The rise of the sharing economy has led to an evolution in consumer behaviour and the disruption of legacy industries. For some, it’s a threat. For others, it’s an opportunity to provide new solutions to old problems and thrive. If there’s one constant, it’s that people enjoy a good, homemade meal.
A new ‘shareconomy’ player with substantial pedigree is online marketplace FoodByUs. Launched in Sydney last month – with Melbourne set to follow shortly – the tech start-up was conceived by Ben Lipschitz, founder of footwear brand Flipsters, together with Tim Chandler, Menulog’s lead developer, and Menulog founder Gary Munitz.
The concept is straightforward: people visit the FoodByUs website or download the app to order ready-to-eat meals from registered and quality-tested food makers in their neighbourhood. Critically, buyers have the ability to search by food type, location and dietary preference (vegan, paleo, etc).
To date, more than 1000 makers across Australia have registered to operate through FoodByUs. Over 150 are already selling food in Sydney, including former MasterChef contestants, professional chefs ready to carve their own path and others who’ve always dreamt of breaking into the food business.
According to Ben, FoodByUs is ‘like Uber and Airbnb – but for homemade food’. He spoke to Dynamic Business about the wealth of opportunities in the sharing economy and the recipe underpinning his new business, which has received $2 million in cornerstone investment.
‘The shareconomy has increased resource efficiency’
“Gary and Tim were both involved with Menulog, which we all agree is a great model for helping consumers order food from restaurants. However, the growth of the sharing economy has changed the way people purchase products and services. Notably, fewer consumers are booking taxis or staying at hotels; instead, they’re booking an Uber and staying at an AirBnB.
“What’s exciting about the sharing economy is that it’s empowering passionate and talented people to easily launch their own enterprise with very low start-up costs. Many people have a car, home, or kitchen – the more efficient use of these resource to provide others with better and higher quality services is a fantastic outcome for suppliers and buyers.
“The three of us were keenly aware of the shift towards consumers buying products and services directly from other people. In the wake of Menulog’s sale for $855m, last year, we saw an opportunity to launch a unique, Australia-first shareconomy player; namely, an online marketplace where talented home cooks could sell food and be rated by a community of consumers. With FoodByUs, the approach is local, personal and friendly.”
‘Our skills and experiences are complementary’
“Gary, Tim and I have worked together for years on different ventures, including Kadima Group – an investment group we co-founded. With FoodByUs, we saw a great opportunity to apply our skills to a new and innovative idea, drawing upon all of our past experiences in a really complementary way.
“I’m skilled in operations, sales, marketing and brand building – my focus is the business side of FoodByUs. Meanwhile, Tim is in an incredible software developer and is the technological heart of the company. Gary is a unique blend of both sides – he can speak authoritatively about databases and balance sheets in the same breath.”
‘Some makers are expanding their operations already’
“FoodByUs is enabling talented home cooks to launch a start-up in a relatively risk-free environment – there are no overheads such as rent and staff costs. Consequently, they are able to offer products that are better value for money.
“We produce the marketing collateral, including photography and discount coupons (free of charge), for our makers and leverage the team’s Menulog experience to grow their consumer base. We also consult with makers on strategies, including pricing and special offers, and help them set their food making and delivery schedules.
“FoodByUs is a new way for makers earn a living. They can use earnings from the platform to either supplement or completely replace income from a full-time job. Some makers are already earning $300 per week, after FoodByUs has deducted a 20% fee on each sale through the platform, and we see this trending to $800 week shortly. We’re already seeing pockets of our community looking to bring on staff and take their operation to the next level”.
‘Our USP is our diverse offering of hard-to-find food’
“What distinguishes FoodByUs from a standard restaurant service is our diverse offering of often hard-to-find food. For instance, we have authentic empanadas made by former Argentinian chefs, handcrafted vegan chocolate and gluten-free nut spreads.
“Our talented makers saw what was on offer from restaurants in their community and felt something was lacking, so decided to enter the fray. Consequently, our target audience ranges from ex-pats looking for food from their country of origin and people with dietary restrictions to the health conscious, adventurous and lovers of great food.”
‘We have a range of quality control measures’
“Over and above the safety regulations that govern the sale of food, FoodByUs imposes quality tests, which makers must pass in order to sell on the platform. These tests, which we conduct with a number of certified partners, include: ID checking, a review of the presentation of the food, and quality tasting.
“The objective is to bring accountability to makers as well as help them understand their responsibilities. Our partners are all experts in the food industry who understand both the requirements of quality food and the expectations of FoodByUs. They include cooking schools, commercial hire-by-the-hour kitchens, and café or restaurant owners.
“It is also mandatory for buyers to rate makers after experiencing the food, giving new buyers a clear, up-to-date view of the Maker as seen through the eyes of the entire community.”
‘We were able to accelerate through the planning phase’
“Building a new shared economy is no mean feat. Our biggest challenges to date have included finding and on-boarding a variety of talented makers who aren’t necessarily versed in doing business online. We’ve dedicated a significant amount of support and training to help these makers optimise their food and pricing for sale online.
“Another challenge has been building customer awareness. As a new business, this is crucial. We are fortunate to have experience in doing this from previous businesses as well as a talented in-house marketing team who are helping to spread the FoodByUs message.
“Of course, Technology is always a challenge when developing a new platform. We are very fortunate to have a talented team of software developers with Menulog experience, which has allowed us to build very complex technology very quickly and robustly.”
“Had it not been for Gary and Tim’s experience with Menulog, I’m certain we’d still be in the planning phase of the business instead of seeing orders grow each week.”
‘We’re keeping an eye on the international market’
“As an Australian-first proposition, we are making sure we establish a solid foothold in our core markets of Sydney and Melbourne. This involves finding and on boarding the best quality makers, ensuring our support infrastructure is there to help (including delivery and quality tasting partners) and providing a constant stream of orders to our makers by creating mass consumer awareness.
“By focusing on quality food and building a trusted community, we know buyers will come to view FoodByUs as an essential part of their daily and weekly meal planning – and this is the ultimate spot we want to occupy in consumer’s minds.
“We currently have no plans for an additional capital raising; however, it is something we may explore to fund global expansion. We are keeping an eye on the international market where there are seeds of this idea already but no dominant player.”