by Nick Taranto
I was fatter, paler, and grumpier, the least optimistic I had ever been in my life. When I looked in the mirror, I felt like my anger and depression were manifesting on the outside. My wife noticed. My mom noticed. Even random people I’d never met noticed. I knew things were bad when, one fall morning, I was walking to work and a homeless man on West Fourteenth Street slapped me on the back and said, “Cheer up, young man!”
The Best Ideas Are Born from Failure
One of the most disheartening parts about working sales on Wall Street was that I was courting the exact kind of people I wanted to be. My job was to track down promising entrepreneurs, get to know them, and then convince them to fork over their hard-earned money. To that end, I was given a credit card and was told to wine and dine dozens of up-and-coming start-up entrepreneurs. That was one major perk of the job: I took my prospective clients to all the best New York City restaurants, places where food existed on an entirely different level from anything I’d experienced before.
By 2011, the farm-to-table movement was really taking off. I was eating out constantly because of my job, and gradually, I began to pay more attention to sourcing. Up to that point, I had never really thought about the food system, how a cow happily roaming the fields becomes a delicious steak sizzling on your plate—I knew so little about the food supply chain that at the time I didn’t even realize that the vast majority of American cows no longer roam in fields at all.
But all of a sudden, I saw messaging everywhere that illuminated different parts of that process. The best restaurants made a point of offering locally sourced and sustainably grown ingredients—eggs from happy chickens, grass-fed beef, basil grown on a Brooklyn rooftop. I’d never thought about it before, maybe because it hadn’t been brought to my attention, but now that my own awareness around food was growing, I could actually taste the difference. The food tasted better when there was thought behind where it came from and how it was prepared.
The owners and head chefs of these restaurants were top-notch, the sort of people who came around to each table to introduce themselves and do a “quality check” during the meal. They were trained in the art of hospitality, highly skilled at giving each customer a personalized experience. The more restaurateurs and chefs I met, the more I thought about the importance of authenticity, personalization, and transparency in the food industry. These themes would become core to how Josh and I thought about building and scaling Plated.
Every time I took an entrepreneur out to eat, we were 100 percent reliant on the person serving us the food—and not just the restaurant owner but the whole team of people who had played a part in getting that food from farm to table. These were people I would never meet, but I had to implicitly trust them. What were they doing to the food along the way? Was the food safe to begin with?
I also began thinking more critically about what it meant to eat well. What did it mean to eat meat versus vegetables? Was it worth paying a premium for good food? What did “good food” even mean?
These thoughts and others were whirling through my head during the nice dinners, where I sat across the table from promising start-up entrepreneurs and realized I wanted to be them. I loved the fact that entrepreneurship was unexplored terrain, far away from the stultifying financial machine of Wall Street or the fixed path of the Marine Corps, where I didn’t get any say in my own future. Starting my own business held the tantalizing promise of everything I had longed for—freedom, risk, and adventure. I wanted in.
I needed the money from my job to pay down my student loans, but I was already checked out. And checked-out people rarely make the best choices.
Eventually, as you might expect would happen to a checked-out employee, I was fired. I had failed. Miserably. Three years later, Goldman Sachs would name me one of the world’s “100 Most Intriguing Entrepreneurs.” But I didn’t know that as I trudged up the deserted walkway with the Hudson River sloshing against the embankment. I was freaked out and demoralized and anxious as hell. But I could feel the Goldman handcuffs unlocking and clattering to the ground. I also knew that my future was in no one’s hands but my own, and that felt good.
For some of the people I met at Goldman, business was about the full-tilt, relentless pursuit of profits at the expense of everything else—health, happiness, broader society. For me, of course, business was about making money, but in the same way that being human is about making muscle. Yes, we need our bodies to have muscle if we are going to survive. The body needs the anabolic and catabolic processes of metabolism in order to break and build muscle, to layer lean mass onto what is otherwise a brittle and vulnerable skeletal frame. But that second-by-second process that starts with eating and ends with mitochondria is not our mission and source of meaning as human beings. Building muscle is not our mission in life, unless you are a bodybuilder. The process of creating muscle enables us to survive, it allows us to spend our time dreaming, sweating, struggling, and achieving. And the same goes for money—it is a means to accomplish a mission, not the mission in and of itself.
The process of evolution exists to constantly improve and redefine how life should be lived. And that cold winter day in January 2012, I began to evolve and move beyond my earlier definitions of what it meant to live and survive. Making money alone was not enough to satisfy my own evolution, in the same way that making muscle was not enough to sustain my fundamentally human search for meaning.
Yes, making money was a goal. I wanted to pay down my student loans, move out of our shoe box Manhattan apartment, go on vacations, send my kids to college—but it was about so much more than that. I felt compelled to create and contribute and build something bigger than myself. I fantasized about leaving behind the world of shuffling financial instruments in order to make something, or at least to improve something. I wanted to get my fingernails dirty and feel the stress and vigor of transforming an impossible dream into reality. I had the desire to improve people’s lives, to make millions of people happier, healthier, and safer—I wanted to make their lives better. That, to me, is what business is supposed to do, and I wanted in.
I had developed a deep respect for the entrepreneurs who left their corporate jobs to build businesses from scratch. I had seen how fashionable it was to romanticize entrepreneurs; my professors at HBS celebrated the geniuses who broke rules to change industries and the world. Politicians praised them as job creators. Tabloids covered the lifestyles of Mark Zuckerberg and Richard Branson. But I saw that the reality of entrepreneurship was as romantic as packing boxes and dirty fingernails.
It was time to take the entrepreneurial plunge.
From Inspiration to Perspiration
I first met Josh when we were only a few months out from graduation at Harvard Business School. A massive earthquake hit Haiti, and a group of us volunteered to help out down there for a couple of weeks. Josh and I worked side by side demolishing houses, handing out water, and consoling folks who had lost everyone and everything in their lives. We slept under mosquito nets on plywood bunk beds, and we stared nervously at one another as the earthquake’s aftershocks rumbled through our camp. It was a powerful way to get to know someone and to see how that person operates under stress.
After taking the entrepreneurial plunge, Josh was the first person I turned to. He was one of the smartest, most levelheaded people I knew. He grew up as an air force kid, moving more than a dozen times both domestically and abroad before graduating from high school. He received his engineering degree from Georgia Tech and immediately took his own entrepreneurial plunge. By the time we started chatting about start-up opportunities in early 2012, Josh had built multiple businesses and had even sold one.
We went through a few weeks of “founder dating” and quickly realized that we wanted to build something together. We had very complementary backgrounds (I was loud, bold, and obnoxious; Josh was cool, calm, and collected), and we knew from Haiti that we worked well together, even when times got tough.
We knew we wanted to work on someth
ing big, where the mission was as important as the money. We knew starting a business from scratch was going to mean a minimum of five years of heads-down grinding, and we wanted our baby to be something we’d be passionate about for decades to come, not just some flash-in-the-pan faddish app.
We spent weeks batting around different ideas and ultimately fell in love with the food industry. Well, falling in love with the food industry is not exactly accurate. It’s more like we began to realize just how broken many parts of the industry are and how much opportunity there was to build a big, valuable business while improving the lives of millions of people.
We saw Chipotle, a mass-market restaurant that for all intents and purposes sold one product (burritos), doing $4 billion in top-line revenue, trading publicly at close to a $20 billion market capitalization. We saw big grocery chains doing tens of billions of dollars in revenue but with very slim EBITDA margins. We saw tens of millions of consumers who expected more, whether it was an escape from food deserts or an elevated yet still affordable dinner experience. And we saw hundreds of billions of dollars in annual food waste. Even though we were young and had no experience in the food industry beyond our preliminary research, we were confident we could build a better business model for food.
When Josh and I started to think through how to build a better food business, we homed in on cooking as the starting point. We knew we wanted to use technology and data in our business model to improve forecasting, reduce waste, and expand profit margins. And through talking to potential customers, what is called customer discovery, we came to realize that there was a massive opportunity to improve one of humanity’s most fundamental activities—cooking dinner.
We wanted to build a business that would change how millions and eventually billions of people thought about food, and we realized that the first step to accomplishing this was dinner.
Our first objective was to build a successful product and system for making cooking easier and more personalized and sustainable. Cooking dinner seemed like the hardest piece of the puzzle to solve. If we could solve for this, then over time, we could scale our business beyond dinner. Cooking dinner would be the first lily pad across the pond, and assuming we could make our business model work, it would be just the beginning.
Back in 2012 when we were just getting started, we painted a vision for one another of integrating individualized nutrition data with wearable technology, sourcing locally and sustainably raised ingredients through a world-class, waste-free supply chain, with drone deliveries enabling the perfect food for you and your family exactly where and when you needed it, before you even knew you wanted it. We knew that hundreds of millions of people wanted to eat better, and we wanted to make it easy for them to do so.
In order to reach this lofty vision, we knew we had to get to work.
Big Flavors Start with Small Bites
Starting a business and getting it up and off the ground is a heartbreaking, soul-crushing, mind-expanding labor of contrarian love. To go and start a business in the first place, you have to be a bit nuts. The vast majority of new ventures fail, and to think that you can beat the odds means you need to be extremely confident, extremely naïve, or, more likely, some combination of the two, which was certainly true for both Josh and me.
Choosing the right founding team is the most important part of starting a new business. Strategy, fund-raising, management, marketing—all these things are essential, but if you partner up with the wrong person or people, nothing else matters. The more we talked about cooking food and eating differently, the more Josh and I felt like we had stumbled onto something with real potential.
As we continued to research ideas and conduct customer discovery, we were both burning through our meager personal savings. We cumulatively had over $100,000 of outstanding business school loans and negative personal net worth. We could have walked away from the entrepreneurial dream and found jobs, but we loved working together, and we had an idea that we knew could go the distance.
We wanted to help Americans cook more dinner, with all the health and environmental benefits that this brings. One night I came up with the phrase Cook More, Live Better—and we realized that captured what we were trying to do. People want to cook at home—they always have—but it’s often just out of reach.
Josh and I thought, what if technology, data, and better logistics could make cooking dinner at home easier and more joyful while reducing the cost and the waste? The fundamentals of the food industry hadn’t changed in decades. What if we could create a new and better way to cook dinner? What would we need in order to truly help people Cook More, Live Better?
It seemed like Big Food didn’t have the right answers. Yes, they donated millions of dollars to charity, which allowed them to check the corporate social responsibility box, but that didn’t hide the fact that they knew they were in trouble and yet still hadn’t come up with an adequate solution. They were still using riskily altered ingredients and sourcing food as cheaply as possible and making promises to the American public that they couldn’t keep. There were certainly improvements coming from Big Food (better ingredients, fewer chemicals and dyes, more transparent labeling), but the changes were happening around the edges.
The problems with food are so big that they demand disruptive, lateral, courageous, innovative, and maybe even crazy thinking. What if we started from scratch and gave people another option? What if we were the ones who could drive that change?
We already had one of the most important ingredients. Josh was a great engineer. It was in his DNA. His mother is an engineer, too, and he grew up grading calculus papers in the summers to earn extra dollars. He looked at the state of the food system differently—as an engineer. He focused on efficiency, and what he found was really appalling. The food industry is staggeringly large—over $1 trillion a year, second only to health care—and it hasn’t changed fundamentally in almost fifty years.
“Sometimes you have inefficient systems that still serve a purpose, like the doorman at a luxury hotel,” Josh explained. “But food is this weird case where we have an inefficient system that also doesn’t work for people.”
After weeks of research and late-night conversations, we were at the point of no return; we either had to part ways and go get jobs, or we had to start a business to solve these problems.
On June 7, 2012, we used LegalZoom to incorporate DineInFresh Inc. from my couch on West Fourteenth Street. We wanted a better name, but we had no money, and after searching GoDaddy for hours, DineInFresh.com was the best thing available. Months later, after we had raised money from investors, we would rebrand and relaunch as Plated.com, but in the early days, it was all about proof of concept, getting a minimum viable product into the market as quickly as humanly possible, for as little money as humanly possible.
It was ninety degrees in Manhattan, which is like two hundred degrees anywhere else, and my air conditioner wasn’t really working. We were both sweating profusely. We weren’t exactly nervous; it was just really frigging hot on my couch. We bought the domain for $9.99, and we were legit. Sort of. We had a dot-com, a concept, and two heads filled with dreams.
We were going to use technology, data, and better logistics to make it easier for people to Cook More, Live Better, starting with dinner. The idea was born out of three insights:
One
There had to be a better way to eat. We both felt this every day, and millions of Americans were dying from nutrition-related issues.
Two
When we looked at the food industry more broadly, we saw hundreds of billions of dollars in consumption, with no meaningful innovation in decades. The supply chain was inefficient, and up to 40 percent of perishable food went to waste. We figured there had to be a way to use data and technology to get people good, fresh food.
Three
Dinner was the most important meal of the day, yet for many people, including us, the meal didn’t live up to expectations, in terms of food or experience. There had to be
a way to make dinner better, and we knew cooking would be a part of it.
Nimmi used to come home from her marketing job with a corporate giant to find Josh and me on the couch, strategizing or pounding away at our computers. I had been fired from my job and had spent months searching for my Big Idea. I’m lucky she didn’t divorce me.
Instead, she jumped in to help us. She was frustrated with her work, where her job was supposed to be about innovation, but that was challenging to execute at a huge slow-moving company. She said she wanted to go to a start-up, to work with a company that really was innovating, but she knew she couldn’t leave her stable job given my risky one. Instead, she started brainstorming with us. “How long should the recipes take?” “Where should we buy the food?” “Who is your target audience?” We had more questions than answers, but we were committed, and we were going for it.
The first steps to getting an idea off the ground are arguably the hardest. This is where most entrepreneurs fail: The idea is good, but the execution doesn’t work. As someone famously said, “Life is 1 percent inspiration and 99 percent perspiration.”
First order of business: Launch a great website and take the world by storm.
First potential roadblock: I’d never written a line of code in my life.
I had inherited a pretty nasty case of techitis from my mom where I somehow shorted out all electronics within a five-foot radius from me. Despite my handicaps, I taught myself how to code HTML in order to hack together parts of the home page.