It’s 11 a.m. on a Wednesday morning and Waitr CEO Christopher Meaux is in tears.
Meaux traveled to New York City from Lake Charles, Louisiana, where Waitr is headquartered, to ring the Nasdaq opening bell and commemorate Waitr’s new chapter as the second publicly traded food delivery company in the U.S. (Waitr began trading under the symbol WTRH on November 16).
His family—wife, parents, kids, in-laws, siblings, nieces, and nephews—stood beside him for the big moment, as well as his co-founders, early investors, and dozens of Waitr employees, some of whom had paid their own way to be there.
We sat down with Meaux at a café around the block from the Nasdaq building later that morning. (He brought his son, Logan, a 20-year-old sophomore at Louisiana State University, to the interview as well.)
Meaux was still choked up from the day’s events. A serial entrepreneur, he’s more used to failure than success in his ventures and Waitr represents, by far, the most success he’s ever seen. The three-year-old delivery service was acquired earlier this year for $308 million by Landcadia Holdings, a special purpose acquisition company run by hospitality industry billionaire Tilman Fertitta.
“My family had to go through hell because of my past failures,” Meaux said, pausing to collect himself. “We went from having everything to having nothing to having to build it all again.”
Skift Table spoke with Meaux about his past failures and how that informed Waitr’s success, how the company has built its restaurant partnerships, its funding path, and how he is gearing up to lead a public company in a way that will continue to warrant tears of joy this time next year.
Note: This interview has been edited for length and clarity.
Skift Table: What was this morning like for you?
Christopher Meaux: It was unbelievable. If you’d asked me five years ago if we’d have been here, I wouldn’t have believed it. Ringing the bell and having my family, the co-founders, all of our team there. It was just unbelievable.
ST: Can you talk a bit about your background? This isn’t the first time you’ve started a company.
Meaux: It’s funny, I posted about this on Facebook last week. I took all six or seven of my business plans that I had written and stacked them up together on the counter at home. They dated all the way back to September 5, 1993. Then I took the business plan that we had for Waitr, which was basically just a business model canvas. It was one sheet, and I put it beside the stack.
I was reflecting on those times because for almost 30 years, I kept trying. I kept at the entrepreneurship thing, but never really succeeded. I spent all this time writing these thick business plans, but the one that was a success was the one where all of the formulation of the idea was on one sheet of paper.
[Waitr’s success] was vindication, in a way, from all those years of failure. The lessons that I learned in all of those failures is what got us to that one sheet of paper. In business school you’re taught to write a business plan, follow the business plan, do these things.
But in 2013, when I started building Waitr, I read a book written by Steve Blank called The Startup Owner’s Manual. It said, forget about the business plan because business plans are for established companies that have known products, known resources, and known people. Business school is to train management. With startups, you only know what the idea is. You don’t know if it’s going to be successful.
ST: Tell me about Waitr’s pricing model. Operators often talk about how much delivery services charge, and now there are so many delivery options in the market. The services are really cutting into operators’ profit margins.
Meaux: That’s something that has been really different in the smaller to medium markets that we’re in. In most of the markets where we operate, we’re the sole provider of delivery.
One of my past failures was a restaurant business. I knew the problems that restaurateurs were facing, so I wanted to be a partner to the restaurant. We knew what Grubhub was charging. So we priced ours at half — 15 percent — because in the small markets, restaurants need every dollar they can get. [Delivery fees from different services can range up to 30 percent for operators; Grubhub has recently said that, across its 85,000-plus restaurant partner network, its average rate is less than 20 percent.]
ST: And that’s what you currently charge?
Meaux: Yeah, we’re still at 15 percent. Our business model involves employing the drivers, as opposed to just using contracted workers. Our driver core is probably half of what most of the other companies in our space is, because they’re employees of the company and we can tell them when we need them to work.
So, by having that advantage, we have a fixed cost per hour for our drivers. Then, we can leverage that fixed cost to increase profitability for us and then pass that on to the restaurants. That’s how we’re able to charge 15 percent.
ST: Can you give me an example of what that looks like, how the fixed costs play out?
Meaux: Yeah, so with our drivers, we pay them federal minimum wage. [Currently $7.25 an hour.] Then we give them additional money for gas, use of their personal vehicle, and their phone. We also use a tip credit. If they earn enough gratuities to meet the minimum wage requirement, plus the additional that we give them for reimbursements, then we can lower our commitment to them. So our cost per hour is about $5 per driver.
Our drivers earn on average $12 to $15 an hour. At $15 an hour, even if you subtract the monetary reimbursement, they’re still making $11 to $12 an hour. In the small markets that we serve, it’s a really good wage. That’s an advantage for us because it allows us to do more orders with fewer drivers, keep our costs per delivery down, and then be able to keep our cost to the restaurants down.
In markets where we do have competitors, restaurants will push customers to Waitr because we are charging them less. That’s been a big advantage for us.
ST: There are other delivery companies that have a similar small-market strategy, too, like BiteSquad. Is that your direct competition?
Meaux: We would certainly consider them competitors, but friendly competitors because I know all of those guys and we talk to them regularly. I talk to most of the other players in the industry on a regular basis.
But if you think about it, I mean, all of us are focused on the vast majority of the market that still doesn’t order online. It’s friendly competition because our real competitors are the people who are still using the phone.
ST: Are you profitable yet?
Meaux: On a market-by-market basis, we are in a lot of our markets. We’re not on a company basis because we’re still in growth mode. We grew 230 percent this past quarter over the year-ago quarter.
ST: And when are you projecting that company profitability?
Meaux: Our goal is growth right now. That’s what the market wants to see from us and so we’ve told the market that we’re going to continue to invest and grow and we’ll do it responsibly because we have to at this point.
We haven’t had a lot of capital. So we’ve had to grow responsibly. We’ll continue to do that, but our focus is going to be on growth. When the market tells us [the focus] needs to be on profitability, it’s gonna be on profitability. But right now, there’s so much growth to be had.
ST: Can you talk about your funding up to this point?
Meaux: [Laughs.] Not a lot to talk about there. When I started the company, one of the first things I wanted to do was go out and raise venture capital. But the problem was all the venture capitalists were in Silicon Valley, Austin, New York, and Boston.
So, I started meeting with them. They liked the idea but they were like, well, you’d have to move to one of these centers if we are going to invest because the resources there are better. You’re never going to be able to hire the people you need to hire in Louisiana to develop the software, management ranks, all that stuff.
I was born and raised in Louisiana and then moved away for 20-plus years. Lived in Dallas/Fort Worth, lived in Silicon Valley, lived in London for a while. I didn’t want to leave again. I wanted to build the company in Louisiana, so I didn’t have a choice but to go to local investors.
We raised $27 million in Louisiana to get our company to this point. We did it in small increments. We had some million dollar investors who were really wealthy people, but still Louisiana natives.
ST: How involved is Tilman [Fertitta, the billionaire behind the company that acquired Waitr in May] in the business?
Meaux: Tilman’s got a tremendous amount of restaurant experience, a tremendous amount of business experience, and he’s been a phenomenal sounding board for me from a business perspective. He’s going to remain on our board. If I ever have a question about what to do next, I can pick up the phone and call him because he ran a public company for 17 years. That’s why we did the deal. We did the deal because of Tilman and his experience and what he brings to the table.
ST: And you recently got a large amount of funding from Luxor Capital Group.
Meaux: Right. Luxor has invested in the food delivery space for a number of years now, and they were investors in a lot of the European companies. When I met with them and we started talking, I realized we were missing some of the knowledge that they had on our board. We had the restaurant and the business experience with Tilman and Steve [Scheinthal] and the people that came from our board but we didn’t have the delivery company experience that Luxor brought to the table. They invested in Delivery Hero, Hungry House, Grubhub, Just Eat, and Takeaway, and sat on the board at some of these companies.
Now we are a public company with $215 million on our balance sheet, a plan for growth, and the experienced board to help guide us through that path.
ST: So, when are we going to see Waitr in New York?
Meaux: [Laughs.] So, New York State is a possibility. New York City, that could be out there a ways. We’re going to stay true to who we are. We’re the leading provider in small to medium markets in the Southeastern region and soon, we hope, in the country.
I speak to a lot of investors now and I use this analogy: if you think about the 1960s and ’70s, there was a small company in Bentonville, Arkansas that started taking on small to medium markets. No one thought they could make it work and today they’re one of the largest retailers in the world. [Meaux is referring to Walmart.]
They didn’t go into major markets. They kept going into the small markets and then the success in those smaller markets pulled them into the major markets. I think the same thing is going happen with Waitr.
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