If you’re looking to expand your business south of the border, you hopefully made that decision early on.
If you didn’t, you probably should have.
That’s the main piece of advice from Toronto young professional Craig Hunter, who recently joined Ritual as General Manager. Hunter was previously the CEO at Bitmaker Labs; before that, he was on the team that helped launch Uber in Canada.
So he knows a thing or two about the tech world.
The massively growing Ritual – which allows users to order and pay for things like lunch and coffee mobily before pick-up – recently ventured south of the border, setting up shop in Chicago.
The move comes after a hugely successful debut in Toronto, so we sat down with Craig to find out what other Canadian businesses should know before they think of taking their talents to the U.S.
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What inspired your recent move to Ritual?
For me personally, I have known some of the investors at ritual for a long time. We actually launched Uber Canada out of the same office; so I’ve been keeping tabs on them since day one. I was an early beta tester of it and stayed in touch. Seeing how quickly things were growing really reminded me of Uber’s early growth path, and I was personally chomping at the bit to get back with a fast-paced tech company. We started meeting and chatting, and the next thing I knew I was joining the team.
What are the biggest misconceptions about taking a business south of the border?
Businesses like ours are local marketplace businesses, so you really need to look at things on less of a country level and more on a city level. Know very specifically where you want to go. If you’re looking to build a meaningful, large company, you need to be thinking international from day one. That typically means the US as step two because it’s a huge market for technology companies and apps. Think about the move from day one as opposed to making this decision later. It’s kind of an all or nothing thing, and something you decide really early.
What barriers may hold people back?
I think being Canadians, people just think Canada first because it’s what we know, but I think the amazing thing about running a software or a tech company is that – aside from some nitty gritty business-type things – crossing borders can be less work than it sounds as you’re able to reach people without needing to set up too much infrastructure in other locations. Testing out new markets isn’t that tough, so it’s definitely worth a try. If your business isn’t going to work in Canada, though, that’s another thing. Find the demand before you set up there, and go with a really low-touch model. For us, we knew the US was somewhere we knew we wanted to go early on; we even considered starting there. From that perspective, it was a really obvious choice to launch our second city there.
What kind of research went in to determining the city you wanted to open up shop in?
Chicago is our first city; it’s obviously an amazing food hub. Consumers are used to food apps there – whether it’s old-school takeout or delivery, trialing in a app-savvy market seemed like a good test. Chicago is also very similar to Toronto. We think hyper-local; we don’t launch by city, we launch by neighbourhood. Our first in Toronto was King West, so when we were looking at Chicago, we found the perfect neighborhood in River North. It’s a lookalike type neighborhood to King West, with a lot of parallels. We took what worked in Toronto and applied it there. We launched there to start, but now we are in several neighborhoods.
What were the biggest challenges?
One of them would be the scale. We’re growing crazy, crazy, fast. We have over 500 merchants, over 30,000 Menu items, and somewhere around 10,000 employees who are working at these places that need to understand what Ritual is, how it works, and how to interact with Ritual customers. Add in that it’s a high turnover industry and you’ve got your work cut out for you. It’s just scale; it’s about making sure that everyone’s providing really quality service, that it’s consistent, that everybody is informed, and that things run smoothly. Things like prices, seasonal items, and specials on a menu change, so we have some really good processes to double and triple check these things and update them in real-time. It’s not just one-off, but needs constant maintenance with all the merchants in the two cities.
What’s been the greatest learning experience?
The US has a huge appetite for apps like this; it’s something that does well there. The local merchants and small business owners are extremely keen about what we’re doing. We’re helping them discover money that’s left on the table, while attracting new customers through technology. They are super keen because it helps service customers better by giving them a better experience. When they heard about our model, they were all extremely excited and it grew faster and quicker there than when we first launched here. Now both cities are taking off and it’s all about hanging on to the rocket ship.
How do you know when it’s the right time to venture into the US?
Don’t do it right away, you need to do it thoughtfully. We’ve grown really fast and are now in eight Toronto neighbourhoods, but each one is like launching a new world. You get good at matching the needs of customers and vendors and figuring out what works and doesn’t.
You build up a team and a playbook so you have people who have done it before and systematize as much of the journey as you can. Once you feel comfortable with what you have as a process and playbook, then you can think about expanding beyond existing borders and reaching a bigger target. Operationally nailing your processes and playbook and making sure it’s running well in one place before you start stretching yourself thin across others is so important. Make sure you have the operational capacity, solid playbook, and ways to measure success.
Is it important to have a physical presence in the US?
We do set up people locally in permanent positions, so we have an office and a team in Chicago. Granted, it’s smaller than our headquarters, but we think it’s important to invest in the local city. There are a lot of nuances to know, from restaurants, to people who are living there, and being able to meet with merchants face to face is very important in our business. While you don’t need to have a massive office and infrastructure and expenses, we definitely think it’s important to have boots on the ground to keep things running well.
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