As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Bobby Brannigan. Bobby is CEO and founder of Mercato, the online grocery e-commerce platform used by independently owned stores across the country to provide same-day delivery of high-quality groceries and specialty foods. His roots in small business started growing as he worked in his father’s Brooklyn, New York, neighborhood grocery store. There he started out dusting store shelves and wielding a pricing labeler, delivering groceries, and eventually, devising systems for orders and inventory management, until he went to college. While in his sophomore year at State University of New York at Fredonia in 2002, Bobby founded and bootstrapped ValoreBooks, growing it to $85 million in sales to become one of the Internet’s largest online textbook marketplaces. It was later acquired by SimpleTuition, the largest student lending website. Bobby has advised and invested in over a dozen startups and can be found speaking on entrepreneurship, leadership, and how to develop win-win marketplaces.
Thank you so much for joining us! Can you tell us the story about what brought you to this specific career path?
After I sold my first company, ValoreBooks, I was unsure what to do next. One of the things that interested me was bringing what I had learned, in competing with Amazon and building my textbook company, to help independent grocery stores run a more efficient business. I wanted to level the playing field so they can compete with Amazon’s and Walmart’s online grocery offerings.
I had always grown up as part of a community filled with small businesses, like my dad’s. He knew every customer by their name, their grandparents, parents, kids. They trusted him to provide their families with high-quality, fresh food and to bring moments of happiness to their lives with a friendly, community-centered shop where they could run into neighbors and buy locally-sourced products. But I hadn’t fully appreciated it until a few experiences influenced me on this way of living.
Before college, I played junior ice hockey, traveling extensively throughout U.S. and Canadian suburbs, exposing me to many smaller towns. Unlike where I had come from, many had only chain stores that stocked mainly packaged food products. People went to the store; they grabbed boxes and cans off the shelf, and the person at the cash register wouldn’t even say hello. A lot of these towns lacked the soul and character of places where the city is fed by people that live there.
Growing up in Brooklyn, living this old-school lifestyle of feeding the community with community-run stores, and then living other places, I saw the contrast. It’s a very different lifestyle than where purveyors are a part of the neighborhood and provide a great sense of worth, character, and culture.
Similarly, when I lived in Italy for six months, it was amazing. I would go down to the produce market every day. Giuseppe ran the stand, and he would tell me what was good; “get this, don’t get that, you gotta try this,” and he would cut a slice of produce for me. There’s something beautiful about having a relationship with the people that feed you and your family.
I believe in the value that independent grocers around the globe provide; it’s not just the food but the sense of community. People take food very personally. Food purveyors in a community take great care in the fresh food products they make available to families in their neighborhoods. These independent retailers also provide jobs and purchase locally-sourced foods, adding to the strength of the local economy. And these stores often act as a place to socialize and chat with neighbors.
I am passionate about what independent food retailers offer communities conceptually and believe in maintaining it in this world. I realized I would regret it if I had not done something about it, and then 20 years later there’s a world of only large chains and Internet companies that lack the depth and character of the independent entrepreneur and the sense of care that they bring.
Having competed with Amazon for a long time, I had a good understanding of what they can do well, what they can’t do well, and what they don’t care about — that gave me a tremendous advantage to help independent grocers.
Starting Mercato not only aligned with my skill set but was something that I was really excited about, in its ability to create an impact and bring my team, the same team that made ValoreBooks an $85 million company within a few years, to the next level.
Can you share one of the major challenges you encountered when first leading the company? What lesson did you learn from that?
One challenge was getting investors interested in helping independent brick and mortar retailers. Most investors are investing in a future world filled with technology and large Internet retailers.
One thing that helped is that I was the first money in the company. And then I brought in angel investors who knew me. But for the first several years no one invested in the company from a business standpoint. Early on, we got Rick Braddock and Monica Woo, the former CEO and CRO of FreshDirect respectively. They knew the industry but were betting more on the jockeys than the horse. Like most investors at this time, they were investing in me and my team, until we built enough software and gained enough traction that larger investors saw the opportunity.
The other challenge is that grocery operations are pretty complex. We had to build a significant amount of technology to model the experience of the stores online. Other retail industries that sell by the unit are more simplistic. But in the food business, some goods have limited shelf life, some are priced by the pound, some by the unit, some by the pound that are sold by the unit, like a steak. There are dozens of nuances to building software to have an MVP that works. But we also saw this same level of depth of technology as an advantage, because we realized that once we built it, it would be harder for others to get into the business to compete.
What are some of the factors that you believe led to your eventual success?
I definitely think my degree of resilience, open mindedness, and willingness to listen to customers, teammates, advisors, and investors has helped.
The resilience is from my dad. As they always say about New York, if you can make it there, you can make it anywhere. I believe it’s true. My dad has had a business there that has been largely successful over 45 years. Competitors came in all the time, and he continued to prevail.
Growing up around my father, his resilience wore off on me. My natural instinct was “what would my father do?” That was just the way I became, and now I don’t ask, I just do. His instincts have become my instincts. That is how you run a business.
What are your “5 Things I Wish Someone Told Me Before I Became CEO”? Please share a story or example for each.
Listen to the customer — They are always right. Keep them as close to you as possible. With my first company in college in the textbook industry, I was young and naïve. I thought I knew it all. I aimed to build what I thought customers needed. It took me a decade to grow the business to $20 million in sales when I first started.
Then I realized I should be talking to the customer. They explained what their biggest problem was and what kept them up at night. It was different than what I previously had built, and I realized I could build it, and in 18 months, the business grew to $85 million in sales.
Bring in great advisors that have been successful — Get to know people that can be great advisors. They will help to guide you and keep you honest.
When you get into an industry for the first time, you don’t know what you don’t know. You may really get into the weeds at times, and it’s hard to see the forest for the trees. I started doing this in my first company.
It’s good to have someone who has been successful take you to the 3000-foot perspective to think more strategically. I am thankful to the many mentors in my life: Neil Senturia of Blackbird Ventures; Michael Loeb of Loeb Enterprises; Jerry Colonna, who just released, “Reboot: Leadership and the Art of Growing Up”; Ian Sigalow with Greycroft, to name a few.
Provide a weekly update to investors, advisors, and employees — I wasn’t doing this in my first company or the first year of Mercato, and then Jason Calacanis got me into it.
Since I started doing it, it has forced me to be more thoughtful about what I do. Because I know every week I have to provide an update. Also, in the early stages of starting a company, you may not make progress every week. This forces you to make progress.
I write the update every Sunday at 2 p.m. It’s a chance to reflect on what I could do differently. And, more importantly, it’s a way to communicate to all the people in the company and keep them in the loop. When I talk to an advisor, they already know what is going on and can provide more meaningful advice.
Be transparent with your team and investors — It’s better than being guarded. In the last business I started, I was sued by the four biggest publishers in the world. I kept everything in and did not openly talk about it at the company.
The stress of internalizing it eventually resulted in me blacking out on the highway while driving. I hit the guardrail and woke up on the side of the road. Luckily, no one else, nor I, were physically hurt.
Because I had not wanted to expose my problems to people in the company, it ended up costing my mental health and left my employees more in the lurch. I found that when I was more transparent, and people knew the situation, they stepped in and were supportive. They aligned their efforts on the company’s priority.
What I learned is, be as transparent as possible; your people and team will thank you. They are there to contribute. How can they help if they don’t know? If you have a team that would run for the hills, you have the wrong people on the team. Especially with small organizations, you need to use resources wisely.
When you feel better, you think better and execute better — In the first years of Mercato, I was working a lot, not paying attention to my health, exercising, or eating well.
Half way in I realized I’d be a better CEO if I felt better every day. Feeling good has a direct correlation on business performance.
Now I have a steady regimen of exercise, natural eating, and meditation that I practice every single day. It allows me to think more deeply about things, to be more thoughtful, and to remain calm under pressure. Your health is always number one; the better you feel, the better leader you’ll be. Take pride in your health.
What advice would you give to your colleagues to help them to thrive and not “burn out”?
First, spend more time thinking through what you are going to spend your time on. A little more time spent being thoughtful can go a long way. It’s easy to spend time on things that feel like you are getting stuff done as opposed to the most impactful things you should be doing. The CEO’s job is not the completion of many tasks, it’s completing the right tasks. Every night I block out the entire following day — even down to when I will eat and get coffee — so I can have the most impactful day possible. Each night, I am already thinking, “What will I do tomorrow?”
Secondly, don’t keep the wrong people for too long. If you know someone is not the right fit, look at how long in the past you have kept the wrong person, and try to shorten that timeframe based on signals you are seeing.
Finally, lean into your strongest people and broaden their responsibilities.
None of us are able to achieve success without some help along the way. Is there a particular person whom you are grateful towards who helped get you to where you are? Can you share a story?
There are so many people I am thankful for: my team for being there for me, my grandfather, my hockey coaches, and my advisors.
I am most thankful for my father for creating a model of resilience that has become second nature to me. He grew his business from nothing, continually adapting to the competition and changes in the market, to consistently be successful and grow.
What are some of the goals you still have and are working to accomplish, both personally and professionally?
A major goal of mine is creating a massive impact for independent grocers. I truly believe in the value independently owned food retailers provide and their ability to advance our communities. We are already helping stores across the country to increase sales and customer service online, but I feel like we have only hit the tip of the iceberg on what we can offer. Mercato has the potential to create a ripple effect of positive impact throughout the entire independent retailer business, not just in e-commerce, but where independent grocers buy their supplies, price their products, and communicate with their customers.
Another goal is to continue to recruit the most talented people. Mercato is growing, and we are always looking for the best talent to maximize the positive impact and increase the bottom line for our independent grocery store partners.
What do you hope to leave as your lasting legacy?
Recently, I was named a 2019 Grocery Game Changer by Winsight Grocery Business for helping independent grocers capitalize on their inherent strengths and focus on strategies that bring down costs and increase sales. I hope this is only the beginning. I hope to have a reputation of creating a massive impact on the grocery industry, to change the way people shop and make them more thoughtful about it.
You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!
The movement would be around preservation of community and culture in your neighborhood and emphasizing the value and joy that brings to your life.
Support local. Be mindful of where you spend your money. Think about the longer-lasting effects of doing that. I want consumers to ask themselves: what will the results be of not supporting local independent markets? And is that the result I desire?
How can our readers follow you on social media?