Podcast: How Grubhub Utilizes A Culture of Experimentation to Maintain Its Position as a Market Leader

Thanks for having me on your podcast, What’s Next in Commerce!


“Grubhub is an LTV business. It’s not just about the immediate transaction, it’s about what happens after that transaction. For example, if a consumer ends up converting at a higher rate, and then afterward has a poor experience and doesn’t come back, that actually is terrible, terrible, terrible. Your typical, immediate conversion optimization tool would just look at the first part of this. ‘They converted at a better rate, great, awesome, keep it.’ We had to build tools specifically designed to capture these long-term effects. We typically look at the results of these long-term activities over the context of a month. So we need to see what happens to consumers for a meaningful amount of time to have high confidence that it indeed is net beneficial.”

“We are in a unique position of knowing not just who the people were, or when they placed the orders at your restaurant, but knowing exactly what they ordered. We can tell you that on Tuesday night, the reviews for people ordering sushi, are actually worse than on any other night. We can help you see that so that you can train the person that’s working on Tuesday night. These kinds of insights are something that we can uniquely provide to our restaurant partners.”

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What’s The Job of the Growth Team, Anyway?

The project seemed fairly straightforward: Here’s a city where our food delivery marketplace needs to accelerate growth. Here’s a budget to buy some ads. Buy some billboards, spend some money on Facebook – that’s all it should take to turn this around.

And yet, the route taken by two employees on the growth team was anything but buying ads, their tool set was anything but marketing and their results were beyond anything I ever expected.

What did they do? We’ll get there, but first, some context.

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3 Areas Where Marketers Can Reduce Their Action Bias

Sometimes repeating a good idea is worthwhile

Marketers obsess about every detail of their campaign, spending hours defining the audience targeting rules and picking out the perfect image to accompany our meticulously crafted copy. But how can we be confident that these steps are making a difference in our business’ top line?

Those that love analytics will suggest using data, running A/B tests and proving hypothesis with hard facts. However, marketing tools are often clunky, and we’re dependent on IT departments, which can make experimentation slow. According to eMarketer, marketing technology is still a broadly unresolved concern, so we get the choice of running campaigns based on our gut or endure the process of getting that A/B test launched. We often choose the former, and our biases remain unchecked.

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Podcast: Experimentation, Alignment of Incentives, and Focusing on the Bigger Thing

Thanks for having me on your podcast, Marketing Trends!


“Growth includes marketing and product and whatever it is that you need to do to get your business to expand.”

“Incrementality is this idea of ‘what would have happened anyway if I didn’t do any marketing activities at all?’”

“If you’re treating your customers as a homogenous herd that is behaving in the same exact way, it’s frankly disrespectful to them and it isn’t good business.”

“If you create a habit in your consumers to expect a promotion on a certain schedule, not only are you delaying their transactions, but you’re ultimately creating a less profitable business.”

“Creativity can be made so much better with the numbers.”

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Marketers, Stop Trying To Be The Loudest Voice In The Room

In a timeless 1970s book “Influence,” Robert Cialdini speaks of a hard-wired human behavior that drives a lot of our actions: reciprocity. It’s the principle that makes us want to give something back to someone who’s been kind and helpful to us.

There’s an obvious evolutionary explanation: Imagine taking turns standing guard at night for wild animals. You won’t sleep well if you don’t trust that the other guy has your best interest in mind. Those that break the trust are naturally selected against – kicked out of the tribe or eaten.

As a result, most modern humans are what Adam Grant calls “matchers” in his book “Give and Take.” They are those who want to give back as much as they’ve received – that is, match what was given to them. This desire is subconscious, uncontrollable and quite fundamental to the social glue that underpins modern society.

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Strong beliefs, held loosely

As people managers, we often talk about creating an environment where each employee “feels like an owner.” We give out stock options, talk about aligned destiny (we all sink together or rise together in this startup!) and hire people who want to control their own future.  

We accept the idea of ownership as an unbiased, pure virtue; as if a team filled with an ownership mindset is an invulnerable hero in shining armor, destined to slay the awful odds of rampant startup failure. We’ve grown up on leadership books describing olden-age corporations filled with “drones,” disengaged employees who are clocking it in, present only for a paycheck and working just enough to not get fired. Surely, the opposite must be a good thing?

Is it that simple or can we hold the idea of ownership too tightly to our chests and become infatuated with the concept? The lack of balance can make us succumb to the dark side of ownership. Let’s explore what this looks like, so as to not fall into it. 

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Ragnar Lothbrok vs Ira Glass: The Spectrum of Leadership

There are two kinds of leaders.

One propels the team forward, aggressively tackling every problem. Fighting like hell to push everyone beyond the realm of possibility, exploding the obstacles along the way, motivating everyone with a battle cry and personally demonstrating what it truly means to struggle and win.

Another creates emotional safety, an environment of trust and respect, where every team member feels supported and engaged. Serves the team, multiplying their output through behind-the-scenes work. Cheering them on while they’re down, believing in their ability to persevere – as, let’s face it, there are a lot more downs than ups along the way.

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The Wrong Incentives Are Killing Your Marketing

CEOs have complained for decades that half of marketing spend is wasted, and we don’t know which half. Despite the move to digital, the massive amount of data that Google and Facebook have collected about each of us and the near-Orwellian AI systems that can automatically pick a face in the crowd, we are close to where we started, with most marketing investment driven by gut.

Why? Aren’t machines supposed to be doing our jobs by now, 10 times more effectively?..

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Incrementality in Marketing: How to Be Confident in Your ROI (video)

I spoke at the MAU conference this year, discussing the topics of measurement and incrementality. How can you confidently tell whether the money you’re spending on marketing is bringing incremental customers or orders – those that wouldn’t have come anyway, without all your marketing hoopla?

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Marketers, Your CFO Is Your Ally, Not Your Enemy

Many marketers have chosen our profession because we love the creative aspect of our work. We worship the brilliant campaigns of our colleagues, those that are remembered years later. We are constantly looking for an authentic, culturally relevant angle that pulls on heartstrings and creates an emotional connection that transcends the cold, transactional nature of commerce.

For me, the one campaign that particularly stands out is the 2010 “Wear Your Seatbelt” campaign from Sussex Safer Roads, which aired in the United Kingdom. I still get misty-eyed every time I go back to it, and it certainly made me change my car-safety habits.

With the mission to connect with customers and prospects on a very human, emotional level, marketers often believe the finance group to be their “natural enemy.” How many times have you heard, or said, “They just don’t get it. Not everything that counts can be counted!” Or even, “These glorified accountants are trying to measure every little aspect of creative activity, driving short-termism and dooming the company to the sea of mediocrity!”

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The Dark Side of A/B Testing – Avoiding the Pitfalls

As product designers and marketers, we love the clarity that comes from A/B testing. We have an idea; we implement it; then, we let the customers decide whether it’s good or not by running a controlled experiment. We split the users into unbiased groups and watch one treatment overtake the other in a statistically significant, unbiased sample.

Thoroughly impressed by our own analytical rigor, we then scale up the winning treatment and move on. You guessed it: I’m about to poke holes in one of the most sacred practices in tech, A/B testing.

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Getting a Return from Awareness Marketing, or Measuring the Immeasurable

An engineer by training, I’ve always been attracted to problem spaces that offer a feedback loop. Got something right? Observe a metric go up. Want to know which approach your customers like better? Run an A/B test, look at the numbers, clearly see the best path forward. You can make a lot of product and business decisions this way.

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This approach served me well – until that memorable day. The day I was the one responsible for acquiring new customers. A hundred years of marketing wisdom tells us that multiple exposures are required to have someone buy from a brand for the first time. And yet, there’s so little science in determining the optimal media mix to actually drive sales.

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Having Others Want to Follow You

01fa9740-8980-441f-a71d-78ffaa06a3b1-largeI was lucky to work for a wise man who taught me the best definition of leadership that I know of: being a leader means that others want to follow you.


Want, as in, they see something in you that makes them believe in you, in the words that are yet to come out of your mouth – only because they are yours.

Want, as in, voluntarily come to you asking for advice. Want, as in, trusting your intuition with no explanation necessary. Somewhat fanatical, a bit primal, it’s akin to blind trust – something that doesn’t usually happen at the workplace.

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Incrementality in Marketing, or Marketing Economics 101

1.jpgIt’s easy to grow a consumer business: attract new customers, increase your sales. Just give your prospects money. That’s right, get on top of a nearby building and scream “Anyone want money? Take some of my money! I’ll pay for your first 5 purchases from me! And give you a $50 gift card!..”

What, you’re not compelled to try this?.. Good. You’re thinking about profitability – acquiring customers in a way that actually allows you to have a sustainable business instead of just burning your investors’ money.

And yet, the approach of giving prospects money so that they become customers is surprisingly common. Humans are amazing at optimizing for the goal that’s set for them; the CEO asked for new customers? Great, we’ll give each consumer $20 to give our product a shot!..

An obvious constraint must be added here, a profitability constraint. If we give a customer $20, we better be sure that in the time horizon we deem appropriate, we are going to get $20 back in profit from this customer. That is, that the long-term value (LTV) of this customer is equal to the cost of acquiring this customer.

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End of my eBay Chapter

This is a copy of an email I sent to my colleagues at eBay.

My chapter at eBay is coming to an end. These past 3 years have been such a privilege for me – thank you so much for putting your trust in me. I’m proud and humbled by people that worked by my side – persistent, creative, bold. I’ve learned so much from you.

When I look back, I remember the days when CRM at eBay was just forming – with a myriad of uncoordinated campaigns and lots of technical debt, all we had was determination, grit, and a vision. We have achieved tremendous results since those days: we’ve grown Marketing by double digits each year – and found the balance between human and machine. Today, peers from Uber, LinkedIn, and Airbnb say that eBay has one of the top 3 Marketing platforms on the planet – both in terms of customer experience and technological sophistication. I know that in the coming years, you will take it even further.

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