COVID-19 has a lasting impact on society and the way we do business. The pandemic has many businesses struggling. Some because they can’t meet their targets. Others are in a more luxurious position and are struggling to keep up with demand. Daniel Gebler, CTO of Dutch online-only supermarket Picnic explains how his company dealt with a massive surge in demand overnight. “We call this business as unusual. Nobody was prepared for this.”
Fastest growing supermarket
Founded in 2015, Picnic quickly became a household name in The Netherlands and their small electric vans a familiar sight. Their innovative concept meant they could offer the same products at the same price as regular supermarkets, but deliver them right at the door of their customers. Combined with a slick app, optimized delivery process and a high tech fulfilment center, the startup was the fastest-growing company in The Netherlands in 2019, with over 350.000 customers. And when public life largely shut down and people opted for shopping from home, a surge of new users quickly found its way to Picnic.
“If you look at the Google Zeitgeist for ‘online boodschappen’ (Dutch for ‘online groceries’), you can see around mid-march it explodes massively,” says Daniel Gebler. As CTO at the online retailer, he is responsible for all things tech. This explosion of search queries quickly translated in a massive peak of users at Picnic. “Most companies are happy when they can report 20 or 30 percent growth year over year. We did 15 times as much as we did before in a matter of days.”
The rapid growth that Picnic faced due to COVID-19, is exceptional but not unique in the online services sector, says Marek Gajda, CTO at The Software House: “While many traditional companies have to find a way how to scale down, a lot of CTOs deal with a different challenge. They need to scale up rapidly in order to answer higher demand for online shopping, entertainment, events, working, and many other life areas that before were more reserved for the offline reality. More and more software projects we’re working on right now are focused on improving existing solutions for better scalability, performance, and infrastructure costs optimization.”
CTO Roundtable series to share know-how
Gebler appeared at the CTO roundtable webinar. These are organized every month by The Software House, with the aim to share knowledge among C-level professionals and tech managers. Picnic’s Gebler joined to talk about how to get ready for the sudden growth of your business. Hosted by The Software House General Manager for The Netherlands Gerbert Oude Velthuis, these monthly sessions give CTO’s across the world insights from other high-tech companies, and the opportunity to ask questions to peers with a particular experience. Earlier CTO Roundtables talked about the challenges of distributed teams and the technology, people and processes necessary for scalability on demand.
Questioned by Oude Velthuis, Gebler furthermore clarified there was a very clear rush hour in the Picnic-app. “Normally, people in the Picnic-app are starting their shopping around 6 or 7 in the morning. Then you basically used to see a flat demand until around 10 o’clock in the evening and then everybody goes to bed.” This behaviour drastically changed in March. “Customers came in large quantities to our app, in the morning at 9.00.” Why at that particular time? Gebler: “That’s when the new capacity became available,” meaning customers could place orders and pick slots for delivery the coming week.
‘Nobody was prepared’
A sharp peak like that, reporting sometimes more than 15 times as many customers as before, put a strain on the operation. Gebler: “It meant we had to scale up basically all capacities. The app-capacity, the backend-capacity, the database.” Picnic’s sudden surge even challenged the scaling capacity of their cloud-vendors. It quickly became clear to Gebler: “Nobody was prepared for a situation like COVID. Nobody was prepared for this kind of peak demand.”
As a tech-first company, Picnic has the skills and resources to quickly move. Gebler has about 50 product teams, each with their own tech lead reporting to him, but operating mostly autonomous. Gebler: “The teams are mostly self-managed, they set themselves goals. They each have a strong vision of where Picnic wants to be the next couple of years.” For Gebler, the code is not finished until there is analytics to support it: “We measure how many customers use a feature, which partly works, who likes it, how much time they spend. After four or six weeks we evaluate consumer-facing products. We want to get better at predicting the impact of new features. In the beginning, it is simple. Everything you build is better. If you are larger, the improvements become smaller so it is prudent to get a better understanding of the impact.”
Building a well-structured development team like Gebler did, has really paid off when the company experienced sudden growth. However, The Software House’s Gajda says, facing this growth wouldn’t be possible if Picnic hadn’t made some significant decisions about their product’s architecture in advance: “In the end, it’s a foundation of scalability and performance of any software product. To give you an example, at Picnic the service-oriented architecture makes it possible to quickly respond to changing situations. Each service is scaled independently, so they can use only as much resources as they need to.”
Design principles of the Picnic CTO
Despite the sudden surge in users at their platform, Picnic has not lost sight of the long-term growth. Their earlier expansion to Germany learned them some valuable lessons. “One of the design principles is, we keep all tech and product development central. All our products are deployed in both countries, and hopefully soon more, in exactly the same way. There are some slight differences, think about payment products. On the tech side, we try to keep everything together.” According to Gebler, this means for Picnic it will be roughly as easy to expand their technology to one country as it is to one hundred countries.
Asked by The Software House’s Oude Velthuis about any advice for fellow CEO’s, Gebler has the following to share: “Most startups fail not because they make a wrong decision, but because they take too much time to make a decision. Iterate as fast as you can. The biggest mistake is being too late.”
More information? Contact The Software House for free consultation
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Image credit: Picnic