ChowNow started as a way for founder and CEO, Chris Webb and his friends to easily order from smaller local restaurants but 8 years later when COVID hit ChowNow became known as a restaurant-friendly alternative to some of the larger players in the space. They began ranking in the app store organically and getting a boost in users and customers. Chris talks with Darrell and Jordan about the” fast and steady” approach to building a lasting company and how to seize a moment when growth occurs.
ChowNow started as a way for founder and CEO, Chris Webb and his friends to easily order from smaller local restaurants but 8 years later when COVID hit ChowNow became known as a restaurant-friendly alternative to some of the larger players in the space. They began ranking in the app store organically and getting a boost in users and customers. Chris talks with Darrell and Jordan about the” fast and steady” approach to building a lasting company and how to seize a moment when growth occurs.
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Darrell Etherington 0:01
Hi and welcome to found I'm your host Darrell Etherington and I'm here with the burger to my burrito bowl.
Jordan Crook 0:10
Jordan crook. Yes. I'm How do you feel about being a burger? I don't know. I mean, like burger is a word in gaming. That means like, you're not good. And then also burgers. Yeah, I
Darrell Etherington 0:21
should have been the burger. I'm not good at gaming. I enjoy it, but I'm not good at it.
Jordan Crook 0:24
So no, that was clear. But I do prefer a burrito to a burrito bowl. So I guess I'm cool with burger. Burger. Yeah. And then my name is actually Jordan. IRL, not burger. So
Darrell Etherington 0:38
that's right. That is her name. You know her you know me. We're your hosts on found TechCrunch this podcast that's all about the stories behind the startups. We got a real humdinger for you this week, we got one related as you might have guessed to food. We're talking this week to Chris Webb from Ciao. Ciao now is online food ordering platform that helps locally owned restaurants get their businesses online so that their customers can have a great ordering experience and delivery experience. And they don't charge a lot of the big fees that other platforms often do. And at the same time, they provide a lot of solutions so that the restaurant owners don't have to go and figure out their own software stuff. It's easy to use if you have no background in software. And they've recently introduced their own app, which is a bit of a departure for them. They used to be much more behind the scenes. Now they're a little more out there with their brand, which is something we talk about a lot with Chris, but let's let Chris explain it because he does a much better job than I just did. So on with the show.
Hey, Chris, how's it going? Going? Well, thanks for having me on. Thanks for joining us. Yeah, we were just talking about what feels simultaneously like ancient history. And like it was yesterday, which was I believe, officially, China was founded in 2010. But I think this was the public debut. 2012, or the product debut, maybe you can tell me that's
Chris Webb 2:09
exactly right. Yeah, it was the official launch of our first product was May of 2012. So almost exactly a decade ago. Wow, we got the company going in 2011 2011 was kind of raised friends of family around build a team of four or five of us build a buggy products, get it out there, test it work out the bugs. And then 2012 was the year that we actually officially launched it and start charging for the product.
Darrell Etherington 2:30
Nice. Yeah. And we had coverage on TechCrunch, which will link so you can go check out it's got a screenshot in there of a very early product ordering page in Facebook. Have you seen that recently? Have you? Do you remember what it looks like?
Chris Webb 2:45
I do remember what it looks like I haven't gotten back and looked at it that well, as soon as soon as this ends on we'll jump onto it and take a look.
Darrell Etherington 2:52
Nice. Yeah, that was I mean, I think it was it was the year I joined TechCrunch. Jordan, when did you join just before that
Jordan Crook 2:59
right? 10th 2011? Right. Okay.
Darrell Etherington 3:01
So weirdly, a year prior to the launch of China.
Jordan Crook 3:07
I say I timed it. Yes.
Darrell Etherington 3:09
You planned it that way. Yeah. But that was even that was read early days, even for food ordering. Chris, there's a lot of distance. And like you said, it's been many years. But it's also feels like yesterday, but can you tell us a little bit about that founding and what you remember about it and what the situation was like and how you came to the idea of building China?
Chris Webb 3:26
Yeah. So for whatever reason, I was drawn to food as a kid, I don't know why people are drawn to various things in life. And food was one of the things at a young age, I loved fast forward and then moved to New York, my 20s spent majority of my 20s in New York, and I don't think you can live in New York without loving restaurants, right? Because you sacrifice so much you live in a shoebox of an apartment. So you need to get out a lot. And one of the places you get out is restaurants. And I grew a greater appreciation for restaurants. As I was talking to more and more restaurants and friends that I knew that were kind of bartending and hosting and working at restaurants, I would just pay attention more to their business. And I realized that all the big national players were starting to roll out mobile apps and online ordering and everything else. And the independent restaurants that I love and love back then and still do, were at a disadvantage. And the only thing they had back then was to join a marketplace who was going to charge them a big commission, take ownership of their customer and then start forcing the local neighborhood restaurants to compete for the top spot on the site. Right. And those were the conversations with restaurant owners that kind of led to thinking for about, hey, there should be a different way of doing this. And that's what led to churn out right?
Darrell Etherington 4:27
Yeah, I mean customer around the customer side, I guess you're thinking like, oh, marketplace convenience, great. But then on the other side, it just turns the restaurant and the restaurant tour effectively into inventory, which is a pretty dehumanizing way to look at a small business, you know, often independent businesses, but it's also like, how do you weigh that convenience desire, right? Because it's like, essentially, consumers are just like, I don't care, but or do they care? I mean, you've been in business now. 10 years, it seems like people care.
Chris Webb 4:54
Yeah, the convenience factors is no doubt very true. Early on, what we realized is that At most restaurants already had an existing takeout business and they just needed a convenient way of providing ordering on a Friday night. Back then it was still kind of the era of calling up a pizzeria on a Friday night being put on holds, placing your order after a couple of minutes of waiting and a hold, pull out your credit card reading the credit card number over the phone. And that's what you did if you're ordering for your local pizzeria, which was was only a decade ago, but sounds so much longer. The Domino's the Papa John's and the Pizza Huts were all rolling out online ordering and they're just kind of starting to to dominate. And they're very vocal about it back then. I mean, Domino's was very vocal about, hey, we're gonna put independent pizzerias out of business because and they didn't phrase it this way. But they basically said they may have better pizza than us. But we have more convenient way of ordering and convenience is going to dominate here. And so we heard that said, Well, why don't we are these independent pizzerias and coffee shops and other cafes and restaurants with tools compete fast forward a decade now what you have there you have restaurants that would prefer direct ordering, which is better for the restaurant, right? There's no Commission's, there's no fees, they have that direct connection with the customer. And then you have all the kinds of delivery apps which then consolidate all the restaurants into one app, kind of to your point, they kind of think of restaurants as almost like food factories that giving them wholesale pricing on food, they don't really care all that much about where you order. And so we are blending those two concepts, taking what we believe are the best of both, which is one app that holds all your favorite local restaurants with the business model of direct order. And so no commissions, no fees, we share all the customer data and customer information with the restaurant, we believe that they should have a tight bonds the restaurant in the diner. And that's a big focus for us now, a decade later of what we're working on.
Darrell Etherington 6:36
Yeah, that makes sense as a blend, because you can't get past the fact that okay, customers have decided this is one way they want to discover new food, right, that ship has sailed. But at least you can be fair in the other ways to say like, look, you can still maintain a direct relationship, like you said, like getting all that information. I think that's something people don't realize, if they're not familiar with how retail food ecommerce, like any of those kinds of businesses operate is that the layer of intervention in your platforms between you and customer can be either very opaque, or it can be transparent. And of course, the latter is much better for you as a business owner, but it's hard to come by. Right? It is it is
Chris Webb 7:13
and one of the reasons that the delivery apps don't share that information is because then the restaurant can be more mobile, they can jump platform, the platform, take your customers with them right when their customers are locked into a platform and they have no way of sending an email, say, Hey, we are moving to XYZ platform, or hey, we just launched our own branded mobile apps. If you download the app, we will give you 5% off every order, it makes it very challenging for the independent restaurant to be able to do that type of thing and kind of be mobile and it locks them in and that's the key is that lock in. What we realize though, and this is kind of obvious to most is we operate in a different type of marketplace. Most marketplaces if you think of anything from like an Airbnb to an Etsy to a Craigslist to an eBay, the buyers and sellers don't know each other, right? That marketplace is making the introduction for the first time you are gonna rent a place on Airbnb, they're gonna connect you with somebody owns a place and you're gonna, you know, they'll make that introduction, and then you go on from there, restaurants are different because most diners, meaning the buyers already know the sellers, and they're very fond of the sellers, right, you already have your favorite place, I would guess sometime in the next week or so you will go to a restaurant that you already know and love. And that's the way most people so it's that discovery piece is less important in our world. And it's more about the convenience of making an order having that one account as a diner. So you don't have to create multiple accounts with multiple credit cards and file. So we've handled all that on the back of an AR platform since that first article and TechCrunch, a decade ago, we have treated the backend from a diner perspective as kind of a marketplace, meaning that one channel account that you create, to order foods put your credit profile that's good at any of our 20,000 restaurants on the platform. So the back end has that convenience from a diner. Now what we're doing is connecting the front end with one app, a channel app, so that discovery is available. I mean, if you want to look for Thai food tonight, you don't have a local Thai restaurant, you can go into the app, you can filter for Thai, and that will give you kind of local local high spots. But that discovery happens a lot less even if you talk to someone like Uber reports. This occasionally like Uber Eats like the average Uber Eats user only orders from the same through restaurants over and over.
Darrell Etherington 9:04
Yeah, I mean, anecdotally, that's true. Yeah, yes,
Chris Webb 9:07
exactly. So what we're building kind of plays on that. And we have built what we believe is the preferred marketplace for restaurants. And we're getting out to the world through actually our restaurant clients who then go into their customers and diners and say, Hey, use chair now it's better for us. It's better for you. Yeah. And getting out to the market that way versus taking out Superbowl ads or other expensive ads out
Darrell Etherington 9:25
there. Cool. Yeah, I think Jordan and I'm already gonna get into Shopify, I have to but yeah, it's very similar to their evolutionary approach to especially with shop pay. Shop pay is like a feature that a lot of people don't even know exist and links behind the scenes, different Shopify stores, right, like you have your shop pay credentials, and they apply it anybody who's participating, and then you can just reuse your credit card and everything on file, but it's sort of invisible. And I remember when I was at Shopify, we often had discussions about is this good? Do people like that this happens? Do they know what's going on? Are they frightened by at times? Because you're going to essentially a totally different brand. And you're like, hey, how do you know my credit card information already? Because it's not branded on the front end, Shopify, it's just like a small thing through checkout. And now they're moving into the shop app. And it's sort of this toe dip into the marketplace approach. And it's making the branding more present and forward. So I'm just curious, did you run into any similar challenges when you're doing that? And was that part of your decision to evolve and introduced this app? No,
Chris Webb 10:31
we actually built that for ourselves. At some point along the way, and kind of 2017 2018 we had enough restaurants on our platform that we wanted to order from as many of the local spots. And we just grew into the size that we didn't know every restaurant that we had signed up on here, and kind of West LA areas. And Monica. So we said, Would it be cool if we just put all our restaurants in one app so that we can so we did that it wasn't a hackathon type project. But it was like a little bit beyond that, right? We put a product team on for like six weeks, we built that quickly through the App Store. And then that product team moves on to build another product for our restaurant clients. And it kind of sat there and we use it and a few other random people would kind of find it, download it, we never promoted it. We never did any consumer marketing around it. We never had a dedicated product team on it. We were back to building tools for restaurants. So their own branded apps or branded systems, CRM systems, automated marketing, kind of all that for the suite of products that we offer restaurants to get their brand out there. COVID hit obviously, but two years ago, and the press started picking up on Hey, DoorDash and Uber and others there may not be so great for your local restaurants, what the industry had known for years from this commissions and fees and everything else started change. And then you started getting local cities starting to put regulations in place and fee caps and stuff like that, that then generated a whole nother kind of press cycle. And in some of these articles, chana was mentioned as the alternative a platform that is in charge commissions or fees and shares the customer data angle, this is a good player among a group of not so good players. And all of a sudden, the apps are ranking in the app store all organically and we're like, oh, this is kind of cool. Eventually, we thought at some point, we would circle back to it. But we just didn't know when and now the app ranks consistently app store it has for probably the last year and a half or two years with basically no marketing behind it. So late last year, we said we should probably do something here. And so we actually put a dedicated product team on it. We just hired a CMO who started last month, she is just getting ramped up now but we plan on later in the year starting to do some consumer marketing. Is that your first CMO? Yeah, first CMO, we've done kind of like b2b marketing, training at restaurants to use our software and our platform for a number of years. But we've never done consumer marketing. So she's fantastic, really happy to have her on board. She comes from medium she ran marketing at medium up until joining us last month. And I often think of it as a comparison, and no one got this at first. But I think people are starting to understand like medium is, in my view, a very good marketplace for readers and writers, but they don't put themselves there, they put themselves as hey, here's a really great software, if you want to create your local blog on whatever you want to write on, you get it up and running in a matter of an hour if you want to get your first post out there. But then they bring this ecosystem of readers these 10s of millions of readers and they will cross pollinate your content with readers that they think will read it that is very similar to what we're doing is restaurants can use our platform, but tap into our ecosystem, so they can use our software tools or ordering just for their own takeout business. But by being part of our ecosystem, we have 20 million people that have ordered on our platform. And last year, all China accounts and so they can tap into this 20 million people. I mean, in theory, right? 20 million people across all the US. It's not like they're located in New York, but in New York, we have 1000s Yeah, it's a much larger base, and they have just for their own takeout business. The idea is that we always want our platform to be commission free and fee free for restaurants. And so it's trying to find that right balance of like, how do we position our brands to sit alongside our restaurants brands without overshadowing them. We've always been behind the scenes, we're kind of coming out from behind the scenes, but we don't want to then swap places we just want to sit alongside our restaurants that we love that would be at odds with I think with the mission that we started on 10 years ago,
Jordan Crook 13:45
a balance that though, ya know,
Chris Webb 13:47
it's a challenge. And this is where you have to constantly remind the team and yourself of our principles, our missions, because they're things that come up all the time that say, Hey, this would be good for chat out. But this wouldn't be for our restaurant clients, right? And we see all the time, celebrities, companies, politicians, have a good reputation, do something stupid, and all of a sudden it crumbles. And it's really hard to recover from that. And so I'm very sensitive to us doing something along those lines. A lot of the way that we're thinking about it is various events and things like that alongside our restaurants and really putting them on a pedestal. I mean, another example I talked to the team about is someone like Nike and all their sponsored athletes, right? Like sponsored athletes, like they bend over backwards for LeBron James or any kind of athlete that they sponsor, but they also want to build their brands. And they obviously have a world class brand and Nike and so there are examples, case studies out there that we look to to see, okay, how do we do this? How do we make sure that we are bending over backwards for our restaurants? Those are LeBron James of the world, right? Those are Michael Jordan's that we love and are obsessed with. But we also want to make sure that people know who Chao is over time. And if we go too far in that direction, it's probably a bad thing. And we know it's nothing.
Jordan Crook 14:49
Yeah, I was just curious. We can talk about that platitude, honestly, forever, right. But like, what does that mean in terms of hard boundaries? So you just hired a CMO? Right as I'm sure this was like a constant call. conversation with this person of like, we need to get out there but like not to the point where we're the star, we're not supposed to be the star, we're supposed to be the mirror, right, that reflect sunlight onto the restaurants and what does that actually look like in practice? What are the limits to that? Where you're like, we're definitely going to take this interview, or we're definitely going to do this commercial. But this commercial is going to be full of restaurants and not meat. Yeah. Right. Like, what does that actually look like in practice?
Chris Webb 15:25
Yeah, I think that is a good example of everything that we do. Every time we put our name out there. It's in partnership, and hopefully with collaboration of our restaurants and the input from them. So it's never just going to be chat out standalone. I think everything that you'll see from us from here on out will have our restaurants embedded into it. This isn't a unique idea. But we had to do it, which is create a Advisory Council of restaurant operators who we've run ideas past all the time, so that we aren't just kind of talking to ourselves convincing ourselves that we're doing the right thing. At least we have somebody to keep us honest. And say no, this is too much. Yeah. Now not enough restaurant clients, it's gonna be a constant battle. I mean, ads and campaigns and commercials. And whatever we do in the future, we will probably have this discussion on a daily if not weekly basis, from here on out of Where's too much on chat now. Yeah.
Jordan Crook 16:10
How does it feel for you, though, your person who's been working for a decade now on this thing that is successful, and you know what it is, and the restaurants know, you know, where it matters, people know what's going on with Chow now. But you also look at like the broader restaurant industry. I mean, you just listed a few people. But like, you have the Uber and you have seamless Grub Hub, power couples, then you have toast toast is also behind the scenes vote. Everybody knows what toast is. So how does it feel for you just as a human being to be like, Yeah, but like, I'm here, you know, we're doing cool. You know what I mean? Like, do you ever struggle with that personally, and I tried to say that as gently as possible, but like, you know, you are below the radar or under the radar low we are it doesn't mean you're any less successful. But it could be frustrating.
Chris Webb 16:55
Yeah, I think it's how you define success, right? What is that number one goal, if it is to be the largest platform in terms of number of restaurants with the platform, number of diners revenue that we make, and it's easy to get caught up in that that's kind of what most people on the outside will compare us to, I don't know if a week or two goes by without seeing a ranking of DoorDash versus Uber versus GrubHub. Right. And that GrubHub has gone from the number one spot in the last four years to a distant number three DoorDash has kind of taken over the top spot, and there's just a constant ranking. It's always by revenue. And no doubt, we want to build a business, that's what we set out to do is build a business. This isn't a nonprofit. But there's other ways of kind of ranking yourselves and defining success. And we want to be a good actor in the space. Some of the companies you named, I would consider good actors. And some I don't think are good actors. I think if you talk to most restaurant operators and owners, they will tell you that point of sale company is good. They're good for us, the way they price the products, the business practices are good, you then ask about the delivery app, and you'll probably hear a very different story, right? And we don't want to fall into the trap. And it's very easy to do, because investors and everyone else will do this for us of saying, well, you're number three or number four, number five, you have to be number one in terms of revenue. And I think we can build a multibillion dollar business, given the size of the space. I mean, that's the thing. It's like when you start looking at the numbers, and I was kind of looking at the latest numbers from last year yesterday, so they're fresh in my head $700 billion was spent at restaurants last year, and it's growing, right? So projections are in the next couple years, it'll go over a trillion dollars, there's so much money spent in our space, that you don't have to be that number one player to have a massive, massive business out there. And so for us, and it's coming back to you, okay, what can we live with the fuel goodbye? And how do we define success as being a good player, and there are other metrics that we think about, but you know, I'd be lying if I was able to completely check my ego at the door. Like there's that aspect of I want to be number one, you know, most founders will find our competitive, I'm competitive as well. It's easy to fall into, I gotta constantly compare myself to the number one player in terms of revenue, and I do from time to time, but I don't think it's the right thing to do.
Jordan Crook 18:54
Yeah, well, it's like not even revenue to write like, I think that there's this balance that every founder has to strike. And I think that most struggle with where the tech world in and of itself can be a hype cycle, I think that we at TechCrunch try our best to not be a huge cog in that machine. Like we try to tell the story as we see it. But when a lot of what you write about is the startup raise money, it just becomes part of the thing. I think it's hard to tune out, because there are now so many different ways to raise money. There's so many different ways to make money. There's so many different category defining startups that are coming in, and nobody knows what the hell is going on until they have 70 million in ARR. And then you're like, oh, wait, this is what works. And so there's a balance that has to be struck between the personality type and the founder, which I think I agree with you. It's like, nine out of 10 are going to be incredibly competitive. People want to be right, they want when they want to be number one, but then also to be able to like tune out most of it and yeah, it just doesn't matter if I'm focused and I think that's a hard balance to strike because competitors are often looking at their competitions then being like, what are you guys up to, I want to analyze, the only way I can be better is to understand this whole ecosystem. And it's just seems like a really difficult balance to try to strike all the time
Chris Webb 20:11
it is. And so that's where you kind of have to get inspiration from kind of like the Patagonia's of the world, right? The companies that just say, Screw it, we don't care about anything else, we will tell our customers don't buy more clothing from us make your clothing lasts longer. And we're not in that camp, I think, to clear your head from time to time, you have to kind of go back and read those stories and hear about these companies that are just I mean, it's amazing what someone like Patagonia has been able to do. There's not many companies like that, that have been basically able to give the middle finger to everyone in the industry and say, We don't care about this, we control our destiny, we care about revenue, because we're a business, right? They are business, they give away a ton of money. There's not many companies like that. But I think AI obviously many, many, many other people look to them as inspiration. There's a few other examples that are probably the number one example.
Jordan Crook 20:54
Yeah. And it's interesting too, because Patagonia has like this, like you've mentioned that my partner is reading the CEOs autobiography, right? Like there's this kind of like, X Factor this not quantitative thing involved with that. That matters a lot, right? Like we all know, in this room. We could go talk about it's almost anyone else. They'd be like, Oh, Patagonia, is that good? Right? Right. There's like something weird about that, that you can't show to shareholders, you know, like, oh, look, it's because we're the good guy, or like, we got to steal because we're the good guy, or we there's not a direct line, you can draw, and yet it counts for so much. And it's like that can again be a difficult challenge to quantify something that is very qualitative, but counts for maybe more than anything else.
Darrell Etherington 21:37
It's like super hard to pattern match that because another example would be Apple, especially like early Apple, maybe not so much current Apple, which is a different ship under cook. Right. But like it was something that so many people try to emulate. And the point is, it's not really emulate a bowl, especially not cross industry, but not even within industry. And Patagonia is probably similar. Like if someone tried to do exactly the same thing as Patagonia, it would not work. Yeah, these are kind of one offs. And you have to go back to like first principles and be like, what did they do on a first principles basis that we can replicate? And then everything else after that has to look different? Because we're in a different position, it's very easy to fall into the trap of, well, let's copy what they did, and then end up with absolutely nothing,
Chris Webb 22:19
right. Yeah, I agree with that. I don't think you can copy anyone down to every last detail, good or bad. So talk about the other side of the spectrum. I just read Frank sleepbuds book. And Franklin is the CEO of snowflake and a legendary operator, not a founder will tell you he's not He says very early on the book. He's not a founder. He's not a board member. He's not an investor. He's not good at any of that. He's an operator, he takes over companies and grows them to an over snowflake is worth today. But and this is his third time taking a company public in the last two decades. He is not the Patagonia type, he is the winner at all costs, hard charging, you could not be more polar opposites, right? And I still read that book. And I take inspiration. There's things I read through that. I've thought, Man, this is a really cool way of doing it. And there's things that like, we will never do it this way. So I think it's like picking and choosing so there's like aspects of like the Patagonia is a world that I love personally and take inspiration from and then there's like the Frank flippin way of just hard charging, like there is no peacetime CEO thing. It doesn't exist. It's always wartime, we're always charging, you gotta just defeat your competitor, and nothing else matters. And there's things there that I take as well.
Jordan Crook 23:19
I wonder also, yeah, that's like useful to look at your actual industry ecosystem rather than looking like so broadly and saying, like, I mean, it feels a lot like you looked at some of the competitors in the space. And we're like never that there's never that almost like instead of things to emulate, it's like, these are lines will never cross instead, right? Like, we're never going to copy the way that they do XY and Z. Like, it's kind of like Twitter, right? If you put a little box around you, how creative can you be? And interesting things can come from that. Also terrible things. If we're using Twitter analogy. There's no question there. I'm just chatting.
Chris Webb 23:54
Ya know that. I agree with that. Circling back to the conversation for a couple minutes ago, at least what investors are coming to realize and have in the last couple years. Are there enough studies and very smart people have written books about mission driven companies and companies that have a purpose of doing good out there and how successful they have been something similar is there's also been studies on companies that are appreciate really great design and this probably start with Apple and talking about the comparison back to that like apple in the old days that have built design and good design into their DNA. And compared to companies that don't and their success rate. So there's been a number of studies so you can kind of take those and can go to the investors be like, see, this leads to more money for you.
Darrell Etherington 24:29
Right. There are your numbers that you care about. They're over here. Not too far over here. Still within reach. Yeah. Yeah. This is a bit of a switch tracks. I'm still curious. Just looking at your work history. You talked about, you know, being in New York and just enjoying restaurants, but you know, you're at Bear Stearns, you're at Lehman Brothers, you're at RBC Capital Markets. Jordan, there's my opportunity for my Canada plug, even though I receive mistakes is not really the same as we seen in Canada but same branding and you run Lehman Brothers Correct me if I'm wrong, but right up until the collapse, is that right?
Chris Webb 25:03
Yeah, yeah, I was there. I was there that Sunday with my box pack and at my desk like 1000s of other people, which is ingrained in the way I think about the world and things like that. So I remember again, luckily, I was in my 20s, I had very little money at stake, there are stories that are much worse, people close to retirement, we lost a lot of money, and we're not in a good place I was in my 20s, like, didn't have much money to begin with the little amount of money lost, I was able to kind of recoup Yeah, well, that's a wash, reset. Yeah, but the lesson, I mean, I remember the good old days of like, 2006, where like, it was the opposite of the lesson eight from the kind of finance world in New York, going out spending a lot of money on food and dinner and like just living large and thinking the industry as a whole. Yeah, the golden days will never end. Yeah. And then 18 months later out of business. And as we have built Chow, now, we have pushed, and we have grown, and we've grown every single year, but there's some companies that have set out. And I think there's a mindset, obviously in Silicon Valley of like, go bigger, go home, create a binary scenario, if you don't become a $10 billion business in a matter of a couple of years, you're worthless, and might as well not be a business, I don't have that mindset, right, I think you can build a really great business that does really good things in both makes money and provides a good platform for customers, we have pushed, but we've never gotten so far over our skis, that we are, frankly, created a binary situation and potentially could be out of business in a matter of months. And a lot of that came from those days at Lehman and kind of seen, it was the largest bankruptcy in the history of the web, right. So like, I got in first row.
Darrell Etherington 26:28
So that was that amazing formative thing to have, especially like Jordan was talking about earlier, the race and the competition, right. And like one way to win, and one of the most visible ways to win is just to raise absurd amounts of money for the individual founder, it doesn't necessarily matter if they use your term, like go over their skis or whatever, like you know, that in itself is a feather in their cap that they can then take on to do whatever they want with after the fact a lot of other people get hurt as a result of it. But maybe not necessarily the founder, you know, so that to you has never been tempted because of this experience, because he was just like, I see what can go wrong. If you start getting a little more hungry than perhaps you can handle
Chris Webb 27:05
Yes, yeah, the way kind of visualize is like it could be a race. And I saw this firsthand with all the banks back then like just outdoing each other to have higher revenue to resell more and more mortgages that constantly chase each other. And like in that timeframe into the kind of housing crisis of 2005 to 2008 timeframe. So I witnessed it firsthand. I just saw it like that wasn't that side of the bank? I wasn't so the business, but I was still within the bank. So I witnessed it and what no one at the time realized or very few. So people did but not many people did is that that racetrack had a cliff, and you just had these kind of cars flying off the cliff. In some cases. If you're in fourth place, you saw the other cars flying off the cliff and you're like, Okay, I could probably break. Yeah, exactly. You know, the kind of the wily coyote type like, you fall off the cliff type thing. Again, it's not like we're slow and steady. We're still fastest. Yeah, but we're not. We're taking the brakes off the car, right?
Darrell Etherington 27:53
Yeah. Has it affected your selection when it comes to investor partners, like when you're going out and raising? Was that top of mind? Or what do you think about when you're going into the fundraising process?
Chris Webb 28:04
Yeah, it has changed over the years, no doubt, early days were desperate. We were taking money from anyone the truth back in like 2011. And
Darrell Etherington 28:12
I feel like a lot of people don't get that. But it's fine to admit that, especially with a 10 years grace, I guess. But yeah,
Chris Webb 28:17
yeah. I mean, there's probably some standards. And as someone who didn't come from tech, who isn't an engineer who can't code, it was very hard raising that first round of funding to come from New York House. So I never went to college. So I didn't have that. Frankly, that doesn't really matter. When it comes to VCs. No one's ever asked me where I went to college. It was just kind of incredible in some ways, but you know, like so many other naive founders, I read TechCrunch and, you know, Engadget and all these other kind of blogs and things like that, and keep worrying about these companies that are raising money. And like this is this is not hard at all, right? And a friend in the tech scene in New York connected me with a bunch of VCs, I had 30 meetings, like, oh, at least one or two of them are gonna like give us like a term sheet, not one of them did. And like, well, this is harder. So we went back raised some money from friends and family brought on we've technically got of like a distant, like, third co founder, who's an engineer, very, very, very good engineer. He joined us about six to seven months after we started the company. And that he built a very small engineering team with this little amount of capital that we had raised from from friends and family and then we were able to build a product. And then and then as at that point, we got it we're able to be a little bit pickier with with our investors. And then as time has gone on, as the product has grown, and we've got multiple term sheets over the years, we've been able to be more selective with investors. One thing that I think we have never never raised capital from from any of the Silicon Valley area VCs and I think part of that is kind of who I am as a person grown up in LA and then live in New York. For whatever reason, all our investors are in LA in New York and I feel like I have been able to connect. I also feel like I am an I've been told this kind of I am not been I'm not didn't get enough at BSc in back to that kind of binary like, Hey, this is like, I think we're building a big business I've been very honest with like how big I think this business can be. And it can make all investors very happy one day, and even today, they're all pretty darn happy on paper. But you go to Silicon Valley, and they want this like, yeah, these crazy stories, these like, you know, and the Travis Kalanick, kind of Adam Newman examples, those are extreme examples, like something along those lines. And I've just never been able, I've never been good enough at BSC into the story that much in my in my opinion, they connect something about your investors, in my opinion, is there a little bit more grounded? And my background is kind of coming up. Finance and our investors like, they're they're very quiet on Twitter that they don't blog all that often. I mean, they're just kind of like, they're great investors? At all. Yeah. Yeah, exactly. But coming back to like, where do you sit alongside your portfolio companies? Like there's some, and you probably know him probably know him personally. Like, it's all about them and their brands. Yeah. And, you know, if they have a portfolio company that's successful, like it only elevates their own brand, and they will let you know, which portfolio companies they invested in early on. For some reason, you know, LA is maybe in the kind of middle of the Silicon Valley, kind of New York, kind of. And then New York is like, just kind of more grounded my opinion. And I've connected with him. And I think it's just kind of like, those are kind of my, my people having lived in there for so many years. And obviously, living in LA for most of my life.
Darrell Etherington 31:29
Yeah, that makes a lot of sense. I mean, it's similar to to the Toronto, the Toronto scene as similarly, I would say, relatively stayed. I mean, I think even more conservative than the New York one, frankly. But like, I think it's funny that you talk about the branding thing. And it being so important to like, shout out like this was our company, right? As we talked about, we've talked previously about a lot of investors will do the like, oh, and we built this and we and it's like, did you I mean, you or maybe you get the money. And then the company did that. But like, I don't, I wouldn't say we. And I feel like that is a valid thing. I also feel like this is, this is very behind the scenes, but like, me and Jordan, everybody, I TechCrunch get lots of messages that are like, Oh, hey, you didn't list firm XYZ in this post, or whatever. And most of the time, it's, it's never malicious. I mean, it's just like, If I list all these things, this sentence sucks. Like, it's just hard to read. So I'm not gonna do it.
Jordan Crook 32:31
Even. I mean, there are a lot of startups that don't even send Yeah, right. Like, I got a text from a VC who I won't name, who was like, wrote about a company that I invested in at precede stage. And now they're big. And they have a Series A for a bunch of big name investors. And like, should I reach out to the company and tell them to always respond to it? Because I was like, I don't know how to, like,
Darrell Etherington 32:53
do both. I just think they don't even pass the stats like that. And Jordan, I don't know if this is true, but I feel like it would be more Silicon Valley based companies that want that. That native check, but I don't know if that's, that's, yeah, yeah.
Jordan Crook 33:12
I mean, like, it matters. I can't blame. Yeah, you know, but like, yeah, I get it. And like, that's how you get your new deal flow and stuff, right? So like, the more your name and SEO and all that stuff is out there, the more people are willing to come to you and be like, Hey, do you wanna invest in this? So you have your pick of the litter? But like, there's something to be said for? I mean, it kind of comes back to what we were talking about, which is like, what can you do to balance being out there enough to do right by your company and your shareholders and everyone involved, but not to the point where that's the end goal, right? Like it has, it has its shades of Elizabeth Holmes for me to write like, I'm in the midst of watching the dropout. So it's like, top of mine. And obviously, that's a very like, a maybe an embellished version of the story. It could be a watered down version, who the hell knows really at the end of the day, but like, just the need to win and be on top and be the number one and be the face of everything is so ultimately turns out to be so toxic to everyone, including yourself? Yeah,
Darrell Etherington 34:22
it's like often that is bad, bad news, right for your mental health and everything. I
Jordan Crook 34:27
mean, everyone but me, I obviously am a winner and the number one.
Darrell Etherington 34:32
Yeah, but that was never a question. Right? So it's unfortunate. Yeah, I think I mean, the only other question I had about kind of the that, which was like, when did you decide like, oh, what I think I should be doing is starting my own business. And also it's going to be in this area. Like, did you think about other things? Did you know you want to be an entrepreneur first or did you know you wanted to solve this problem first, or how did that go?
Chris Webb 34:59
Are you eventually Where did I, so I grew up. So I'm 40, which then puts me in high school in the late 90s. And in the late 90s, was the first.com. Boom. As someone who just love tech, I tried to closely I even started in high school, a company that went absolutely nowhere, called car car upgrades.com. Because that was also the cars back then was good. It was great. I haven't looked it up in years. It was just selling aftermarket carpet. It was like an E commerce site. But like, I didn't do it, I got my wholesale licenses to buy products, and I had no money I was 17 or something like that. Right. And so that was my first failed attempt that lasted probably five months, it wasn't a long, long journey on that one. But I that is where it kind of appreciation for tech products, you know, the you know, everyone else that was looking up to Steve Jobs, and still does, and that kind of that put me in that kind of timeframe. And my parents both have their own business, most of my kind of family members, uncles, aunts have their own businesses. So that's what I saw growing up. The other thing I got to like, though, in the 90s was stocks, because everything went up and I would pick a stock and it would go up. I'm like, Damn, I'm good at this. It's like, you know, you look back years later, like what an idiot. But like, it was like those that econ class in high school where like, you pick up a portfolio of stocks, you track it. And like, again, you can pick anything on that list. But back in the late 90s, because everything went up before the crash. And this was a year or two before the crash. That's what actually got me into stocks, which took me to New York, and I followed that path. But I was always so envious. Reading constantly about all these, these new tech companies coming out. And again, whether it was TechCrunch in gadget or any of the other kinds of publications back then I would read them constantly. And that was actually when I was trading. That's what I would trade more often. So like, when POM came out with the pre like it was a new adventure, right? Like and it was like they had this exclusive contract with Sprint and is this big thing. And you know, you had Web OS like I knew that story inside and out. Like I'd go to sprint stores just to see like how many people lining up. I was like obsessive over that.
Darrell Etherington 37:10
That's just people that if the listeners don't know, go look it up. Because it was wonderful. It was. Yeah, really unmatched I think still. And it's such a shame. But like, yeah, it didn't go anywhere. But yeah,
Chris Webb 37:21
100% and iPhone, the iOS today, it's very much Web OS grown from 12 or 14 years ago, if you look at if you decide but I think people already have done this comparison. But it's like this, the gestures and the swipes and the be able to like swipe the the app to close it and get it off like that all came from Web OS like palm had done that in what 20s 2007 or whatever it was. And so point being is like I'm obsessed over that personally, but also and so I always knew I wanted to start something, I didn't feel like I belonged in a massive company in a massive bank, I just felt kind of like an outsider, which I kind of enjoyed to be honest. But But I knew it wasn't my entire life's calling. And so after talking to restaurant owners and seeing that, here's an opening to do something with tech with restaurants I also love. That's where the idea came together. So I moved back to LA in 2010, I went to Argentina for for about six months to kind of unwind. And New York was fun, but like 2008 2009 was slightly stressful and less fun than it was in 2006. Do those five, six and seven. And so that's where the kind of like, Huh, I wonder if there's something here. I've talked to restaurant owners in New York, I was involved with families involved in a very small way in a restaurant in LA that had just got going. They were saying very similar things about e 24, which is like the LA's version, or California's conversion of seamless, they eventually both got bought by GrubHub. And that's where the idea started like span of like, Hey, I don't want to move back to LA to trade stocks, I want to do something, I want to build something and it all kind of all these ideas kind of collided at once. And I don't think anyone has a fully formed idea. Day one. It's not like you wake up and you're like you have that entire vision, right? Vision usually is formed by inputs from other people, in this case, restaurant owners and other people and, and that was 2010, which we have referenced earlier that the company really got started to that's a lot of enthusiasm and was just like tinkering with ideas. Gotcha. Who doesn't love it? It's like, okay, let's go full time, my co founder and I go full time on it, raise some capital and get to get to work,
Darrell Etherington 39:20
right? I mean, I think that's a really good point to raise, especially for people who are not founders or are considering it or like interested in the idea, but like, feel unsure about it is like, Yeah, you don't start with like, well, you know what I've got it's Uber in LA, like, you know, like, and this is how it works. And it's everything. Like, that's not how it works, right? Like you go out and you kind of go like, I feel like there's something to fix here maybe and maybe I'll talk to people and see what it is and you know how we can do it and compare it to other things and look at what they're doing and see like what they're missing. Like it's a very slow gradual process with a build and you kind of like have a nebulous idea and then affirms up over time, right? It's not like totally all at
Chris Webb 39:59
once. Yeah. The other thing I think people forget is that any large business that's been around for years has transformed itself over time, right? That that original idea rarely lasts forever. Yeah, it almost never does. And so the company that you're starting is not designed around that one product. Like a lot of what we do today, that one product is kind of morphed. It's expanded, but like you referenced, like the Facebook ordering, like we don't even really support that anymore. Because it's changed. We have Instagram org. And so now, and we have a whole bunch of other things that we didn't do back then. But But the world is changing. And if you don't evolve, I think people like I don't hear, in my opinion enough about this, about how companies transform. Yeah, and that original idea and you're pitching, hey, this thing is going to be a multi billion dollar idea in your seed round and your series A likely isn't the company, the company may become a multi billion dollar company, that original product likely changes quite a bit. And it has to eventually get reinvented, we're talking about palm as an example. They didn't do it quick enough. And they went away.
Darrell Etherington 40:56
Hey, Web3, BlackBerry, my LG TV, right? Yeah.
Chris Webb 41:00
Yeah. Exactly. You know, Blackberry is another example. Like, you constantly have to reinvent yourself. And if you're not somebody who's going to just kind of eat your lunch for you, they don't kind of think about it. So that's something I've been, you know, now that we've been around for a decade, I think about what's the next decade? How does this business have to evolve and change to keep up with the times otherwise, if we don't change anything, and we just, we put blinders on, and we say, hey, what we've what we've been doing for the last decade is gonna get us 10 years down the road. Like, we won't be here in 10 years, like, I can almost guarantee that
Darrell Etherington 41:33
it's a good lesson. And it's never, it never ends. Like you never reach a point where it's like, okay, good. Now we're static. And it's keep true, right? It's like, no, look at Intel. Look at everybody, it's changed.
Chris Webb 41:42
Yeah, 100%. And that's why I'm always kind of, I find it so interesting, when people want to go start a new company and do it again, it's like, I actually think I once described that we'd never, we'd never kept this in our bio. But in one of our boilerplate for the company years ago, I described us as a studio that made products for restaurants. And the reason I like studio is because like, you're constantly in there tinkering. And constantly, if you don't think of it that way, we've never used that I've just want to tell stop me out of using Travis, as a studio. But I do have to think about ourselves is kind of silly to kind of invent it. And so from that aspect, I rather think of today is like the first day of the company. And like what, what is the resources we have, we have 10s of 10s of millions of dollars in revenue, we have, you know, 500 employees, we have all this stuff. To me, that's much more exciting than starting day one from scratch with nothing to start. So like, to me, it's like starting a new company today. Versus versus really, you know, selling the business. And that started it started again, from from nothing, I don't know.
Darrell Etherington 42:45
That's great. That's great. That's a great perspective. It feels so refreshing and energizing right to to, to build wake up to that and be like, Look at this, like, I have all this before me, what can I do with it? And it's so much I mean, this is a terrible comparison. So I don't think that people will use this, but it's kind of like roguelike and video, like you on each run, like you gain skills and accrue and then you start new and you're like, Okay, now I'm much better for this run than I was last run. Not that I don't think that's gonna mark it well with the general masses, but your your way of putting it was much better, Chris. I think we're about out of time. But thanks so much. It was really great chatting with you. And yeah, I love learning about this. And also just I'll put in a request that you bring the channel app to Canada as soon as possible, not available in the Canadian App Store.
Chris Webb 43:33
Yeah, we have some work to do here. The US we technically have restaurant clients in Canada. I don't believe our app is the channel app. We just don't have enough restaurants, you open an app. There's three, three restaurants here in wherever you are in your neighborhood. And yeah, and you're like, this is kind of lame. So so until so we believe we launch something that's not lame. It'll be us only for now.
Darrell Etherington 43:53
All right. Canadian restaurant chairs get on there to help a plug free plug.
Chris Webb 43:58
Yeah, we need a pair of sales team on.
Darrell Etherington 44:02
All right, thanks very much.
Chris Webb 44:03
Yeah. Thank you. It's been fun.
Darrell Etherington 44:12
Okay, that was our chat with Chris and Jordan, what did you think about our conversation? And what do you think about China?
Jordan Crook 44:19
Yeah, well, I thought it was a great conversation. I think the piece that I was most into was talking about the startup hype cycle and how Chow has for the most part flown under the radar in a pretty crowded big space, especially one that has like a lot of consumer facing app services, angles, whatever, and kind of trying to stay humble, but also being candid about like how that feels all the time and not, you know, kind of being in the news and being in the magazines. People are on covers of magazines still right? It's 2020 That still is a thing but
Darrell Etherington 44:53
I believe that magazines still exist. I believe if you go to a store visit there's
Jordan Crook 44:57
still some magazines that are shown ELDs, a mag or an airport? I feel like that's where I see the most magazines. Yeah, but I can't I can't say for sure. But I think that's true. It's been a while since we've been to an airport to be honest. But I liked that bit. And I also liked and also was intrigued maybe as a more as a better way to say it. The bit about Chow kind of being like the good guy, this persona that Chris and Chow have kind of like cloaked themselves in as the good guy, like, doesn't charge the same exorbitant fees, and like really puts the restaurants first. And I think that's interesting, because I we talked about, like, modeling after Patagonia and how you know, there's like an X factor like an unquantifiable benefit you get from actually being that in the space, but I also think it's kind of precarious for a company to letter. Yeah, pronounce that, because it leaves very little room for error that most companies do make. And it also puts you in a box in terms of what you're able to do with your business. I mean, some businesses have to be cutthroat, some have to kind of do the gray thing, instead of being so black and white in order to succeed. And so, I don't know, I think that's interesting. He's one that I would love to check in with again, you know, and see, like shows that going being the good guy? Yeah, I
Darrell Etherington 46:12
mean, well, they have you know, they've been, well, yeah, they got a full decade under their belt. So that I think, seems to indicate that they're, what they're doing is a smart approach, right. But I think it's like, the pressure from the other side is not going anywhere, and it's probably only increasing your rail, you're right about reputational risk, right? Like, as soon as you put yourself out there as the good guy in some way, you're immediately more susceptible to any failings you have in that area. Right. And they can do a lot more damage than they could for somebody else who never made those claims to begin with. Right, right. I think I think again, like based on channels just kind of existence to date, it seems like they're navigating that correctly. And we've seen some of their competitors do big missteps in that direction, be like, Oh, we're all boat drivers, or whatever, for Uber, for instance, and then all of a sudden, all the drivers like, we hate, are you because we work for you? And this sucks. Right. But I think, you know, I think it's the thing where the on the other side of it, and you touched on this too, all of that is subject to how much do consumers care in the end, right? And you're up against that every time where it's like consumers vote with their consciences in that way with dollars, especially when it comes to convenience services? Or are they just cool with whatever base one, how
Jordan Crook 47:32
will they feel in the future to right, because I think like being the good guy, brand wise, whether it's like sustainability, or just like treating your workers, right, or whatever, I think we're all more inclined with where we work and where we spend our money and who we vote for. And all of these things to like, be thinking about who aligns with our values. Generally. I also think, though, that like, I mean, by, by default, a company is like, at neutral, whether it's like, morally good or bad, right. And when you make a reputation for being the bad guy, like, I'm just gonna go ahead and say, like a Facebook or an Amazon or an Uber, like, but you become indispensable, it really doesn't matter. And it gives you more freedom to move honestly, like, I mean, it's true. Facebook has the money to pay whatever fine the government sees, fit, and to keep doing whatever the guy wants to do. And it's indispensable. So a lot of people and they're gonna keep using it. And so it gives you a lot of room and freedom, that doesn't really matter in the end, right that you were the bad guy. Maybe it does with like, talent acquisition stuff, but will that always be the case?
Darrell Etherington 48:32
When I don't know writers with global karma? universal karma? Totally. I'm
Jordan Crook 48:37
not saying doesn't matter. Like, it matters a lot. Like I deleted my Facebook, but I still use Instagram, alright, I mean, I still use Instagram, I still use Uber to an extent. And I still use Amazon, right? Like, and I don't necessarily align with their values. So maybe I'm bad to you. Just I think you when you say you're the good guy, you take the humanity out of it. Because we all say like, oh, I stand for this. But in reality, we're all making concessions on our values every day. Right. And we, with our Yeah, we forgive it because like humans are humans, but I don't know. I thought that was really all that to say. I thought that was really interesting piece of the conversation.
Darrell Etherington 49:11
Yeah, same. But I think he brings up a good point when he brings up Patagonia as a as an example. Because it's another thing where it's not all or nothing, right? So we're bringing up all these examples. It's like, yeah, it is a good approach to go in kind of like a moral or like from a business standpoint, right? Because then you don't really have to call anything back. And if you can secure your position, you're kind of bulletproof in a lot of ways, right? But at the same time, it's also cool to go in with this approach where you're like, you know, what, we're going to aim for this level of success. And we're going to do it based on these values. And we'll have like a really dedicated customer base as a reward for that. Right. And it's a different kind of business, but equally valid and still, you know, have used to everyone who is both a consumer and employee of the thing, right? Yeah, I think I think it's cool that they're taking this approach and that it continues to exist alongside and hasn't have been clouded out or dumped under the boots of the web, or whatever. Yeah, yeah.
Jordan Crook 50:05
Yeah, I like it, too. I mean, just goes to show how much we can prattle on about it afterwards that it was he's an interesting guy. Interesting company. Interesting chat. Yeah, all about it.
Darrell Etherington 50:16
And interesting, too, that he was, he was willing to talk about having these. There's been 10 years. So who knows where these people are in his cap table, if they even are anymore, but talking about like, in the early days, it was like, don't take my
Jordan Crook 50:26
money for anyone. Yeah, just like write me a check right now. Yeah, we're good. No, it's not there. Most of
Darrell Etherington 50:31
the people we talk to are at the stage where they're not going to say that because those people are still very much important. Like they're like crucial stakeholders, right? And even if they're having trouble with them, they're not going to say, at this point, but Right. When we check in a decade later, they'll say that
Jordan Crook 50:47
I do think this change though, for startups, like they are more choosy, right, and like VCs are having to clean up their act a little bit and show that they are valued, aligned, and aligned and
Darrell Etherington 51:01
yeah, but it's great. Chris was great to talk to you, but in general is just nice to talk to a much more mature startup than we usually do and get kind of perspective on things to complement the more early stage chats that we usually have really enjoyed it and yeah, I'm gonna go order some food now. So take it easy, Jordan, later dude. Bound is hosted by myself, TechCrunch news editor Darrell Etherington and TechCrunch Managing Editor Jordan crook shot McCarney is our executive producer. We are produced by Maggie Stamets and edited by Cal Keller TechCrunch. His audio products are managed by Henry pick of it. You can find us on Apple podcasts, Spotify, or wherever you get your podcast and on twitter@twitter.com slash man. You can also email us at found@techcrunch.com and you can call us and leave a voicemail at 510-936-1618. Also, we'd love if you could spare a few minutes to fill out our listener survey at bit.li/pound listener survey. Thanks for listening and we'll be back next week.
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