Glovo’s hypergrowth — Podcast #41 with Sacha Michaud
On itnig’s Podcast #41 Sacha Michaud, one of the cofounders of Glovo shares his take and experience on the hypergrowth of the Barcelona based delivery startup with us, talks about market about delivery and on-demand user experience.
Bernat Farrero, CEO at itnig and Jordi Romero, CEO at Factorial speak with Sacha Michaud about his own personal story, how he grew as an entrepreneur and last but not least his perspective on Glovo in this podcast. Listen to our podcast on Youtube, iTunes or iVoox.
Sacha, we know each other as partners in Playfulbet from a few years ago but tell us about you, please. What’s your story?
I am English by family, Canadian father but born in London. As a kid I travelled a lot to different countries and I ended up in United Kingdom. When I was16 years old I stated to run as a jockey and through the sport I went on to live in the US. But my mother lived in Barcelona at that time: I went to visit, loved it and stayed.
At the end of the 90s I learned to program, it was the time Internet was taking off. At that time I create Latinred, which went very well, I was able to sell it to a US Nasdaq listed corporate. We sold to a competitor, with less users and traffic but much more capital.
You were able to sell before the crisis.
Yes you could say it like that but there are also other examples. After three years I left to create what is now known as Betfair, first here in Spain and then Portugal and Latin America.
That’s where the circle closes. I come from the horse racing world, filled with bets, I knew the world and I was a big fan of Betfair.
At that time Betfair was very strong in London and Ireland — I really liked their model of betting against other users. The more traditional way is betting against the house, which is earning a margin. Betting exchanges on the other hand are against other users and the house gains a commission. Betfair invented this model and I was already a big fan when they called me up to launch Spain.
Their way of launching was “Create a business plan”, I had a very entrepreneur role, very open. You have the platform and capital and you can run and create. I learned a lot, before I had been focused more on technological side but here I learned a lot about Sales. It was a more strategic role where I spent 9 years.
How did you leave Betfair?
After 9 years many things had changed, we went public, the way of managing the business turned to become much more centralized. I would have had to go to London or Dublin to continue to have an impact but I decided to leave.
At that time I was already really interested in Peer to Peer and On Demand and the sector Glovo is in now.
I joined forces with Oscar, a kid who just came back from the US and had the same idea. To get started we became part of Connector, an accelerator, a group of mentors with Carlos Blanco.
How was this experience with you?
When you start out it’s a good place. A secure place to start. In the beginning Glovo was a text field — you introduced what you wanted delivered and to which address.
“Bring me a pizza from this restaurant to this address.”
We grew organically in Barcelona and Madrid, launching within an interval of 6 months. We grew without marketing by giving excellent services. This allowed us in the first phase to grow — even though it was not scalable.
Then in the summer of the next year we launched Glovo Marketplace ,— with the restaurants and catalogues of products you see now.
The text box is still there, right?
Yes, it’s magic! And it’s very important that you have it. Its the WOW — it’s these the orders that you comment to your friends. You won’t talk about having received a pizza delivery but something custom, yes.
User Experience is everything. It’s not the App but everything : the service to the customer, the speed of delivery.
More than weird things that are bought and delivered, I am surprised by the quantity of things like keys. Kids get home from school and forget their keys so their parents send a Glovo or Real Estate agents and Airbnb renters who use Glovo to send keys.
Here at Camaloon we’ve tried different providers. Now we are at a 2% of cases in which packages do not arrive. Lost packages, accidents…You really don’t have ?
Yes but you don’t control the transportation chain. There are different delivery providers involved and the user might not be at home when the package arrives. But at Glovo it’s the opposite. We have control and it’s in demand.
Glovo is sharing economy. Were you sure from teh beginning that you wnated to have an external fleet of riders?
For me sharing economy is a project between individuals. Sharing living space or a garage between two peers. We are economy on-demand. This is very different – here is a peer and a professional involved. We are a marketplace with professional sellers and the delivery is done by a professional, freelancer.
There are two arguments in the discussions: Flexibility and liquitidy to everybody and on the other side, precarity and worsening of the job conditions, giving control to one industry over a lot of workers.
I don’t think so. The big majority is not looking for a fixed, full time position so we combine it. Glovo is not the work of your life. It can be something nice to do but it’s not the main aspiration.
Somebody who has been working many years in a restaurant kitchen, small space, no air, as a Glover possible to make the same.
How much does a Glover make?
It depends on the city and the volume of orders — 5 /6 € per order and in high times the average is serving two orders per hour.
What do you earn then?
Commission and fee that the user pays, minimum 1,90 Euro.
Would it make sense to have Glovo with own riders like DHL?
This would mean changing the dynamics. Flexibility would not exist anymore — it’s something we would have to look into. It’s an option but at the moment we are compliant with the current model.
What’s the trade-off by dealing with big funds?
Dilution. But I think it’s about choosing the right partners.
What about Rakuten? Why did they join Glovo?
Because it’s a company which has a vision about the sector Glovo is operating in. Rakuten is the Amazon of Japan — they are very interested in on-Demand, they entered the taxi market with an investment in Cabity. I see them as a very good partner, I hope in the future they will continue.
Next steps: Latin America, reaching more cities and becoming leader where we operate and we are looking for other cities like Istanbul, Cairo, Bucharest…Each one very different but we see a big opportunity.
Jump to the podcast to hear the end of the conversation with Sacha:
Listen to our podcast to learn more about Sacha Michaud’s journey and his perspective on entrepreneurship and startups. Learn more in this Podcast in Spanish on our Youtube channel, listen to it on iTunes or enjoy it through iVoox and subscribe to our newsletter to stay always up to date.