- If you’re operating a marketplace, it’s necessary to allocate your marketing budget to attract both sides, sellers and buyers.
- At the same time, marketing costs typically represent the largest expenditure for any business.
- What if your marketers could attract buyers on their own, saving your marketing budget?
This platform has found an interesting way to do just that, and this idea could be applied to other services as well.
HomeCooks is a food delivery service. However, on HomeCooks, the food comes not from restaurants or cafes, but from independent chefs.
HomeCooks features a classic marketplace interface. You can filter food offerings from different providers, read descriptions and user reviews, view appealing pictures of delicious food, and place your order.
What sets HomeCooks apart from other food delivery services is its approach to promoting the personal brands of chefs.
You can familiarize yourself with each chef, learn their story, and feel a personal connection to them.
You can even explore which dishes each chef prefers the most.
Business model
The order and delivery process is quite straightforward. You browse through the offers, select what you like, place an order, and the food is delivered to your doorstep.
The special marketing message from HomeCook is that the food offered comes not from large restaurants, but from small private kitchens.s – “Our chefs cook in small quantities, which allows them greater precision and control to create delightful flavours in every meal.”. In other words, the platform seeks to differentiate itself from other food delivery apps by offering a more “home-style” approach to food delivery.
However, there may be questions about safety or compliance with food preparation and delivery regulations. HomeCook addresses it by requiring the food-safe certification of each chef.
All chefs need to provide proof of a level two food safety certificate and have registered their kitchen with their local council.
This means that all our chefs in our communities have the same legal requirements and responsibilites as any traditional food business.
As a result HomeCook declares very high food hygiene rating.
All food is delivered frozen in ice-packed boxes and only needs to be reheated in the microwave. HomeCook justifies this approach by stating, “In the UK, restaurants produce around 200,000 tonnes of food waste every year, and 60% of food waste comes from homes.”
Based on this, HomeCook has challenged its chefs to create high-quality, flavourful artisan meals that can be stored in the freezer and reheated when necessary.
Currently HomeCooks delivers across the whole of the UK, excluding the highlands of Scotland and Northern Ireland. Each order can be as little as you like, but for orders below £15 there is a delivery fee of £5.50.
HomeCooks e takes a commission from the food creator on every meal sold through the website. However, according its calculation partnering with HomeCooks is highly profitable for chefs. If a chef cooks over 130 portions in each batch, then can earn on average £1,000 per batch (this equates to about 1-2 days worth of work!). For most of the chefs, HomeCooks is the only way they can deliver their food nationwide.
The platform believes t can compete across three industries:
- The £12bn UK food delivery industry, by offering cheaper meals with more coverage across the UK (Deliveroo, UberEats).
- The $1.5bn UK meal kit industry, by offering higher choice and higher convenience than a meal-kit provider (Gousto, Hello Fresh).
- The $15bn Ready to Eat Meal industry, by offering higher choice and, in our opinion, higher quality (Cook, AllPlants).
What’s the catch?
HomeCook collaborates with individual chefs, which is significant due to several factors:
Trust
The proliferation of social media platforms has simplified the process of building and promoting personal brands. These personal brands, unlike corporate ones, often portray a more authentic and relatable image, thereby fostering a stronger connection with their audience.
One of the key reasons for their popularity is the trust factor. People tend to trust individuals more than corporations, viewing personal brands as more genuine and transparent. This trust has allowed personal brands to effectively compete against established corporate brands.
Due to this HomeCook builds more trustful relationship with its customers just by design.
Natural marketing
Personal brands always built around social media. HomeCook’s chefs have their profiles in Instagram, Facebook, X and they pay a lot of attention to their networking, they post their updates, reply to comments and feedbacks, monitor their reputation. Due to this they work as a voluntary marketers for HomeCooks because the followers of the chefs are coming to HomeCooks.
Economy
If you work with individuals, you can maintain more favorable prices because a registered business always has more expenses. In other words, the HomeCooks model is very similar to the Uber model and even better, because unlike the classic Uber model in the case of HomeCooks, its partners additionally work as promoters of the service in their social networks.
What can you reproduce?
Uber was the first platform to invent this business model. Even 15 years later, there are still interesting niches where you can apply this model.
It’s also worth noting that if your partners are not taxi drivers but people in more creative professions, you can use this to your advantage. Aim to build your product in a way that encourages your partners to advertise your service on their social media. This can result in more efficient marketing at a significantly lower cost.
Recently, we reviewed another service that successfully utilizes this principle – https://randomround.com/insights/growth-recipes-for-fintech-startup/
Karat is a credit card designed for media influencers and content creators. This is an ideal audience, as content creators are often the most effective at promoting things on social media, and Karat users do exactly this. Karat has already secured $115M in funding, and their clients have played a significant role in this success by actively promoting the service on their social media.
About the company
HomeCooks was started by serial entrepreneur Joshua Magidson. His previous venture, eatstudent.co.uk, was acquired by Just Eat. HomeCooks began as a simple Facebook group and has since grown into a well-established company backed by venture funding.
With the ambition of creating the ‘Etsy of food’, in addition to the £2.5 million committed by institutional investors, HomeCooks’ is opening up the doors to community investment and ownership via a crowdfunding campaign.
Targeting £1.37 million on Seedrs, HomeCooks has already collected $1.5M, bringing the total funding to over $4M.