The Grit of Ooshma Garg
Her 12-Year Journey to Gobble's 9-Figure Exit
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Ooshma Garg is one of the grittiest founders you’ll ever hear about.
She is the Founder and CEO of Gobble, a company that makes and delivers 15-minute dinner kits, and that was acquired in 2022 for a reported 9-figure amount.
Paul Graham, Co-Founder of Y Combinator, described her as “Relentlessly resourceful” and as someone who “Does not give up.”
Sam Altman, who I previously wrote about, said Ooshma was one of his favorite founders.
It’s easy to see why.
After starting Gobble in 2010, Ooshma changed her business model four times before eventually finding product-market fit and, before that massive exit, she navigated an industry that had soured for years after a deflated IPO from Blue Apron in 2017.
Through all of it, the ups and the downs, she persisted.
Let’s get to it.
Even as a child, Ooshma was entrepreneurial and showed a high level of ambition.
After trying to pass a test for years to get into a better school, she finally does, which ends up being a turning point for her:
And finally, in seventh grade, I got into that school. And it changed my life. I used every resource they had, I started new organizations, I got funding from the principal of the school to start a Model UN society. I saw it in a different way. And I just seized the entire opportunity when I was there, because I knew how special it was, and I worked so hard to get there. And so somehow, early on, that was one experience. But there were more experiences like that, that I just learned that life is about hard work.
She clearly had grit from a young age, a trait that would be paramount for her as she would build Gobble, taking on well-funded incumbents and navigating the fundraising slog herself.
But at this time, years after getting into the school she wanted in seventh grade, she’d start her first real company - Anapata.
Ooshma’s First Business
While a junior at Stanford, Ooshma started Anapata, an online platform for recruiting college students, primarily targeting law firms, banks, and consulting firms.
At the time, nobody was using LinkedIn for this type of recruiting and she saw an opportunity.
While she was building Anapata during an internship at Morgan Stanley in 2008, she made the big decision to go all-in:
It took a lot of courage and decision-making because folks said “Oh you’ll be blacklisted from wall street. You’ll never get a job in finance if you leave.” I was very scared at the time, but the excitement outweighed everything.”
The excitement outweighed everything.
Damn, I love that.
She had been doing sales outreach for Anapata prior to the internship but hadn’t made any sales.
A few weeks into the internship, when she made that big decision, she had gotten a $10k check in the mail from a law firm that wanted to use her platform.
Ooshma was off to the races.
She set up her “office” in her 150 square food dorm room, elevating her bed to the ceiling, adding 3 desks, and sleeping at her boyfriend’s place at the time so her team could work from her dorm.
The idea was working, they were making money, and companies were writing $25k checks for annual subscriptions to her recruiting website.
But she was struggling.
The business she built, wasn’t what she initially intended, as the companies she was working with often had quotas they were trying to meet for different types of candidates. This didn’t sit well with Ooshma.
On top of that, her health went down the drain because she was working nonstop.
As Ooshma described in a conversation with Adora Cheung from YC, she got to a dark place.
But out of this experience, after 3 years of bootstrapping Anapata and eventually selling it to Law Works in 2010, she would have the clarity she needed to start Gobble, much like Tope Awotona’s clarity after multiple businesses led him to start Calendly.
Growing up, Ooshma’s dad always cooked amazing meals for her family’s dinner. This was important to him and also an important part of Ooshma’s life.
After she had gotten to a dark place building Anapata, where her health was deteriorating, her dad, upset that she wasn’t taking care of herself, flew in to visit her.
He brought with him three days’ worth of food he had prepared for Ooshma, stuffed in suitcases.
Let’s just say it had a big impact on her:
That first bite of my dad’s home cooking inspired Gobble.
She realized just how meaningful a home-cooked meal can be and how important nutritious food is.
So she decides to start Gobble and this time goes about fundraising to get the startup off the ground, targeting one investor in particular - Keith Rabois.
Similar to Melanie Perkins’ fundraising journey, pursuing Bill Thai as an investor after meeting him at an event, Ooshma used that same persistence when trying to get Rabois to invest in her company.
Keith Rabois was at the top of her investor list and had recently invested in Airbnb, but at the time he wasn’t investing in any more companies as he had just left Khosla Ventures to work at Square.
Ooshma asked friends who knew Rabois for an intro and she had actually been in email contact with him but hadn’t had any luck in getting a meeting.
After 6-8 weeks of sending him email pings without a response, she met up with her friend Jason at Red Rock Cafe in Mountain View, and, hearing that she still hadn’t met up with Rabois, he offered to text him for her.
Rabois agreed to give her 20 minutes of his time if she could be there in an hour.
Upon meeting her, as Ooshma recounts in multiple interviews, what’s the first thing Rabois says?
“Who are you?”
He was curious about this founder who had been pursuing him for weeks.
But after hearing her pitch, he was convinced and agreed to not only invest, but bring in other investors like Reid Hoffman as well.
Ooshma Announced her $1.2M seed round in May of 2011 with investors including Reid Hoffman (via the Greylock Discovery Fund), Felicis Ventures, Founder Collective, SV Angel, Morado Venture Partners, Thrive Capital, Keith Rabois, Jack Abraham, Lorenzo Thione, Benjamin Ling, Noah Goodhart, Craig Shapiro, and Doug Chertok.
At the time, Ooshma’s announcement in TechCrunch described the Gobble experience:
On the site, users can sign up to order home-cooked food from chefs in their area. You can search by dietary needs and other filters, and the service matches people with chefs’ creations. Members can also review and rate meals.
This, as Ooshma would describe, was their “peer-to-peer lasagna” business model, the first of four she would eventually try out. But more on that soon.
This seed funding round would help her build out her team:
[email protected]_K 2/ I was the only FT person. Still raised seed bc I had proof of concept. With the funding I hired one of the engineers. #ASKOG
— Ooshma Garg (@ooshma)
May 5, 2016
She had tried to find a technical co-founder, doing the whole founder dating dance, but couldn’t find one.
With this team, they were able to go after their target customers, which Ooshma described in a Twitter AMA:
[email protected] Since day 1, we've focused on busy professionals, dual-working couples and parents. Rolled out in Palo Alto first! #ASKOG
— Ooshma Garg (@ooshma)
May 5, 2016
And just where did Ooshma find those early customers for Gobble?
She left business cards with coupon codes at coffee shops, talked to moms’ groups, posted on forums, got tables at community events, and even ran up and down the streets of Palo Alto putting envelopes on every door with more coupon codes.
This in-person strategy was effective. A key component of it?
The early feature they built into Gobble allowing promo codes so they could have attribution, enabling them to see what was working and what wasn’t.
By December 2011, Ooshma had her small team, and they were about to go through years of iteration.
happy holidays from the gobble team! http://t.co/6ZDNcdAO
— Gobble (@gobbleinc)
Dec 22, 2011
Trying to Find the Right Business Model
Remember Gobble’s first business model, “peer-to-peer lasagna,” as Ooshma called it?
Here’s how Ooshma described it in an interview with Garry Tan:
Marketplaces have a good chance of working with assets, like clothes or toys or an extra bedroom. It’s a bit more difficult of a nut to crack with services.
We saw companies like Homejoy or Exec not necessarily be able to work out all the logistics and similarily with Gobble, though we had a lot of chef talent, in our case just the standardization of spice level or portions or delivery times wasn’t something we could make consistent with such a distributed pool of chefs. So we had to pivot from a marketplace model.
After this first business model, Ooshma moved to an enterprise catering business model, something that had been suggested to her by others as having high revenue potential.
And it worked, was making money, and seemed easy. They made good money and showed growth, but this wasn’t what Ooshma set out to build and she knew if she continued down this path, where 75% of her revenue was coming from this enterprise model, it’d lead to her committing to that business model 100% as this is what she’d need to raise another round of funding.
But she didn’t want to.
She wanted to stick with her vision, and she explained why:
I have found that I can not listen to anything… there is nothing more loud than my gut. When you know something and you’ve been it for 3 years or thousands of days, you can’t avoid it. You know what you have to do.
So instead of raising a Series A of financing at this point, she raised a bridge round of around $200k, eventually having to raise another bridge of $200k, and wound down the catering business.
I just have to interject here and give mad props to Ooshma for staying true to her vision. It couldn’t have been easy, but she stayed true to what she believed in with her whole heart.
So which business model did they switch to next?
Personalized dinner service.
This time they were more focused on the technology, and using this personalized nutrition model that hadn’t taken off yet.
After switching to the personalized chef version of the business model, they were making 5x more than any other model so far and Ooshma went out to raise a Series A of funding again.
It didn’t work.
VC firms had already made their bet on other food startups and the industry at the time was crowded.
Ooshma failed to raise a Series A again and, as the company was running out of money, a friend suggested they apply to Y Combinator, the famous startup accelerator.
She was reluctant, having already raised a seed round of funding and being farther along than companies are when they typically apply, but she would go on to give a glowing review of YC:
Y Combinator was the lifeline we needed and we wouldn’t be there without them.
And you’re about to learn why.
Joining YC and Finding PMF
Ooshma joined YC for their W14 batch, at the beginning of Sam Altman’s reign at the accelerator.
During this time, Ooshma was visiting customers every week and making every penny count.
It paid off as she was able to figure out what their fourth and current business model should be.
In August 2014, after completing YC, they launched their 15-minute dinner kits, shutting down the personalized nutrition model that was doing between $1.5M and $2M of revenue at the time.
Here’s why Ooshma decided to shut down a business model that was working:
And I shut down that personalized dinner service. And we were doing maybe like one and a half to two million in ARR, but it wasn't going anywhere. The food wasn't different enough.
And when we had tested and R&Ded these prep kits, where people cook it themselves and feel like a superhero, that was magical in our testing and our customer visits.
So within 30 days, we just ripped the band-aid off, shut down that business. It was the highest revenue making iteration that we had ever built.
With every iteration, we made more revenue ultimately, even though we shut it down. And then on August 3rd, we launched this thing. And I emailed Adora (YC Partner) this long email of, "Here are the screenshots, here's this." And I was using her to hold myself accountable. I was like, "It's launched."
And that was the best decision of our lives. And so just speed to execute. And the other lesson is like finding people who are in your corner, you need people who are in your corner, and it's okay to not talk to the ones who aren't. But finding people who are in your corner who you can use as an inspiration to motivate you is really critical for speed.
Around this time, Thomas Ricci, a chef with a rather impressive resume, also joins Gobble as their head sous chef.
And this article explained their new model with Thomas Ricci on board:
So Gobble prepares and cleans the locally sourced vegetables, marinates the meat (or tofu) and provides the instructions for the rest, putting it all together in a way that makes cooking it in one pan completely possible. Each kit costs $11.95 per person; the price gets bumped if you want to adjust the servings for more people.
The menu rotates. This week, they're offering cashew chicken with vegetables and brown rice; barbecue ribs with macaroni salad and green beans; sweet potato enchiladas with Spanish rice; cheese tortellini with sundried tomato pesto sauce; and others.
And they found product-market fit, which Ooshma describes as, “the center of the Venn diagram of ability to grow on one side and retention on the other side.”
After switching to this new model of 15-minute dinner kits, Gobble hit $6M in ARR in no time, well beyond where they ever were previously.
The experience of finally finding PMF also forced important lessons on Ooshma:
Necessity breeds invention and so by not having that much money we didn’t get comfortable and we had to innovate and we had to have good numbers. So I’m not saying we should all starve our companies but because we were like somewhat cost-starved, I wasn’t distracted by lots of fancy things and I just focused on making all the dollars count and doing something meaningful.
By May 2015, Gobble had delivered 230,000 dinner kits.
Around this time, they’re growing 42% monthly, with the average member spending $242 per month.
The new model also unlocked another idea, with Ooshma realizing you could ship meals using the likes of USPS, FedEx, or UPS, a new concept at the time for meal delivery:
The shipping model was great on contribution margin. One, because it costs less than drivers sitting in traffic and delivering to people on the fly. But two, because you’re sending multiple nights of food in one box, not just delivering one night at a time.
At this time, their kit cost $11.95 and they were planning an expansion into a number of states including Arizona, Nevada, Oregon, and Washington.
And I told you they hit PMF after YC, but here is the revenue chart to prove it, from a talk Ooshma gave in 2016:
Ooshma’s experience going through YC got Gobble to The Promised Land.
While Gobble would continue to grow, little did Ooshma know at the time, there was a storm coming.
Growth Before the Storm
Gobble raise a $10.75M Series A in 2015 and they were serving 1+ million meals per year in California at that time.
This round of funding, led by Trinity Ventures, also included Andreessen Horowitz, Fenox VC, Initialized Capital, and Anjula Acharia-Bath.
Riding continued growth in the next couple of years, they raise a $15M Series B in 2017 led by Khosla Ventures with Initialized Capital, Andreessen Horowitz, and Trinity Ventures also participating.
Gobble is available in 32 states at the time, making more than $800 per year per customer, more than competitors Blue Apron and Plated, having best-in-class LTV:
[email protected]'s customer LTV really is best-in-class. $900 vs. $APRN's $630 after 12 months. Congrats, @ooshma! (FYI @sarahbuhr @DelRey @heatherhaddon) https://t.co/7ENA7wd2SZ
— Mike Babineau (@mikebabineau)
Oct 6, 2017
And Gobble continues to expand.
Ooshma shared more about what this expansion entails in an interview with the New York Business Journal in February 2018:
It has been a dream of mine for years to launch Gobble in New York City. The ability to serve all the busy couples and families in one of the busiest cities in the world is truly a dream come true. Launching in a new city is in many ways similar to launching a whole new startup. You have to hire new team members, handle different laws and regulations, buy new equipment, open a new office, and on-board new suppliers. Plus, each region in the United States has its own unique attributes, which affect Gobble as a business.
By February 2018 they’re in 35 states.
Expanding on what she mentioned in that interview above, she shares more about how the East Coast differs from the West Coast:
Each region has its own weather, unique personality, demographic composition, housing, style, family size, and food preferences that affect everything from what meals people want to order to the equipment they have in their kitchen for cooking our dishes. For example, in New York, we knew that our one-pan kits would be a hit. Many people in New York have small kitchens. Often they won’t want to use their ovens, or they may not even have the storage space for mixing bowls and cutting boards, let alone the time to mix ingredients or chop veggies.
We built a state-of-the-art facility to service the entire East Coast in a building with existing refrigeration equipment. We were also supported by local and state governments in our building and hiring efforts, all of which helped make this launch possible. The East Coast market is growing 10 times faster than the West Coast one. We could not be happier. I had to check the sales numbers three times to even believe them. The need for convenience and the number of busy working couples is more concentrated on the East Coast than on the West Coast.
Gobble has around 160 employees at this time and is growing like crazy.
But what makes them stand out?
How are they able to have such high revenue per customer?
To Ooshma, it was obvious - their innovative product. Their 15-minute dinner kit was an entirely new way of cooking at the time and their product itself, with its AI recommendation engine, continued to get better in time:
Gobble has begun experimenting with AI to help ensure that meals look and sound as appetizing as possible. “This is something AI can do with far greater accuracy than any one person or one-off survey,” Garg said. “Gobble employs a ResNet based computer vision model and NLP vector embeddings to see if we can predict how appealing a given photo, title, or meal description is to our members. We pair this with an iterative and A/B testing approach to dish copy and creative, showing unique combinations to different member groups across the country to capture further learnings — much like Netflix’s approach to displaying different cover art in various placements.”
By April 2018, Gobble was growing their annual subscriber revenue by $1M per week since the start of 2018 and they are in 44 states, with a big partnership with Walmart announced in August of that year.
All this growth, all this buzz, but the leader in the industry at the time, Blue Apron, had a terrible IPO in 2017 and industry sentiment would sour for 3 years, directly impacting Ooshma and Gobble when they needed to fundraise.
Trying to Raise a Series C
Around 2018-2019 Gobble is doing somewhere in the $50M to $100M revenue range.
They get a term sheet valuing the company at a multiple of that, as Ooshma would describe, “in the hundreds of millions.”
But they’re also running out of cash.
The VC firm that had offered that term sheet, utilized very predatory behavior, leveraging the fact that Gobble was near the end of their fundraising period and didn’t have much cash left, to change the valuation to less than $10M.
Yes, $10M, not hundreds of millions like not long before.
Ooshma’s thoughts on this?
I think after seeing everything under the sun happen and just challenges beyond my dreams, I have a bit of a zen attitude about it. On the one hand I do think that reputations echo long after any action… but on the flip side, some people have the reputation that all is fair in love, war, and venture capital.
It’s the company’s job to maintain their own leverage and protect themselves.
It made her realize they’d never be fully in charge of their own destiny if they always took external capital.
During this time, Ooshma described how she always thought about her business:
Even when our economics were strong and our customer LTV was the best in the industry we, somewhat counter-intuitively for Silicon Valley, made it a practice every week to look at our operating expenses and to cut costs and cut fixed costs so that, should we ever need to face any difficult situations we could weather the storms and be the winning player.
And thankfully they did.
But at the time she was still burning more than $1M per month.
So, without having success raising her Series C, she had a few options:
When our Series C didn’t manifest, we could have done one of four things - shut down the company, recap the company, sell the business for some version of an asset sale, customer lists sale, or acquihire, or try to turn the company around and operate profitably.
Ooshma decided to completely cut her marketing spend, from around $1M per month to $0, and see how many customers would stay with them.
She had projections for multiple scenarios of what might happen.
The switch to profitability worked!
They ended up maintaining 70% of their revenue by the end of the year, showcasing just how loyal their customers were.
As Ooshma describes it, “We were generating cash every month and we basically raised a Series C in millions of dollars in free cash ourselves without diluting the company one bit.”
And this time, they did get to the promised land.
In December 2022, Forbes announced Gobble’s 9-figure exit to Intelligent Foods.
Ooshma was named CEO of both Gobble and Sun Basket after Intelligent Foods acquired them as well.
But why sell?
Here’s what Garg had to say:
Intelligent Foods was the right long term partner for Gobble because they are a fast-growing and diversified food powerhouse with the resources of a top food manufacturer combined with the spirit and hunger of a startup. The timing was perfect for Intelligent Foods to bring in Gobble because Gobble has been growing and profiting sustainably for over four years – a rare occurrence in this industry – and we are ready for the next level
Hearing more about Ooshma’s approach to building businesses, it’s clear why Gobble not only survived the storm but thrived after it:
Some people think that they have to win today or that they have to win tomorrow, but to me, winning and success is being the last person standing. It’s not being the best person today or tomorrow, it’s being the best person at the end of the day.
But what else contributed to the success of Ooshma and Gobble?
Their secret sauce.
Here’s how Ooshma described it:
There are a few companies in the space, Gobble being one of them, Daily Harvest is another one, that actually set up an innovative supply chain, and made proprietary IP in the food.
By putting in the upfront work and developing these proprietary SKUs, our secret sauce is the sauce actually.
At the time of that interview, two years before their exit, Gobble had more than 2,000 proprietary SKUs and sauces.
As Ooshma would mention, you can’t simply go to the grocery store and recreate Gobble’s recipes.
They created flavors, much like Coca-Cola and Starbucks, that people keep coming back to again and again. All of this made the product even stickier and ultimately led to Gobble’s nine-figure exit.
In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.
Ambition is very singular, mission is shared. Ambition is not enough. Mission is the strength it takes to get through the trough of sorrow and all the way to product-market fit. Mission is what I shared with these 10x hires who stayed with our company through all the ups and downs.
On knowing your core competencies:
Sometimes it’s not enough to just have one core competency… you have to find innovation at the edge of two industries, and in our case, it’s food and tech. A lot of food tech companies are just tech and I don’t think that they were able to make it that way without bringing the food expertise in-house.
And more on core competencies in another interview:
Any company is going to go through ups and downs at different periods in their life cycle and it’s important that you believe in what you’re doing beyond just doing it for the money and hopefully set up long-term core competencies that stand the test of time so you can weather those periods of months and sometimes years that are going to be harder for your market.
On real innovation:
And what I have learned, what I would suggest to an entrepreneur is that real entrepreneurship comes from diverse perspectives. And from innovating at the edge of different industries.
On reasons to quit:
I guess I quit on my first startup, and on one of the iterations of Gobble, and the only reasons I have ever quit is because I think that what I was doing didn't have enough impact in the broader world, or fulfillment and meaning and purpose for me.
And those are the only reasons I have quit in the past. That said, I think if the environment evolves, and you can't keep up with it, and things are just always surpassing you, then that would be a really hard look in the mirror and I may need to quit in that instance.
So not getting comfortable and constantly iterating and not being dogmatic is important. A good example of that is Netflix. Netflix evolved to stay alive. There are a lot of big titans of industry that fell along the way because they couldn't evolve.
Finally, on the power of one founder:
One person and one founder really can bend reality to their will and it just takes that unbridled confidence to do so.
Thanks for reading! Let me know on Twitter what you thought about this edition of Just Go Grind. If you found this valuable, please consider subscribing and sharing it with a friend 😊
And if you enjoyed this profile, take a look at the first three - Sam Altman of OpenAI, Melanie Perkins of Canva, and Tope Awotona of Calendly.