You'd think it's a simple concept. You get hungry, you call, they answer, you order and an hour or so later, you have food. But there is so much more to it than that. There's an integrated web, chat platform, phone and fax system, a scanning system to monitor pick-up times. They've even implemented a quality control program that involves secret shoppers armed with hidden cameras! We're not making this stuff up! And then there is Mark Secchia, the man who put it all in motion 13 years ago. We caught up with Secchia at Sherpa's base camp on Xiangyang Lu to learn more about the man behind the brand.
Mark Secchia: God, I wish I still had the original business plan around! When we launched, all the couriers were on bicycles. The delivery box was made of wood. We didn't have uniforms, we had baseball caps. Of our first four couriers, one was a girl, Candy. We were in my friend Tony's office. He has a cleaning company and they finished around 5.30pm. So we would wait outside his office for all of his staff to leave and then come in and use all his computers. I would photocopy all the menus and stand outside major buildings, Plaza 66 and the Portman, and just handing them out asking people to try us.
M.S.: It was not so much the obstacle as it was the solution to the obstacle. The obstacle itself was registering the business. There have always been four ways to launch a business in China: high-end Western lawyers, mid-range Malaysian or Hong Kong lawyers, local lawyers or just do it yourself. We chose to do it ourselves. At CEIBS [China Europe International Business School], I was the co-founder of the Entrepreneur Club and I went to two fellow members with my idea. I had the money, but I needed help. I put the business in one of their names. It's much more efficient to run a Chinese company than a Western company. It's cheaper. There was a three-month long internship at CEIBS where we're supposed to go work for a company. But we decided to build our own company and I paid them a salary during that time… I'm really lucky I had some local friends I could lean on.
M.S.: I have very little pity for those guys. If you remove the incentive for someone to take a business from you, they won’t take it. So many foreign entrepreneurs think along the lines of, "Seven years ago my partners signed this contract and therefore they have to live by this contract." Well, that contract was written when you were a 5000rmb-a-month business. Now you're doing a million a year. Make a new contract. Your partner's sitting on the side going, "Oh great! I'm going to get a 1200rmb management fee while this guy's making 30,000rmb in net profits." What do you think he's going to do? So you have to have some perspective about it.
M.S.: Foreigners can get their heads blown up being here. Whether it's some girl in a bar saying, "Oh, you're so pretty, you're so handsome" as they fall in love with the passport blue of your eyes, or if it's that the culture here is very respectful. You know, privately they'll make fun of you, but in front of you they'll be very deferential. So you get someone who, back home, never did much more than be a back-up point guard for his high school basketball team and all of a sudden over here, he’s able to bat two levels above the girls he was able to date back home and you start thinking you can do things you can't.
M.S.: Oh, certainly! Right now! I mean look at this. If you put my business in New York, I would die. I'm not aggressive enough. I'm not intelligent enough. I'm not driven enough... Look at all this crap [pointing at a gallery of framed newspaper and magazine clippings on his wall]. I'm a food delivery company. I've got a couple of guys on mopeds and some people answering phones. That's all we are. But, how does your head not get huge? I mean China Daily, Shanghai Daily, ICS. All this press and everything. But I go home and it's kind of my wife's job to put me back in my place.
M.S.: Our biggest problem has always been our growth. We can't keep pace with it. We're always running out of office space, or phone lines, or training, call center staff, or couriers. The competition that we have, from our end, it's been irrelevant. There were 3000 foreigners in Shanghai when I started the business, 30,000 when I started to get profitable, 300,000 now! Right now, we're short 30 couriers. By 7.30 at night we're already telling people that there are delivery delays. So it doesn't really matter to us that there is competition out there right now. We can't fully satisfy the market.
M.S.: Well, we don't really do that much data mining, but one time we tried to train our call center staff on how to understand different accents. We listened to 1000 random calls and documented what we thought the accents were. Americans were the biggest...
M.S.: Haha! We don't keep tabs on things like that. But I can tell you that we have a blacklist. There are over 50 customers on it, but I'd say that 30 of them have probably already moved out of Shanghai.
M.S.: Oh, that guy wasn't even blacklisted. That was random. That got on the web because of a friend of mine named Jeremy Goldkorn, who runs a blog called danwei.org. One night we were hanging out and I was like, "Dude, listen to this call we just got!" And he asked me to email it to him so he could post it on his blog. I didn't think it would go mainstream, but somebody at Shanghaiist picked it up and I felt awful about that. That guy's not blacklisted; he was fine. To get blacklisted you've gotta do a lot worse than that. And you've gotta do it twice. You don't get blacklisted for one offense.
M.S.: There was an alcoholic American who wanted a fight. Sober, he was the nicest guy in the world; he would apologize for everything he did. He's probably just like a husband who beats his wife. But as soon as he got drunk, and, generally, that was by the time his pizza arrived, he would get in a fight with the courier.
M.S.: Yes. Physically get in a fight. And we have a couple of couriers from Henan. You don't mess with guys from Henan. So the courier got there and there were too many pepperonis on his pizza. The courier called back to the office, got the call center on the line and explained. Then he hands the phone to the customer. The call center girl apologizes and says, "Just keep the pizza for free and we'll get you a new one with less pepperoni." And he took the phone and he threw it against the wall. So the courier turns around to leave and the customer tackled him. He ripped his hair, threw his glasses against the wall, just got really violent with him. So that courier went back to our center and grabbed three or four of his Henan friends and they were on their way back to the customer's place. Fortunately, we were able to get the police there in time to defuse the situation. All the food companies in town eventually banned him. The boss of New York Style Pizza knows him, Melrose's boss knows him. Banned! Can't order from anyone. Including us.
But that's just an outlier. We're doing 2000 deliveries a day. That’s over 600,000 per year. We've probably averaged 200,000 deliveries a year for 10 years. That's about 2 million deliveries. You're gonna get weird stuff like that. But, I guess a friendlier way of looking at the matter is that it has to do with the stress of living here. You know, it just gets to people.
M.S.: Someone was doing a scavenger hunt in Shanghai. You had to go through all of these hoops, and one of them was to call us up and order a bottle of vodka and a condom. We don't offer condoms, so you had to try and talk the girl at the call center into doing this. Meanwhile in the background there was someone making sex noises. So we had, like, nine calls in a night with "Uh! Uh! Oh! Oh!" in the background while some drunk guy's going, "Uh... I'm gonna need a bottle of vodka and a condom." And the first guy had to explain what a condom was to the operator, so was like, "Well, it's kind of like a rubber band, but it goes around your penis." And, of course, she's like, "What's a penis?" And he says, "It's a thing that guys have..." That was definitely the strangest night ever. Because it kept happening. You know, it happened once and everybody had a chuckle. Then it happened again and again.
M.S.: Our strangest was when we allowed our clients to deliver their own food for a lower commission... We don't offer that service anymore. But one of our restaurant partners sent their courier to a customer's house, a French lady. The courier knocked on the door and she didn't answer. So he went into her house. He went upstairs. Couldn't find her. He went into her bedroom. She was in the shower and came out with nothing but a towel on her head to find a 50-year-old man in her bedroom with no uniform on. And she just started screaming. Whether the guy as was actually stealing something or he was looking for her, who knows? But he ran. And so she called me in a very thick accent. I could barely understand her. And the owner of this restaurant is French. He speaks his French, she speaks French. It's completely his fault. I had nothing to do with this. So I said, "I'll put you in touch with her." Then his line went dead. He closed his phone and refused to talk with the customer. He just left me with this mess. I didn't know who the courier was. I didn't know how to find him.
M.S.: I have no plans to leave. This is home. I've lived in Shanghai longer than I've lived in Michigan. So this is it. I'm from Michigan. That's where the auto industry is. All of my friends are out of work.
Sherpa's latest menu is due for release on March 15