HelloFresh co-founder, Patrick Drake, shares his start-up journey, which took him from handing out fliers in a carrot costume to delivering 10 million meals a month globally.
What’s your business background?
It sounds a bit immodest, but I was entrepreneurial even as a kid – washing cars and selling cut-price chocolate bars to undermine the school tuck shop. When I went to university, I studied law. From there, I started to slip into the corporate machine. I started at [law firm] Clifford Chance and then went on secondment to Goldman Sachs in financial law.
I hated it. I didn’t feel like I was doing something creative or that mattered. They say that if you don’t work on building your own dream, you will end up helping someone else build theirs – and it’s true. I needed an escape route, so I turned to food.
What did you learn from your legal career?
I learnt about stamina and work ethic, but the most useful experience was learning to communicate clearly and concisely. It sounds a bit boring, but being able to write a clear email can’t be underestimated. To make any communication clear and unequivocal has been very useful. It’s something that I spot is lacking in people who haven’t had to deal with corporate machines.
I also learnt that people’s leadership styles are just like teachers at school; there are people who lead with fear and those who try to lead by inspiring people. Then there are certain people who are meant to be leaders, but don’t lead at all – they just flail about. Seeing what did and didn’t work shaped the way I lead people now.
How did you get involved with HelloFresh?
I had always loved cooking. I was thrown in the deep end on a ski season, where I had pretended to have cooking skills and then suddenly found myself having to feed 50 people, having made only a lasagne before.
I improved over time and started talking to a TV producer friend about an idea for a cooking show. She pitched it and then I flew to Los Angeles for a pilot. It was petrifying being in front of a camera for the first time.
It didn’t go anywhere, but it forced a decision: was this just a fun escapade or would I commit to working in food full-time? I set up a YouTube channel, then started trying to learn as much a I could about food. I worked in the Clifford Chance kitchens in secret at lunchtime, then moonlighted at London restaurants, for free, just to learn.
In 2008 I went into my boss’s office at Clifford Chance and said that I was going to quit. He asked me what I was going to do: banking or law? I sent him a link to the pilot and he looked at me like I was mad.
How did the company get started?
I saw a similar concept – a recipe food-box idea – that focused on the family market in Sweden. I approached investors Rocket Internet with the idea of adapting it for the UK market, concentrating on young, busy couples. It gave us some seed capital to help us get started.
Growth has come from experimenting with every possible way to market the product. Even though we’re five years-old, we’re still acting like a start-up. We’re still agile and not afraid to fail, in controlled circumstances.
When it comes to marketing, my advice for other start-ups is to just to get on with it
At the start, we dressed up in carrot costumes and ran around Waterloo station handing out fliers, until we got kicked out by the staff – we could only flier commuters near the entrance. We’ve also done TV ads. We just spread eggs in plenty of baskets and hoped for the best.
When it comes to marketing, my advice for other start-ups is to just to get on with it. There’s a phrase about entrepreneurs – about them being people who throw themselves off the cliff and build the plane on the way down. That’s how HelloFresh has approached business.
Two weeks after we started the business, we were unpacking bags of shopping in my living room with a logo that I threw together and printed at a shop around the corner. We hand-delivered the bags via the London Underground. Within weeks we had real customers – people who weren’t our parents – giving us frank and instant feedback, which shaped the product. We now get 90,000 responses a month on customer questionnaires. It’s invaluable information that helps us retain customers.
How do you manage costs?
At the beginning it was difficult. We would call up suppliers and say: we know that you supply all the meat to the Emirates Stadium, but would you consider packing 50 individual chicken filets? We would often hear the phone being put down.
People didn’t understand the business model and we weren’t big enough to get the best deals on produce. We weren’t getting a very good deal on logistics either. Now we deliver about 10 million meals a month globally.
For example, we now have a fleet of vans in the UK, whereas before we had to rely on couriers. It’s by growing – and the economies of scale that come with that – which will allow for profit.
Logistics, warehousing and marketing are expensive and require massive investment. We’ve had to front-up lots of costs, and while we don’t share numbers, we’re in a position where we could invest in growth or aim for a profit. We’re choosing the former.
What has been your greatest challenge?
Trying to get people to understand our concept at the beginning. People couldn’t see why they would want to get their food shopping in the HelloFresh format, rather than going to the supermarket.
We had to show people that it wasn’t an additional specialty product and expense, but a replacement for their food shop. You can’t just take a out a billboard to make that happen. It’s about talking directly with customers, with salespeople and customer referrals.
It’s part of why our recruitment process is so important. When someone’s coming for an interview, unless it’s a “hell yeah” then it’s a no. If there’s shred out doubt, we say no. We look for cultural fit as much as technical knowledge.