Think at London Business School
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Founded in Berlin in November 2011 with backing from legendary German startup incubator Rocket Internet, HelloFresh was one of the first movers in the home meal-kit sector. Soon after launch, however, serious competitive threats emerged nationally and globally, and over the next half a dozen years the industry became a veritable battlefield as more and more venture capitalists pumped ever more funding into the sector, launching over 100 competing startups that all offered some variation of the home-cooked meal assembled from a kit.
But, in the space of six years, HelloFresh had come to dominate the sector, becoming the market leader in every country where it operated (it had offices in New York, Berlin, London, Amsterdam, Sydney, Toronto, Auckland, Paris and Copenhagen) and going public on the Frankfurt Stock Exchange in November 2017.
Today it is the most popular meal-kit company in the world; the undisputed global leader that last year supplied more than 600 million meals to 5.3 million active customers worldwide and netted revenues of €3.75 billion.
Given its powerful backing and the pedigree of its co-founders, one may be tempted to assume the journey was relatively plain sailing. It’s an assumption that Thomas Griesel, one of those co-founders, is quick to reject: “HelloFresh was definitely not an overnight success. It was not as if we started the business and had thousands of customers signing up for the service. In the early days we had a bell in the office which we would ring every time a customer signed up. Unfortunately,” he adds with an easy laugh, “it was a very quiet office!”
So, what differentiated HelloFresh in such a competitive field? Underlying it all, it seems, was an unshakeable belief in the value of data that he shares with co-founder Dominik Richter: “The approach we have is to be extremely data-driven. The way we like to operate is to start with a hypothesis, get a solution out there as quick as possible, see what the results are, what customer feedback is in a very quantitative way, react to that, improve it and test it again, and iterate very, very quickly,” (he lays even more stress on the second “quickly”), “because we believe that is the best way of finding solutions.”
It clearly proved a winning formula, and not merely because it meant HelloFresh was able to get a more robust, better-tested product to market quicker than its rivals, but because it helped the founders avoid many of the problems that can bedevil startups: “Another reason for that approach is that it is the least opinionated [subjective] way do it, so it also helps avoiding a lot of conflict that you typically have in an organisation.”
The data-driven approach was so comprehensive that it quickly became the ‘recipe’ for the startup’s entire business strategy: data is collated and interrogated to identify the target customer, inform and refine the marketing effort, improve recipes, broaden the product range, and expand to new demographies and territories.
If that sounds like a classic consulting-cum-business-school approach, in fact it owes more to what the founders learnt in their first year as a startup: “It was definitely tough and forced us to work in a particular way. A lot of things simply weren’t working out, so we were forced to test a lot of things and use a heavily iterative approach, to improve in relatively small and incremental steps, see the results we were getting, and keep improving based on them. That came to a certain extent from consulting, because in consulting you are taught to be data-driven – working with data is part of the ‘thought school’. But, really, the more relevant part was the first year at HelloFresh.”
"In the early days we had a bell in the office which we would ring every time a customer signed up. Unfortunately, it was a very quiet office!"
What did come from business school – Griesel completed a Masters in Management at LBS in 2010 – was a truly global awareness: “One of the things that I found really impressive about my first week at LBS was actually seeing how diverse my class was and how diverse the background of people in the programme was, in terms of where they came from, previous experience, what they wanted to do in terms of career, and so on. Finding a place in that programme and adjusting to that environment and learning how to work together on projects and in study groups was something that I still benefit from today.”
Its global environment and reach were the main reasons Griesel chose LBS to launch his entrepreneurial career. He says, “The thing that really sets LBS apart is how international the school is. It’s pretty much unrivalled compared to other schools out there.”
Given that he is responsible today for all the company’s activities outside the US, including markets in New Zealand, Australia, Europe and Canada, it was to prove an invaluable foundation: “HelloFresh is a super-international company and we are active in many different markets. In our Berlin headquarters we have people from 90 different nationalities, so being able to adjust your style and to understand how people from different backgrounds work and how we can all work together as a team is incredibly valuable.”
Another key classroom takeaway was the value of perspective-taking: “LBS definitely taught me to think about other angles and other perspectives – not to approach a problem in a one-dimensional way, but to take a step back and take the time to think about how other people might perceive a situation. What might other potential solutions to a problem look like? That is a really important ability and something I use on a day-to-day basis when it comes to approaching decision-making and considering how to tackle problems.”
The global Covid pandemic has greatly accelerated HelloFresh’s growth. As of 2021, the company is active in 14 countries, operates four brands and its share price has tripled in the past 12 months. Does that level of success incline Griesel to want to try his hand at something new, perhaps by repeating the trick in a completely different sector? “No,” he answers emphatically. “Never say never, but I definitely have no plans in that direction. For me, it’s about continuing to grow the business – there are so many exciting things on the agenda, whether it’s launching new verticals or launching in new geographies.
“There is a lot of exciting stuff ahead,” he adds, warming to his theme, “so I have no plans to leave HelloFresh at all.”
Speed. Move quickly – speed is something that a lot of people underestimate and it makes a huge difference. The best companies are not necessarily the ones that find the best solutions. You can invest a lot of time and energy in finding the best solution possible, but often companies that have a solution that is 90% or 95% as good but who are able to roll it out faster will win out. The most successful entrepreneurs I know are people who have a very agile and fast pace of working and who create organisations that mirror that philosophy.
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