“College Party” Marketing Tactics Led to a Multi-Billion Dollar Startup
One promotion was totally “saucy”.
Martin here. Welcome to another edition of Founders’ Hustle!
I produce content about the “hustle” of entrepreneurship and building startups.
Today I’m sharing how Just Eat, now a $15bn+ company, acquired their first few thousand paying customers!
Outsized results came from “old school” marketing techniques. 💪
A lot of time was spent in a van, eating hundreds of pizzas. 🍕
They initially pitched target customers totally wrong. 🤪
I was recently emailing Jesper Buch, founder of Just Eat, in relation to another subject I was writing about. The company is publicly traded and worth many billions of dollars.
As a direct result I learned about how he and other members of the Just Eat team acquired customers in the early days.
With a marketing budget of approximately zero, they managed to signup thousands of paying customers onto their platform from scratch.
Achieving that was absolutely pivotal in generating the momentum needed to build what would eventually become a multi-billion dollar business.
Fascinatingly, this customer adoption was driven by tenacious “real world” marketing initiatives such as pitching people face-to-face, decals, and events.
His book “KICK-ASS From Basement to Billions” is full of incredible detail on this subject, which I used for source material to write this.
The stories are inspiring and a perfect example of “founder hustle”. An ability to build immense value with little in the way of resources.
Let me put this into context. 🧐
Just Eat was founded as a two-sided marketplace, which are notoriously difficult to build.
On one side they had food vendors — those who produce and deliver the food. On the other were consumers — those who order the food online.
A significant imbalance of one or the other “breaks” the product.
Vendors will leave if there aren’t enough orders coming through. Consumers won’t place orders unless there are enough vendors to choose from.
This means two entirely different sets of customers have to be onboarded and scaled proportionally. A simple problem, but one that is very hard to solve.
Here’s how that went down, in the beginning. 👇
Let's start off by taking a look at consumer adoption. Those who ordered the food.
How did the Just Eat team go about acquiring thousands of paying customers with a marketing budget of “approximately zero” for years?
Jesper credits traction to “loads of energy and ideas”. ⚡
Here are some key examples.
For one initiative they showed up at University residence halls, tenement houses, high schools and other public places where their target audience gathered and put up totally unauthorized attention-grabbing decals and posters.
This is a fairly well-known guerilla marketing tactic. But, usually the pursuit of small local businesses — like nightclubs — as opposed to digital startups.
Whoever owns the property the marketing materials are being affixed too are often less than thrilled about it.
Jesper was even confronted by annoyed gas station owners after discovering Just Eat stickers all over their pumps. But, that didn’t deter him.
“It was a no-holds-barred situation”.
The posters were also kind of “saucy” and risqué. 😉
To give you an idea, one of them had an image of two pairs of legs poking out the end of a bed with the cheeky caption “Hungry after sex?” below it.
It was designed internally. No expensive models or photoshoots. One of the pairs of legs was Jesper’s!
He drove around all-around Denmark with his friend Henrik Østergaard putting them up.
This also presented an opportunity to speak with their target audience directly.
Whilst visiting residence halls they noticed it was easy to walk into shared kitchens. Some locations had up to 80 each.
Students were often hanging out in them, so they’d turn up unannounced and pitch them on how “Just Eat is a super smart way to order food online” and handed out cards with discounts.
According to Jesper, students “thought it was pretty cool and funny” that he showed up in person like that. It stood out. 😎
This led to other similar schemes. One of which cleverly generated a tradeable commodity which they could exchange for exposure online.
“At one point we made 500,000 flyers in business card size, and then we drew a number as a winner of a competition.
Then basically I traded the ad space on the back of the cards of X million Just Eat banner exposures on popular websites”.
— Jesper Buch
In another initiative, Jesper identified the potentially massive customer acquisition potential from converting “influencers” to using Just Eat.
It would have a “viral effect”. They’d tell their friends, and they’d tell their friends, and so on.
But, this was the early 2000s. No Instagram or TikTok. Who was an “influencer”?
Who hung out at LAN parties, which were huge back then. Playing titles like Counterstrike, Starcraft, and World of Warcraft.
Jesper contacted the best-known gaming fraternities and invited them to parties at Just Eat’s “hip” HQ, known as “The Factory”.
“They didn’t get any money… but... we gave them a case of CULT, Just Eat t-shirts and caps for the whole crew, plus a gaint Just Eat banner for their gaming sessions.
They thought it was amazing cool to be sponsored like that, and we got branding value, great visibility, and a cool image with the right segment.”
— Jesper Buch
PR was also an effective consumer recruitment mechanism.
Since it was directly affecting small business owners and the everyday lives of residents, the story of Just Eat was compelling for local media to report on.
Back then, the concept was also novel.
“The first pizza parlour in XYZ town to go live with Just Eat” was a headline that captured the imagination.
Jesper hounded local TV and newspaper companies in order to extract maximum value from the opportunity.
All of this helped a ton, but, one of the smartest initiatives utilized to raise awareness on a local level was leveraging Just Eat’s relationships with food vendors — the pizza parlors and takeaways.
Jesper and Henrik supplied them with merchandise branded with the Just Eat logo and a simple caption that conveyed the proposition clearly.
“Order food online”.
Merchandise included clothing like hats and t-shirts. And, significantly, decals for the retailer’s unit like stickers and streamers.
The latter were strategically placed in highly visible locations by Jesper and his colleagues personally — usually outside where they could be clearly seen from the street. 👀
The takeaway proprietors agreed to use all of this stuff for free since they figured it was in their best interest.
The streets outside were highly trafficked by people walking, riding, and driving passed who took notice.
Even if they didn’t like that particular food vendor, they suddenly knew about “this new service” where you could order food delivery online.
Collectively, the media value of this across all of their food vendor partners was worth a fortune. If they were billboards, it would have cost many, many thousands of dollars to pay for annually.
They got it for next to nothing. Year-after-year.
Signing up the first few hundred food vendors to Just Eat was achieved the “old fashioned” way. Face-to-face sales meetings and cold calling.
There was no “secret sauce”, per se.
Jesper and Henrik travelled around Denmark in “Toyota Sports Vans”, which they slept in, for weeks at a time pitching takeaways and eating over 1,000 pizzas along the way. 🚙
For a period of a few or more days at a time, they’d intensely focus on one town or city, referring to this as a “sales raid”. Starting at 10am each day and ending around midnight.
But, initially, they made a significant mistake. Not understanding who they were pitching too.
“The first sales meeting was not a success, and neither were the next few handfuls.
Suit and tie is not the right attire for the segment we wanted to sell too, but we hadn’t realized that yet. We had a stereotyped image of how a salesman should appear.”
— Jesper Buch
Plus, they were pitching the wrong people. 😬
Showing up unannounced in this context usually meant talking to employees without any decision-making authority.
These people were just trying to get on with their job — serving hungry customers.
“I looked like the worst salesman cliché ever while I tried to sell an IT solution to people who were standing with flour, yeast, and ham in their small restaurant kitchens.”
— Henrik Østergaard
To fix this, Henrik changed up his sales strategy to spend two days per week booking meetings with food vendor business owners and the other three days physically going to meet them.
Once this was optimized they quickly signed up 10 food vendors. In the process they learned “how to sell” the solution, too. Henrik got a feel for communicating the advantages in a way business owners could understand.
Now, they had a basic “playbook”. 📕
But, it was time-intensive. To go from 10 to 100 food vendor customers quickly they needed more salespeople.
They made sales hires and repeated Henrik’s strategy at a larger scale.
These people only worked on commission, so it came at no additional cost to the business unless they brought in more revenue.
It was a scaleable framework. Food vendors were signed on at a faster rate. Then, they could make more hires. And so on.
Within three years, Jesper recalls they finally hit a critical mass level of awareness and situation.
Food vendors began calling them. Just Eat had reached escape velocity. 🚀
For a business that was “Internet first”, Just Eat’s approach to marketing and sales in the first few years was deliciously “old school”.
Particularly on the consumer side, there were more overlapping themes with promoting a college party than a digital startup.
Leveraging a social platform like Facebook, Twitter, or Instagram to generate virality wasn’t possible since they didn’t exist back then.
Internet advertising existed, but they had no money to focus on it as a big channel. Plus, people weren't searching for “food delivery” on search engines like Google in a meaningful way back then.
Theoretically, they could have employed other techniques to leverage the Internet for growth. Instead, they chose to hit the streets and connect with people in their everyday lives. To great success.
I think there’s a lesson here on utilizing the world around you to leverage the “do things that don’t scale” methodology.
Consumers are bombarded by companies pushing products in their digital lives constantly.
In their real lives, not so much. Less noise and outsized impact. 💥
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