Transcript
Narrator: You’re listening to Founds on Air with Steve and Mike.
Steve: Good afternoon. Today we have Dave Berger, co-founder of Jimmy Brings and previously co-founder of Suppertime. Welcome to the program Dave.
David: It’s great to be here. Thanks, guys.
Steve: So you’ve had an illustrious entrepreneurial career. Looks like you can do a few more rounds in the ring. Tell us a bit about how you got started.
David: Well, look, I guess the first thing to say is, when you know, when I was starting out, I didn’t feel like I was an entrepreneur. I didn’t feel like we were building startups or anything like that. It was really very humble beginnings. So I, my business partner, Nathan, who I’ve been in business with for about 10 years. He set out in life to become a poet, and he realized that being a poet didn’t really pay the bills. Yeah, so he got a job on the side as a delivery driver. And it was he was working for a very small company actually called Suppertime. So Suppertime, we didn’t start it, strangely, it was actually established in 1995. Well, and he was one of about four or five drivers working for this very small business in the suburbs. The owner at that time, wanted to get out, and he ended up buying the business off him for I think about $10,000, something like that. And at the time, I dropped out of a number of different university degrees, so I was a complete uni dropout.
Mike: Join the club, all three of us are dropouts.
David: And my dad at the time, had retired he was in business. He was at a software company, and he was in business and he retired and he said, “Look, you don’t seem to be enjoying uni, why don’t we do something together?” And we went out and we bought a furniture store which was an absolute disaster. But having said that, Nathan was a friend of mine, he was starting out, he had bought a business and he came to me asking for advice about how do you value a business? What do you think about this business? I said, I don’t really know but I’ll tell you what I know but I’ll tell you what I do know. And yeah, I kind of liked the business that he was in and it was very simple. It was actually a B2B business, supplying delivery drivers, to restaurants that did not have drivers. So there was no B2C element. We didn’t have any of those—
Steve: So it was kind of like an agency
David: Correct, very low tech, two way radios, clipboards, all this sort of stuff. So yeah it was very inauspicious beginnings we would just running a small business and trying to do a good job.
Steve: How did that go and expand into what overtime it became
David: So I guess what happened was, essentially what we were doing was we were supporting little mom and pop businesses to run a delivery business. So our pitch was, delivery drivers are annoying, that’s expensive. We’ll supply that and you can create a new kind of channel, a home delivery channel. And the way it worked was that we charged a commission to the restaurant. And the bigger the order, the more money we made. And what we found was that occasionally, we would have to do these very large orders into the city. And we would go in there and some guy would down in a suit. And we’d say, why are you ordering 20 pizzas? And they say, we actually work at some bank or some consulting firm and we stay back late almost every day and we order dinner in. And Nathan, who is really a fantastic salesman he would corner these salesman and say that what other food would you like to order from Una’s in Darlinghurst. So then we went to Una’s in Darlinghurst and he said, I’ve got a customer that will order 20 meals a night, if I can get a discount from you. And basically, we started to build the business really on the back of this kind of corporate work that we were doing and we basically we started to move away from the restaurants that you can typically get home delivery from and we were going to more high end more casual dining not sort of fast food type places and doing deal with them so we could delivery those to our corporate customers in the city. In the beginning we would email them here’s a PDF of the menu and they would email us an order and we thought how can we do this in a more sophisticated way. So we thought lets build a website.
Maybe it would make more sense for them to order via our website. In the beginning, we were so protective of the restaurants that we had, that we actually considered not making the website public we thought it was going to be this exclusive club that only corporate people would know about. But in the end we thought that’s a silly idea, let’s just make it public and see what happens. So yeah we launched and we became what we were and really in the start it was focused on corporate type people.
Steve: I guess you’ve evolved into Jimmy Brings along the way, what sort of led you into going down that was that sort of after you exited from Summertime?
David: Yeah I think we were always looking for different business angles so you know at the same time we were running the B2C offering or having a website where people could order we were still running a B2B business, servicing other restaurants to do their deliveries, we got into day time catering work and what we kind of realized that we had built up quite an interesting set of infrastructure and technology and skills to do delivery. So we thought to ourselves, what else can we deliver? And one category that seemed to be really underserviced was alcohol. And we thought this is an interesting idea, could we deliver alcohol. And the first discussion that we had with the regulator, was basically they shut us down and were like, no you can’t do that and we sort of revisited it and poked and prodded and we said that it is interesting if a business like Dan Murphy’s can take your order online and deliver it to you 3 days later then we don’t really see what the difference between us taking an order and delivering it to you 30 minutes later and that argument ultimately prevailed and we were off to the races.
Mike: How long did that process take?
David: The whole thing took a long time for that business to get anywhere given that we are talking 7 years ago that we launched Jimmy Brings, this was at the time where this was pre Uber Eats, pre delivery, there was not the sort of customer habits. So we normally had to create the business and the whole category. It took a long time to get all the legalities sorted out and then to actually build the business so it was a slow burn.
Steve: Dave thanks for sharing some of those early stories, it’s amazing. We can ask a few more questions about that later but the jimmy brings face is that the face I see right now and you know it has become iconic. I see the vans rolling around, so is it true that you nickname’s Jimmy? How did you guys come up with that name?
David: So the name Jimmy is quite interesting. We, I actually think it’s a terrific name. I love the name. And I think it’s very memorable. It was not our first name that we were going to use. We basically at the time were running Suppertime and at the same time we launched Jimmy Brings we launched a sushi platter delivery service which was called sushi time. And we were going to call our alcohol delivery business liquor time and were going to create this time house of brands. And for whatever reason, sushi time didn’t really get off the ground and actually was a small business for quite a few years. But liquor time I can’t remember which element of which was taken but we couldn’t get the URL or the business name or some part of it we couldn’t get so we couldn’t get that name and then we decided that we were going to call it moonshine and he got the URL and we got the business name and when we applied for our liquor license, the regulator knocked it back because they didn’t like the connotation but we were desperate to launch this business we were tossing a few names around and Nathan came up with a character and he sort of threw out the name brings and I went home over the weekend and I was running through a couple of names. And Jimmy sort of felt right. And I said to Nate I remember I sent him a text I said we should call it Jimmy Brings, he wrote back, he said I think that’s a terrible name and like by Monday morning he was so exhausted by this process who was like all right whatever let’s just go with it and I think it really served us well. And in terms of the face and all that sort of stuff, originally it was going to be Al Capone’s mugshot was how the brand was going to launch and our designer as a joke said I want to take a few photos of you guys to create business cards and we said OK. And when he did the next iteration of the web design, he then dropped the Al Capone mugshots and he put our mugshots on the design and we thought it was a joke and in the original Jimmy Brings branding was both my face and Nathan’s face and in the end he convinced us that this was a more interesting look and this was definitely a more interesting thing to go to the market with and overtime we’ve needed to simplify the brand we decided to keep one face and it happens to be mine.
Steve: So your mates call you Jimmy now?
David: It does happen.
Mike: We saw Jimmy was standing for parliament, which I thought was a fantastic, very clever guerilla marketing technique. Tell us a bit more about how that came about. Whose idea was it, did it work well
David: It worked really well. That was actually the second time we’ve done it.
Steve: Maybe you can just share with our audience a bit more about it.
David: Yeah I guess you know when you are launching your brand you need to find ways to get your name out there and you know, five years ago when we really were totally bootstrapping really didn’t have any marketing budget whatsoever we sort of thought wouldn’t it be interesting that during an election campaign to put up our own posters. To get our name out there. So for very little expense we went in and we printed 250 or so of these vote for Jimmy Brings alcohol delivered in 30 minute posters. And we hired a guy in a ute and then a ladder to drive around at night and put them up all over the eastern suburbs. So I remember it was literally like Malcolm Turnbull and Jimmy. And in the end one council did get upset with us and sent us a letter and a $400 fine or something but all in all that wasn’t a heavy cost, $3000-4000 were saved. We got it all over the eastern suburbs. Having done that 5 years ago we kind of kept it up. And the most recent campaign this time we went a bit more broad we had that campaign running in Victoria and Queensland and New South Wales and everyone I’ve bumped into has said that they voted for me.
Steve: Could you see like a direct correlation in sort of website hits increase?
David: Yeah absolutely, I think with any kind of campaign, you need to tie a few things together. We had to do, you know those good comms going out it definitely got picked up. A lot of people on social were posting a lot of images, I think we had a free delivery voucher code running that weekend, it was huge. And I think again that we also know that in general election nights are busy nights for us as people are inside, they are ordering so you know it hit all the notes. So it was successful in terms of getting people to order and obviously a lot of people still sort of remember us.
Steve: Cool, So maybe you can share with us some of the other marketing activities that were really successful for you over the years.
David: One of the first marketing campaigns we did, when we launched we really didn’t know what channels and 7 years ago there weren’t that many digital marketing channels, people certainly weren’t searching for Alcohol home delivery and during the suppertime we did quite a lot of success through direct mail. So mailbox drops very old school and we thought we’ll try something in that space for Jimmy Brings I’m sure you’ve seen the Jimmy Brings fridge magnets.
This is kind of an interesting about that because when we were doing that campaign we got some support from a tobacco company to help sort of fund the campaign and you know my naivety the tobacco company said that can you put on the magnet 30 minute alcohol and tobacco delivery. We said okay you’re paying for half the campaign and we were so naïve we didn’t know. We went and we printed these things in China. And it was a huge expense for us, I think it was $30,000 or $40,000 it was a big deal to invest in this, we received 50,000 fridge magnets ready to hand them out and we drew up a big map of Sydney we are going to start in the most Eastern point and work out our way West until we run out of magnets. So the day after the first box of magnets went out, we received a phone call from the legal counsel of the New South Wales Department of Health. She said I’m sorry to tell you this but do you realize that by putting the word tobacco on your advertising material, you’re in breach of the tobacco advertising kind of regulation. And she said that on that basis, you cannot distribute this material and we were like this is crazy, and I said to her I was very honestly, I said look to be honest with you, don’t throw the book at us, we’ve only handed out one box and don’t worry, we’ll stop. And I called Nathan and he was travelling and I told him the story and he straightaway said well, we’re just going to hand it all out straight away you know get it all out there. And I said, look, I’m really sorry to tell you Nathan but I’ve already told the powers that be that we actually haven’t handed out and and I think it would be a problem if we now handed them all out. So we did not know what to do but we were thinking how to get around this. So early next week, I got back in touch with this person who called me and I said look I gotta ask you know you were going to send up a letter you know cease and desist, we haven’t received anything I want to know from you is there any way around this, can we put a sticker somewhere, can we just cross it out and she was very kind, she said look, David what I will tell you is that I am drafting you a letter and in that letter it will tell you to stop handing this out. What you do between now and receiving this letter is up to you and I said I just want to make sure I heard you correctly. So yeah, within 24 hours, we mobilized maybe 20 or 30 people to hand out all these magnets in literally like a 48 hour period so that launched Jimmy Brings. So before that it was like one or two orders in a day but suddenly it was 10, 20 orders and it was happening so it was just interesting, it was a pure kind of online business but that offline very analog, old school marketing is really what launched the business.
Steve: So the buzzword of the moment is IRL, in real life marketing and you’ve got a lot of vans, how many vans you guys got running around at the moment?
David: I think it’s about 20
Steve: Yeah and is that a part of the success of the brand as well? The business? Tell us a bit about that, Any advice for any budding entrepreneurs out there?
David: Yeah my advice would be to put your face on the event. Yeah I mean again, very serendipitous. If you ask anyone how do you know Jimmy Brings, half the people would say they know us from the vans but again, the van model is again something not what we set out to do but basically we started off with a little office in essentially in Bondi or just on the corner of the hill. And you know it meant that we could only service a very small area if drivers were coming in picking up from that office. And because we’re very much into sort of logistics and that sort of thing we thought wouldn’t it be interesting if we put stock inside a refrigerated vehicle so that we would never have to pick up from anywhere so we thought we’d give it a try and we went and bought some secondhand complete pile of junk from rural Victoria and we drove it up to Sydney and we fitted it out and you know off we went, we deployed that vehicle a little bit further out than our normal delivery zone and we’re like alright we can expand our area and very quickly it became apparent that this was a fantastic logistics model. So we thought this is how we’re going to do it. So in a sense, yes it turned out to be an excellent marketing device but really the purpose it served was much more about I guess making the business model work and in the end it was terrific for our branding and kind of general recognition.
Mike: So like in the early days, when you were still starting, how quickly did it take you to get to some level of scale?
David: These things take a long, long, long, long time especially, you know, Suppertime and Jimmy Brings were funded. So we know it was all bootstrapped and we were funding it from our own cash flow and yeah these things take a lot of time and you need to be realistic about how long these things take. There’s so many times people tell me they want to open a website or an app or something like that and the first thing I tell them is expect absolutely nothing to happen because it really takes a long time and so I think as we become more experienced and as we launch into new cities we have a much more developed playbook as to how to do things so I think that can make things happen faster. But in general it really comes down to a lot of patience and persistence.
Steve: Okay, and so was it, 6 months or a year when you sort of felt like there was scale?
David: I think there were various kinds of points that you realized this could be something. When we built these businesses we certainly when we launched them the idea was that we would service the eastern side of Sydney, the restaurant delivery service and alcohol delivery service and that this was a good area to service and there was never any true ambition to go beyond that.
Mike: And it sort of evolved as the business evolved and your idea and concept evolved
David: Yeah and I think in a lot of ways it’s been an interesting learning in that. We didn’t realize that we’d actually built a very scalable model and I think that there’s probably a lot of other businesses out there where you might be a bit blinkered and sort of be so focused on doing what you’re doing in your local area and not actually realize that this is a scalable concept that has that potential, that global sort of potential. I think we are wise to that now but certainly in the early days that wasn’t the agenda.
Mike: And early on, did you have like your own development team? Do you do any development?
David: We’ve tried everything, so no, I am not a developer, I guess I would call myself now a semi proficient kind of tech person but certainly not an engineer. We’ve tried everything, we’ve worked with Australian developers, we’ve worked with offshore teams, I think what ended up working for us is to have a offshore team who we’ve built a long-term relationship on retainer so I think it is very tempting to think about any tech development is like some discrete project that you’ve got to get someone to go and build it. And then it’s done. It’s never done. So yeah, you need to have an ongoing relationship and the team that we work with are based out of Indian. We’ve been working with them for six or seven years now and it certainly has it’s challenges but I think if you’re starting if you’re bootstrapping and you don’t have a lot of money to throw at the problem, using an offshore team , getting 80% of what you want for 30% of the price.
Mike: It’s really interesting seeing how different businesses do different things in the way they sort of start up.
Steve: We’ve all had hairy moments in our businesses. Can you share one or two with us? And how you got out of those situations?
David: Look the story I told before about the marketing material almost having to be thrown away was certainly one. All I can actually say is that if you’re going to be in business it’s just a succession of hairy moments, there are just that many problems to be overcome and that’s actually the whole art of it is that recognizing that there are just a succession of problems. When we were exiting both businesses, negotiating those deals, all of those deals, they’re all on a knife’s edge. Both of them could have fallen over at any moment, the implications of them falling over could have been terrible. There’s that many moments it’s hard to even think about any in particular.
Steve: That’s really interesting. So basically it’s really just a roller coaster.
Mike: And you just become problem solvers, really good problem solvers grow successful businesses.
David: Exactly, almost the art form is making more right decisions than wrong and just having to overcome each challenge as it comes and just having to steer around it or over it and just as you said a lot of problem solving.
Steve: Yeah, cool. So you’ve mentioned a few things that have been really successful for you guys in your business, the magnets that got you launched, etc. But looking back, was there something that you built? Or did you sort of look back now and say that that was a critical factor in your success.
David: Yes I do, I think as I’ve mentioned that this sort of our business in terms of the logistics of it was very, very old school. So you know, it was two way radios, clipboards and excel it was very, very rudimentary. There was one point where we decided we’d like to know where the drivers are and we’d like to track their mobile phones via GPS on the phone. And this was not being done at all, it was quite groundbreaking stuff. And we did that and we were able to offer, Suppertime was offering live GPS tracking maybe 7 years ago or something like that, very early on and we were backyard hacks kind of putting this together, it was hard to do and we put that together and that really kind of opened up the whole potential. That’s actually what made home delivery, in my opinion, scalable. That was the breakthrough. So, I guess being early on that little innovation and harnessing what that could do obviously providing the customer with an awesome experience but also the ability to control hundreds if not thousands of drivers so yeah, that was key.
Mike: I can’t imagine running a logistics company without the sort of tech we have right now.
David: We used to run a team of 20 or so drivers with two way radios, it gets to the point that beyond a certain size you can’t work out what’s going on, in the old days that was a big as any dispatch team could be, one guy and 20 people, maybe you could repeat that a few times but it wasn’t terribly scalable. The other thing I would say is we also made a very deliberate decision at some point when we launched the suppertime website to take really beautiful photos and that again that was quite an expensive process
Steve: Photos of the food?
David: Yeah, photos of the food and really celebrate the food, photograph it beautifully, style it beautifully and I often say that half the reason why suppertime was acquired because it looked really nice and it caught your attention and there were other players doing what we were doing in Australia at the time but taking pride in the product made a huge difference. And yeah, again it was a big investment for us and it really paid off.
Steve: Cool, so you’ve been through two exits now, how did they start it? Did they give you a call or an email?
David: They were both a bit different. So, the suppertime exit was hilarious because it was literally, we literally got a LinkedIn message by some guy that Hi, we’re coming to Australia, we are going to crush you, are you interested in us acquiring you? And we thought oh that was a little bit aggressive. And this MNA guy from rocket internet he wanted to talk to us, he wanted to make a time to speak to us and I remember the night, we agreed to a certain time but we ended up, it was like some rainy Thursday night, we were slammed and it meant all hands on deck. I was in the dispatching room, everything was completely out of control and I could see this number calling on my phone and I was like I can’t answer this call I have to deal with the business. And eventually, he actually ended up calling through out customer service number and finally talking to us and I remember saying to them, look, happy to have this phone call but I cannot talk to you right now, business is booming, can we speak later? And yeah, so that was literally a LinkedIn request. And then I guess being acquired by Woolies was quite different in that we reached out to them soon after leaving Fedora, Suppertime became Fedora, we got in touch with Woolies in the context of having a conversation about fundraise and would they be interested in investing, they weren’t at that time but we had established a relationship and then we got back in touch wit them about nine months or a year later, towards we were very close to completing a fundraise and we just got in touch to say, hey, where you at? And yeah, we got involved in a conversation that ended up in us being acquired. So yeah, one was very much a bolt from the blue and the other one we made that happen.
Steve: And like the due diligence process that you go through? And like how long did it take? How brutal was it?
David: I mean the rocket internet deal was probably like the strangest due diligence process over. The due diligence took place past acquisition, and pre acquisition I mean we sent them numbers but the actual verification of those numbers took place after the acquisition. We had to personally gurantee everything. To make sure it was true. We had one face to face discussion with a guy who flew in from Singapore. We spoke to him for about two hours. Other than that, we never had any dealings with anybody. It was very light touch, very quick deal.
Steve: How quickly did you agree on price?
David: From memory, I think that the price part of it happened probably within a week or so of starting a discussion. We then had to sort of knot out the terms of the deals but I think from start to finish it might have been only 6 weeks or something like that. Very, very fast. The Whoolies experience was the complete opposite. I don’t think a business of our size has ever been put through as much due diligence as that. Understandably so, they are very kind of responsible corporate entity and they cross their Ts and dot their Is. And that took a lot longer and was much more thorough and I think you have to kind of understand what the nature of both of those acquisitions were. The nature of suppertime acquisition was all about speed to market. So you were destroying value by wasting time in a long due diligence process and they completely they’re the masters of execution and speed and urgency whereas for the Whoolies acquisition it was more about acquiring a unique set of skills, and IP and knowhow and also they had to learn about the business model and understand if this was a proper business model so they really had to go through a different process to end up at an acquisition.
Mike: What advice would you give to other founders in terms of going through an acquisition process? Like is there something that you learn? Like, I wish I knew this before I started this process?
David: I think the first thing is always be ready. You have got to have your data in good shape, you have to have your corporate structure in good shape. Anything could happen at any time. So you got to make sure that these things are in order. The other thing I would say is that hold on to your hat is that it’s a rollercoaster ride and you can have a bunch of investment advisors in the room which we never really did but I guess the point is, it doesn’t matter how strong your team of advisors is at the end of the day, you still have to make the decision about price, terms, no one is going to make those decisions for you. It is stressful, exciting, complicated, and the only other thing I would say is that you are probably better off talking to multiple parties than just to one but you know each opportunity comes when it comes, it is what it is.
Steve: Dave we’ve often heard the advice that building a great business and the opportunities will follow. Do you believe in that advice? Or do you think that an exit is something that you have to actively work on? Is it something that you guys work towards?
David: When we started Suppertime and Jimmy Brings we had no concept of an exit that was not part of the plan so I think that there probably are some situations that engineering a business for an exit makes sense. I’m a little bit uncomfortable with the idea. It doesn’t feel like you’re doing justice to what you’re doing. I’ve always said to anyone, if they say what’s your advice in business, it’s very simple. It’s like just do a good job.
Mike: A good customer experience and people will keep on buying and the acquisition will come along when it comes along.
David: Do an excellent job, love your customer, love your product. Just do as good a job as you can. And the success will follow and if that ends up being an exit or just a really, really good profitable business it works. That’s the key thing.
Steve: So on that point, what’s the best advice you’ve ever been given along your journey in business?
David: I think one thing to what I kind of go back to a little bit is something that my dad told me is that when you’re doing a deal of any type, any transaction, any deal, it has to be a win win. And if it’s not, then it’s just not going to sustainable. So I think we’ve approached in our business life so many situations that we sort of made sure we weren’t getting too good a deal because if we wanted to be if we wanted to make something sustainable the other party needed to be benefitting. So I think it’s a key one, it’s got to be a win win.
Steve: That’s great advice. So one last question today and thanks for being so generous with your time Dave as well. So what’s next for Dave Berger? What’s on the horizon? Any new ventures? Is the rumor true that you are going to be standing for parliament anytime soon, we could do with some smart standing camera.
David: Sure I would love to do that. That looks like a horrible job actually. For now, I personally am getting a huge amount of enjoyment out of being able to expand Jimmy Brings within the context of a much larger business with a much healthier balance sheet with some unbelievable assets at their disposal. 1300 BWS stores, couple hundred Dan Murphy stores. This is like you couldn’t do it without it. So I’m really enjoying that journey. And yeah, there’s still a lot that I want to achieve in terms of growing the Jimmy Brings brand and kind of realizing the dream once it crystallize that we could actually become the alcohol on demand brand in Australia. So I really want to realize that. We’re always looking for opportunities, there are just a few other bits and pieces bubbling here and there on the side but for now it is pedal to the metal growing Jimmy Brings is kind of what I want to do.
Steve: Yeah, I think it’s a really interesting time when you’ve transitioned into working that large corporate and being able to get access to all those resources and be able to, you know, sometimes execute on some of the things that you wanted to do previously, you didn’t have the funds to do it.
David: Yeah, it’s been great!
Steve: Cool. Well, thank you. I really appreciate you coming along and joining us on Founders on Air. And that brings us to the end of our second episode. So for all those listening, thanks for listening, and feel free to subscribe on any of the apple podcasts on Spotify. We’ll have a couple more founders to interview over the next couple of weeks. I look forward to speaking to you then. Thanks for joining us.
Narrator: You’ve been listening to Founders on Air, with Steve and Mike. A podcast designed for founders by founders to help you scale your business. For show notes and to ask questions for future episodes, go to foundersonair.com. Thanks for listening and don’t forget to subscribe. We’ll see you next time.
