Small Steps in a Big Market: Wizard of Oz – Devan Hughes
This week, we held our 6th Idea 2 Scale meetup in Dublin featuring Devan Hughes, founder of Buymie, an on-demand grocery delivery company. It was an energetic night in an unusual venue – after hours at Krust Bakery. Thanks to Garret Flower for hosting us! Devan has founded multiple businesses in various industries and shared many tales of the ups and downs. There are too many insights to include but I’ve summarized key takeaways I feel are most relevant for founders starting out on their journeys.
Many Small Steps
Listening to Devan, I was reminded of some wisdom I picked up from a new book I recently read (The Third Door by Alex Banayan). One of the author’s key learnings from interviewing some of the world most successful people was that there isn’t necessarily one big break & overnight success, it’s all about persistence and taking small steps, leveraging each win. You can only recognize a tipping point looking back and this certainly seems to be the case for Buymie. Devan is a master of using what he has, to leverage an opportunity. Whether that was using Enterprise Ireland funding raise an additional €25k from an Angel Investor (after he originally committed €8k), or later using their backing by Unilever to win contracts with Lidl & other major retailers, he’s really embodied the “success by association” concept. As he likes to put it; “A truly great startup is a conspiracy to change the world and you need to actively turn people you meet into co-conspirators, by preaching your vision and always maintaining a professional front.” Realistically, as a startup with little resources, behind the curtain is the Wizard of Oz, pulling the strings and doing everything behind the scenes!
Take Deliberate Action
Devan has always been quite deliberate about what he does. For example, after starting three companies that went nowhere, he decided to go work for a functioning business to learn where he was going wrong. He purposely chose one that was 30 people in size so he could have exposure to all levels and departments of the business. When starting Buymie, he wanted to learn how a platform business should work, so he took a job at Salesforce while building the prototype for Buymie. 9-5 Salesforce, 5-12 Buymie.
Early on, Karl Aherne, one of Buymie’s mentors gave Devan a serious grilling, highlighting the fact that he had no data to back up what he was saying! – Devan and the team went out that weekend and got 350 responses to a survey they created and came back with some customer validation. This shows determination and coachability, two characteristics mentors and investors will consistently look for.
Speaking of investment, Buymie have had an interesting funding journey so far, raising money from family, angels, governments, corporates and a crowdfunding campaign, leaving them with 289 investors! Number one piece of advice is to spend time working on term sheets and not give in to everything investors ask for. Downside is, this takes time so you need to plan and manage the cash you do have. Also; “If you’re not willing to raise money from friends and family, do you really believe in it? You have to show investors, you’re willing to have an awkward Christmas”
Taking on a Big Market
When Devan first started looking at the industry, online grocery was a €9 billion industry in Ireland and the UK, that was losing €300m a year. Something Devan really emphasized which I feel is often overlooked, is to make sure you understand your market. What are the dynamics, economics, main players and what does the future hold? Is it at equilibrium, is there a correction due? Is disruption happening? Otherwise your idea might not matter when executed if the conditions aren’t right. Devan recognized that demand for online groceries was going to double and he saw the opportunity to create a platform whereby the retailers and brands could share the infrastructure rather than each building their own, when they were all losing money with online offerings. Essentially, they took their inspiration from watching how other startups executed, namely Instacart in the US. “Never re-invent the wheel, find what’s working well in other markets, replicate and localize for your market”
I was impressed by their ability to segment the market and effectively position themselves a as platform. As they have grown, their data enables them to drill down and exploit these insights by targeting segments and customer personas that Buymie particularly resonates with.
The grocery industry was complacent at the start, opening up huge opportunities. They incumbents didn’t realize the shift or care about data, they only woke up when Amazon bought Whole Foods. Buymie are a data rich company. Yes, they make money on groceries but the long-term play is the huge amount of high-frequency data points they have. We’re looking forward to seeing what the next few years hold for Buymie and wish them the best of luck - try it out and save yourself some time. The average person spends 5 days a year in grocery stores!