Growth Gurus: Co-Founder & CEO of ezCater
Insight's Growth Gurus series showcases inspiring leaders from our portfolio of growth-stage software and internet companies. In this interview, we spoke with Stefania Mallett, Co-founder and CEO of ezCater, the world's largest online catering marketplace.
At the start of your career, was there a person or inflection point in your career that accelerated your success?
I graduated with a computer science degree and soon discovered that I was going to be a good engineer, but not a great engineer. This frustration drove me to pursue business, which at the time, was a unique combination of skills. You can't take the engineer thinking out of the woman; you can take the woman out of engineering.
I grew up in a world that micromanaged me. Between my school, my parents, and my religion that I was brought up in, I wanted to do things my own way and with my own team. When I started my first business with my current co-founder, we struggled to solve a problem that many people continue to face. While we were working to solve that problem, our customers kept asking us, can you help us make food appear for business meetings? After ignoring this comment for a while, we started to run into a brick wall with the business and the refrain of, "Can you please make the food appear?" came to ring louder and louder. We looked under the covers of how you might do that and saw that it's an excellent business model. Four days later, we started ezCater.
What were some of the initial challenges that you and your co-founder faced and how were you able to tackle those efficiently?
We started ezCater in my home. My co-founder and I were fighting yesterday's war with lingering trouble with our investors from our previous venture, so we wanted to bootstrap this time around. As system thinkers, we believed that software could be used to solve every problem, which helped us be clever and frugal.
Initially, we didn't understand the scope of the problem that we were solving. We thought we were going after a billion-dollar market and then discovered that we had accidentally backed into a twenty-four-billion-dollar market. As we saw the horizon expand, our ambitions grew and our desire to go after that bigger thing grew. Over time, we came to realize that we were hurting ourselves by working with angel investors. Finally, goaded by adversity, we called some of the venture funds that had been calling us. One of those firms that we called was Insight Partners.
Insight put a term sheet on the table, which became the term sheet that the other guys had to beat. It wasn't so much the valuation, but rather the terms. It was such a clean and rational approach to doing business that we saw the error of our ways, the error of thinking that you should bootstrap. With a sizable investment, we were able to flex our muscles. Even better, it was from people who were not money on deal terms, but who are going to make money when your company is successful. Taking money from investors of the caliber of Insight Partners was the single biggest inflection point in the history of the company.
Why did ezCater decide to take the tech inclusion pledge? What impact has that made to the culture and the scalability of the business over the years?
Software is eating the world. I'm a big fan of that phrase because I believe it's true. Briscoe, my co-founder, and I are both software engineers by training. The core of our business is software that’s written by people, because people write software. Those systems are operated by people. I always tell my people here, without people, we don't have anything, but the oil in the gears is the software. We can't scale the way that we have scaled without that toolset.
We signed the tech inclusive page. When it first came out, it was essentially a goad to make you review your hiring and your staffing approach to ensure that you've got a diverse workforce. I jumped on it when I first heard about it because I believed it was the right thing to do. We had said for years that we were not diverse enough a workplace and we hadn't really focused on fixing it. Signing it outed us and made us focus on fixing it.
At the time, our Director of Talent said that we were very diverse, but in unusual ways. We hire people from different educational backgrounds, socioeconomic groups, and physical appearances – tall people, short people, thin people, good looking people, and not so good-looking people. My response was, “Are you kidding me? Doesn't every company?” She said, "No, that's not what happens. Companies hire people who look like the Founder." We were joking about whether I had an identity crisis because we were hiring all kinds of people. She said, "No, you're just blind to these things and that's a really good way to be."
We still were not diverse from the perspective of racial mixture, in particular, in racial and ethnic backgrounds. Since we've signed that tech inclusion pledge, our numbers have climbed. We do this not only because it’s the right thing to do, but because when you want to be a company that grows as fast and as successfully as we have been, you have to open yourself to these talent pools.
Last year, you made an acquisition of a French-based company, GoCater, which has allowed you to expand internationally. Why did you leverage M&A to grow outside the US?
With every expansion that we make, we always have a buy versus build conversation. When we discovered GoCater, we realized that they had customer cohorts of the same quality as our customer cohorts. They also had a culture that was remarkably similar to ours, a little less advanced, but they're also a much younger company. Since we were further along in the same journey, we were able to give them advice on how to scale the business. When they run into a challenge, they call us for advice and take what we've learned, apply it as it makes sense in France, and utilize that logic in other countries.
How would you say you've evolved as a leader? Looking back, is there anything that you would have perhaps done differently as you’ve scaled the business?
I have become more bold; I swing bigger bats and I swing for the fences more. That’s a symptom of our successes and also from watching my co-founder, who is famous for saying things like, "Well, how hard can it be? It's only two more zeros."
Also, when I started this business, I wanted to get away from being micromanaged. Ironically, I started to become a micromanager. I’ve had to learn to step back, trust the people who work for me and be kind. If you give people a chance, you will realize that all humans want to do well and the right thing.
How do you plan to leverage your funding to scale the company?
We have always been driven by building a healthy standalone company. When the moment is right, you can raise more money. If you choose to do that, you could potentially go public, be bought, or continue to function independently. I've never been a fan of building something to be bought or building something to go public. We keep our options open and try to be as healthy as possible.
At the end of your career, what do you ultimately want to be known for?
I’m proud of the fact that I've created jobs that people want to have. As a capitalist, I believe we all need something to do that has meaning. We're not saving the world, but we are removing a fair amount of hassle from our customers’ lives and we are creating business on the supply side of our marketplace. Doing that with excellence, in a way that makes our employees enjoy their work is rewarding. I walk the office halls and people are laughing while they're getting the work done, which is fantastic. Someday when I retire, if people remember me as, "Oh my god, I worked there and it was the best job I ever had," then I did something good.