Why Greylock invested in Ritual

About Greylock

Greylock Partners invests in entrepreneurs that focus on consumer and enterprise software companies.

• Menlo Park, California, United States
• 101-250
• Venture Capital
• Early Stage Venture, Late Stage Venture, Private Equity, Seed, Venture
• www.greylock.com

About Ritual

Ritual is an ordering app that taps networks of co-workers & colleagues for fast & easy pick up & pay at local eateries and coffee shops.

• Toronto, Ontario, Canada
• 251-500
• Series C
• Private
• www.ritual.co

Our Investment in Ritual

I’m very excited about our investment in Ritual. Ritual has grown into a thriving social commerce marketplace that connects brick-and-mortar merchants and local customers.

We led the Series A in the summer of 2015 and I joined the Board of Directors. Since then, Ritual has launched 7 cities, raised a large Series B, and signed over 1,600 restaurant partners.

Through Ritual today, a person can order food for themselves and have it ready to pick up when they arrive at the restaurant.

No waiting in line. While ordering ahead via an app is not a new thing, the magic with Ritual is that other friends and colleagues can add, or “piggyback”, their own food orders onto the person who is already picking food up.

As a result, the first person picks up all the food orders when they pick up their own, and brings it all back to the office. It’s Social Ordering and local delivery — powered by technology.

Ritual has taken a natural behavior that already happens in the real world and made it efficient and effective by connecting supply and demand in real-time at scale.

The founders of Ritual — Ray Reddy, Rob Kim, and Larry Stinson — are incredibly talented serial entrepreneurs who all have deep local commerce and mobile technology expertise.

Ray and Rob worked on Google’s mobile product for years and later launched Google Shopping Express.

Before Greylock invested in Ritual, we met regularly for more than a year and talked about how to use technology to unlock local commerce.

Throughout that year, my belief in them as founders was so strong that I was prepared to support them on anything they wanted to do. So I was thrilled to invest in the team and join the board.

Ritual started as an order ahead service. It was the foundation necessary to build the social platform that addresses local commerce.

And in the process coined the term, Social Ordering, to describe their approach. This idea has been brewing for a long time, but hasn’t come together until Ritual.

Local Commerece and Social Commerce

Local commerce lives at the intersection of the real world and the virtual world. Many entrepreneurs have tried and failed to unlock the power of people and product.

The dream has been to have the business model of a transaction-based network with the virality of a social network. It’s a challenge to make this work.

The trillion dollar local commerce market has been stubbornly resistant to disruption. Time sensitivity combined with low ASPs make it unusually hard to unlock.

Founders can’t afford to brute force distribution with money. They can’t afford to accommodate tight SLAs with employees.

They can’t afford to move products from point to point with paid couriers. It takes a nuanced business model and product touch. That’s why nearly all attempts have failed.

Ritual has created a peer-to-peer network driven by people as much as product. It is financially and logistically efficient. And creates a powerful network effect.

Social Ordering enables Free Delivery

Local merchants want their products to reach as many people as possible. Limiting restaurants to walk-in and take-out customers misses the millions that need more convenience.

And customers are hungry for a better experience. Today, people stuck at their desk working toward a deadline will eat whatever is sitting around in the break room that isn’t spoiled or has someone else’s name on it.

This has given rise to food delivery services. However, they have only solved a need for people who value their time more than money.

It’s not uncommon for a food delivery customer to pay $20 for a $10 burrito. This doesn’t work for the mass market who value money as much as time.

Ritual’s “piggyback” allows friends and co-workers to pick up lunch when they have time, and their friends can return the favor when they have time. It’s a nice way to connect and support your colleagues.

And the delivery is free when it’s done by your friend. Social currency displaces financial currency. It’s an elegant solution at the right price… Free.

Free delivery is the only price that works for mass market local commerce.

Modality Matters Walk VS Drive

All local commerce isn’t the same. Hyper-local is different than local. Distance defines the transportation modality. The line of demarcation is between walking and driving.

The existing delivery services and their heavy economics work as a premium service for driving distances. Ritual and its lightweight social economics works for all commerce that’s walking distance.

Inexpensive items within walking distance which make up a large portion of the trillion dollar local economy should be accessible without paying a delivery premium.

My rule of thumb: if you can go to it, delivery should be free. If it has to come to you, then delivery should cost money. Ritual’s social ordering model enables all items within walking distance to have free delivery.

Conclusion

We talk a lot about unlocking markets through the power of technology itself.

And it’s often the right approach. However, for local commerce, the answer may have always been leveraging technology to unlock the power of people. Read more about Ritual.

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