Ideas and Validation February 26, 2020

Want harsh criticism on my restaurant-related idea

Giancarllo Rojas @GiancarlloRojas

There's this TV Show here in Brazil where a popular chef goes to restaurants that are almost bankrupt and tries to identify their problems. Most of the time the problem is related to communication between the waiter, the kitchen and the manager/cashier that leads to poor customer experience, leading them to not come back.

As an avid restaurant-goer, I've realized that some of the best customer experience I had was in places where they had their own software to solve this problem, my idea is to make something more accessible for small/medium-sized restaurants that have such problems as well.

The idea has 4 layers:

  • The manager:
    -- Can register products classified by categories
    -- Can manage product stock
    -- Can register tables and see their status
    -- Can add special offers
    -- Can see and manage orders
    -- Can see Statistics and KPIs
  • The customer:
    -- Can scan a QR code and get access to the restaurant menu
    -- Can make orders, call the waiter, see the status of the table
    -- Can subscribe to receive special offers through SMS or E-mail
  • The waiter:
    -- Can add orders for tables
    -- Will receive real-time updates on orders that are assigned to him(automatically), things like grabbing a chop or an order that is finished on the kitchen
    -- Can mark an order assigned to him as finished
  • The kitchen
    -- Will receive real-time updates on new orders
    -- Can mark an order as finished

I'm trying to think of channels for customer acquisition for this idea, I spoke to many people that said that this is a kind of idea that needs direct sales, which is totally out of my comfort zone hahah.

What do you guys think? Thanks for reading it, really appreciate it.

  1. 3

    If direct sales are out of your comfort zone (which is totally fine), this idea isn't something you should pursue. Restaurants are not looking for this and you'll need to (hard) sell this. Unless you want to team up with a great sales guy, don't pursue this.

    PS - Just my opinion.

    1. 1

      Maybe they're not looking directly to this, but don't you think they're in pain? I keep hearing stories about how hard the industry is right now, about how some restaurants are moving out of delivery apps because they're charging too much commissions. But tbh I don't really know if it is true.

      But you're completely right on the direct sales thing, I think I will go out and try to get conversations with restaurant owners and see it for myself. If I fail at this I would probably fail in sales with that product also.

      Thanks very much for your response friend!

      1. 2

        Yeah. You are right there is a pain point. But they aren't looking for solutions because many don't think it is a problem. They just think "that's the way things are" and they will have to work hard.

        Restaurants are adopting such systems but it is a hard sell. You are asking someone to use a system that they are not familiar with and saying this will solve a problem they have (which is great). But the problem does not end there. Now the employees have to learn to use the system. Waiters need to replace notepad in their hands with tablets. Cooks needs to have a big screen to see all the orders. Managers need to effectively learn to use all the features. What would happen if any one of them is not tech-savvy?

        -------------

        You are right about the delivery apps are charging too much commission. I talked to the manager of a small restaurant in my area and he told me they have to increase the price of items if you order online to make a profit. So ultimately commission is sort of being paid by the customer and not the restaurant.

      2. 2

        IDK how it's around your area but in many places restaurants are the number #1 type of business in closer rates.
        Too many people think it should be easy and start them with little knowledge of the business or people side.

  2. 2

    which language are you planning to use to create that software?

    1. 1

      First I was planning to build a native app with React Native for the Customer / Waiter / View, but then the customer would have to install the App before getting access to the restaurant menu, which can be a hassle.

      So if I go ahead with this idea I'll be using React alongside NodeJS for the backend for the MVP.

      1. 1

        I created something like that but in c#. and i have some restaurants using it. I agree that's is not easy to sell, even if every restaurant needs it.

  3. 2

    My parents have been running restaurants for 20 years and I agree with Akshit that it will be hard to sell it.

    I'm sure you can target to more specific group. I see a few challenges here. Major challenge is most people in that industry are not tech savy, and employees working there (servers, kitchen staffs) are not used to this idea.

    They want something that can directly increase their revenues instead of something that can save costs.

    I believe there's a great potential industry, I want to see how you can overcome them. Anyway I can subscribe to your business progress?

    1. 1

      The thing you said about them not being tech-savvy is so true. The only company offering something similar here in Brazil also offers training and are really expensive, but only sells to big brands as a result of that.

      I want to do something really simple, for example the Kitchen view would consist in basically a list of orders and a button for marking an order as finished, not that different from the usual kitchen bell that alerts the waiters of finished orders.

      But yeah, It looks like a really challenging idea. You can follow me here on IH, I'll be posting updates here, thanks for your response and interest!

      1. 2

        Good luck with it. I saw that China and Japan have all kinds of advanced technologies in restaurants. What's your status now? and do you have a co-founder? What's your business plan?

        1. 1

          I'm really at the beginning, trying to validate the idea first.

          My plan is to make a prototype in Adobe XD and make a video presentation, so I can illustrate better the idea when trying to validate. I don't exactly know how I'll find restaurant owners, but I thought about doing keyword research and paying ads.

          What do you think of this plan? I don't have a co-founder, are you interested?

          1. 2

            I'd like to see the video when it's ready. I don't think I'm ready to join a company with proper commitment at the moment, but I might be able to help with you something on ad-hoc commission based.

            I think for sales, it is best to call them and arrange a face to face meeting. If you are targeting more younger restaurant owner who are active on internet, maybe pay ads would work. But from what i've seen, average age of restaurant owners are I think above 35, who are more comfortable with face to face meetings.

            My parents have bought some services and this is how it happened.

            1. POS software - We pay the most since the POS service charge per every payment and forcing us to use other properitary system from them. I think the sales team of that POS software got in touch with us when they know we are buying a restaurant. After that, my parents used same software for other restaurants. They consider changing this software multiple times, but it works and their customer service is good.

            2. SEO / various blog marketing - This one, my parents paid above 1k per year. They send 5 bloggers to our restaurants and make them write reviews. My parents are unhappy about them. They just have really good sales team, who contacted us multiple times, and built shallow relationship with my parents by visiting our restaurants few times, exchanging messages for long period of time to convince them.

            3. Delivery - They take big chunks from every orders, but we don't mind it because it's just extra sales we make. I think this one gave the most value.

            4. SEO - We never bought - Almost every week, we get phone calls from SEO companies, and they want to sell their SEO service promising to increase sales significantly. Some of them visit our restaurants just to chat with my parents.

            5. Job site - They use a job site where they can find temp staffs. They pay some money for it every month.

            That's about it. My observation is that those restaurant software sales people get in touch with us by calling our restaurants multiple times, and visiting us.

            I think most restaurants already have POS software, and your software should be able to integrate with them. It will be hard to replace those POS.

            1. 2

              i think this can be sold well if you can prove this software can reduce one part-time employee, even better if can reduce one full time.

              The manager and and the waiter features - I think most POS system have this. Extending this to kitchen and and customer, there are few software doing this, but I think it's rare. I dont know about situation in Brasil.

              I think you can start with a niche product that can integrate with existing POS software. Like, as you mentioned, allowing customer to share it easily on FB, or doing something with tiktok etc..

              1. 1

                That's some valuable information, thanks very much for taking the time to write it.

                "I think most restaurants already have POS software, and your software should be able to integrate with them. It will be hard to replace those POS."

                This will be a pain, you're completely right.

                "Delivery - They take big chunks from every orders, but we don't mind it because it's just extra sales we make. I think this one gave the most value."

                It's easier to value a product that helps you get more clients and make more money hahah I'll try to get conversations with restaurant owners and see how easy it is to sell this idea to them.

                Thanks very much for your input, I really appreciated it!

                1. 2

                  Yup, good luck with that. I think the good thing about this business is that there isn't monopoly service globally yet. So, you can build something for restaurants in Sao Paulo, and you can build another thing for restaurants in Asuncion or Buenos Aires.

  4. 2

    So...I owned a restaurant for 7 years back in Spain. I will tell you my point of view.

    First, if you go to McDonald's has almost that workflow. https://soyummy.com/mcdonalds-tech-order/

    Gordon Ramsey used to do that I think...a crack up.

    Well, anyway, the problem of these restaurants is not because of a software or something related to tech, is just because they are not meant to have a restaurant...or responsibilities.

    I have seen a lot, in fact, when I moved to Finland from Spain I had a summer job on a Kebab place, so glamourous..., right? I know, I didn't speak Finnish nor Swedish by then, but I do now.

    This family came from Iran, they stod in the middle of the night waiting for fo the boat to come and sell them food, then they bought a small trolly, then they rented a small place, that place became bigger, they opened in town, they opened another restaurant. This family is so effing loaded that is one of the riches in the Island I live.

    What's the point of this? If there's a will there's away. Sometimes tech is not needed...

    have a good one !

    1. 1

      That's a really cool story, I agree, hard-working people are the only that usually succeed in this type of business and software can't make good tasting food, right?

      I think my idea would be target at restaurants that are already running and have customers but are struggling with communication between the staff in the busy hours. You know when you go to a restaurant, order some food, then It after a long time you still didn't receive your order and the next table, that comes after you, receive theirs? I think this kind of problem is related to communication and can really piss people off.

  5. 2

    You speak about sales but even us we are not sure what you propose exactly. Is this a software?

    Try to sell your idea a one-day training in a restaurant maybe and post your feedback.

    1. 1

      Yeah, It's a software aimed at mobile phones and tablets.

      I'll be updating my next moves here on IH, thanks for you comment.

  6. 2

    The idea is fine, but really consider if you want to spend your time selling to restaurants, where margins are super thin and no one is going to want to buy what you are selling.

  7. 2

    if this is for the brazillian market, my suggestion would be to just copy the design of an existing point of sale system and release a brazilian portuguese version to the brazil market.

    1. 1

      I will definitely be looking at services that offer similar solutions for the US market to get inspiration.

      Thanks for your reply!

  8. 2

    I believe that the market might be quite satiated, but worry not. Do a market research and see what they offer and what you can do differently! Also, do not worry about direct sales, I have a very similar problem! Just find a person, preferably from the restaurant business, with whom you would partner up, and this person would be responsible for the sales! You always have to focus on your strengths!

    1. 1

      Yeah, you're absolutely right, I will try to get conversations with restaurant owners and see it for myself. Maybe I can even find a non-technical co-founder.

      If I fail with that I would fail with sales also, so nothing to lose hahah

      I'm quite unsure if the market is really satiated, I'ts is something that I will have to find out before jumping into building it.

      Thanks very much for your response, appreciate it!

  9. 2

    I watch a few similar USA shows.
    There are current solutions for the restaurant industry that offer most of said list. And it seems there is actually a big spike in offers IMHO with all the related business like food delivery and pre ordering...
    If you don't love the customers/users, than this business is not for you. I do agree that would need direct sales not just online presence and would need hardware integrations and possibly sell as a package...

    1. 1

      Yeah, I've done some research and found some products that are similar to what I was proposing, and as you said also offered hardware support for their solutions. But they're in the USA, there's only one player doing this here in Brazil, but they are really expensive and focused on big clients. Actually, this scenario is real for lots of niches, we're so far behind in the SaaS industry.

      What you said about love is quite interesting and made me reflect on myself. I'm a developer, I like building products and working in projects, I realized there's nothing that I really love, I would love to have a successful project that solves peoples problem hahah

      Thanks very much for your response, I really appreciate it!

      1. 2

        As a business it might be smarter to go make a deal with an existing company to be the local branch for them in a way, licence, whitelable, geo/language franchise whatever format you can get that makes sense rather than rebuild.
        Building a sales and implementation org not a software development company.