 My name is Stan de Teuling, student at Tilburg University. Today I'm visiting a very special company. I have the honour to kick off this first session and let's kick it off. I'm sitting in maybe a familiar vehicle. You might have seen these little carts driving around your neighbourhood, delivering food at your doorstep or maybe even on the news. Since 2015, Picnic expanded their operations from four to over a thousand of these carts. Today I will be driving around with Thomas Elders, who is sitting next to me. Good afternoon. Good afternoon Thomas. Alumnus of Tilburg University but also currently a business developer of Picnic. Together we'll gain some insights about Picnic's booming business, their journey from start-up to established name and all what is to come. So Thomas, we're driving here around Amsterdam. How did you experience your time as a student at Tilburg? I had a fantastic time at Tilburg. I studied econometrics. I did a Masters in Constate of Finance and Actuarial Sciences. So now I love the gezelligheid in Brabant. I loved going to the Philips. I'm not sure if that's cool anymore. It still exists. It still exists. Maybe there are new venues that are much cooler than the Philips and the Bolle. But I sometimes look back to my time at studies with some nostalgia. Could you maybe explain what Picnic does in a few sentences? Sure. So Picnic is the online supermarket solution of Europe, I would say. We deliver groceries for free at the lowest price, minute precise at the door of our customers. And it's a full range of groceries that you have in your pocket with your app. And if once you have ordered, you can follow your delivery. Like you also, for example, with Uber, you can follow the delivery. You have a delivery radar, as we call it, and you follow the van we're sitting in right now. And you know at the minute precise when your groceries will be delivered. All right. That seems very nice, especially free delivery and at the low cost. I could imagine that some of the viewers don't know Picnic by heart or your process by heart. So could you maybe also explain what goes on behind the screens of Picnic? What goes on from order to delivery? What happens? Yeah, so that all sounds quite easy. Like, okay, we are going to offer our customers a service where we don't charge any delivery fees at the lowest price. But that, of course, in the back comes with a supply chain, which has to be very, very, very efficient. If you compare our model to that of traditional groceries, then they all have more what you would say a premium service. So they charge a delivery fee and they see delivering the groceries as an extra, an additional service to the store. And that's also, they've add on basically that delivery to the infrastructure they already have. So the founders of Picnic, they completely redesigned the full supply chain without any stores and legacy in order to be able to on an economically viable basis deliver this to our customers. So we have, for example, fulfillment centers where we receive the goods from our suppliers, where the orders are picked for our customers. So you could say that's basically what a customer is doing themselves in a supermarket. So maybe one step back, a supermarket is basically a self-service model. So the service grade of a supermarket is actually very low. You have to go there, you have to go through this maze of shelves every time picking the same things, your same milk cart, your same shopping clothing, for example, can be fun. But super groceries, it's in our habit at a supermarket and that model that evolved in the 70s with a very big range of goods and also at a very low price compared to the smaller stores you had before. But you also had the milkman and the milkman had a fantastic service. There was a smaller range of products and it was maybe a little bit more expensive. But they drive around and everyone knew when the milkman was at the door to then supermarkets emerged and which pushed away the milkman because of the much bigger range of choice in products. And they competed in price, which was very difficult to match for the milkman. So what's picking is basically the modern milkman. So in modern times with technology we can deliver that same service with very friendly delivery boys and girls with the hospitality mind. So basically... Service is key. Service is key, the type of person you will meet in a restaurant or a bar. With a smile on their face they deliver your groceries with the same service level as the milkman with a huge the same range of products as a supermarket and also at the lowest price. And that sets us apart from our competitors and that makes this a mass market proposition. So it's a proposition for the mass. There's a lot of there in what the picnic has done in the past years. And that's also the entrepreneurship I think of the founders that they did a lot of research. Something that they had an idea overnight and started it the day after. They did a lot of research and they visited basically all types of delivery models, the postman, parcel delivery services. So they really studied what drives their efficiency and how that works. They did a lot of research on supermarkets. They had no background in how to run a supermarket. So if I understand correctly, Picnic is a totally new concept. It prices itself and distinguishes itself with service levels and also efficiency. So that about Picnic and then about yourself. So you told me that you're a business developer within Picnic. What is your role? What does a business developer, especially in such a new company, what do you do? So on a daily basis. On a daily basis. So it's quite diverse, but our team is responsible for the business planning and the strategic direction we're going as a company. And that's on the short term. So the whole, let's say call it budgeting process for the one-year horizon, but also the 10 and the 15-year horizon. We have to think really far ahead because building this company and building out the infrastructure has quite lengthy lead times. So you really have to plan ahead. And that's one of our key responsibilities. Next to that, we're also responsible for arranging the funding of the company. So making sure we have enough cash to do all this. And it can be raising debt with banks or raising equity with investors. So quite an important position then, especially in a growing company, of course need funding for all sorts of projects, for these cards, for new warehouses to hire new people. Exactly. Well, you could say it's your license to operate. If the funding stops, then at some point... So I know that you weren't there for the first years then, but maybe you've heard some things. Could you maybe take us along in the first year or the first two years of picnic funding-wise, starting up a new business, growing? Yeah, so what I mentioned is that the founders with a very small team did quite some extensive research before they actually launched the service and did the first delivery. So that took a couple of years. To really reinvent the delivery model. So we say at a certain time, in a certain day, where we'll be in your street, do you want us to deliver your groceries? And that's one or now also two time slots a day. And on Monday that will be at four, and on Tuesday will be at five, and on Wednesday will be at six. So typically there's always one day that suits the schedule for customers. But it's very different from a competition that offers 10, 12 times slots or even more on a day, but with quite broad slots. So wide slots. So what I mean by that is that they say, two, maybe sometimes five hours. So you're not really certain when they will arrive. And that milkman round is very efficient for us, because the more customers we have that we can deliver in the street, at some point we don't even have to drive to the street and we deliver all our customers in that street, and then we can drive back. And it also makes our service extremely reliable. And efficient. Once again the efficiency comes in. Yes, so it cuts in both ways. So it is efficient, so that's good for picnic, but in the end also good for the customer of course, because that's why we can deliver for free for the lowest price. And it also makes our service so reliable. And especially with shopping groceries, which is basically really a habit type of thing. So people are creatures of habit. And somehow they have developed the habit of going to a supermarket. And that's sometimes difficult to cut through. So once a customer joins picnic, and they have tried to service out and they like it, they stay forever. Our retention is something, every time we show that to investors or anyone basically, they don't want anything else. They're blown away. Without any subscription. Service, efficiency, price, and they don't want to leave anymore. I can get it. Because a lot of the viewers might be wanting to start their own company as well, how do you acquire finances? Was it completely financed by the starting, by the staff? I think the beauty of picnic is that the cost of experimenting and piloting is very low. So picnic started in Amersfoort. With a hub, you've seen it. It's basically a small parking place. You compared it to a parking garage and it really is. It's very different to renting a very expensive piece of real estate in the city center for a supermarket. And having to do the full fit out of that supermarket. So and a couple of vehicles. And then a small warehouse, very small warehouse, that's how it all started. And that doesn't require a lot of funding. And then the cost of experimentation in this model is really low. And we can also experiment in new countries, but also in new types of services. I think that's very different from a corporate, which typically takes quite some time to get something implemented and approved. We just start trying it out and see if it works. If it does work, we stop immediately. If it works, we can roll it out. And the cost of doing that is relatively low. So you just indicated that you started in Amersfoort, relatively small with a small hub. Was that also how you validated your business model or your concept? Was it just starting out and seeing whether people liked it? So that's a good question. The founders also in that lengthy research time and really developing that model and for example also developing this vehicle. This vehicle is fully developed by Picnic. And it's one of the great assets of Picnic because it enables us to make this efficient delivery and has quite a short time that we spend at the customer. We can spend at the customer's door, but not at the vehicle at the customer. So the stop time is very short because we can enter it from outside. But how did you, because the concept seems to work now, but how did you validate at that point in time that the Netherlands, maybe even Amersfoort and the Dutch customer were ready for groceries at their door in a milkman way, but with a new fork? No, very good question. So the idea of Picnic started with the observation that a lot of categories were transitioning to online. So customers were buying electronics, books, etc. all online. But they weren't buying food online. Another observation was that the category of food of groceries is as large as all the categories combined, the other categories combined. So it's a huge market to enter. It's a huge, huge market opportunity. So it's very interesting to dive in. What was the reason that only at that point in time 1% of groceries was bought online? Only 1%. And do you have an indication what it is now? It's now roughly 6%. So we have grown that market. Considering the market is quite big, an increase of 5% is good. That market is a 40 billion market. So we were talking about the validation of your business model or of the concept. How did you figure out that Amos Ford, the Netherlands in general but also the Dutch customer, that they were ready for Picnic? So I talked about the observation of the founders that the market of groceries is as big as the market of all other consumer categories combined. 40 billion market. So that's quite big. And so it is a very interesting opportunity to look at why are people at that point in time or why weren't they buying the groceries online? And they found out that one of the reasons was basically price. So that every other model out there was a premium model. They all had to pay extra for service, delivery. They had to pay extra for delivery. So that was a huge... And also reliability and service. So this only works if you're sure when your groceries are being delivered. It's different than sending out your parcel from... Yeah, you need your dinner on time of course and kids need to eat for breakfast before school. Yeah, I can imagine. Exactly, and you need to be at home. That's also quite important. And that's very different from delivering a TV or a book. Alright, so after a lot of market research you validated that the market was big enough to enter even if you could grasp already as a small bit it would work. And then you managed to grow with Picnic the market for online grocery deliveries from one to six percent. So in five, a little bit over five years. Yeah, so the full market has grown to six percent. And there's one other thing that the founders and that initial group of Picnicers did and that was they held town hall meetings. So they did a lot of meetings with potential customers. Town halls, they called it, where they really validated and interviewed them on what would you like for such a service and what is needed for you to use such a service. So that was also a very important element of basically validating if there's demand for this. So by now you have been working and operating for six years yourself included for two and a half. And would you, from your own personal opinion of course, would you already say that Picnic is a success? Well I think from the first day in Amersfoort on the first announcement basically that was Picnic was going to deliver the demand was really overwhelming. So in Amersfoort it was just only that small hub and very tiny warehouse at the moment. But already from the whole country everybody subscribed when it was announced. So from day one it really has been a very big success. Nobody imagined that within five years Picnic has grown to a business of 500 million. So because that's what your revenues are at the moment. 500 million euros per year. Per year, yeah. So yeah that's unicorn status for a startup. In five years towards such a big revenue number it really amazes me. So we've now talked about Picnic as a company working there but maybe also interesting. A lot of our listeners or viewers might be interested in starting their own company as well. So I would like to know from you how it's like working for a startup and contributing to such a new concept. And first I would like to ask maybe you indicated that you worked at Grabo Bank for quite a long time, eight years. And what made you decide to leave that maybe even comfortable position and start something new? So maybe a bit cliche but I read the book of Elon Musk and I thought okay I'm indeed in a comfortable position here I could do this for another five years but I was really inspired by that story from building something completely new that didn't existed and was really tangible because what I did was relatively abstract at Grabo Bank and I wanted to work on really building something new and then I saw an ad on LinkedIn Picnic and I immediately caught my eye and I had heard about Picnic but I didn't knew that much about it yet and once I started to look at videos on YouTube I was getting more and more excited and after my first interview I was bouncing back and forth okay this is what I want to do it's such an energetic company very different from a big corporate there's a lot of possibilities basically everyone who has an ID is welcome to work that out and try it out it doesn't really matter if it's close to the team you are if it's a good idea then start doing it so you could even say that you wanted to contribute to something new and face a new challenge and within Picnic everyone can actually be an entrepreneur within a bigger startup within a bigger company I think that everyone within Picnic gets a sense of what it is to be an entrepreneur that's really nice actually and you get a lot of autonomy it's very different from working at a big corporate there's not much hierarchy when I joined there weren't even team leads managers that changed we do have team leads now because you need coordination it's not that you everyone wants to be the team lead it's not seen as a better position than a specialist in a certain area it's seen as okay this person is very good in coordinating a team and leading a team that's a very good job to have but it's not a better position than being a specialist and everyone works also with the founders so the founders do they drive these carts as well? the founders yeah sometimes they do delivery rounds definitely we have this at Christmas and busy times as a head office we typically tend to help the operation also always good to see the operation very down to earth they join the customer service to answer questions from our customers and they work very in the same way with with our employees who just we're just coming from university have no experience as with someone who has 15 year work here if someone is smart and bright and has the right ideas they love to work with them very nice to hear from what we've heard right now Picnic is a really low barrier company with a nice company culture you've been operating for a little over 5 years now already it's also good to take a look at the future so let's take the last part of this journey of our drive towards going a bit into the future of Picnic the grocery market is of course very big you already mentioned it but it's also very fought over and there are of course already some big established names in the grocery market your concept is new as you mentioned very new but also new as in refreshing a unique concept but also it relates a bit to the milkman so what is your future strategy but what is your value proposition and why do you think that you as Picnic are here to stay as of today we're still the only one in the world that offers this proposition to customers so no delivery fee the lowest price you only have to minimum order value of only 35 euros and there's no one else yet that offers this but we have still a huge market to tap and we can expand beyond all the countries we are now already active so Germany and the Netherlands and but we also we have built a very efficient home delivery system so it's not only about groceries we can deliver all sort of stuff in the long run what we're already doing now is that we're taking back parcels so if you're sending back a book or something else to a web shop you can give that to the runner at your door once they deliver your groceries and so it will not stop at groceries and there are so many things that we still can do and so the opportunity is really really really big and we had of course also some tillwind from headwind from corona you're taking the words right on my mouth yeah so you see that online grocery shopping is really at an inflection point and you see and our biggest challenge actually is to find and hire enough people to cater for the demand we have so in order to cater for the demand we're currently having we have to hire around 1000 people a month that's a lot what I would also say is that something about the growth rates at the moment but that's one of the biggest challenges we're managing that so I don't think there's a lot that stands in our way at the moment all right great to hear so indeed I wanted to ask about covid but you already mentioned that of course is a bit of a tillwind do you think that after everything returns to the way it used to be or at least in some way shape or form that you will see your sales decrease will people go back to the regular supermarket or will they stay with picnic I don't think that will decrease with a big step and the reason is that as I mentioned before people are really creatures of habit and once they've paid out the service also before corona they tend to stick with that but they have a habit of going to a supermarket because there was no alternative exactly but it's the step trying out the service and then we see that our customers tend to stay forever all right so actually one thing that rest meets you is what is the future for picnic going to look like you mentioned a thousand employees new employees each month already a 500 million Euro revenue each year what is the limit is there a limit no I don't think there's a limit I think it will stop at world domination is that the goal as well it's like expansion towards other countries so we have seen that this idea travels it works really well in Netherlands but it also works extremely well in Germany because you are in Germany right? we are also active in Germany the growth rates in Germany are even higher than that in the Netherlands and that's very encouraging also because of the fact that basically the Netherlands and Germany you could say that those are the hardest markets because food prices in these two countries are extremely low if you compare it to other European countries so there's a lot of opportunity to expand that to other countries and what's also very encouraging is the fact that every city but also every country we launch basically exactly the same adoption by customers so it's a very forecastable model and we really know that it works and we don't do a lot of marketing basically these vehicles itself are marketing they stick out so that's maybe a good one to end on Picnic is definitely here to stay a young company still with a huge arsenal of cards a lot of customers and of course also employees who love working for the company I enjoyed my time with you and here in Amsterdam a lot today so thanks a lot for inviting me thanks a lot and this was the first episode of venture visionaries I hope you enjoyed and on to the next episode I would say Hi welcome everyone good afternoon to the first edition of venture visionaries I'm delighted to welcome you all here first of all I would like to welcome Thomas Zelders as well I don't know if he is here Yes I am Hiro Alright welcome also I hope you really enjoyed the video of Thomas and Stan we put a lot of effort in it so yeah hopefully you enjoyed yourself so this this last 15 minutes we will just ask some additional questions that came in after the recording of the video just some more questions that were not completely clear at the beginning of the video or at the beginning of the event so the first one is about the business model we had some more questions about the validation of the business model and especially for Thomas then how did you come across the problems that you faced with this business model did you have to encounter or did you have any mistakes during this whole adventure that looking back at it were yeah prevented very easily but yeah that's only looking back at it Yeah I think that's a good question I think we made plenty of mistakes and I think to be honest every growing company and especially startups and scalabs is very important to make mistakes otherwise you're not at the edge of the growth and the edge of your capabilities the most important thing is to don't make mistakes that are detrimental for your existence or very harmful on your customers of course so you really need to make sure that you mitigate the large risks but in experimentation and trying out new things we definitely I've made a lot of mistakes on the way and I think the key thing to focus on when you make mistakes of course to learn from them for the second time so we have automated a sort of incident system and also make post mortems how it's called so we make quite an elaborate evaluation once an incident happens so what happened and how can we prevent it the next time came back a lot of times even now that we're also there in the beginning or are they all filtered out now I think we are still trying out new things but the basics and the foundation of our model I think we have a very good we have filtered out most of those things in the last five years but still something happens like the snowstorm of a month ago and that's we now have processes in place of course how to deal with that but still we learn from those things and next time we hope to do even better than this time maybe also adding to that the social component of a business model how did you contribute to the food waste problem yeah so interesting that you ask so that is something we don't carry out in my view a lot from pregnant that we are also very sustainable actually at the core of our model and what I think is great in that sense is that sustainability goes hand in hand also with efficiency here so we drive fully electric vehicles zero emission but as you mentioned we also prevent a lot of food waste and that's because we only order at our suppliers once we receive an order from our customers so we don't have to throw out for example or other fresh goods at the end of the day because we didn't sell them and that's a big difference so we save close to 90% of food waste and everything if there's a little bit of additional stock that we otherwise have to throw away because it's getting beyond the best before date then we use that in our canteen so we use basically every food and we don't throw away any food that's very good to hear that was about the business model then we received a new question which is what was your first marketing strategy or platform as business to consumer is always tricky as people say so what were the platforms for direct to consumer good question so we used Facebook Google search basically online advertising very targeted advertising because especially in the beginning we weren't that active in that many regions yet so it's not really helpful to do a TV ad for example if you're only active in Amersfoort because that's quite expensive and you're reaching a lot of potential customers that cannot order yet so we do quite some we did targeted advertising but as I also said in the video our marketing is relatively low because we do once we launch in a city we do some marketing to get that flywheel going and get the first customers in but once people see the vehicles drive around the city there is awareness and that's basically the most important thing that there's awareness and then the conversion to register and to conversion to buy we don't need a lot of marketing for that actually all right I hope that answers your question then going on with the other questions that we had before this live session started still about the funding so you said that it started with I didn't cost a lot of money to start from a parking lot in Amersfoort that it was a lot of research prior to starting picnic but how did you handle the funding maybe in the previous years and now that you are expanding onto new markets yeah good question so we raised 100 million in funding in 2017 from from large families from wealthy families in the Netherlands so strategic investors long-term investors very important for us and we also raised another 200 million in 2019 and I would say in raising funding the most important element is having a very very solid business plan and what I mean by that is that you need to have calculated and modeled out the future in a very detailed way so we have a model that also even up till the amount the number of plastic bags all these small items we forecast and we are very accurate at the moment in forecasting our business in terms of profitability revenue etc etc and that of course gives a lot of comfort to potential investors yeah were there also moments that you under produced or under ordered any of the products that you had to use for the sale of any of the products sure I think a very important element is completeness and availability so for our customers and that's also I think how we distinct from our competitors that we have extremely high service levels there so it's of course if you order your groceries online you don't want an important ingredient for your meal missing because then you have to go to the store anyway so that is very key in our model and we are reaching a very high completeness rates but of course in some more unpredictable times such as Christmas then it is a bit harder to estimate what the demand will be for a certain item but we use a lot of different forecasting models including AI models to really forecast on an item basis how much demand will have and in the end that's still a very small part of what we sell because the majority of what we mentioned before also in terms of food waste we only order once we get the order from our customer I can imagine that during Christmas time it's very hard to have an indication so we have another question so because of corona a lot of people were scared to go to the supermarket or to the grocery store and did picnic do anything market wise to play on this trend now in terms of marketing we didn't do anything else I think our service was we were in that sense lucky that we had this proposition already going and this system and that we could help our customers in not having to take the risk to go to a store what we did do for example we made priority for people who worked in healthcare for example an elderly such that they had a priority in ordering with us that's very good to you that's also very societal to do traditionally people spend a lot of money spontaneously when they walk in the store and they see for example a chocolate bar or something and they buy it at that moment does it also affect your business model or how you have sales that's interesting so there are quite some possibilities there but we also have to be careful that for us it's most important that we that our customers buy things at our store that they would like to buy but there are possibilities in the app like also in your Spotify app or your Netflix app of course to promote some products and we are also everyone who opens the app sees a different app because it's tailor made to the customer itself and the needs of the customer and what the customer bought before so do you also have like temporal promotions for people that buy chocolate once in a week or something that you give them an extra promotion for the chocolate bar from another brand of something you get the promotions in your email that you can also sometimes choose which promotion do you want all right okay yeah I think we have time for one last question it's already a quarter to four so the last thing that we had was if there are any possibilities for graduate or internships for university and HBO or HBO students to join picnic yes most definitely so please look at our website we have a lot of vacancies so you're all happy to to look at that and we are very much invited to go there and apply also in terms of internships definitely so and that's very broad so it can be in the supply chain itself or in head office so we have a lot of yeah we have a lot of vacancies and also we have vacancies for if you want to earn a little bit more as students we have vacancies for so our delivery boys and girls so you can drive the same van you saw in the vehicle in the video and make our customers very happy right nice good to hear yeah you heard it you can always go to the website for any job applications for now I guess this is it for us I want to thank Thomas once again for both the video and today the live session I want to thank you all for joining this last 45 minutes I want to wish you the rest of the weekend a nice weekend already yeah and maybe till the second edition thank you very much and a compliment to the nice video and all the editing and also to Stan for his interview he couldn't be here he had a busy schedule but I will send your regards to him great thanks a lot Ron