HungryHouse.co.uk get £100k investment from Dragon’s Den
HungryHouse.co.uk secured an investment of £100,000 for their website on the BBC reality TV show Dragon’s Den this week.
Hungry House is basically a site whereby you can go to order your takeaway online. Much the same as you can with Dominos Pizza and Papa Johns (btw Papa Johns make the best pizzas in the world), but the difference is you can choose from a selection of takeaways in your area. Well that’s the theory anyway, in reality there are only 255 takeaways on their site, and most of them are in London.
Anyway, the Hungry House guys managed to secure a £100,000 investment for 50% of their company. Unlike when Theo got ripped off the other week I can’t decide whether this is a good investment or not. Time for a pro/con list.
Pros:
1. The site is up and running and actually quite good albeit not groundbreaking in terms of technology, i.e. it has a really cool feature when you can state if an item you’re ordering is for yourself or someone else so it splits the bill for you. So no need to build a site from scratch, although this wouldn’t be exactly hard, see cons for more.
2. I would use it. Sometimes its a pain ringing in a takeaway order, only having to repeat your address about 5 times as the person answering the phone doesn’t use English as their first language and can’t understand you/you can’t understand them. Plus it saves on ringing back if the phone is engaged.
3. If (and its a big if) the site got 100% or as near as possible coverage then I could imagine a scenario whereby if I couldn’t decide what food to choose I would just type in my postcode and bring up a list of takeaways in my area to choose from.
Oh dear, I’ve ran out of pros.
Cons:
1. As Peter Jones rightly said it would take no effort at all to replicate the website, there is nothing unique about the technology being used.
2. The whole model relies (in my opinion) on recruiting and training a national salesforce to knock on the door of every takeaway in the UK. This is where most of the investment (and them some) will be spent. In order for the site to be truly successful it needs as many takeaways listed in as many parts of the country as possible.
3. I’m not 100% convinced about their business model. They currently charge 9% of the order value to the takeaway. To a takeaway owner would the uplift in sales by being listed in their directory justify a 9% surcharge? I’m not convinced. Also take a look at 118menu.comwho are launching soon but already advertising aggressively online, they are operating a pricing model where takeaways receive their orders for free.
4. Does the service rely on all takeaways featured on their site having a PC and internet access to receive orders? As I don’t know any that do in my area.
Hmm, I’m having a real difficulty here. As a takeaway customer I would most probably browse through my local indian takeaway menu that I keep in the kitchen “menu” drawer and then go online to order - as it cuts out language problems/engaged tones. But that wouldn’t mean incremental business to the takeaway owner, would it?
So will this venture take off? The jury’s out for me.
What I’m listening to right now: Wanya Morris - “Official”
Wednesday, November 21st, 2007 at 2:15 pm and is filed under General Ramblings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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[...] in last November I wrote about online statup HungryHouse.co.uk appearing on the BBC TV show Dragon’s Den and [...]
Welcome to my blog. My name is Kieron Donoghue and I run UK Offer Media Ltd. I thought it would be fun to post a daily (well hopefully daily) blog, writing about my experiences in Internet Marketing and more specifically Affiliate Marketing. I'll include some personal stuff too, probably about my other passions, music and cars. Please feel free to post your comments and thoughts too.
Also there is already a merchant with affiliate programme http://www.just-eat.co.uk they are on affiliate future.
I have never ordered with them, I tried but even though they cover bristol they did not have any in my region.
When I first looked at them they only covered london but they now have a few more major cities.
So hungryhouse will be competing with them too
I think they need to hire a usability expert like Jakob Nielsen and some expert copywriters to make this site easier for the standard UK web surfer to use.
They should also try and get a few ‘online only’ offers going.. i.e. free drinks with order.. stuff like that.
For once I’m pleasantly surprised that they own the .com!
Indeed, just-eat is the Denmark rival that they actually mentioned on the show. It’s a lot bigger and seems to work better than the hungry house site which wasn’t user friendly in my opinion. It’s also on Tradedoubler btw
I think it is a pretty good idea,
I used to work for Toptable.co.uk which although it doing well now took years to break even.
The problem is you need people to call the take aways, there isnt a way to communicate directly with them, just incase there is something wrong. If you make 9% of say £15 that is less than £1.50, with over heads you need a lot of orders to make any money.
I have used hungry house’s competitors just-eat’s website twice in the past from Coventry and the first time after the order went throught I had a phone from just-eat saying they can’t get hold of the the resturant even though they confirmed the order and took payment and the the second time the restuarant rang through to my house anyway because the online order didn’t make sense to them so maybe hungry house has a change if they have a better ordering system in place.
The takeaway only needs a fax machine I think.
Wouldn’t a 51% stake for them to keep the casting vote on any changes be in the agreement.
It would if I was one of the 2 owners.
P.S. Is Wanya Morris the lead singer in Boys 2 Men ? , is he not in Boys 2 men anymore ?.
Wow, you guys must not have very many good pizza places on that side of the pond. Papa Johns arguably makes the best pizza of any *chain* pizzaria, but there are countless, smaller pizza joints the world over that simply blow Papa Johns out of the water. If you’re ever in San Diego, give me a holler and I can introduce you to a few of the options around here. (And there are plenty of places that have better pizza than we do here)
This would be such an incredibly easy business model to replicate but hats off to the guys for getting it where they have already and to get a bid from the Dragons!
I know in our house though we keep a hand-picked selection of menus for our favourite takeaways, plus does everyone need to huddle around the PC in the spare bedroom when trying to decide what to order?
“P.S. Is Wanya Morris the lead singer in Boys 2 Men ? , is he not in Boys 2 men anymore ?.”
John, yeah thats him. He has a solo album coming out and its very good
This is such a naff idea. I had the same idea about 5 years ago and decided against developing it then because it simply won’t work. How many of us don’t know our local take-away places for each of the various meal types?
On an average order value of say, £15, 9% commission is £1.35. In order for the investors to just get their money (£100k) back, they’d need to generate 150,000 orders (they have a 50% stake).
Away from the logistics of how the site works, whilst watching the guys from HungryHouse pitch and seeing some of the dragon’s eye’s light up at the “potential” figures I could not help thinking that this just reinforces the belief that we are in the midst of the new web boom.
A few domain sales recently have caught my eye as being hugely over-priced.
I have tried Just-Eat myself and I never had problems with them really! In fact it has become my regular source of takeaway food
Cool, I liked him in the band, will go out and buy it.
I’m with Peter Jones on this one. It’s so easy to replicate and it’s not got anything that’s particularly patentable in order to secure the future of the business. They’re not even the market leaders in their industry.
However, one of my clients was on Dragons’ Den recently and what we see on TV is a tiny snippet of what goes on. The actual pitches, discussions and negotiations often last for more than two and a half hours. Perhaps Duncan and James saw something that I didn’t. Either way, the site could definitely do with some SEO work
Hi all,
I’m actually the third person in the team at http://hungryhouse.co.uk, and just wanted to say hi, and thanks for taking an interest.
As you can imagine, the negotiations actually went on for around an hour and a half - much more than what you see on TV.
The show was filmed in August, and we have grown significantly since then. You would be suprised at the number of orders (we believe) a site like this can generate. Just-eat, the Danish company, actually get about 300,000 orders a month in Denmark - and that only has about the population of London! Mind you, they have been growing organically since about 1999 over there, so they must be well known.
Obviously we are aiming at getting many more restaurants involved as a top priority (as well as some much needed SEO!). Up to now, we’ve done most of the restaurant recruitment ourselves and we’re still only a core team of 3, but if you take a look at the coverage in South London, that’s what we’re aiming for nationwide…
Anyway, thanks for taking an interest, and if you have any more feedback that you think could help us to be more effective, please feel free to contact us through the site.
Graeme
Hi Graeme, and thanks for popping in to say hello. I hope you find the feedback here useful, and good luck on expanding your business nationally.
Graeme - I’d be interested to know what the Dragons have brought to the business, other than money?
What about the 3% they’re also losing to the credit/debit card processing which must chew into their revenues too?
I’ve had serious problems with my orders every time I’ve used just-eat in Bristol. Every time I give them another chance it’s a total disaster. I won’t use them ever again.
I also toyed with this idea about 7 years ago. I decided it was a non-starter for me as it would require a massive effort to retain a quality service. Still good luck to them, I hope they do well with it.
Hello id just like to point out the obvious http://www.118menu.com is coming soon, to be live in Jan 08 and its clear even at this early stage that 118menu will be the clear market leader , the business model is 100% more in touch with the takeaways expectations and the technology behind the product is in a different world compared with the hungryhouse idea of sending a fax ?? they dont have a clue do they ? For expample until dragons den there own website did not even rank its own name in google !! i mean come on how the hell are people going to find you ? and its clear that just eat have a long long way to go in sorting out there customer services .I belive you only get one chance , if a customer uses your site and your product dosnt work they will walk away. That wont happen with 118menu .
oh forgot to mention both dragons have pulled out of hungryhouse .
I think it is hilarious that 118menu will work well….they seem pretty arrogant and if any of the other 118 services are anything to go by i dont think so!!! All they are doing is copying what is there and if it is anything like the other 118 companies. Is it a division of one of the existing 118 search companies…god i hope not?! i have used both just-eat and hungryhouse and both worked, although in my opinion just-eat have more and better restaurants and also a better order flow.
I will have to check them out. I have not had the opportunity to check their sites out.
Gemma, i very much doubt that the management from 118 would be bothered to write anything on a blog !!!! However from a quick google search it does show that 118menu do indeed hail from a major 118 number 118055 so who knows but i doubt it .
i have to agree why would an MD even bother to post on a tiny blog. i do have a little tit bit of info about 118menu though they are defo not attached to a major 118 number (ie new commers) and from what a local takeaway told me set to launch soon! i hope they cover my area is all! also mr menu is a quality logo