How Good Eggs came back from the brink–and plans take on Amazon
“Good Eggs first launched in 2011 as a digital version of a farmer’s market, bringing local produce to customers who didn’t have time to shop in person. By 2015, it was struggling. The company had quickly expanded and then crashed badly, closing its locations in New York, Los Angeles, and New Orleans, and laying off 140 workers. But the San Francisco location stayed open, changed leadership, and worked to solve its problems in just one market.
“The investors saw an opportunity for the company to grow, even in the face of Amazon’s purchase of Whole Foods, which now means competing against free grocery delivery for Prime Members in San Francisco. ‘I think there is a type of customer who wants what they stand for related to food to not be from the largest e-commerce provider in the world,’ says Bill Gurley, general partner at Benchmark. ‘I think that Whole Foods is already at a scale that makes some of the local work that Good Eggs does impossible . . . it’s a little counterintuitive, but when you get to where you have 1,000 stores, it’s remarkably inefficient to source locally. You can actually be too big to deliver against that value proposition.’
“After initially expanding too quickly, the company hired a new CEO, Bentley Hall in late 2015, and was able to turn the business around. From 2016 to today, the company’s average order size has increased 21%. The company has grown more than four times, even while competitors like Instacart and Amazon have entered the market. The cost of Good Eggs’ offerings are fairly similar to Whole Foods; eggs and dairy prices are slightly lower. Produce, which Good Eggs says it sources to a higher standard, is 4% higher on average. It declined to share specific numbers, but Hall says that Good Eggs is delivering thousands of grocery orders each day.
“When Hall took over as CEO, he says that the biggest shift the company made was to focus on what customers wanted. The team at Good Eggs started offering more products so that it would be possible for someone to buy a full week’s worth of groceries in one place.”
In the Giraffes of Technology book’s Chapter 3, we wrote about dealing with problems in The Cycle of Falls and Rises so that when you fall (with problems) you are still able to rise again as being positive vs negative. Chapter 6 deals with Blending into Communities that helps companies move forward with customers, and Chapter 1 focuses on The Lookout Post that keeps leaders to look forward in the age of science and technology in a broader vision to keep rising vs. falling more.
Fast Company Link: https://www.fastcompany.com/40554143/how-good-eggs-came-back-from-the-brink-and-plans-take-on-amazon