He moved to the US with nothing. Now he does $750M ARR. | Mateo Marietti, Founder of CookUnity

I was confident as a second time entrepreneur, I was confident on certain things. I understand the basics of building a team, building a culture, operations. But the part that was very new for me was first, the US market, Second, building a team in a different country, different culture, and with like literally zero credibility because people knew what I built in Argentina, but nobody knew what I built here. And then raising capital, we saw the Product Market fit very obviously because we, those phones, you couldn't even get handled on one person taking the phone calls, right? And then we put like two people and then like again, you'll call and you'll hear like the occupied sound. Like, I think it took us like three, four years to match supply and demand. So like the moment that it felt very special was the first interview that I did with one of these customers that were ordering multiple meals a week. The first time I started conceptualizing the job to be done of meal planning, like, that was like the. I haven't even thought about this. Like this makes sense, but actually our meals are the best for this. How big is this market? What is this time? Like, I, I wanted to like, almost like skate that interview, like, and start making models and research. And so like, what do we have here? That's Product Market Fit.

0:00

Product Market Fit. Product Market Fit. I called it the Product Market Fit question.

1:14

Product Market Fit.

1:18

Product Market Fit. Product Market Fit. Product Market Fit.

1:19

I mean, the name of the show is Product Market Fit.

1:22

Do you think the Product Market Fit show has Product Market Fit? Because if you do, then there's something you just have to do. You have to pick up your phone, you have to leave the show five stars. It lets us reach more founders and it lets us get better guests. Thank you, Matteo. Welcome to the show, man.

1:24

Thank you, Pablo. It's a pleasure to be here with you.

1:41

Well, I'm especially excited to do this one because unlike, you know, most of the, most of the people that I talk to here, typically it's kind of like the first time meeting them. In our case, it's a little different. We were investors at Cooken and Cooking was acquired by cookunity end of 2024. So that's just over a year or so ago. So I, I know a lot more about the story, let's say, than, than many of the others that, that we cover here. And it's been an excellent, excellent ride. I mean, you ended last year at 750 million. Revenue run rate growing 70%, which are massive numbers. And the other thing that's special here is I've actually used Your product. Like, I've tried the food that comes out of cookunity and it is stellar. And I really do think something that, you know, everybody eats and I think this is something that can be absolutely massive. So that is a long intro, much longer than my normal ones. But all that to say, this is a special one for PMF show. Let's start. You know, where we normally start. Like, tell me a little bit. You know you started cookunity about 10 years ago, right? 2015, 2016. Tell me a little bit about what you were doing right before you started, just to kind of set that context.

1:44

Great, thank you for that. And Pablo, thank you for the support as an investor. I'm very glad to be on this journey together and we're just getting started. And also thank you for supporting our community of independent chefs as a customer every week.

2:51

Happy to do it. The food really was, I mean, it's like eating in a restaurant or eating like the best home cooked meals and you don't have to do anything. So it's great.

3:03

So look, it's good to be about 10 years, which is a great moment for reflection for me this year I moved from South America, Argentina, where I'm from, to New York in 2016. So it's going to be 10 years

3:11

this year, which I think you're also the first Argentine that's on the show except me, which I'm on every episode. But in terms of a get and

3:27

what are you doing there? Like you. What's. What's written in your right hand?

3:34

The mate for sure. Every episode.

3:38

Is that a common, A common thing or like a. More like a very generous gesture?

3:40

No, this is, this is every episode. I think I started doing maybe like 50 or 100 episodes ago. Yeah, I'm just like, this is the key.

3:44

I love, I love it. I can, I should tell you though that I don't do caffeine and I tried to do mate because I love the ritual. And a few weeks ago I did for a whole week and I was so pumped with all the mate, so probably too much for me, but I still love it. So coming back to your question, it's going to be 10 years for Cookiti. And that journey obviously was here from day one. So 10 years for me as well. But my journey with food is longer. It's almost 20 years old. And the reason why I say that is because from my point of view, my previous company and cookitty are part of the same journey, even though these companies are completely unrelated. Cap tables, storage teams, and my previous company still exist as a separate entity. When I moved to New York to start cookitty with a relatively clear idea of what we wanted to build, I came to almost as an iteration from my previous company. Right. With all the things that I learned that worked and all the things that didn't work, I thought that we couldn't fix with another company. We need to literally create a new business model. So my previous experience, my previous company that I studied in 2007 and we could touch on this if you're interested, when we talk about per market fit, because in that experience we found per market fit immediately I really felt what pro market fit looked like because we couldn't even. The phones were busy all the time. You couldn't even get the handle on the.

3:51

This is in Argentina.

5:20

In 2007, this is in Argentina. And that company was what we now call cloud kitchens or virtual kitchens. So like some, some of these terminologies to basically say a restaurant without a storefront that does delivery only without an Uber either. Right, without an Uber either. We'll have our own delivery people. But like basically my intuition back then as an older millennial was that my generation will cook less than the previous generations and we'll need a more modern solution. I think that was directionally correct. There was a lot of delivery and delivery only and cloud kitchens happening in the last 20 years. But the main learnings from that business were that people really want selection and customization in full. And it's really hard to scale high quality. So we couldn't quite do the very best version of the customer offering we wanted with that model. And that's why I decided to move to the US to start cooking the.

5:21

It's interesting, John 2007, the club kitchen stuff became most popular like probably 10 plus years after. And your model was what you would bring in the other, like different restaurants and under their own brands, they would cook in your kitchen.

6:19

We had multiple kitchens without a storefront and those kitchens could do more than one cuisine, more than one brand. So customers were ordering from different places without knowing that they were coming from the same kitchen. We also experimented having like putting all those brands together and see if people like to order salads and sushi together. And basically that was the model.

6:32

And how big did this company get by like 2015 or so when you, when you decide to come to New

6:53

York, volume wise, because current revenue highly depends on the currency change, but also because this was mostly coming from Argentina. We have brands and our own, our own operation, our own locations. And franchises of our brands in Argentina, Brazil, Peru and Paraguay. But like the Argentina macroeconomics are not super stable. So the currency revenue will change a lot. But volume wise we had around 600 employees and like similar something like 100,000 deliveries a month, let's say.

6:57

Oh wow. Okay. So I mean is a massive operation. Maybe let's go deeper on your decision to come to New York. That's a big. It's one thing if the company's failing, you want to start over. But you guys, a company that's doing very well, how do you decide to even to come to New York? Like just tell me more about that.

7:29

Yeah, I'm sure that another factor there, if this company in this same moment of progression was in the US would probably have continued pivoting and iterating with that same model. The fact that it was in a different region with a lot of macroeconomic challenges probably was a big factor in deciding to start a new company and move to the US A different market altogether. And I also thought that even though that company was bootstrapped, I started with a co founder and we didn't have investors. I think that this new ambition of cookieuity, creating a completely new business model from scratch will need capital and will need a much longer time horizon. So even though I didn't have experience raising capital myself, I thought that that was kind of a necessary component. And also both the talent that you get in the US and the customer open mindedness, the appetite to try new things and adopt new services. That coffee is more common in the US markets.

7:43

How developed was the Cook Unity idea when you came to the us?

8:40

No, no, I came only to build this. I was a little bit naive in that sense because I realized then obviously everybody outside, at least in the western side of the world, but I was in China a year ago and I talked to a lot of people there. So I guess this also applied to other parts. Obviously a lot of us admire of the US culture and the US dynamics when it comes to entrepreneurship and company building and just the general model of invention and creating value for consumers and as a consequence of that being rewarded. So that for sure I was one of them. And even growing up, a lot of my mentors or inspirations or people I look up to were US based entrepreneurs. And part of the cookie T idea, the model or the two sided marketplace idea was inspired by US based marketplaces like Uber, DoorDash, Airbnb. The part that maybe I was very naive on is obvious from the outside view that US is a great Place for immigrants to come and you have enough energy grid risk appetite, you can build something. But most of the foreign entrepreneurs, immigrant entrepreneurs, have some sort of onboarding experience, study here or working a big company. That is my excuse of why the first two years of cookitti weren't the most successful ones. And it was like we had to push hard to get some traction at the beginning until I understood what was what and how to recruit talent here and all that.

8:43

When you come here, you come here alone. What's step one?

10:18

Step one was the transition out of my previous company, which was already hard. And I'm incredibly proud of my co founders and the team there and the job they've done since I left. Probably even better than the years where I was there as the co founder and CEO. So kudos to them. But as a builder you have to put the title of a CEO just because that's how things work. But you care about building something. You don't care about being the CEO of a company really. I think most of founder CEOs will probably agree with that. Definitely the ones that I talk to. But at some point you need to take on that responsibility. And one of the harder parts is succession and living a sustainable culture and team. So I think step one was that because I really decided to move to the US more in 2014 and I had a great idea and we were thinking with idea in 2014. So the first step was succession and transition.

10:23

And you did what you called your co founder in charge or did you guys hire somebody new?

11:25

I mean in short, we tried to hire a professional CEO. It didn't work. And then my co founder took over and some of the best people that we had already in the team, we ended up empowering them to run their business.

11:28

And then when you come here, do you have like startup capital or is your first step to fundraise to just get some traction?

11:41

We decided to come here and I said we because I came with my wife who is also my co founder in the business. So quick funding story. I started Cookitti with two co founders, Matthias Alucia that in the early stages of business we parted ways and Clara, my wife, former banker, joined full time.

11:47

She was your wife already back then, right? Ten years ago, yes.

12:07

She's an early but late co founder as we said in the business. But we moved together, right. So we said okay, I need you, please join me, let's go all in. We didn't have kids back then, so we were rich in time.

12:09

So it's the two of you. That's the we. But what is your first step? Do you start signing up chefs? Do you start building? Do you, do you fundraise?

12:25

Yeah, that's the part that was a little bit messy that I was referring about before. I was confident as a second time entrepreneur. I was confident on certain things where like hey, I understand the basics of building a team, building a culture, operations, money gets in. No more than that should go out unless you have like some more financing. Like the basics of running a business, marketing consumer consumer satisfaction and promoted fit or those type of frameworks. But the part that was very new for me was first the US market. Second, building a team in a different country, different culture and with literally zero credibility because people knew what I built in Argentina, but nobody knew what I built here. And then raising capital. So you add on top of that that our first intuition of what model we should pick for cookitty because the first intuition was right. There is this two sided marketplace. Can we do for food what already happened in music, in video, in travel,

12:32

between what Chefs and users? That was the idea.

13:37

Yeah. Chefs and users. Which wasn't common back then and still isn't common today. The majority are vertically integrated business. Like Chipotle is a vertical integrated business.

13:39

Yeah. Or you guys see what I'm like doordash ubereuse. But these are like three sided marketplace with like delivery kind of the aggregator.

13:49

Not only there are three sided marketplace. They're not the difference between a doordash and Airbnb. And I'm not saying one is better than the other. One is like Airbnb is the type of marketplace that is aggregating fragmented supply that you cannot find in another way. Right. Like yes, theoretically you can go and knock at the door at the owner of that beach house and say hey,

13:55

it's not realistic, it doesn't happen. Yeah.

14:14

Or the copy action Craig List ads. But that's what I love about marketplaces. Doordash is more like a logistics layer. A very efficient one, a very valuable one. The utility is truly there. But I am a little bit more fascinated and intrigued by the Airbnb type marketplace. Even the Spotify type marketplace. I'm old enough to remember that I used to go with $15 and choose one ban one release. Right. This guy listen. These 15 tracks for the next three months and now you just open Spotify and you listen to whatever you feel like. Right. Or whatever the algorithms feed you now these days. But that's not the state of things in food. You need to again go to Doordash, let's say, you know that one thing at a time, okay, I will pick the sushi place and we pick of this menu. And if you're not satisfied with that next time you can make a different choice. If you're not satisfied with your choice in Spotify, you click a button and you move to the next. And of course there are limitations to that analogy because food is part of the physical realm. But I think that's kind of exciting vision of what we can do with a two sided marketplace. That's why we chose to empower chefs as users instead of employees and giving them the tools and the incentives so they can unlock their full creativity and have all their talents.

14:17

Well, the Airbnb analogy is very compelling because if you think about it, if you want to stay in a bed before Airbnb, you can, but you got to go through a company, you got to go like to a hotel. And yeah, you got booking.com and these other aggregator types that will show you many hotels in one place. But ultimately you got to stay in a hotel if you want to go deeper, like to the long tail like you're mentioning to like the individual house or an individual farming, it just can't be done. Right. And in food it's kind of similar. If you want to eat different food, you can, you can go to a restaurant, you got to go to a company, right? Like you can't go to the chef. I mean some chefs are so famous that they have, you want to eat from that chef, you go to that restaurant. But most of the time you don't actually know who the chef is that's cooking for you. Right. And so what you're doing is you're taking that really long part of that tail and connecting that with users.

15:38

Yeah. And that matters at least for, for some, some, some very meaningful portion of the, of the, of the customers. That will be a superior experience for a bunch of reasons. One is instead of getting like a chain type experience, right, as hotels or QSR food, that comparison, you get a much more personalized one from a real person, from a creator. So the connection is very real. The connection is very meaningful for a lot of people. A lot of our customers, part of what they love about cookitty is like they're connecting with their favorite chefs, they're supporting them. But the other piece is I think in the marketplace, in a developed, mature marketplace, the long tail of supply is what allow customers to truly find the supply that optimally cater for their needs. Right. Instead of like, okay, I Have family with three kids, and I'll book two rooms and try to get those two rooms next to each other in the hotel. We love saunas and we love kind of swimming pools and we love, like this view. And obviously we can do that much better in Airbnb than in hotels.

16:25

So that was your first intuition, which was this marketplace. What was the first step to kind of realize that vision?

17:27

So then we had to make a decision of, okay, in practical terms, we chose to create the first food marketplace or the first food creator marketplace, at least. How do we do it practically? One option could be restaurants that already exist and they have some idle time and chefs already live there. Maybe they can do some extra meals in the idle time. Another option was home kitchens. Those also already exist and there's a lot of talent or maybe there's a lot of talent that they haven't found their way to the marketplace. Ultimately, we researched those two options. We even tested those two options a little bit. But ultimately we decided that we will outgrow if we were successful, we will outgrow both options quickly. None of those pieces of infrastructure will be optimized for. So we decided that we needed to build our own kitchens.

17:32

How quickly was this? Is this a many years decision or a couple months?

18:23

Maybe like half a year. I hope I'm honest with memory tends to.

18:27

And you're doing this still bootstrapped or you'd already raised some money?

18:31

We raised friends and family type round, not because they were literally friends or family, but like an angel round of like relatively close network angels.

18:35

How much did you raise in that first round?

18:45

600,000. Felt like a lot of money back then, especially because I haven't needed to raise money in my previous company. And it felt like an incredible support. I felt very energized to have people believe in our mission, but at the same time, it felt very heavy. One of the things that I have here about our journey is that a few years ago, I was able to go to those people and say, hey, you can already sell your shares if you choose to. Now it's up to you, right? But I obviously understand and I was able to internalize as a founder that they're not doing a favor. It's a smart, intelligent decision. And I know how the BC Power Law work now. But still, as a founder, I think you have a lot of connection, loyalty with the people, especially the first people, but all people, but especially the first ones that believe in your vision. So we raised out money. That wrong. I probably learned the basics about Fundraising, and I'm saying the basics just to understand the minimum, to don't make horrible mistakes after two years. So the first two years were also messy in that sense. That friends and family angel round was pretty good for a year, so we had to raise relatively quickly another round or some sort of extension of that round. And then late 2017, I believe, or early 2018, we had the first Institutional Investor Collaborative fund from New York that invested. And I think only from 2024, we did the classic round for 24 months. These are the milestones I went to check with the round. And we didn't raise much in the last few years because the company was already self funding. But yeah, the first few years, the learning curve of fundraising can be painful.

18:47

And so going back to that, let's say first six month period where you're testing these cooking in the idle time of the restaurants and then the home cooking, how are you testing? I'm just curious, are you actually creating meals? Are you shipping them to users? You're already starting the marketplace, making it happen. What do those tests look like?

20:31

Yeah. So what worked really well for me, my first company. And then of course, we all tend to gravitate towards the playbooks, the things that work for us was very scrappy. And in my personal journey, what happened a lot is because I started relatively young as an entrepreneur at 21, some steps, some decisions happen intuitively. And then I found a framework that validated that intuition. It's not that I learned or read about promote fit or MVPs or lean startup before doing my first competition. Like, I found those frameworks later and then like, I could refine my own approach using those frameworks plus my own experience. So my first company, we did a very, very, very, very, very rough rudimentary mvp, which was literally renting an office, a commercial, like office floor 6B, and bought a residential fridge and hired a swishing master for an event. And then convince that person to come work with us for a month and then put a phone number in a magnet and handle those magnets in a corner of downtown. You get the idea. We saw the Promark fit very obviously because those phones, you couldn't even get handled on one person taking the phone calls. And then we put two people, and then again you will call and you'll hear the occupied sound. And then I think it took us like three, four years to match supply and demand. So that was pretty obvious. So I tried to do the same in the cookie version. So we'll go to a restaurant and say hey, why do you cook like 50 meals for us in this idle time? We'll pick them up, that kind of thing. Go to some home cooks, post on Craig List, say, hey, we're looking for home cooks or maybe professional chefs that cook from their homes, that kind of thing. And we were selling those meals in Seamless, which back in the day was the predominant delivery platform.

20:49

You were like a store on a grubhub like app.

22:44

We opened a store, right? Like a cloud cloud, like a virtual brand. So as Cookie it is our first happy customers. The first group of people that order recurrently were bankers, consultants, lawyers that work late at night and their employers will give them a stipend of $20. I believe was back then.

22:47

But that was a way to hack, kind of go to market. Because go to market on the user side, as you well know, is not easy. Takes a lot of money, a lot of brand building, et cetera. So there's a way to hack that side and just focus on cooking the food.

23:07

And yes, I think I'll be using a lot of language and tone as we made a lot of mistakes in the first years and a lot of things I will do differently, but directionally I will do the same in terms of try to grow as quickly as you can and gather some signal from the market. One of my favorite mottos from the Coinbase CEO Brian is action, produce information, right? Very much default to speed and to test something imperfect in a controlled way. Of course, you don't want to harm the brand. You don't want to, but you want to be able to make conclusions. So it needs to be properly set up. But in that case, like, we wanted quickly to get some feedback from merchants and from customers. So first sign of potential fit was like all these bankers and lawyers and consultants in Manhattan ordering cookinity saying they loved it. The problem is they were really buying it for free, right? Because they had a budget from their employers, so they couldn't order anything.

23:19

How'd you even know who they were? Did you query them or ask them or something?

24:19

Well, back then, these platforms still today, they don't give you the full information, so you don't own the customer data, which is one of the problems to then be vertically integrated in that sense. But it's pretty obvious because you have 20% of your orders going to 383 Madison Avenue, which is great Suisse or was great Swiss. So then you realize then maybe you reach out or I deliver orders myself and say, hey, can I invite you coffee tomorrow? And Then you will have a coffee with the first customer and then those type of things. I think if you're constantly pushing for motion forward is irrelevant. It's secondary the how right. Of course there are better and worse ways to do customer research. There's better and worse ways to ask a customer to have an interview. But the important part is doing is like moving forward and just have that motion constant momentum. So important in startups. So just to wrap up to don't make this part too long. First sign of what felt probably fit was this like bankers, lawyers ordering late at night. I think it was not totally false because they really love the food and it was even though they had free budget, they could order anything and they were coming back to us almost daily. So it did mean that at that price point people were willing to put that money versus other places. Then what I learned in that year something selling the assemblance because Cookitty has a first founding moment in 2016 when I moved from South America to New York. But then it has a second founding moment when we pivot in April 2018 to the subscription service. That word is a little confusing because Spotify is a subscription service and cookie is a subscription service and they couldn't be more different. So I think probably the better term is like weekly meal plan service. You have a weekly service that comes as a habit, comes every week at the same time, starts knowing your preferences over time, that kind of thing.

24:23

And it comes cold. Right. I assume these meals at first they were on demand, hot, ready to eat meals.

26:20

Yes. First they were like warm up.

26:25

Right.

26:27

I mean we try both, we try to warm them up. So we were. I don't know how much of detail and color is fun to share. But the first version, once we chose to have centralized kitchens, which I don't know why I used plural because it was one the kitchen that was sublet in Brooklyn for half of the day. But then what we did is we hire, we rented a bunch of refrigerated buns and we put like six around the city. So we have the meals already pre cooked ready to reheat, ready to get the seamless orders. So then we will pick and pack inside the refrigerated van and then a driver will go to JP Morgan and deliver to five bankers. Then we also try renting commercial spaces like very small micro fulfillments and reheating the food and seeing what difference will that make. Will people be willing to pay more like it more because it was novel and probably like a point of friction for People to receive the food and have to go to a microwave in their offices and do that.

26:28

Yeah, I would think so.

27:31

We tried both. But the key insight we learned in that seamless, long pilot of a year and a half, and this was, in my view, the first sign of probate fit, is that at some point I started seeing that some customers were ordering four to 10 meals at a time, which was very different than the bankers ordering one meal for dinner as they stay longer. And I started seeing this from some bankers, lawyers themselves. And when I talk to them, ask for coffee, they will say, like, oh, no, I take advantage and order a few. And then I don't really consume them in my desk. I take them home, put them in my fridge, and reheat them. We haven't even designed the product for a week. Shelf life or a weekly meal planning type solution. And then we started seeing some families in the Upper west side in Tribeca that also order like, 8, 10. And they will say, like, this is ideal because it tastes like the restaurant food we love, but in a more homemade, healthier version and at a daily price point. And that cuff was our more precise definition of ch to be done. And said, like, okay, we're going to pivot the business. At that point, we were maybe making like 2 million in revenue.

27:32

Okay, and how. When.

28:41

What.

28:42

What year is this? Is like 2017ish that you're starting to see this.

28:42

The first quarter of 2018. So one year and half that you

28:45

see these people ordering like five to 10 meals at a time.

28:48

Yes. And we decided to shut down. Not entirely. And start with zero revenue. I mean, we had some customers that were the ones that were ordering in that fashion. Right. They said, okay, now you can only order in cookie Tacom, minimum order size for meals. And you do order ahead, days ahead.

28:51

I'm really worried because listen, like, you've been listening for, like, what, 10, 20, 30 minutes now. Clearly you like it. And the thing is, the next episode is way better and you're gonna miss it. You're gonna miss it because you're not following the show. So take your phone out and hit that follow button. So I have many questions about this. Obviously, that key insight led to. To the beginning of what Cook Unity is today, the massive business that it is. So maybe just the first very basic question, but, like, people are ordering on Uber Eats doordash all the time, and rarely. I mean, you might order and get some leftovers. Right. But rarely do you order, like five or 10 of it on purpose. What was it about the design of these meals or the setup of them or whatever that some people were even doing that at that point.

29:07

I think that's why it's so important to be out there experimenting and trying as early as possible and iterate as quickly as possible. Because we wouldn't have guessed that I had such a strong bias towards on demand delivery because I did that for 10 years before that. I didn't even know what weekly meal plan was. I didn't even know what subscription was. I haven't even looked at the subscription services back then. Kind of fresh the milk kits even though very different solution because those were delivery ingredients. But I wasn't even thinking in that. It's not that I was considering that as an option. I was completely ignoring that path. So your customers will participate in your promarkit fit discovery. Of course they're the key actor there. So as much as possible you need to put things in front of them. There's a bunch of methodologies to do that. This is one, right? Like an MVP and try to launch products. But you can also do user testing, you can also do customer discoveries. Of course not the same level of signal and such a different version versus my first company, right. So I'm very grateful that our customers told us, hey, this is what we want you to do, guys.

29:47

When you look at those meals that people ordered 10 of back then, was there something in the setup of them? Like people don't order 10 times 10 pizzas, they don't order 10 with Chinese fried rice or whatever and have it for like 10 days. Like what was it about your meals? Do you think now thinking back that some people would have taken those actions?

30:55

I, I think, I think it's pretty straightforward. So again, if we go back of why we started cooking in the first place, right. The, the gap that we saw in the market is that even though there were a ton of food services out there and in simplifying terms, like there's restaurants, there is QSR that is like a fast restaurant. Then there's groceries and then you have like food factories let's say, right? Like some sort of prepared meals version. Customers care about quality, selection, quality, slash flavor selection, price, affordability and convenience. Right? Like time saving, peace of mind. And I was, I will argue in the, in the last 10 years, maybe a little bit more. And it's accelerating nutrition as well, right? Like the wellness, the health food, food as a driver, as a key input for their well being. None of these services, none of these models, restaurants, QSR do all of them well, for customers. So customers are constantly forced to compromise. Right. So either go in and get like frozen meals from whatever is your favorite grocery shop. And of course it's not the highest quality. I won't be super joyful eating every bite. Right. But they're very affordable and convenient. So you always have accepting these trade offs as a consumer, as a food consumer, particularly. So we thought that but with this marketplace model, there was a potential for a flywheel, that the bigger it gets, the better the customer experience, the better the offering for consumers. Inspired of course by the Amazons of the world, the Ubers of the world. I think like back then we all whipped users and said, hey, Uber used to take 10 minutes to arrive, now it's taking two minutes to arrive. Amazon, I don't know who was the early days, but like two days delivery was a big innovation. And then next day delivery. So you get the benefits when you have a flywheel. My previous business, which was more a more traditional model, we didn't see clear benefits of having 20 locations versus two locations. In fact, a lot of people will say your quality is going down as

31:11

you scale because you were the one determining the menus and the quality versus just letting chefs.

33:05

There's no network effects, there's no flywheel. Right. Yeah, you can charge a little bit less. There's some price benefits. Right. Maybe deliveries are a little bit faster the more locations you open, but it doesn't get easier to offer more selection, more options to customers with size in that model. And then it doesn't get necessarily higher quality. In the cookitti model, we scale by adding more small producers, a chef, a restaurant, and they still cook in their artisanal, small batch way. It's not that they need to cook in an industrial way. We just keep up with volume by adding more of them. And adding more of them also means more selection, more options. So now we have more than 25 cuisines in that like seamless pilot. Maybe we had three or four.

33:10

Gotcha. The quality was still similar. It was still kind of the chef

33:55

in the price point.

33:58

In the price point.

33:59

My interpretation of why as your question of why people will order 4, 6, 7 where they don't order that amount of pizzas is because by design we were trying to solve the daily meal. We were trying to solve the gap between people used to cook every meal. People didn't even question that in the 90s, right. Or 80s. Now people are either by choice or by limitation of time, more hectic lifestyles, cooking less. So you needed to have A price point that fits in the budget of real households. And even though we started in New York City, which is a more affluent city, and we started, as I said, with bankers and lawyers, so we started very high, we understood that it needs to be perceived in the minds of the consumer as a daily budget option.

34:00

When you see this happen, and this is obviously a huge insight, how do you make the decision to forego the other 2 million and just go all in on this new opportunity?

34:45

I mean, there's a bunch of criteria there, but fundamentally, the moment we chose to raise money from investors, especially venture capitalists, the deal is we have this very big vision. If you give us capital, some support and some patience, I think we'll do our best. We'll try to build it. The first model, the seamless model, we have learned that there were limitations to it. And as tempting as it was to keep the 2 million while we tried the other part, it is too distracting and we already knew that it couldn't scale. So the moment you find something that feels like a real job to be done, like a meaningful problem to solve, that you have a potential innovation, a potential solution to solve that problem better than anyone else, you need to lean in. You need to like go lean. I don't think especially early on, I will argue, like even today there are like very, very bigger discussions about should we do these new products, should we do this new business which will dilute focus from the core offering. But especially early on, you have, your resources are so limited. We're like mostly the Tuka founders and maybe like to more employees and we need to grow all in.

34:54

So I mean, I fully agree with that mindset. How does going all in on this business look like? What you do lose out on is on the go to market on the user side. Right. Because you were using seamless to effectively put you in front of, you know, potential customers. Now you kind of have to own that part. How do you, how do you solve for that?

36:01

Well, the opportunity that we saw and what made me bullish to that, and this was paired with our first institutional round as well. So this was like part of a plan that we agree with that first institutional investor, more capital came in because we needed to rebuild that. So sometimes you have the chance and sometimes you just don't have a choice. Right. And there are successful businesses that have, for example, in this comparison, kept both businesses for some time because they have to. So I'm not being fundamentalist about it. I'm still directly try to lean in as much as possible. Try to focus as much as possible. But in our case the opportunity that we had was that because the change the insight is people still ordering one meal per day, even if they order every day. It's like the YouTube economics of that are very different than if people order six meals one day. So the udemies were much healthier and much more predictable revenue per user. So what we couldn't do in Seamless or the reason why we chose Seamless also was not only to access a group of customers, but also to avoid the CAC payback less than value CAC game. Right? Not that the game was a possibility for us because we said, okay, I can predict my lifetime value better and I believe I have a more substantial lifetime value in this meal plan behavior than the previous one. And also the unit families are healthier. So for example, Cookitti had around two months payback since that moment. We were able to keep it around two months payback since 2018. So that is a very healthy self funding machine for growth.

36:17

How much did you raise in that round? In the pivot round it was some

37:46

number between 1.5 and 2 million.

37:50

Tell me a little bit then about growing to that first million or so in ARR. Like what was unit economics on paper made more sense. What channels did you end up using to get users?

37:52

And then I will connect with what I think is the missing piece of the story of per market fit for us that happened with COVID So now we are in Q2 2018, we have much more understanding of what customers care about this, what is the exact problem they're trying to solve and what I did for around two years until Covid happened in New York in March 2020 is trying to get to as many of those type of customers as possible, right? So for example, families in the Upper west and I met with as many as I could, right? I went to their houses, I had coffee there, helped babysit their babies while they were sharing feedback and everything in between. We still have customers from those days. Those insights were valuable to go deeper and deeper and not only understand these chop to be done as I defined before, but also understand how did you find us? What were you doing? What were you doing before? If Cookie no longer exists, what happened later? I'm sure this was mentioned in your podcast because of the obsession around per market fit, but around this time I don't remember when this came exactly. There was a blog post from. There's an email service called Superhuman.

38:03

The Superhuman. Yeah, yeah, of course, of course. Yeah, well. And you want that 40%, like, very disappointed.

39:15

Yeah. I don't remember exactly when that was, but like, Rahul, articulate that very nicely. I have already read the original 40% rule in that book, Growth Hacking. I forgot the name of the author now.

39:21

Yeah. Sean Ellis, who was on the show as well. Yeah.

39:36

Yes. So I already used it myself, but I think Rahul articulated best than anybody else. What the aha moment of that made me realize is like, okay, the key part is ignoring the people that are somewhat happy with your product. So it's almost like the big decision was cutting from seamless and moving to this. But then even within that, we were trying to get as narrowly focused as possible. So we did Farmer's Market, for example. We would join Farmer's Market in these different neighborhoods in Manhattan and have our own stand, even though we weren't offering anything from farmers. Exactly. These are people that care about the integrity of the food, that are willing to put a little more time, a little bit more money. They care about the stories. So that's an example. We did other things like Facebook, groups of moms. We did a lot of things. And we also were learning the basics of direct response advertising, like meta, Facebook back then, direct mail, those things. The interesting piece, I think until from that moment 18 months, if we look at the chart, it will look up and to the right. No big, big events to share.

39:38

And all still in the one location. All still kind of in New York.

40:46

All New York. Yes, all New York still. And then the next big moment for the company is we're getting slightly better. Right. Every month learning a little bit more. I think by Q1, 2020, we're doing maybe 5 million revenue, which wasn't top one percentile, but it was like, okay, we're competing. We're growing three times per year. We're in the ranges of. Of what you want to see to stay alive. And another framework that I love is from Paul Graham. Right. The stay alive, the fundable. What is exactly how he.

40:49

Is it like default alive.

41:21

You're talking about default alive or default fundable, right?

41:23

Yes.

41:26

And we were like, in that default fundable level, at least. At least with the rules of pre2021 correction reckoning when capital was almost free. But basically the next inflection point happened in Covid. People will assume in our business that Covid created a spike in demand for us. The reality is that it didn't happen because nobody knew us. Our awareness and top of mind was close to zero. Yes. Our customers ordered a little bit more, increased their Order rates, et cetera. We were on the lucky side of businesses, if that term is allowed. But the interesting part for us, and maybe what I didn't dig yet, is today we give the. Is a platform where many, and soon, probably most of the best chefs in America have offered their creations.

41:26

There's how many chefs now? 150.

42:14

150 something? 170. We had, like, Marcus Amelson, Eina, Dan, Moni, Rick Bailey, Scott, Cora. Like so many. Like, the list is very long. And 26 the chefs joining that we will announce soon is incredible. This feels such a. Such a. Like, really spoiled to be able to get food from these people, like, on a Tuesday lunch. But back then, if we're talking like the 2018, 2020 moment of our journey, there were, like, no famous chefs in the platform. There were, like, all what I consider equally talented and passionate, but they were all the type of seller that there were professional chefs in the majority. There were, like, some amateur cooks that wanted to do this as a living, and this was a platform that allowed them to. To take that risk. But they work as number two in some of the restaurants that we love. But they weren't behind in the basement, in the kitchen, right? They're behind the.

42:16

They're unknown.

43:08

And that was enough to make amazing meals, but not so much for marketing. Covid happened, and I was, like, knocking at the door of our favorite restaurants in New York and trying to convince them to join. They was like, oh, cute idea. Maybe next year I'm opening a restaurant. Thank you. So even though we had permarket feed with chefs, we had permagret feed with one segment of chefs, and that segment was great at creating and producing meals, but not at engaging audiences and doing marketing, which was another important piece of the puzzle. So Covid came. One, two, three months passed. Not a big change on the demand side. Like, people order a little bit more, a little bit more often, a little more meals. But the big change was when a few months after chefs that before were saying, cute idea, but too busy. Maybe next year now, I said, hey, I want to try it. I wanted. I'm ready to try. I have the time. My restaurant is closed. Either on board or we need another running stream. Of course, this was a very serious situation in New York, where we were based back then. We haven't expanded to other cities then. I felt like that was a moment designed for us in the sense that nobody will have chosen being in that situation. But having that opportunity, to me, was almost a calling. Okay, we're ready for this, this one was what we wanted from day one. This opportunity, we won't mess it up. We won't miss this opportunity. So the chefs were gracious to give us a chance to try something new. I think there was a lot of experimentation in food models during COVID in some way. I'm a little bit disappointed that some of those experiments didn't develop much further. Cooking classes and other things. So maybe Kukita can bring some of those. Some of those were great ideas. And maybe another angle. I don't know if any of your guests or you have thought about this, but. But I think most startups are not enough, are not big enough, are not meant to be standalone businesses, but more like a feature or a pro in a bigger business. Right. And as amazing as an M and A as an exit is and like super admirable, the reality is that when you do an M and A, that's what it means basically. Right. Like that your business will become a product or a feature of a bigger business. So I think like we can do some of those ideas as features or products of Cookitti. But the big difference was when some of the best chefs in New York joined our platform and then we had all the media in New York talking about Cookie T as the new Spotify for food and doing articles about these chefs.

43:09

Yeah, that's my key question when they join. Obviously now you have a brand name chef on the platform, but what is it that gets the message out? Is it those chefs posting? Is it just now you get crazy priority about it? Do you change your ads to now just highlight those shafts? Like what is the messaging part of that equation that lets everybody know that Cook Unity exists?

45:36

That was clearly or mostly at least a PR led phase for our growth. And even though we have a lot of PR after and let's say that that was like Q2 2020 to like mid 26. That was a very low marketing spend era and a very fast growth era. Mostly driven by sellers, mostly driven by PR until.

45:57

Sorry, you said mid-2020. Till when?

46:19

2021. Sorry, mid-2021.

46:21

And that's. Is that when you want. Because now you cover the entire United States and actually some of Canada as well. When did you expand from one city to the rest of the country?

46:23

Yeah, I think it sounds like this is also how you like to dissect businesses and the journey as a set of steps. I like to think about craft startups also almost as video games. Not. Not in a hopefully immature or irresponsible way, but there's a way to make it a bit lighter, right. And make it a little more fun. And sometimes you just need to get to the next level, right? You don't need to do everything perfect or nail everything right now. Just need to nail certain milestones, certain parts of this level to get to the next level. So in that case, for us, my list of things I would like to do or things I knew the business still had to develop was gigantic. But what we really thought was necessary next was to prove that this model could exist in other regions apart from New York, because there was a lot of skepticism. Oh, maybe this works only in New York, because New York has the restaurants and all the culture around food. But second, and more importantly, is as nice as this PR led bump was and seeing the sellers promote cook unity, go to pr media events, TV shows with the cookuity bar. There's a limit of how much you can rely on PR to grow your business. It's not as systematic, as predictable, scalable. So to truly be able to do payment acquisition, well, we had to be nationwide. It was really hard back then 2021 to be efficient in Facebook, only in a city. So we raised our Series B back then, led by Insight Partners. That was a 47 million round, which is like 40% of all we raise in total since inception, even up to this day. So very meaningful inflation point for us. And the mandate was replicate around the country, this model.

46:32

And how fast did you grow between kind of 2020 and 2021, like you mentioned, you were at 5 million or so at the beginning. 10x 10x in a year?

48:09

No, 10x in. So end of 29, we were doing 4 million.

48:18

End of 2019.

48:23

Yes, 2019. Sorry. And the round the series B was in Q2, let's say May, June 2021. Those year and a half have 10x.

48:24

Wow, that's crazy. That's. That is clear primary fit.

48:35

We had already open LA back then. It was only open for a few months. We wanted to prove that this could work in our markets to do the round. Maybe one of those kind of very real stories of building a company that are not the sexiest or like where everything worked perfectly. I have made a mistake. Or maybe not the mistake, but. But definitely the execution wasn't good enough. In 2018 when we raised our first institutional money, we opened LA in that period before that and Covid and we opened LA with the same approach. I opened my first company, very scrappy, MVP type thing. Three months later I shut it down, came back to New York, concentrated Our funds. I realized I had a plan that was like if everything was perfect plan, the plan didn't allow for any temporary bump or iterations or we need six months to figure this out. And that's obviously not smart, not cautious enough. So we shot the MLA and in 2031 I thought that to do the run at the right terms with a great investor, we had to show another market that was working. And this might be a little bit counterintuitive because hey, you already did it, it didn't work. So what are you iterating on exactly? You should do something different, you should open it up, different city, you should do it differently. But I really thought, and this is where the founders need to have intuition about their own interpretation of data. There's a ton of data, data quantity, quantitative. And ultimately you need to make your own interpretation. And that interpretation will include intuition. It's very rare when the data is so obvious that everyone will agree on what we should do next. So my intuition was it was mostly execution, like the hypothesis still makes sense. And we launched LA and in three, four months it was like absolutely firing. And with that we did the csb and then with that we started opening more markets.

48:39

Was there. I'm sure when you talk about execution there's probably a bunch of little things, but was there in particular any big things that you remember that you did differently the second time around that had a big impact in la?

50:29

Yes, very different. And of course this is a mix of like you always have a strategy risk and execution risk. And in the LA1 attempt one and LA attempt number two, there was like improvements in strategy and improvements in execution. The first la, I massively underestimated how important was which chefs would choose. And you can also use chef as a proxy for quality and a proxy for cuisines and diets. Right. It wasn't like super thoughtful, super sophisticated how we chose what cuisines we need to lunch with, etc. And also because back then we only had like the non famous chefs segment, the up and comer, or entrepreneurs, first time entrepreneurs as we call them. When we launch again in 2021, some famous chefs already were willing to join. So the selection was much larger, much better, matching the demand. In la we research much better. And then the theme, the execution, everything was just more polished.

50:39

Perfect. Well, listen Matteo, let's stop right there and I'll ask the three questions. We always end on the first one and I'm curious because all the different changes that happened that led to what cookunity is today, but when was the moment when you personally felt like you'd found product market fit.

51:40

I think that for me, what I remember as the moment that it felt very special was the first interview that I did with one of these customers that were ordering multiple meals a week through Seamless. The first time I started conceptualizing the job to be done of meal planning, that was like, the. I haven't even thought about this. Like, this makes sense, but actually, our meals are the best for this. Like, oh, shoot. Like, how big is this market? What is this time? Like, I wanted to, like, almost, like, skate that interview, like, and start making models and research. And so, like, what do we have here? And that was, like, the moment I felt that we have found something. And by the way, that lady of that first interview still is a customer today. And every, like, two months or so, I ask her, our customer support team, like, is she still subscribed? Like, yes. And they talk like, once a year, I send her a letter or something. Makes me so happy. And recently she also told me that she lost, like, 40 pounds, 30 pounds eating kokiti over the years.

51:54

And then was there ever a period, especially in those first few years or maybe during COVID or whenever it might have been, where you thought things wouldn't work out and maybe this whole idea of cookunity could fail?

52:52

I mean, we need another hour. Because as I said at the beginning, our first two years were very messy. So we almost run out of money so many times. In the first two years, there were, like, several rounds of capital that we got there with very few months left. And there was one, the last before COVID So Even in the 2018, 2020 range, the business performance was already kind of up and to the right. And we didn't have any extraordinary, outside the company of common challenges that a series a company will have or seed company will have. It was very hard to raise money because one thing that happened in our journey is in the years that we've been building coogunity, there have been very big rounds for food companies. And so there has been clear moments of hype and clear moments of skepticism, right? So this was one of those valleys of skepticisms and despairing, like, fully scuffed doom. And there's no opportunity for innovation and those kind of things. So it was really hard to raise money to the point that I had to put my own money to keep the company going for, like, two, three months. And when we get the commitment from this investor, we were like, minus three months of Runway, right? So that was the last time, I thought maybe we don't make it. From that moment forward it's only a matter of how big this can become and what are the right strategic choices that we need to make to maximize that chance.

53:03

And last question, what would be like your number one piece of advice for an early stage founder that's looking for product market fit?

54:29

If I had to say one thing that is a meta principle in the pre product fit phase is what we mentioned before about this bias to action produce information and the default alive or default fundable. Right. I think there has been a lot of healthy correction, but we still have some of the bad habits from the free capital era, the SERP era. There has been cases that proved me wrong. But generally speaking, you cannot brute force with capital. Your pre product fit phase, you need time to go and figure out you and yourself and your team. You might need to pivot so many times and you have the energy to grow in that discovery. You'll likely find it some amazing companies find it in a very different place than they started. Like we had a very meaningful pivot ourselves and maybe we will come back to on demand one day. It's part of our ambition. But you need to be very open minded and you need to be like low ego about it. But the conditions for that is you need to be doing things and you need to don't die. And the don't die part is such an important part of any advice you need to really maximize your chances. Just don't die.

54:35

I like that. Just do things and don't die. It's a good, it's a good way to leave it. Well, Mateo, thanks so much for, for jumping on the show, man. It's been, it's been great to have him.

55:47

I really enjoy it. Thank you.

55:58

Wow, what an episode. You're probably in awe. You're in absolute shock. You're like that helped me so much. So guess what? Now it's your turn to help help someone else. Share the episode in the WhatsApp group you have with founders. Share it on that Slack channel, send it to your founder friends and help them out. Trust me, they will love you for it.

56:00