On Thursday, Feb. 1, Oakland-based food startup Josephine announced that it will be ending operations after almost four years in business.
Co-CEO Charley Wang wrote on Josephine’s blog, “We knew that Josephine was an ambitious idea from day one and, as you all know, there have been many highs and lows over the years. At this point, our team has simply run out of the resources to continue to drive the legislative change, business innovation, and broader cultural shift needed to sustain Josephine.”
Josephine was founded in 2014 by Wang and Tal Safran as an online platform for home cooks (and sometimes, community groups and non-profit organizations) to sell meals to their neighbors. An alternative to restaurant take-out, Josephine allowed amateur cooking enthusiasts to share their culinary talents with their community and for neighbors to meet each other through their mutual love of food.
But Josephine also became something bigger — an advocate for vulnerable communities that didn’t easily have access or the means to start their own restaurants or food businesses. In many cases, these were immigrants, minorities and stay-at-home parents. Aside from helping individuals become local entrepreneurs, Josephine partnered with non-profits and community groups, selling meals made by Food Shift Kitchen and Willard Middle School’s Growing Leaders program.
Troubles for Josephine started in May 2016, when the company was served a cease-and-desist order by health regulators for illegal food sales. It was forced to stop operations in Alameda County. The Bay Area accounts for one-third of Josephine’s business, with about 50 to 100 cooks active on the platform per month. (Seattle and Portland are its other major hubs.) The company was able to find a workaround by making Josephine a private marketplace. Cooks were able to continue using Josephine to make private sales of their meals. But that meant Josephine could no longer advertise as a public marketplace, instead, depending on the cooks’ own efforts and word-of-mouth to grow.
In the meantime, the startup mobilized a coalition group to address outdated cottage food law. It collaborated with cooks, legal experts, food and labor justice organizations, as well as the very group that had been working against them, the California Conference of Directors of Environmental Health, to legalize the sale of homemade food.
In February 2017, things were looking up when Josephine sponsored the Homemade Food Bill, AB 626, to legalize the sale of meals made in home kitchens. In April, AB 626 passed the California Health Committee with bi-partisan support, but in June, the pending bill hit a wall when the Assembly Appropriations Committee decided to stall a vote on it until late January 2018.
Days ago, on Jan. 29, Josephine had a victory. The bill passed the Assembly vote. But it will still need to pass through the Senate, which could take another six months.
It’s been a long journey for the start-up and it’s taken its toll.
Wang told Nosh that he and Josephine co-CEO Matt Jorgensen made the decision to close operations in the second week of January.
“Last summer was tough for us,” Wang said. The business almost shut down at that time, but was able to raise just enough money at the very last minute. The bridge round allowed them to sustain Josephine through the holidays, but during a short post-holiday break, Wang and Jorgensen took a moment to reflect on the business’s future. Over a week, they came to the realization it wasn’t sustainable.
“At the most basic fundamental level it’s about resources,” said Wang about their decision to close. “We had a hard time raising more capital given the timeline of policy efforts. The bill passed the assembly floor vote two days ago and is heading to the Senate [for a vote], but that could take up to six months. The policy timeline doesn’t match up with venture capital timelines.”
Josephine plans to continue working for policy change for home cooks through its advocacy group, Creating Opportunities, Opening Kitchen (C.O.O.K. Alliance). The group includes members from other organizations and individuals that Josephine has worked with over the past two to three years on AB 626.
Josephine will keep its online platform running until March 30, “to allow time for cooks and customers to enjoy a few more meals together.” During this last 60 days, it will be waiving platform fees for cooks and will continue taking new customers until its last day of service. It has also created transition packets for its cooks to help them continue their businesses once the company shuts down its platform. Packets include each cook’s personal business data, contact info of customers who agreed to share their information, proposals for business models that cooks can pursue to continue their business, as well as other resources.
As for the groups like Food Shift and Growing Leaders, Wang said he will be talking to them in the coming days to see how Josephine can support them during the transition. He seemed hopeful that they’ll continue after they part ways. “These organizations are the most capable of bouncing back,” he said because they have business-minded and tech-savvy teams, resources and a customer base. “They’re already on their way.”
He also is confident that many of Josephine’s home cooks can continue to thrive after the platform ends. “They may feel a sting right now, but I’m super confident they will land,” Wang said.