Personal Growth

Disruptive DNA: Mark Secchia

September 2016

What do you do once your start-up matures? Mark Secchia shares his journey from founder to strategist and lessons along the way.

US-born entrepreneur Mark Secchia is the founder of Sherpa's, China's multi-million-dollar food delivery company operating in three major cities: Shanghai, Beijing and Suzhou. These days, Secchia's role has evolved to that of hands-off strategist. It's a far cry from the always-working, micro-manager that typifies most start-up founders in the early years. As Secchia's company matured, he's been able to freely relinquish control to his executive team as he became confident they could handle the responsibility. Today, he's based in the USA, and focuses on future expansion, with the daily running of the company tasks now handled by his carefully selected management and staff.

Sherpa's targets the huge - and growing - expat market in China, offering food from over 440 restaurants that can be ordered via English-speaking phone operators. After fifteen years, the company shows no sign of slowing down; with over 400 employees and an annual turnover in excess of eight million US dollars, business is booming.

Secchia is more familiar than most Westerners with the complex world of business in China - he is the first non-Mandarin-speaker to receive an MBA from the China Europe International Business School (CEIBS) in Shanghai. He also has strong links to the expat community and is a past president of the Rotary Club in Shanghai.

He arrived in China in 1997 with a BA in Economics, selling his car in Grand Rapids, Michigan to fund his travel. His main goal was to reunite with his childhood sweetheart - and the plan was a success, the pair married in 2003.

Towards the end of his MBA degree, Secchia was assigned a role as an intern at a local petrochemical company - but instead persuaded his supervisors to agree that he could start his own company, a huge departure from the usual processes at the School. Sherpa's was born in 1999, as Secchia's MBA internship project.

“I love stepping back from the company and seeing them working independently and making strategic decisions" 

Identifying the market

Secchia does not subscribe to the common belief that entrepreneurs must embrace unnecessary risk. “If you want risk, go to a casino," he says.

From his early days in Shanghai, though keen to explore his new home, he found going out for a meal something of a trial. Waiting staff did not speak English, Chinese menus were indecipherable and exploring the many different cuisines on offer was nigh on impossible. He felt embarrassed that he couldn't read or speak the local language and conscious of inquisitive stares from the locals.

Like most other expats, he found himself gravitating to foreign-owned or managed bars, hotels and restaurants. Dissatisfied, he pondered the problem - and realised there was an opening in the market for an expat solution.

Secchia's vision for the company would allow short and long-term expats the facility to have food delivered, and not just Western food but dishes from multiple restaurants that serve a wide variety of local, national and international food. Sure, other companies offer delivery services that cost less but Sherpa's has positioned itself at the higher end of the market, with quality restaurant partners and a solution for English-speakers that included a bilingual menu-book (essentially a print publishing operation that will be phased out as mobile apps are released), a website ordering system, call centre and reasonable delivery rates according to distance from the restaurant (cheaper than a return trip by taxi).

His intuition was spot-on and correctly identifying supply and demand led to company growth and success.

But making it all happen wasn't without its difficulties.

Secchia knew he'd find it easy to market to expats – their networks were accessible to him. Meanwhile the company grew organically, by word of mouth, for locals with high disposable income. The expat focus shifted, local trend-setters latched onto Sherpa's to organise food delivery for group gatherings, and now, there's an almost 50:50 customer ratio of expats and Chinese locals.

mark-secchia-feature2.jpg
Sherpa started out in Shanghai

Technology challenges

“Hiring staff was not an issue in Shanghai in 1999, so you could really pick and choose. It's not as easy these days," said Secchia. He had a good understanding of all aspects of the business, from marketing to accounting and management - but not IT.

Delivering a great customer experience is paramount, and he obtained three samples of multi-restaurant order delivery platforms from the U.S. so he could build a bespoke system to suit his local requirements, including the delivery process and multilingual options.

Secchia hired a local university student as the software developer to produce the first version of the company's delivery management system, DMS1.

And now, with more than 400 restaurant partners and over 100,000 menu items, software development has grown to several hundred thousand dollars. The importance of mobile to the customer experience means a a mobile app is a key part of the upgrade. “We're calling it WTF, which simply means 'Where's the food?" says Secchia.

To seamlessly integrate with the food delivery process, a courier app, a new customer website, an office interface and wireless printers for all restaurant partners are all pending release.

Secchia credits his new general manager with the smooth sailing of Sherpa's technology platform.

An evolving role

Some entrepreneurs like to be in control of even the smallest decisions. Not Mark Secchia: his strategy is to find and empower independent employees with strong problem-solving skills.

“I love stepping back from the company and seeing them working independently and making strategic decisions," he says.

“It is especially gratifying when deserved internal promotions take place."

And as the company has grown, he's relinquished more and more control to these trusted employees, which allowed him to investigate future options for expansion, external investment and process improvement.

From initial startup in Shanghai, expansion to Suzhou and Hangzhou in 2007 and Beijing in 2012, Sherpa's is looking to boost its annual $6 million turnover to even greater heights through further expansion.

“Beijing and Shanghai are the low hanging fruit as they have the largest expat communities," he says.

“Suzhou and Hangzhou (which was determined unfeasible) were test cases for targeting Beijing."

In Suzhou, Secchia tried a new strategy, buying out a local business called Food Express. Within a year, nearly all of their original employees had left. Secchia learned a valuable lesson: his business had a strong and thriving culture, and to preserve it, he needed to set up future new branches from scratch.

Recently, he has added a strategic business partner - a larger company named Dao Jia, - and has stepped back from the front-line management.

His partnership with Dao Jia has given him increased financial independence, the potential to access additional markets in other cities and a reduction of his day-to-day responsibilities.

“The Chinese have a phrase that mice can only see an inch or two in front of them," he says. He sees his role now as a big-picture advisor.

As a special advisor to the company, he has time to investigate future growth opportunities, can spend more time with his family in the US, where his six-year-old daughter attends school, and can visit China every few months for hands-on tasks and public speaking engagements.

Secchia predicts that in the next five years, Sherpa's will expand to an additional 20 cities.

The company's rise is due in no small part to his strategic expansion, team selection, the addition of a valuable partner and careful market analysis.

The hard part is completed and Secchia - who now spends a lot of time back in the US - intends to enjoy the fruits of his labour, while remaining a key advisor in the future.

 

Writer: Michael O'Dwyer

Photographer: Hannah Chester