Featured Start-Up: Bite2Eat.com
May 18th, 2009 by admin
Over the last ten years or so, the world has become obsessively digitized with once manual activities being replaced by Internet-efficient apps, platforms and processes. Even the hands-on intensive restaurant industry is starting to experience the first wave of a Web revolution. One such start-up to recognize the opportunity and take advantage of this new reality is Bite2Eat.com. Recently featured in Globes, the company’s technology efficiently connects restaurants with their customers, translating online orders into phone calls that establishments can respond to the traditional way. Already being dubbed “The Facebook of Restaurants”, Bite2Eat.com is one we should all be keeping a close eye on. Here’s more from the co-founder and CEO, Jay Bailey:
Please tell us about your start-up Bite2Eat.com. What makes it unique? And how does it fit into the marketplace?
Bite2Eat.com is a restaurant portal where restaurants can give us their menus to digitize, at no expense to them, and quickly be able to take delivery and take-out orders from new customers on the Web. There are certainly companies in this space, but we found that most of the focus is on the larger cities and larger restaurants. We’re going after “the long tail” of the medium-size cities and restaurants, many of whom have never considered this approach or were afraid of the expense/complexity. A big piece of our business strategy is to use minimally disruptive techniques — orders are sent by fax or phone — so there’s little to fear from the technology.
We also introduce a social aspect called Buddy Orders, where you can save the usual steps (in an office, dorm or family setting) of having to dig up a menu, pass it around, mark it up, call in the order, etc. With a Buddy Order, the initiator opens an order and uses his Buddy List to send an invitation to his friends. They click on the link to see the menu and join the order. Finally, we developed an automatic voice system that does all the phone ordering without a call center; it read the orders (yes, we’re always tweaking the pronunciations) to the restaurant, while providing a way to talk to the customer directly with the touch of a key.
How do you promote a business such as this? What markets are you targeting?
Bite2Eat.com is targeted at a broad, national population, specifically those hungry folks who are actively online. So naturally, we’re using Google AdWords to connect to people searching Google for, say “Mexican food in Little Rock”. In addition, though, we’ll certainly be looking to market to office managers (who typically compile manual “Buddy Orders”, students who order and eat together in dorms, etc. Eventually, we hope that even products like groceries would be a niche we could handle.
What’s the business model behind Bite2Eat.com - is this something that is advertising driven or is this a subscription service?
We take a commission of every order we send to a restaurant. Unlike some of our competitors, we actually bill the restaurant for this sum at the end of the month; we didn’t think it was right to keep the lion’s share of the order all month and only pay out at the end of the month. It’s a cash-flow problem for them. We’d prefer to have people focus on ordering. So while some restaurants in our lists don’t yet have menus and therefore feature some Google Ads, it’s not a significant part of the business. Eventually we do plan to help restaurants do promotions on the site and via newsletters.
Did you write a business plan? How did you fund the launch of your business? Are you currently seeking investment?
Yes, a one-pager with highlights and a longer one. I’m not a big fan of massive plans for start-ups because the facts on the ground tend to change so quickly and often that it’s almost dishonest to present “The Plan”; from the time of the initial meeting/reading until the funding hits the bank account, it’s sometimes radically different. Naturally, you need the fundamentals, but I’d always include plenty of “options” and “ideas”. We got initial funding from angel investors. Just enough to get the site finalized and bring in the first batch of 750 restaurants. We’re currently ready to do another round with individuals or VC’s so that we can launch the marketing and PR efforts.
What advice can you give others looking to start their own businesses?
Look to outsourcing. The original Bite2Eat.com plan called for an office and about 10 people on staff. By outsourcing big pieces of the business that I manage closely, we actually cut our projected costs down easily by half. It lengthens the runway and gives you the flexibility to add, change or adjust staffers without major upheaval in the ranks. If we had opened up a full-blown office, we’d have gone bankrupt long ago. The virtual office (my partner Marc Fischman, the CTO, works from cafes) eliminates SO much overhead.
Also, as I mentioned above, be ready to make radical changes to the plan. As long as the core is there and you believe in it, just buckle your seat belt and swerve. We changed major parts of the plan, and we’re better for it.
Finally, the adage that it take three times the time estimate and twice the money is, well, quite accurate. If you run out of start-up funds, you’ll find yourself shut down or giving away a large chunk of the company for an investor who knows you’re desperate.
If you had to start all over again, what are some things you would do differently?
Oh, it’s too early to tell. The outsourcing was the right move. I’d probably have tried to raise more, earlier, so that we don’t have to drop what we’re doing now to visit and make the pitch to investors. Also, I’d essentially create an exercise where I make the top five assumptions about the company, and do a devil’s advocate thing where I (and the team) try to punch holes in it, as if I’m another company trying to compete for the same funding and trying to talk the investor out of it. We were a little too optimistic in the beginning about some of the things that simply sounded right before thorough analysis and some experimentation/testing.
What are the long-term plans for Bite2Eat.com? For you personally? Will you start other businesses?
We certainly have a few years to grow this to the size and scope we plan. Once it’s all running fairly smoothly we can have capable staff running it day-to-day, I think I’d like to do another (or, if the revenues are good enough, help fund a few!). I’m really, really enjoying working from home, for all the usual reasons. I have trouble seeing myself returning to a standard office/management position with all the overhead required in time, money, focus, etc.
