Yummy.com co-founder and Chief Executive Barnaby Montgomery is somewhat of a rare breed among L.A. tech entrepreneurs.
For starters, he launched his online grocery company back in 2002, only a year after the dot-com bust claimed Foster City’s Webvan, a pioneering service that crashed after a massive $800 million capital raise.
Another thing that sets him apart: His company has never raised, nor even sought, a penny of venture capital.
What’s more, Montgomery has no mobile strategy, generally seen as a prerequisite for
e-commerce startups these days.
“There’s no competitive advantage to be obtained by having a mobile app,” he explained. “There is a competitive advantage to having a reliable system that can deliver orders in 30 minutes.”
That all might seem iconoclastic among today’s tech-oriented businesses. Yet Yummy, which delivers groceries to L.A.-area residents from one of five retail stores in about a half-hour, appears to be registering with customers. It opened a store in the Mid-Wilshire neighborhood late last month and a Century City location is expected to open later this year.
Yummy keeps its focus on its back-end, vertically integrated system that includes a proprietary order management platform, as well as a fleet of delivery vans and a team of about 125 full- and part-time drivers.
“We do not outsource,” Montgomery said.
“We think the customers are better served.”
That’s a different model than the one employed by San Francisco’s Instacart, which connects customers with other shoppers who pick up and deliver the groceries.
Yummy has also made do with its dated-looking Website for years, though an update to a more responsive design is in the works, according to Montgomery.
“The last thing we think about is our website,” he said. “We’re always thinking about the back-end systems first.”
By doing that, he said, Yummy can focus on keeping its service efficient and accurate.
Despite the entrance of Amazon.com Inc.’s AmazonFresh delivery service into the L.A. market in 2013, Yummy claimed year-over-year sales increased 21 percent in 2014.
That’s because the two services are catering to different types of customers, Montgomery said. Whereas Amazon offers scheduled deliveries, Yummy customers tend to be people who need a few items right away.
“They’re not attempting to stock up on $150 or $200 worth of groceries,” he said.
Yummy’s average order is $60, and about half its revenue comes from walk-in customers at its stores in Hollywood, Santa Monica, Silver Lake and Playa Vista.
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