Jesper Buch: How I delivered profits from takeaways
When Jesper Buch got a midnight craving for pizza, he spotted a gap in the take-away food market. After four years hard work, his company broke even. Soon after, he sold his share of the business for £3m.
Jesper Buch got his business idea from a midnight craving for pizza. In 2000, the Dane now 35 was completing a diplomatic internship in Norway. "I was new in town and didn't know what number to ring to order a takeaway pizza so I looked online." When Buch couldn't find what he wanted he realised there was a "massive gap in the market".
His plan was for a website that would act as a "one-stop-shop". Customers would only have to go to one site for all their takeaway needs. Restaurants, meanwhile, would benefit from extra custom. "It was the perfect business model because I did not need to handle any product I could just charge a commission for every transaction." Buch returned to his native Denmark to set up the site, but he realised he needed "expertise and money". He approached the banks with his business plan and found that "they liked the idea". However, "after the dotcom crash they were giving out thousands rather than millions".
He needed "a top accountant and web developer but didn't have the money to pay a good salary". His solution was to offer equity in his firm. "I would rather own 25% of a great success than 100% of a failure". A lack of money also stopped him from "spending a fortune on internet advertising". His solution was to team up with a dating agency. "Again, I had to offer equity. But it meant that we had instant access to half a million young single people exactly the people who would look for takeaway food online."
His new firm, FoodZoom, began developing its website and signed a deal with Carlsberg. Yet, while he was waiting for the website to come online, "I heard about another group that was about to start the same concept". Buch negotiated a "50:50" merger. "They had a deal with Coca-Cola, so together, I figured, we would be stronger". After a quick poll with users on the dating site, they also decided to use their partners' name Just-Eat.com. Yet by 2003, the merger had gone sour. The new company had "no money" and the partners were "split in our thinking" on key areas such as paying salaries versus offering equity. Buch and his original partners bought out the newcomers and began to "turn the company around". It was not easy. "I was working 70 hour weeks and sleeping on a mattress in the office."
By 2004 Just-Eat was breaking even and in 2005 it made a profit of £100,000. Buch had his eyes on the UK "the biggest takeaway food market in Europe" but he decided to "test the model another time". He introduced Just-Eat in Iceland first. Its success convinced him that it was ready for Britain. Buch decided that the only way he could set up the London office would be to live there. And once he had established a foothold in the UK market, Buch then set up new bases in Holland, Sweden, Iceland and Ireland.
By spring 2008 Just-Eat.com had more than 200 employees in seven different markets. But Buch was ready to move on. "I enjoyed creating and building a company, but the reality of managing it did not appeal to me." He sold his stake for £3m and quit as CEO. Freed from his day job he moved to Spain. But he's not sitting back. His latest website - mentaline.com - helps you find a therapist or 'life coach'.