By definition, a Window of Opportunity is a short, often fleeting period of time during which you can take a rare and desired action. Once the window closes, the opportunity may never come again. For Mr Yum cofounder, Kim Teo, a Window of Opportunity presented itself at the height of the COVID pandemic to launch into not just one but two massive international markets — the US and UK. It wasn’t a task for the faint-hearted, but when you’ve built your culture around mantras such as ‘Think 10x’ and ‘Run towards the fire’, it makes perfect sense.
As part of Spark Festival 2021, Kim sat down with AirTree Partner, James Cameron, to chat about their explosive international growth and how they’ve scaled their incredible culture across locations and time zones.
You can watch the conversation here, or read the Q&A below👇
Tell us the founding story of how it all came together in the beginning.
We started with a simple consumer insight: People are visual, they want to see photos of dishes, and menus haven’t changed for hundreds of years. The idea was to make a menu more visual, interesting, and appealing with photos and add language translations and ingredient descriptions.
What we didn’t know about the industry at the time was margins were tough, labour costs were going up and operators were looking for ways to be more efficient. The industry started asking us for ways to pay and order through the menu, and our solution was born.
Mr Yum came out of a startup incubator — Pitchblak — and we hired the first 8 or so team members from that. We’re lucky that 3 out of the 4 cofounders have worked together previously and have some history. We each have a different set of responsibilities:
- Adrian: looks after sales, marketing and brand functions.
- Kerry: is our CXO. Everything customer experience and team related sits with Kez.
- Andrei: is our CTO.
I look after the product and partnership functions of the business, as well as some stuff that I’m not as good at, like finance (lucky we just hired a CFO!).
What’s been the financing journey to date?
At the start of COVID, we were a small business operating out of Melbourne with a team of 12. Now, we have 105 employees, offices in 5 different cities, and we’re in 1,500 locations.
Growing to have global operations in the space of 18 months has posed some challenges. We did our first seed round about six months (May 2019) after we started. The industry led it; our customers wanted to see a product like ours, but we didn’t have the traction to go to a VC. That raise was $1.5m at $5m valuation, all done on SAFE notes. Not having to figure out exact valuations (but having a cap that’s meaningful) was a super-easy way to get started.
When COVID hit in March 2020, it was ten months post our first financing round, and it was lucky that our team was so small, and we weren’t burning through money — probably about $20k-$30k a month at the time. We did another $2.5m round in October 2020 after seeing product-market fit, led by TEN13, who we had known for a little while.
In April 2021, we did a post-seed round with AirTree at $11m. So it took us three rounds to get to this point; it’s not always the cleanest run at the start.
What were things like in the early weeks and months of COVID when you were in a tough spot with the previous business model?
It was pretty tough and emotional. Our whole business model was based on restaurants, pubs and bars being open. If they weren’t open, we wouldn’t make any money.
Our biggest customer at the time asked if we could do a takeout and delivery product because we already did the menus and payment. We only had two developers — Andrei and Tom — and they spent the week in the lead up to the lockdown creating our pickup and delivery product which was live two days into lockdown. We got a lot of brand equity because we quickly pivoted to be there for our customers. The hundreds of locations that already had Mr Yum already could flick the switch and turn on takeout.
I remember listening to podcasts to try and figure out what to do. Everyone said you need to preserve cash and try and extend your runway as much as possible. There was pretty scary rhetoric around how funding would slow down and VCs would deploy less funds.
We presented transparently to the team how much money we had in the bank, how much time that gave us and what our burn looked like. We had maybe 6 or 7 months left of runway for the exact burn of 12 people at the time. We wrote a long letter that said if we all take a 20% salary sacrifice (not a pay cut — salary sacrificing options), we’d extend our runway to 12 months. We incentivised the team to go harder than 20% by doing a bigger discount on the valuation so they could bank a lot of options.
We gave the team metrics, e.g. once we reach our pre-lockdown GMV, we’ll reverse this and lift the request to salary sacrifice. We got there in 6 or 7 weeks, which is mental because we had a different product and offering.
I love that ultra transparency when the chips are down and doing what you said you’re going to do with your employees.
Transparency is a big part of our culture. If we ever feel like we don’t know what to do, the answer is often, “Let’s just tell the team what the data points are and see if they can help us decide”.
Right now, we’re going through a review of our compensation. We don’t have sales commissions at the moment, which is unique as we haven’t found many instances of scaling sales functions without commissions. We’re going through the process of figuring out if we should move to commissions, and if we do, how do we do that and what do targets look like?
We decided to put all the data together, present it to the sales and account management teams, and get them to vote on what they want to do. We think it’s going to come out the way that makes the most sense for the business, but we’re going to give them the numbers; what they would have made, what they could make, and the risks, and then let them decide.
You’ve done a remarkable job of building culture. When you were a small team with just an idea, what were your strategies to bring on the first 10 people and convince them to invest their career capital?
There’s a lot of people out there who are equally as important to the ecosystem as founders themselves. We’d be in so much trouble without the first 10–15 people at Mr Yum. They’re entrepreneurial but don’t necessarily want the risk or to think about cash flow, capital, product-market fit, and all the other things you need to as founders.
We hit up our network; people we’d worked with before or who knew us in some capacity, to convince them to come on our crusade, which at the time seemed like a very risky, very pre-product-market fit idea and concept. When you find the right people, they value the learnings that they’ll have over the next 12 months, whether it’s successful or not.
The other part is finding people in the industry who, for whatever reason, have an emotional connection to the problem you’re solving. If they have that connection, it’s easy to convince them to come in early when other people can’t see the point or purpose of the product yet.
When you’ve got your first 10–15 employees who are true believers, it’s easy to maintain a culture and get everybody excited about the vision. How do you keep the culture strong once you start to scale?
Ironically, I don’t think it has gotten harder. And it’s because you hire professionals to think about and do those things. We invested early (in the context of our journey) in a Head of People — we were about 30–40 people.
Laura, our Head of People, previously worked at Catapult, and she’d seen growth go from 30 to 300. She felt like she wanted to go back to the beginning of that journey again, so Mr Yum was perfect for her.
Laura pushed us to figure out our mantras, which are:
- Here to serve
- Think 10x
- Run towards the fire
- Numbers over hype
The rollout of these was done well — Laura didn’t just say what the mantras are; she found examples of when people had lived them and would constantly communicate and reiterate them. Then she created what we call The Yummies, which are our quarterly awards. We pick a winner for each mantra to remind the team of what they are again and again.
A great people and culture person becomes a filter between you as a founder and the team. Our team often request more communication from the founders. There are times where we think we’ve already covered a certain point, and Laura reminds us that the team loves to hear the same thing consistently and be reminded of the goals, objectives and motion to getting there.
You’ve also been very focused on the mental health of your team. Can you talk to that, especially as we’ve gone through lockdowns and some tough times?
As a Melbourne-based company, it’s been a challenging 18 months. We’re constantly thinking about things we can do or conversations we can have. But at the core of it, we’ve got very open, caring and transparent individuals who want to talk about how they’re working through something. At Mr Yum, we try and normalise these conversations so they can say, “I’m feeling a bit shit, and this may be the reason for it,” and we can keep checking in on how we’re all feeling.
The team can take a mental health day whenever they need it, and we use Frankie Health so that employees can access therapists to chat to, which we pay for.
What was your thought process and plan like for the international expansion?
The reality of being an Australian company is you can’t build a very big business with only local customers and networks. And it’s difficult for a business like Mr Yum to go international without people on the ground.
We were deciding between the US and UK for our international expansion, and we chose LA for a whole bunch of different reasons. Because of COVID, we either had to go for three months or stay in Australia. We applied for an exemption to travel and were lucky that it got approved pretty quickly. We’re lucky that Kerry and Andrei could stay in Australia and continue to build the team there.
We weren’t vaccinated and it seemed like the most insanely ridiculous thing to do — LA was one of the biggest COVID hotspots at the time. Adrian and I booked a one-way ticket and there were 10 people on the flight. We looked at each other and said, “This is either the best thing we’ll ever do or the most ridiculous thing that we’ll ever do”.
Hiring and getting to product-market fit is impossible from afar. We knew that we’d have a much better sense of what the restaurants and cafes were thinking once we got on the ground, as it’s really hard to figure out the operator mindset from afar.
When we first got to LA, we walked around to different restaurants and saw there were a lot of QR codes, but not many ordering and payment products like Mr Yum. Meanwhile, in the UK, we saw some interesting signs of adoption. We started running digital ads on Facebook and Instagram to see if we could get some traction without physically going there [to London]. I remember three nights in a row in LA where Adrian and I woke up because we had a few amazing inbound leads in the UK, all from the ads we were running. Luckily, we had someone on the ground that we were already chatting to and interviewing, and he got started pretty quickly.
We ended up launching LA and London within three weeks of each other. If you’re expanding internationally and you can’t go to a region, send one of your original team members there. Because we couldn’t go to London, we sent Justin, our first non-developer hire. He was there for three months and launched that market with Alex (our first UK hire), who became our conduit in the market and acted like a founder.
When you are setting up shop in another country, what are the logistics and how does it work?
The first thing we did was reach out to a whole bunch of people we knew in Australia to try and connect us with people who had restaurant and tech experience in the US. We met a guy who was the SVP at Toast (an amazing POS and restaurant tech company in the US) in the talent and recruitment function. He gave us a lot of insights into what they did and how they recruited. At the end, he said, “You’ll probably mess it up, so I would recommend that you hire someone in talent very quickly.”
Our first hire in the US was our Head of Talent, and I could not be more grateful that we did that because she has helped us navigate what to do, who to look for and our benefits package. In the US, the employer has to look after medical and dental because the government doesn’t. If you don’t have benefits in your package, then you’re not an attractive employer.
Why do you think Mr Yum broke out in the market when many people were circling this problem and realising there was a change in consumer behaviour?
Having an experimental culture around the product and hiring incredibly entrepreneurial developers and engineers is how we got to where we are.
If Tom and Andrei thought an idea was good they’d be like, “Let’s do it!”. Typically, you hear stories of engineers being cautious, pushing back on timeframes, and building a business case around why they want to build that product. We didn’t have that problem at all — we have a team who wants to do stuff they believe in without over-engineering it. Andrei thinks 10x on me. When we were building five menus at a time, he’d be like, “How do we build 100 menus at a time and then 1,000 at a time?”.
What are you doing to try and level everybody in the team up across the board?
In the last two weeks, we’ve been having conversations with all of our first 20 hires to say this is what our growth looks like in the next six months; think about where you want to fit in, and then we’ll build a team around the things you want to do, and fill in the gaps of the areas that you don’t like.
We’ve cut the org chart about eight times over the past two weeks. We’re trying to find people a role that’s exciting and enough of a growth opportunity so that they stay. We don’t take culture or our lack of churn for granted. Mr Yum is already becoming hot property to poach talent from. Many of our team are getting hit up by recruiters and other startups. So we have to consistently ask ourselves, “Where is this person going to be in 12 months? And how can we make sure there are lots of growth opportunities in front of them?”.
We believe that some people who don’t want to do management are the best people for management. We try to encourage them to give it a crack, knowing that there’s a great support network around them that will help them develop their leadership and perceived lack of management skills.
We’re moving a lot of people around as well, between teams and regions. If someone in sales doesn’t want to do sales leadership, we’ll see where else we can move them in the company. That could be into partnerships, marketing or operations. For the zero to one people who like the start of the journey, taking them out when it gets to 100 people and moving them to a different region is great.
As CEO, where do you see yourself focusing over the next few years?
This is not just a question for me; it’s also a question for our first 10–20 team members. We’re not all going to be the best engineer or sales and marketing person, so where do we fit in this puzzle?
I’ve tried to triple down on my areas of focus. I think my biggest strength is seeing around corners. I have a good instinct for what’s coming, what the competitive landscape will look like, what movements are going to happen and trying to be there way before anyone else.
I’m spending a lot of time thinking about the evolution of our category and industry and trying to gather as many data points as possible to plot out the path to getting there. That’s across products, partnerships and regions.
There are many different parts that I work on, and some i’ll hold onto and others I won’t. If someone comes along that’s better than me at something, I’ll happily move aside.