En­tre­pre­neur’s tip: You’ve got to be ir­ra­tional some­times

China Daily (Canada) - - PEOPLE - By CE­CILY LIU

ce­cily.liu@mail.chi­nadai­lyuk.com

When Wil­liam Shu founded a food de­liv­ery com­pany in Eng­land three years ago he was the first driver. Now the firm has 500 em­ploy­ees, hun­dreds of con­tracted driv­ers, 5,000 part­ner restau­rants in more than 20 coun­tries and has raised $100 mil­lion from in­vestors.

“It’s re­ward­ing to see the firm ex­pand­ing from city to city”, says Shu, 36, a Chi­nese-Amer­i­can. “It’s stress­ful, time con­sum­ing and ex­tremely fun from an emo­tional per­spec­tive.”

Shu was speak­ing at the Univer­sity of Ox­ford’s Said Busi­ness School, where he gave a talk at the Ox­fordChina Fo­rum on en­trepreneur­ship. Dressed in jeans and a ca­sual shirt with­out a tie, he re­sem­bles the typ­i­cal tech­nol­ogy startup per­son­al­ity.

But things were not al­ways this way.

Shu, who was born and raised in Con­necti­cut to Chi­nese par­ents, had a very tra­di­tional Chi­nese up­bring­ing, where hard work is val­ued and a highly paid job is seen as the pre­ferred ca­reer path­way. Af­ter grad­u­at­ing from North­west­ern Univer­sity in Chicago he landed an in­vest­ment bank­ing job at Mor­gan Stan­ley in New York.

“Back then, we were work­ing 100 hours a week, and we ate din­ner ev­ery day with a $25 stipend, and that was the high­light of our day,” Shu said.

New York’s food de­liv­ery scene was ev­ery bit as good as Shu had ex­pected, so when he was trans­ferred to Mor­gan Stan­ley in Lon­don in 2008 the paucity of good food de­liv­ery ser­vices sur­prised him.

“The hours were the same and I would end up hav­ing to walk to Burger King or Tesco, which was pretty de­press­ing.”

He be­gan to think about start­ing a food de­liv­ery com­pany, but back in those days the lo­gis­tics could not sup­port it. Smart­phones were not nearly as com­mon as they are now, and smart­phone ap­pli­ca­tions were at a very rudi­men­tary stage of de­vel­op­ment, so real-time in­for­ma­tion could not be shared be­tween cus­tomers, restau­rants and driv­ers, mean­ing quick de­liv­ery could not be guar­an­teed.

The Lon­don food de­liv­ery scene was just tak­ing off, with the help of de­liv­ery firms such as Just Eat, which was founded in Den­mark in 2001 and ex­panded to Lon­don in 2006. Just Eat con­nects restau­rants and cus­tomers, but Shu did not like the idea of restau­rants de­liv­er­ing food them­selves, be­cause of what he saw as in­con­sis­tent ser­vice.

He went back to study for an MBA de­gree at Whar­ton Busi­ness School at the Univer­sity of Penn­syl­va­nia, and when he grad­u­ated in 2012 he re­al­ized the tim­ing was right for De­liv­eroo, which he founded in 2013 with a child­hood friend, Greg Or­lowski.

Cen­tral to De­liv­eroo’s busi­ness model is the firm’s net­work of cy­clists or mo­tor­cy­cle rid­ers, who may be stu­dents or part time work­ers. De­liv­eroo uses so­phis­ti­cated tech­nol­ogy al­go­rithms to make sure restau­rants and cus­tomers have real-time in­for­ma­tion of the lo­ca­tion of the driver. This, the com­pany says, re­sults in con­sis­tent ser­vice and an av­er­age de­liv­ery time of 30 min­utes.

The busi­ness charges restau­rants 25 per­cent of the food’s price as its com­mis­sion, a cost the restau­rant, rather than the cus­tomer, cov­ers, plus a charge of 2 pounds and 50 pence ($3.50). The busi­ness rapidly took off, and is now in part­ner­ship with 5,000 restau­rants world­wide, in­clud­ing Dishoom, Ping Pong, Dirty Burger and even Miche­lin-starred Tr­ishna in Lon­don.

De­liv­eroo is avail­able in 30 UK cities and 20 cities else­where, most of those in Europe. The startup is now mak­ing for­ays into Dubai, Hong Kong, Sin­ga­pore and Aus­tralia.

The se­cret to build­ing up vol­ume is to ex­pand from neigh­bor­hood to neigh­bor­hood, as den­sity mat­ters to the cus­tomer ex­pe­ri­ence, Shu said.

“We don’t have to go to an en­tire city straight away.”

Asked whether he is keen to ex­pand to China and the US, Shu said both have big po­ten­tial but busi­ness ex­pan­sion is now dif­fi­cult. Com­mon to both mar­kets is their large pop­u­la­tions, which means tech­nol­ogy firms that want to grab mar­ket share are un­der­cut­ting com­peti­tors’ costs by con­stantly giv­ing out dis­counts and of­fers. It creates a com­pet­i­tive mar­ket in terms of cost, but Shu be­lieves it is un­sus­tain­able.

“The plat­form tech­nol­ogy mar­ket en­abled by smart­phone ap­pli­ca­tions like Uber and its Chi­nese equiv­a­lent Didi Kuaidi is new and emerged in re­cent years, so mar­ket play­ers are still try­ing to work out how it works, and in coun­tries with big pop­u­la­tions, Uber and Didi Kuaidi are try­ing to drive each other out through costs. This can’t be the long-term so­lu­tion, and we will wait to see what hap­pens when the com­pe­ti­tion set­tles down be­fore en­ter­ing the mar­ket.”

De­spite the dif­fi­culty of bring­ing De­liv­eroo to China, Shu said his Chi­nese up­bring­ing had a strong im­pact on him, an ob­vi­ous one be­ing his love for Chi­nese food. Chi­nese noo­dles and dumplings are his fa­vorites.

Per­haps the en­tre­pre­neur­ial spirit of Chi­nese peo­ple also in­flu­enced Shu, and he said the job is now very re­ward­ing.

“It’s re­ward­ing to see you’re do­ing some­thing that changes the way peo­ple trans­act. You’re also build­ing a team of peo­ple around you.”

His early bank­ing ca­reer gave him the im­por­tant tools of dis­ci­pline and an an­a­lyt­i­cal frame­work, but one cru­cial in­gre­di­ent of the suc­cess­ful en­tre­pre­neur is to be ir­ra­tional, he said.

“You’ve got to be ir­ra­tional some­times, be­cause if you’re ra­tio­nal all the time, then what you end up do­ing is what other peo­ple have done al­ready.”

An­other piece of ad­vice he gives to young en­trepreneurs is that one can­not hedge one­self from en­trepreneur­ship.

“You can’t have a job and try some­thing on the week­end; that’s the less risky op­tion but it doesn’t work. Set­ting up a busi­ness re­quires ev­ery­thing you have.”

PRO­VIDED TO CHINA DAILY

Wil­liam Shu, with two De­liv­eroo rid­ers.

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