Guy Michlin, Co-Founder of EatWith, a marketplace for in-home dining experiences - Episode 9

Joost Schreve:

Hi everyone, welcome to the 9th episode of the kimkim podcast. My name is Josst Schreve and I am co-founder of CEO of kimkim. Today I have Guy Michlin in the show. Guy is co-founder and president of EatWith, a marketplace that connects diners with chefs for home dining experiences. Welcome to the podcast Guy.

Guy Michlin:

Thank you, happy to be here.

Joost Schreve:

Great, yeah it's great to have you guy. Maybe you start with introducing yourself a little bit and tell us about your path to eventually starting EatWith?

Guy Michlin:

Sure, sure. I started EatWith about 5 years ago, at that time I was still working for a solar company in Israel, I was doing business development for them. I was on a vacation trip with my wife in the island of Crete. I don't know if you've been there but there's tons of tourist trap on the islands.

Joost Schreve:

I haven't been there but I definitely heard that is a popular destination, right?

Guy Michlin:

Yeah, it's very popular. Amazing beaches and people but tons of tourist traps. After 4 days of tourist traps, essentially I thought there has to be a better way to travel. Through a friend of a friend of a friend I managed to get ourselves invited to a Friday regular dinner with a family in their home. This dinner was just the best thing that happened to us in the trip and it also completely changed our trip. They gave us tips on what to do on the rest of the trip, it was just a very warm and authentic experience. Nothing like anything else that we experienced on that trip. Then when I went back home to Israel, I met with my co-founder and I told him about this very profound travel experience and on this thought, we literally decided, "Okay, let's go and build a marketplace that will enable this magical experiences to be replicated all around the world. Everywhere you travel in the world, you can eat with locals in their homes.

Joost Schreve:

Wow, it sounds great.

Guy Michlin:

That's how we started 4 years ago.

Joost Schreve:

You were based in Israel at that point, maybe tell us a little bit about, you're from Israel I guess and have you been living in other places as well before that?

Guy Michlin:

I grew up in Israel all my life, did the army, went to law school and at one point I came to the US to do my MBA at Stanford and we happen to be classmates.

Joost Schreve:

That's right.

Guy Michlin:

Then I stayed in the US for another 2 years, I started a company which was also around foods and in 2008, I went back to Israel and joined this solar company I told you. Then my co-founder and I, we started EatWith in 2012 and at the end of 2013, we raised around of funding in the US and as part of it, we moved the company back to the Us in 2014. I've been here ever since, so 2 years now.

Joost Schreve:

Right, Okay, that's great. That is a great path. Let's talk a little bit about EatWith being a marketplace. Your platform connects travelers or diners with hosts and I think there's a lot of subtle and complicated dynamics going on. One of the questions I think that's very interesting to talk about is, how you grow such a thing? Of course, we know about very big marketplaces like Ebay and Airbnb but once you're big it kind of make sense but how do you get started?

Guy Michlin:

That's a great question. Obviously I have to start with a supply because if you don't have supply, there's nothing to sell.

Joost Schreve:

Right and the supply meaning the ...?

Guy Michlin:

Supply is for us the home chefs. It's basically people that turn their homes into a restaurant, a home restaurant. At the beginning we didn't have much choice because people thought we were pretty crazy so we recruited anyone just agreed to start this home restaurant or turn his home into a restaurant. The first host was actually my mother and then a couple of friends.

Joost Schreve:

That's a great way to start.

Guy Michlin:

Yeah, that's true. We started basically, we did a startup in Israel with friends and family that were willing to open their homes.

Joost Schreve:

Right, but I'm sure you wouldn't take just anyone, it had to be somebody who would be a good chef or a goof cook or at least also somebody you trusted I'm sure.

Guy Michlin:

Right, right. The beginning we started pretty wide because we didn't have a lot of choice but we realized very early on just like you said, that it has to be some kind of a vetting process in order to make sure that the experience is great. After a month or two we actually started to vet everyone that went on the platform. As we saw what makes a great host, we actually adjusted the persona or the person we're looking for. Today, we're in the point where we're only accepting like 4% of all the applications that come in. We pretty much know exactly what is the persona that we're looking for and all the rest we're just not letting them in.

Joost Schreve:

Can you share about the persona that it's a good for EatWith?

Guy Michlin:

There are basically around 14 to 17 different attributes but mostly what we're looking at this is the personality of the chef, it needs to be very welcoming and just a warm person that you would want to spend 2 or 3 hours with. We're looking at his cooking ability and we made a transformation. At the beginning this wasn't very important for us, today we give more emphasis on the food. We actually want to see that the person can give a food experience. It doesn't have to be a 3 star Michelin type of food but needs to be a unique type of cooking that is also authentic so it actually embodies the story or the personal story of the chef.

We have the personality, we have the food and the 3rd attribute is actually the apartment. We realized that part of the experience is actually the surroundings. We're also looking at the apartment and want to make sure it fits within the those 3 attributes and can convey the experience.

Joost Schreve:

How do you check the food? You cannot go there yourself and check it in occasions, right?

Guy Michlin:

Right. When we started, we only started in Tel Aviv and Barcelona, it was easy because we had teams on the ground. We actually did a demo dinner and people actually went and tasted the food. Today we're in about 166 cities around the world, today's more complicated so what we do, we have 2 ways of operating. One, we send photographers to a demo dinner to take pictures, because we saw pictures are very important in terms of creating trust and conversion. Those photographers when they go to the demo dinner, they taste the food and now we started to get the community involved. We do demo dinners and we open it up for the community so the community actually go to the demo dinner to taste the food and then they rate it and then if the demo dinner passes in score, then the person is vetted and is now in the platform.

Joost Schreve:

Wow, it's actually a great way to use a community as well. I'm sure the community like it, they like it as well, right?

Guy Michlin:

It's also, you have to get to a certain skill in order to have the community. Once you have the community, you can leverage it and it's great for both sides because it enables you to scale and also the community loves to be involved.

Joost Schreve:

If you envision a lot of the things before starting or did you discover this as you went and built EatWith?

Guy Michlin:

Many of the things were just discovered as we went on. We had a hypothesis, we tested them, we got to learnings and we just kept building on that.

Joost Schreve:

Cool, that's really great. Another big question is that also, we with kimkim face, how global do you go? Of course, there's always some desire to say, "Hey, we're covering the whole world." But then of course, there's the counterpoint which is focus on one city or one destination in our case and I'd love to hear your perspective on it as well.

Guy Michlin:

That's a great point. I'm not sure I have the solution for that yet but I can tell you where my mind is at right now. We started with one or two cities, we did pilot in Tel Aviv and then we focused on Barcelona. Very, very quickly we started getting PR all around the world and we started getting applications from all around the world, from people that wanted us to come to their city.

Joost Schreve:

It's actually very similar to kimkim as well.

Guy Michlin:

That's good. Where we ended up is after 8 months, we started opening up the platform to onboard more cities to the point, like I told you, we have about a 160 cities today but we did that before we had a playbook on how to actually scale a city. The good thing about that was that it gave us this global scale and also it made us the global leaders of the industries. The negative or the challenge was that, since we didn't have a playbook we started replicating many of the mistakes that we did in Barcelona to other cities and we wasted a lot of resources. Then once you start scaling, instead of focusing on writing the playbook and solving the marketplace fit problem, we start dealing with all those destruction of support tickets and onboarding new hosts and different languages.

Joost Schreve:

Something happen in some random city across the world and how can you figure out what happens.

Guy Michlin:

Yes, exactly, why or Argentina that you cannot process the payments from Argentina. All those things that are, I think if you talk about the company, you have to face it. You have the market product fit and you have the scale. If you start mixing with them and you start scaling them before you actually have market product fit before you wrote the playbook, it just creates a lot of tension and a lot of destruction. I think that, yeah, I'm not sure what's the solution because like I said, it had these pros and cons but an ideal world you want to finish one city, write the playbook, know that you know how to scale and then start scaling.

Joost Schreve:

It's very interesting, a couple of weeks ago I had a podcast with Douwe Osinga who was involved with Google Wave when they launched and in that case also, they went all out globally without, they had an interesting product but it wasn't clear what the user cases were. When I asked him about the learnings, his biggest point was, "We never focused on any particular use case, we just tried to boil the ocean at once." Of course, we know how Google Wave ended, even a company like Google faces this issues where they can't really do it all at once.

Guy Michlin:

Yeah, I totally agree, like I said, it had it pros but it's very, very challenging to mix those two faces of the company into one.

Joost Schreve:

I guess the other thing that is the case is when maybe you have one host in a certain city, which your life in the city but then the user comes to your site and they see, oh you're supporting, let's say, Bogota or something as an example. Maybe there's one host only, in that case it may have not a great experience because they're expecting of course to be able to choose from maybe at least 10 different hosts or something like that, right?

Guy Michlin:

Yeah, that's totally true.

Joost Schreve:

Just probably better to just focus or at least there's little benefits of focusing, it's not something you think about when you start. Something you really discovered the hard way I guess.

Guy Michlin:

Yeah, there's a lot of lessons. You discovered it the hard way, this is definitely one of them, I agree.

Joost Schreve:

Right, right, cool. Can you share maybe a few other things about what made EatWith work? I think you talked about videos at some point that you created and some other content marketing efforts, anything interesting there?

Guy Michlin:

With us in a way, you think about we're creating pretty new experience. When you explain what EatWith is, it's hard to grasp that because it's more of an experience and it's something that a lot of people haven't tried before. What we found is that videos are an amazing medium to actually be conveying what EatWith is, if it's done right. Then we created a series of videos that we saw that it increased conversion when you just show the video to someone, he gets it. As we found, it's a very effective medium to convey the message.

Joost Schreve:

Right, if people are listening also building marketplaces, do you recommend video and if so what approach do you recommend? I've looked at it, it's quite expensive and we're still trying to find what the best aproach is, what are your suggestions there?

Guy Michlin:

First of all, I think you need to figure out what your product is such that the video would make sense. If it's something that everybody knows what it is already, maybe video is less of an importance but if it's something that it's new and people don't really know and visual here can make a big impact and definitely I think you can make a big impact also. We were very lucky, we found someone who was very cheap relative to his quality, he did the Beyoncé video and we managed to work with him in a reasonable price. I guess if it was market price it would've been much more expensive. We got an amazing quality of videos from all around the world in a relatively makes sense price that we can afford. It's always a balance between the price and the quality of the video.

Joost Schreve:

Sure, I think creating videos at scale, while it not being too expensive and while the quality is still very good, is definitely something that's really hard. It's not easy to figure out to scale.

Guy Michlin:

What he did, he actually created the comic guide book for the teams that went on the ground, he found photographers in Barcelona, in Israel and in New York. He gave them a script of what to do, what's the equipment. That basically narrowed down the time and the need to invest on it and he did all the editing. That enabled us to do it in a much more skill-able way.

Joost Schreve:

The other end of the spectrum, there's kind of the whole Snapchat trend where even this VC based out of LA, Mark Suster, he has this new site called Snapstorms where he records quick lessons and he just take selfies with his cellphone which is low quality almost by design and it's another thing where exploring and thinking about, if it's very raw and very authentic it's also of course very cheap. That could be another interesting approach.

Guy Michlin:

I agree. What we're doing right now in Israel, we're actually using cell phone videos but for the vetting process. We ask the host, actually submits 30 seconds Snapchat of who they are and this enables us to get a sense of their personality and the apartment. We haven't tested it on the website itself yet.

Joost Schreve:

Got it, cool. Something we may test at some point, should be fun. Great, let's see. One thing I like to dive into a little bit, everyday many people are dining in other people's homes and so you are, so to speak, responsible for that. How do you deal with risks? It's quite the responsibility, eating foods, things can go wrong of course with foods, people care a lot about their foods. How do you deal that responsibility and how can you day to day manage the risks of that experience?

Guy Michlin:

Sure, that's a great question. Very early on, we realized 2 things, one we realized that trust and safety is paramount to the success of the marketplace. We put in place couple of mechanism that ensures that. One, we have insurance in most places around the world for worst case scenario which we luckily didn't have up until now. I think that the main thing here is it all goes back to the vetting process and the host and the training of the host. If you have an amazing host and you keep working with them to improve the experience, then at the end of the day, you're limiting the risk of something going bad.

At the end of the day, these people are hosting from the same kitchen, same table they're feeding their family, that ensures that the place is clean and probably does not going to be any problem. We're working with them all the time to share best practices and to make sure that something is working with one host in Barcelona, we're trying to disseminate this information with all the community. For example, we have a Facebook group for all the hosts around the world. We have sort of a host academy where we're sharing best practices. These are all things that we're trying to do to basically help this people that did make through the vetting process to actually get better all the time.

Joost Schreve:

Right, on the flip side, I guess and I haven't though about this as much but, when I was thinking about this interview, we eat in restaurants you face same problem, who's cooking your food, it's not that different I guess. The difference might be that it's more established and you're used to it but fundamentally somebody's cooking your food and you're kind of hoping that they treat your food well.

Guy Michlin:

That's true. In the restaurants, you usually don't see the person who's cooking and he doesn't see you. Here, there is a very personal connection with the person that is feeding you. He sees you also and talk to you. I think our hosts feel the burden and the responsibility and the connection to the guest that's coming.

Joost Schreve:

Yeah and I'm thinking pre-Airbnb world it's what it would've sounded actually crazy but I think since Airbnb has proven that millions of people can sleep in other people's homes. This feels a lot more mainstream right now already.

Guy Michlin:

That's true, that's true.

Joost Schreve:

Maybe on the flip side or on the less risky side I guess, or the more interesting side, you have people having great experiences everyday, I guess what I'm asking here, how does it feel to, I think you get a lot of extremely positive comments from people. I think EatWith really makes people's vacations or people's local outings a lot more interesting. Can you share maybe a little bit about the feeling that it gives that you get all this love in social media and everything?

Guy Michlin:

Yeah, that's like I said, that's the most amazing thing about what we create. Almost every day we get e-mails from users saying this is the most amazing experience or the highlight of the trip. We have some amazing or crazy stories of people getting married after meeting in an EatWith or completely changed their trip after having an EatWith experience. We also changed the lives of our hosts, we actually empower them to become entrepreneurs, seeing how we empower people in one side of the marketplace and changing people's trip or sometimes their lives on the demand side of the guests or the users that experience it's pretty amazing.

Joost Schreve:

Right, it's great. You really as you say for both sides, you create this emotional connections and opportunities for people to kind of build business and also have an amazing experience in the process.

Guy Michlin:

Yeah.

Joost Schreve:

It's great. Cool. I'd like to switch gears a little bit to your personal life. I know you have kids, I have kids as well. How do you combine running a company, running a startup with having a family as well?

Guy Michlin:

It's actually something I'm thinking a lot about because as you know here in the valley we have a lot of young entrepreneurs without a family so in a way, the things that they have the weekend, they have 2 more days to work like 7 days a week, which we don't because over the weekend we spend time with the kids. I think for me personally, it's something that's very grounding and going after very hard work into the weekend and spending time with the kids it's something that balance the week and help me to recharge. It's definitely challenging but at the same time, I think it's also mentally help at least me, to be more grounded and I know that I need to be very effective in the time that I do have because I cannot stay until midnight or I cannot work over the whole weekend.

Joost Schreve:

Right, right, exactly. It's also motivating in a strange way where you see this little kids have all the trust in you that you know what you're doing and they know you're going to make sure there's dinner every night. You can't really fail, failure is not really an option anymore. In a good way I think, you got to be able to deal with the pressure a little bit but it motivates a lot and I find them always super positive always kids right there, they're pretty excited. We just had new T-shirts and the kids got in the way to wear them and all this stuff, it's great.

Guy Michlin:

Yeah, I agree.

Joost Schreve:

Cool. The role of exercise and sports. We actually happen to run together every Saturday morning and we do some half marathons as well together. What's the role of that in your life because you saying, "Hey I work hard in the week and the weekend I spend time with the family." But actually you also spend some time running trails with me actually.

Guy Michlin:

That's true. I actually think exercise is part of the base or the foundations, I try to spend an hour every morning between 5 to 6 or 6 to 7 and go on a run, meditate and also do some exercises. I find that if I don't do that, my whole day's different and not in a good way. I try to do it every day and I find it is very also grounding and it's just an amazing way to start a day with your right foot.

Joost Schreve:

Right, right, for sure. I think when we were running this half marathon a few weeks ago, you mentioned that there are a lot of parallels between running a race like that and running a company, can you talk a little bit more about that?

Guy Michlin:

Yeah, I think it's mostly in two ways: one, when you run with someone it's always easier, I think that's also when you start a company and you have a co-founder, it's easier because you have someone to talk to and to consult with and it feels just less lonely and it is a very lonely way to run and start a company. The second thing is, it's always amazing to see when you run and you think you cannot run anymore and then you actually can run 5 or 10 more miles and it's the same with the company, there's those days that you feel like you hit a wall and then you go to sleep and the next morning you just start all over again. Then you see that it's actually not a wall, it's just a little bump that you can go over it. I find a lot of parallels and this kind of mental roller coaster between sports and races and having a company.

Joost Schreve:

Right, I totally agree over that. For me too it's both the feeling and it's important to actually, you have to exercise and spend some time outside. That's a huge positive but also, the learnings, you're at some point, you hit this kind of, in the beginning you're excited like you're starting a race and you think you can conquer the world as easily but then after a few miles you start feeling like, "Oh my God, this is not going to work." But just keep going and at some point you can keep making progress even though it feels like you're not. I totally agree, it's great to have fun, rhythm, I guess in my life to do a lot of exercise and everything. It sounds for you does the same as well.

Guy Michlin:

Yeah, totally.

Joost Schreve:

Great. It's great Guy, it's really amazing to talk to you about EatWith and how you built a company, I would really like to thank you for being here and I'll post some links in the podcast notes so people can check out your website and thanks again for joining me today.

Guy Michlin:

Thanks for having me, it was a pleasure.