Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
Ray Reddy is obsessed with milliseconds. The average person might not notice when something is five milliseconds too slow, but it affects peoples’ decisions anyway, he says. The more time we save, the more efficient, the more productive, the happier we are.
So he co-founded a company that allows users to skip lineups for restaurant takeout food. This past January, Ritual launched in Toronto’s King Street West neighbourhood. People can order food or coffee in the area through a smartphone app, using a credit card to pay, then go to the establishment, walk up to the counter and grab their goods without waiting in line.
Today, Ritual’s service is available in seven neighbourhoods in Toronto and two in Chicago, and "tens of thousands" of people use it. The company is also exploring markets on the East Coast of the United States.
According to Ritual’s data, the average office worker spends 45 minutes a week waiting on coffee and lunch.
“The idea at a really high level is, can we make local commerce better if it were way, way faster, and we removed all the friction of waiting and in-store payment?” asks Mr. Reddy, who co-founded Ritual with Robert Kim.
Ritual was designed as a hyper-local service. Mr. Reddy and his team built relationships with vendors, spending time with them to get a sense of how app-requested orders might mess up their workflow.
“We took a lot of care to make sure our first rollouts went really well,” Mr. Reddy says. “It’s a little counterintuitive, but for local, if you want to get really big, I think you have to start really, really small.”
Ritual users pay no extra charges for their food, unlike food-delivery apps. The company instead takes a percentage of the new, incremental revenue it drives.
Mr. Kim and Mr. Reddy are serial entrepreneurs. PushLife Inc., their most recent joint effort, helped people install media libraries onto non-Apple phones. It was acquired by Google in 2011. Their time at Google bestowed them with a deep appreciation for speed in consumer experiences – the power that comes from shaving off milliseconds.
But Ritual’s vendors are becoming more numerous and far-flung by the day. The pair want to emulate their early success without sacrificing the things that made them successful.
It was easy to train merchants and keep track of store hours and menu changes when there were just a few of them next door. But now there are more than 500. Even keeping track of modified holiday hours for long weekends “can be a monumental effort,” says Craig Hunter, Ritual’s general manager. The company does have a “partner portal” that allows merchants to submit changes themselves.
Ritual has many ways to expand: new cities, new neighbourhoods, new merchants, new companies to partner with for perk programs. Mr. Reddy and his colleagues are pushing ahead on all fronts, but they don’t want to sacrifice the experience for anyone.
“It’s an ongoing thing, figuring out how to manage that scale and volume and maintaining really high quality,” Mr. Reddy says.
The Challenge: How can Ritual maintain its service quality as it scales up?
THE EXPERTS WEIGH IN
Alyssa Burkus, founder, Shift Wisdom, a change consulting, training and coaching company, Toronto
The need to recruit quickly to match rapid growth can mean compromising on hiring decisions, but in the long run, it’s worth it to take the time to ensure there’s a strong culture fit with all new hires.
Ritual’s founders need to spend time codifying their business’s culture and clarifying its unique values and behaviours if they want to be able to replicate the experience, for employees as well as for customers, in every location.
Creating a consistent workplace culture is a struggle for many organizations. Growing companies tend to underestimate the need for training and communication. Establishing strong practices for keeping teams connected to the information they need to do their job well, sharing ideas for how to solve issues, and celebrating successes will be needed to keep the level of energy and engagement needed for delivering high quality service.
To use the Ritual system requires some training on the part of vendors, both with how they record the orders coming in and some operations consulting. The problem with that is, the less sophisticated the vendor, the more they stand to gain to work for Ritual and the more it costs Ritual to service that account. Those who are more sophisticated, who have worked out the efficiencies, end up subsidizing the less sophisticated and efficient vendors. If every operation is distinctively different and requires a distinct idiosyncratic approach, then the pricing model has a problem.
I can’t give you an off-the-rack suit but give you the attention of a bespoke tailor. Every time a new menu item is added, somebody has to be dispatched to figure out the logistics of that menu item. Unless they can find some kind of templated format to use, they’re going to have to keep adding people as they add vendors.
Carl Mercier, co-founder and chief executive officer of VarageSale, a virtual garage-sale app that allows users to buy and sell locally in their community, Toronto
As we grew rapidly in the beginning, maintaining quality at mega-scale became the main focus. It forced us to think bigger, and made us realize our status quo actually impeded our ambitions. We built tools around this grander vision, and implemented rigorous processes so we can now scale quickly and easily.
Some questions to consider when thinking big: How can you efficiently handle one million merchants across North America within 12 months? What would you do differently if you could multiply your team by a factor of 10 or 100 times? (It turns out there are cost effective ways of doing this.) What are the things that really matter? What can you outsource, and what can your users help with?
You might also want to ask yourself whether you’re in the productivity business or convenience business. Or even better, ask your users. This could change the way you think about your business and its future.
THREE THINGS THE COMPANY COULD DO NOW
Distill the cause
Whittle down the values and behaviours that create success with their existing vendors to ensure they replicate them as they scale.
Take their time
Scaling up means hiring, but Ritual needs to be patient and carefully find the right fits for their culture.
Assess the price model
If some vendors are more time-consuming than others to service, it may be worth building in additional charges for the attention.
Facing a challenge? If your company could use expert help, please contact us at firstname.lastname@example.org.
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Interviews have been edited and condensed.