In the first episode of this season, we’ve invited David Buttress, former CEO of delivery giant Just Eat.
David shares with us his thrills and challenges building Just Eat together with his friend Jesper Buch, and offers great insight into how a tech giant was created from scratch.
In the beginning, there were David and his Danish colleague, Jesper Buch, working together in a basement. Jesper mostly handled the backend part and the customer service, while David was in charge of signing up restaurants and customers. They basically did everything together.
David and Jesper bootstrapped for two and a bit years. Looking back, he says, they should have raised money to accelerate faster, but instead Just Eat initially grew relatively slowly. As David puts it, "it was quite noble and cute, and perhaps a bit naive".
But the early signs were good. David hit the streets of Canary Wharf, where they were based, and restaurants were signing up. And each time their monthly revenue increased enough, they’d bring on another addition to the team. Which worked until they realised it was time to kick on and take on some funding.
How Just Eat got funded
David and Jesper initially took investment from an angel investor, but soon moved onto the first major funding round with Index Ventures, one of the biggest venture capital firms in Europe.
In the beginning, they didn’t know anything about the mystical world of VCs, but their passion for the product did the job and ultimately lead to the successful series A and subsequent rounds.
They did a lot of VC pitches; they went to 120 presentations and were rejected by at least 50 firms. The main reason for rejection was: “How is your product scalable?” Investors thought it wasn’t. They were wrong, obviously.
Interesting side note: David thinks that bringing your personal bias when you should be trying to judge objectively is the biggest mistake venture capitalists make. Something he’s taken with him to his role at 83North.
Index Ventures did believe in them and saw that they were very operationally-driven. Their investment allowed Just Eat to scale the way they needed to. They raised £7 million in their series A, having underlined three objectives:
To expand in Western Europe
To trial a national advertising campaign for the first time
To scale their sales organisation to every corner of the UK
Then in their series B, they raised £15 million from Greylock Partners and RedPoint Ventures. Then they went on to do a series C - which David admits was completely unnecessary - and raised £35 million from Vitruvian Partners. They never used the capital, because the company became profitable in the meantime.
A transparent company culture and global ambitions
When he left Just Eat, he had helped build a company with around 2,130 employees. David is very proud of the culture they created. They chose a very flat organization and shared information widely, even when they went public.
David understood that if you want to build an organisation and then scale it, you will need people who are very different from yourself. So hiring people you like to spend time with is… not the most practical approach to building a global team.
David was always massively competitive. He wanted to create the biggest, most successful company possible. He did, however, keep a healthy respect for his competition.
In fact, Just Eat were not the first mover in the UK: before them came LastMinute.com's Urban Bite and Hungry House. What made Just Eat different from the rest was scale: they were thinking global.
Just Eat were the biggest tech IPO in the UK for a decade or so. They floated for £1.5 billion on the London Stock Exchange.
Moving on to another challenge
After 11 years, David stepped down from being the CEO of Just Eat and moved into a venture capital role.
The best thing about being a VC in his opinion is that you get to spend time with really smart entrepreneurs.
When he speaks about the challenges VCs face, he particularly emphasises two of them: bringing your personal biases to the table (you really shouldn’t do that as a VC) and trying to identify the really special entrepreneurs.
So what’s David really interested in right now? He likes robotics and thinks that at an industrial application level they can be transformative (also for deliveries). Finally, David has a soft spot for e-commerce marketplaces. It doesn’t take a genius to understand why.
What does the future of takeaway look like for David? More diverse in terms of food, and more exciting in terms of delivery technology. So if your startup idea has anything to do with robots delivering takeaway, you might want to get in touch with him.