this in the decline of the big fast food chains. We’re getting more and more health conscious. We care about what we eat, the origin of our ingredients, the facts of our nutrition. We want to feel happy when we eat, not guilty. Bingeing on junk food will go the way of binge drinking — something we do occasionally not a regular pastime.
The next multibillion dollar food company will be one that leverages technology to operate in the foodie’s sweet-spot between quality and convenience.
The trigger for this change is mobile technology. Mobile is enabling the emergence of a new breed of food companies, just like the assembly line production method gave birth to the fast food industry back in the 1940s.
For the first time in history, we can offer consumers on-demand healthy and affordable food, delivered in minutes.
It’s a demanding business requiring excellence in a range of functions (food, technology, logistics). Those who deliver on these will build the next generation food giants, while improving our daily lives.
So, where should you look for these food tech pioneers to emerge? It’s a good bet that they’ll show up in cities with populations of at least 2m. What they will need to thrive is high density cities where there is a latent demand for healthy food and a baked-in delivery culture. If those places also have a bit less noise from the ailing fast food giants that would help.
Athens is one of these places. You’ll have noticed that Greece has not had an easy ride.
But the crisis has obscured the reality that Athens is a great starting point for a business like Forky.
It has more than five million residents — a huge takeaway market estimated at >€700M. It’s a high density city with a vibrant delivery culture and an oversupply of junk food.
Athenians, like people in cities near you, are beginning to realize that the old compromise between quality and convenience is evaporating.
You can have both, you can have Forky.
The path back from a WFIO moment is hard. We know, we walked it.
Now we know We are Not F*cked and It’s Not Over.
In fact, we’re hungry and our appetite is global.
PS1. I hope our story will be valuable and inspiring for fellow entrepreneurs. Remember WNFINO
PS2. This post is also a great opportunity for me to publicly thank:
- Petros for being the best co-founder, obsessed with food and great cook, best friend, best comrade.
- The Cookisto core team: Yannis Asimakopoulos, Dimosthenis Nikoudis, Dimitris John Raptis for being there under very tough conditions, for inspiring me, for growing into world class experts in their field.
- The Forky team: Marios Bisilkas, Thomas Kountouris, George Giannakeas, George Vasileiou, Christos Stamatelos, Stratos Markou, Katerina Foskolou, Iro Charalambous, Anastasia Tatarinova, Dimosthenis Nikoudis, Dimitris John Raptis, Iasonas Tragakis, Nikos Kouroupas, Yannis Kefalianos, Stella Milla, Marientina Chardalia, Panos Ladas, Christos Anastasiades, Konstantinos Vyzas Asimakopoulos for being the gatekeepers of our vision, for excelling daily and solving real difficult challenges. For constantly setting the bar higher. For making thousands of people happy on a daily basis.
- Our Investors: OpenFund, BlueWire Capital, John Coustas, Leon Yohai, Philipp Brinkmann, Dimitris Vranopoulos, Panagiotis Papadopoulos, Sami Fais for believing in us from the very beginning. Special thanks to George Tziralis from OpenFund and Nikolay Tretyakov for their continued trust, guidance and support as our Board Members.
- My “mentors”: Simos Kitiris, Chrysanthos Chrysanthou, Nikos Moraitakis, George Hatzgigeorgiou for spending hours helping us with their expertise and network. We will do our best to pass all this knowledge and positive energy on to other young entrepreneurs in the future.
- My fellow startuppers: Pollfish, Intale, Holic, Incrediblue, Parkaround, Weengs, Avocarrot, Welcome and other entrepreneurs for all the free psychotherapy sessions :)
- Ben Horrowitz and Andrew Grove for writing the business books that have influenced me the most: “Hard Things About Hard Things, “High Output Management”, “Only the Paranoid Survive”
- My gf, my family and my dog for supporting me in everything I do. Yes my dog is supportive as well.