Arram Sabeti is the founder and CEO of ZeroCater, which bills itself as the “startup that’s feeding Silicon Valley.” Not every company is large enough or flush enough to staff an entire cafeteria devoted to serving up organic veggie burgers and berry-infused water, à la Google. For smaller companies that still want to eat well, local restaurant delivery is a staple. ZeroCater hacks a number of the logistical problems associated with group delivery orders, and does it well enough to have recently attracted $1.5 million in venture funding. Indeed, it does it well enough that even some companies that do have in-house dining options still opt to use ZeroCater now and again, either for variety’s sake or simply because teams were literally too busy to leave their desk in the run-up to a big product launch. Let’s dig in.
FAST COMPANY: What’s the brief pitch you give prospective clients on ZeroCater?
ARRAM SABETI: The brief pitch is that it’s Pandora for food. The slightly longer pitch is, say you have a company of 35 people, with two vegetarians, and you order lunch on Mondays, Wednesdays, and Fridays. Give us that information and we’ll make custom orders for you, and the food will just show up until you tell us to stop.
That’s true. We’re basically a catering company that orders food from hundreds of different restaurants, food carts, pop-up kitchens, and chefs.
How’d you get the idea?
I worked at Justin.tv. I ordered the food for the office, and it turned out to be an enormous pain in the ass.
What’s so hard about ordering food?
For one thing, some restaurants in general are not very reliable. Sometimes the food was supposed to be there half an hour ago. Having 30 hungry people looking at you is pretty stressful. Then there are things like dietary restrictions, ordering the right amount of food, variety. “Oh, we already had this place, we’re sick of it, what else can we order?” And you won’t be able to make everybody happy, so it’s a pretty thankless job.
You became a pro regardless, and started doing this thankless job for other companies as well.
We started with a handful of companies, and today we’re feeding 175 companies a month.
How do you hack the problem of tardy deliveries? Do you deliver the food yourselves?
No, but we make sure vendors are reliable. When they deliver food, they send a confirmation text, so we’re able to keep a restaurant’s track record. If a restaurant starts to fall off, we let them know it’s not acceptable.
Doesn’t that mechanism already exist in individual orders? If my delivery’s late, I don’t use them again.
But with us the effect is more concentrated. If they don’t deliver on time, they lose all the business we’re sending them, thousands of dollars every month.
How much control do people have over what food they get? What if they don’t want a certain kind of food?
There’s what we call a playlist of restaurants, and you can check or uncheck things. The customer can be as hands-on or hand-off as they like. A few customers select every item they get, but most customers prefer to be completely hands-off. Basically, that’s one of the biggest surprises–that people didn’t need to pick their own food. They were fine to have someone else choose for them, as long as it was chosen well.
How do you make money?
We charge a 7% convenience fee. We also negotiate a cut from restaurants.
Have you thought about expanding beyond startups and tech companies to more traditional businesses as clients?
We already have a lot as clients: a design firm, an accounting agency, this company that manufactures gym equipment… On the day the iPhone 4 came out, I went to a Verizon store early in the day to buy one. The sales rep saw my business card and asked what the company was about, and I gave him a 30-second pitch. When I got back to the office, three different Verizon stores were requesting food.
Oh right, the sausage day. I think it was some national holiday and a company hadn’t told me that they wouldn’t be in the office–but I hadn’t asked. The delivery guy went to their door, but no one was answering. They called me: “We have sausages for 40 people. What do you want us to do with them?” I decided I’d eat the cost. I tweeted out that I had sausages for 40 people. So I had a last-minute sausage party, which every party is in Silicon Valley anyway. Surprisingly, it was one of the most successful parties I’ve ever thrown.
This interview has been condensed and edited.
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