How the Founder of Daily Harvest Escaped Corporate America to Build Her Successful Food-Delivery Startup
In the Women Entrepreneur series My First Moves, we talk to founders about that pivotal moment when they decided to turn their business idea into a reality -- and the first steps they took to make it happen.
“I’ve never really been a rules follower,” says Rachel Drori. “Corporate settings have been a challenge for me.” Still, before launching the popular subscription service Daily Harvest, which delivers healthy, frozen meals to customers, she spent years cutting her teeth in corporate settings like the Four Seasons and American Express. “It helped me learn best practices and how to steer a big ship.”
But when inspiration struck, she knew she had to scratch her entrepreneurial itch. Launching Daily Harvest in 2015, the company has since raised $43 million in funding and serves more than 100,000 customers nationwide.
1. Get ‘hangry.’
A gig at Jetsetter, which was part of Gilt Groupe at the time, allowed Drori to work on everything from marketing and branding to business development, skills that would ultimately give her the confidence to branch out on her own. But her busy schedule left her with little time to be mindful of her diet.
“The Gilt pantry is a big part of why I started Daily Harvest -- I was hangry, you know?” she says. “I was either running late for work and grabbing a bar or I was starving at 3 p.m. and grabbing trail mix from the pantry. They weren’t terrible decisions, but they weren’t the best.”
At the same time, food bloggers on Instagram were tormenting her with gorgeous images of fresh, delicious food. “They make it look so easy, but who has the time?” she says. “Instagram plus hangry equals Daily Harvest.”
2. Find the whitespace.
Drori started spending her Sundays doing meal prep so she didn’t have to figure out how to feed herself on the fly during busy weekdays. “It solved the problem, but it took so much time and effort, and I just didn’t want to do it,” she says.
Other solutions on the market didn’t provide the convenience she wanted. “Meal kits are perishable, they go bad in your fridge, and they take 45 minutes to prepare,” she says, “And all convenient food is preserved in some way.”
So she started making larger quantities of meals and storing them in her freezer. “It solved the problem -- frozen is not only sometimes higher in nutrient content, but if you need an instant solution, it’s always ready for you,” she says. “When I realized no one else was doing this, I knew this was the way.”
3. Prove your concept.
The very next week, Drori built a website and started talking to food distributors. “Branding and marketing was my background, but I decided not to worry about it at first. If I am solving this problem for more people than just me, it will work,” she says. “I went to a food distributor and was like, ‘Whatcha got!' I just needed to hack a proof of concept to test.”
She pulled together meals and started selling, giving herself one goal to aim for. “Once five times more people than I knew were buying, I’d dive in and stop doing it just as a side hustle,” she says. “I wanted to make sure it wasn’t just my mom’s friends being nice.” But the sales did come in after just six weeks. “I quit my job and dove in head first.”
4. Get help, from professionals and family.
Drori was delivering orders herself, just one day a week. “I’d drive around with my nephew and make him sit in the car or run upstairs when he was 16,” she says. “I’d give him 20 bucks for hanging out with me for the afternoon.”
But she had to dig a little deeper into her pockets for her next hire: a chef. Originally, Drori was developing the recipes herself, working out of a commercial kitchen where she spent her weekends. “But I am not a chef, so I was like…eh, these [recipes] will do.”
She quickly learned that her tastes aren’t necessarily universal, so she hired a part-time chef and a nutritionist to help her create more appealing meals.
5. Change everything.
As demand grew, Drori knew she couldn’t keep up at her current pace. “I finally started thinking about brand and form, and how we could scale with product in the cup, what delivery would look like,” she says. “I can’t think of one thing that was easy.”
Drori ordered food directly from farmers, but because of the relatively small size of orders, she didn’t qualify for delivery, which meant a lot of time driving around, picking up food.
From there, finding partners and building an infrastructure to support a subscription model took her focus. “Everything was faking it until I made it -- making it look like we were bigger than we were to get people to work with me.”
6. Consider capital.
After bootstrapping for eight months, Drori started researching what the company would need to look like to effectively raise money. “I talked to a lot of people and realized that there are certain metrics the investment community looks for at different stages, which vary by industry and category,” she says. “So I reverse-engineered our rounds: What does this need to look like to get the economics I want and have investors not be able to question it? I worked toward hitting those numbers first so raising money wasn’t too much of a distraction and it didn’t take a long time.”