Newsweek

Feeding Lawyers

SeamlessWeb handles meal deliveries to fancy Manhattan Firms

May, 2003 - Even lawyers need to eat. (Really, they do.) For two young entrepreneurs, that insight was the beginning of a business. The idea: at firms all over Manhattan, harried lawyers were ordering in lunch. And dinner. And maybe breakfast. Then they were submitting those tandoori-tinted receipts to the accounting department, which had to figure out which clients to stick with the bills. Jason Finger and Paul Appelbaum, then associates themselves at large law firms, smelled opportunity.

Founded in 1999, SeamlessWeb puts meal delivery online (all of it, except delivering the actual meals). Hungry employees at more than 200 law firms, brokerage houses and investment banks log onto the system, then view menus and order from 550 participating restaurants. Their employers can impose price limits on orders and SeamlessWeb sends them a single electronic bill that can be zapped right to accounting. Restaurants get their menus on the screens of 150,000 potential customers, and SeamlessWeb gets a bite of each meal.

OK, this was never a glitzy e-commerce company with real-time streaming data and the like. It's a gritty game of customer service and sales calls. On the other hand, it's still around, unlike Kozmo.com, say. Finger says it's growing by 20 percent a month and has been profitable for nine months (on annual revenues of more than $3 million. Mark N. Vamos talked to Finger, 31, about his company's survival.

NEWSWEEK: What lessons did you draw from the failures of other online-delivery services?

FINGER: There are similarities with Kozmo.com and UrbanFetch. They were in the business of gratifying people's immediate needs. But they needed a larger infrastructure, and an inventory of goods and services. We don't. We're just using the internet to convey information back and forth. We also decided to stay focused on providing great service and not expand too quickly.

Will you expand in other areas?

We just launched in Chicago and we're starting up in Washington. We've completed the technology and testing for a ground-transportation application-online ordering and billing for "black cars". It'll be called SeamlessWheels; the food ordering will be renamed SeamlessMeals.

You started at the height of the internet frenzy. Did you get caught up in that?

Venture Capitalists said, you've got to raise $5 million to open in New York and Chicago and Washington and Philly and London—really blow this thing out." We wanted to build a business that could sustain itself because we both have hopes of building lots of businesses. We wanted to be able to go back [for more] to our investors [the friends and family who provided the initial $345,000].

What were you worried the most about?

Whether we would fail right away. When you're dealing with friends and family, your interests couldn't be more aligned. It's your uncle's money. If you lose it you are going to hear about it.

What's been your biggest surprise?

People think because you've started a business, you must be rich. If they only knew the truth-that you're not drawing a salary, that two hours ago I was cleaning the toilets. This is a 24/7 business.

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