How Claude Ritter went from Bootstrapping in Shanghai to Raising Billions in...

Boredom drove devout entrepreneur, Claude Ritter of Book A Tiger, to begin his very first, self-funded start-up in an apartment in Shanghai. Feeling less than challenged while working on a project in China, he came together with some like-minded techies to create a website that offers online dating services to the German market. 10 years later, with a billion dollar venture under his belt, Claude has learned many lessons in starting and scaling successful businesses. He shares his experience with us today:

Setting: Not many of us know about this - your startup career actually kicked off in Shanghai, building some of today’s Germany’s largest casual dating communities. Tell us a little bit about it?

Claude: I originally went to Shanghai for a project through the Swiss chamber of commerce. The work itself was pretty boring. I then coincidentally met David and Julius who were at that time searching for a developer for their website. That’s how the road to the 'casual dating' business started (laughs).

Setting: How was it running a company in China?

Claude: We started out by working from our apartment, with then up to 10-12 people. We had limited resources available, so how we have been dealing with business matters was sometimes illegal, like paying everyone in cash. At some point, our Chinese employees start to question about social benefits and we decided then to incorporate the business. In China, our only option to set up a company was to put in $100,000 of our own money. We had to save up for a year to finance the incorporation.

Overall it was a great experience, we were able to try out different projects and approaches. Especially in the field of traffic generation - we were forced to get creative since we couldn’t rely on SEM or Facebook Advertising, which blocks any adult related content.

Setting: Your previous venture, Delivery Hero has raised roughly $1 billion to build its network of food delivery services, being now one of the most valued startups in Europe. Why did you decide back then to go this path of building a business highly dependent on venture capital?

Claude: It wasn’t our intention originally for the company to become this large.  Our initial goal for Lieferheld was to become a good number 2 in the German market (behind Pizza.de). The awakening to become a larger network was at the point when we established the Delivery Hero Network in 2011 and acquired the Swedish company OnlinePizza. It became clear to consolidate operations in order to succeed in the market. That led us into raising larger rounds of investment to effectively buy ourselves into the market to gain market share quicker. We called it the ‘Buy & Build’ strategy.

Setting: Now leading Book A Tiger, you’ve been for the past year only operating out of Germany. Why and what are you doing different this time? 

Claude:  We had many learnings thanks to our previous ventures. Personally, I didn’t want to work anymore on a shitty tech product, but rather building a solid foundation first and then grow the business from there.

With Book A Tiger, we’ve now placed a big emphasis on solid HR practices - from screening, to hiring to onboarding new employees. We learned the importance of having a proper company culture. With Delivery Hero, we were very performance driven and often neglected the cultural aspect of a business. We’ve mistaken ‘making events’ with ‘making a culture’.

Employee Values at Book A Tiger's office

Setting: You’ve had a lot of experience in scaling a business quickly - what would be your advice to other startup founders?

Claude: Don’t muck yourself with KPIs that don’t make any sense. Try to find out what are the true drivers behind your business. Do you understand what is really happening behind the numbers?

We’ve recently had an example with Book A Tiger where we initially misjudged the numbers for December. We analysed the numbers again and found the reason that was lying behind the surface. That’s a mistake that would have probably slipped through with Delivery Hero.

Setting: Thanks Claude for the interview.

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