Ben Walters came on the show to sell the investors on Feedback, an app that lets restaurants change their prices on the fly. But when Ben shows up in the pitch room, he’s already decided that it’s time to make some changes to the business. Can he get the investors salivating over a startup that’s mid-pivot?
Today’s investors are Jillian Manus, Charles Hudson, Phil Nadel, Michael Hyatt and Sarah Downey.
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Michael: That's one of the best answers I've ever seen on this show. Like, honestly, one of the best answers.
Today's founder Ben Walters, has all the right answers. Ben's app, helps restaurants boost their bottom line by cutting down on food waste. And it's worked pretty well so far.
But only 13 months after launch, Ben is sidelining his initial product to start a new one, that he thinks can be way bigger, and much more appetizing to investors. But can he convince them that he has the chops to make a pivot this huge?
From Gimlet, this is the Pitch. I’m Josh Muccio.
Today’s investors are:
Sarah used to run her own company. Now, she’s a partner at Accomplice and an angel investor making bets on early stage startups.
As a serial entrepreneur Phil built companies that sold for hundreds of millions of dollars. Now he manages Forefront Venture PARTNERS, one of the largest syndicates on AngelList
Jillian is a partner at Structure Capital, where they’ve invested $98 million in high-profile startups like Uber.
Michael built and sold two software companies for over $500 million dollars and now he invests for himself.
Charles started Precursor Ventures where he’s invested $20 million in over 100 startups to date.
Alright, on with the pitch. Bon Appetit.
Jillian: OK. Lay it on us.
Ben: Yeah. Let’s do it. So I flew to New York City from Toronto.
Michael: Best place in the world.
Ben: Thank you Michael. For my seventh time this morning. And I know that, because I pulled up all past flight tickets and I looked at the prices. They ranged from 212 all the way up to 600 dollars. Which didn’t surprise me and probably doesn’t surprise a lot of you. We could go through that same exercise with hotel stays, tickets to sporting events, now taxis. And that’s because all of these industries use the most basic law of economics; supply and demand, to determine price.
Right! Ben is talking about everyone’s favorite economics principle … supply and demand. When demand meets supply at just the right price. Businesses can maximize profit and cut down on waste. But Ben’s not here to teach an econ lesson.
Ben: But I actually want to pick on Charles for a second. Do you have a favorite lunch spot?
Charles: Ah. Let’s go with Mixt Greens in San Francisco.
Ben: Okay. And do you have a go to menu item?
Charles: Yep. Order the same thing, order ahead almost every day.
Ben: And how much does it cost?
Charles: It’s about fourteen bucks.
Ben: Okay. And so that price, $14 stays the same all of the time. And that’s because the restaurant industry uses static pricing. They’ve never had the opportunity to really change prices like some of these other industries, because transactions happen in an offline environment. Think about how difficult it would be to be constantly printing out new menus and changing menu boards. But right now, the restaurant industry is going through a technological revolution. And we believe it has opened the door for us to be able to take some of these pricing techniques of these other industries, and apply it to the restaurant industry for the first time.
Ben is basically saying. Look. It’s 2019. A salad restaurant — like the one Charles goes to — should have the ability to change the price of, say, a cobb salad based on how much cobb salad it has available. If there’s too much, it’s gonna go bad soon, let’s drop the price by a buck or two, and try to move it out the door. But since restaurants can’t change prices like that, Ben says that the industry has to throw out $8 billion dollars worth of food in North America, every year.
Ben: And what we’re doing is changing that So my name is Ben Walters, CEO and co-founder of Feedback And we’re here raising $800,000 in order to repurpose the pricing technology that we have both developed and tested through a mobile marketplace, in order to allow restaurateurs to apply it to their existing channels. So for the first time, restaurants will be able to both test, configure, and modulate prices in order to improve their profitability as well as reduce the food waste that they are generating right now.
Phil: So is it dynamic pricing? Does it change in real time?
Ben: Yeah, so what we’ve done over the last 13 months, is we have a mobile marketplace. We’ve generated $350,000 in off-peak sales. And sold 22,000 meals that were going to end up in landfill. And we’ve done that by changing the price based on demand and inventory levels at restaurants
Sarah: And do you, have you looked yet at consumer, the end consumer behavior? Like, Charles goes in, he expects his salad to be $14. You're talking about a world where that can change.
Sarah: do you have any early learnings about what those reactions are like?
Ben: Yeah. So we have for the last 13 months been selling through a mobile marketplace. We connect 300 restaurants with all of these different consumers and we have been able to see how those things go. Because it is quite a disruption. But we believe that dynamic pricing is intuitive to people because it is based on economics, which is how prices are supposed to be set
Sarah: Do you have anything you can show us, like of the UX or the...?
Ben: Yeah. I can show you what the app looks like.
Sarah: Yeah that would be awesome.
Ben: And then I’m happy to send you all the mock ups for... Can I just walk over there? Walk over to you guys?
Michael: No, you’re not allowed.
Sarah: Stay within five feet.
Ben: So here is just like one of the restaurants so let’s just look at the full menu
Ben walks over to the investors and shows them the Feedback App on his phone. It looks a bit like what you’d see on seamless or grubhub, with different restaurants listed. But there’s a little icon that tells you, hey, Chipotle’s offering 50% off on some of its burritos for the next hour. So you can rush over and snag you a chicken queso burrito.
But pretty much as soon as Ben explains this to the investors, he tells them ... things are about to change.
Ben: Right now, so there's a pivot happening right now. We are right now a marketplace. But what’s happened is, we started speaking with mom and pop shops, worked great. We then went up to franchise owners. We’re now working with 300 restaurants in Toronto. But as we got to head offices, the conversation changed. And they made two things very clear. One, is that there’s app fatigue. Restaurants are sick right now of having another app. The seamless and UberEats of the world but what they said to us is they love what we’re doing with price. And what they’ve asked us to do is repurpose the technology that we built in order to allow them to apply it to their current models. What that will allow them to do is better compete with all of these other third party apps that are taking a large commission from these restaurants. Not only do the unit economics make sense, they also now own that customer. They know who the customer is. They can re-target that customer There's so much value in these restaurants actually owning the customers through their own channels. Because they're getting their lunch eaten, at the end of the day
Ben is saying that a lot of restaurants don't want to use things like Seamless, because they have to give up some of their revenue. On top of that, Seamless, not the restaurant, gets all that sweet, sweet customer data.
So Ben wants restaurants to use his technology to handle all their pricing. And he says it can tell them all sorts of things, like how much to charge for different menu items.
Michael: Can you walk us through a real case example of someone in Toronto who is using this? And how much money would you make out of this? What can a... Can you give us some unit economics behind it?
Ben: Yeah, sure. So one of the restaurant brands that we work with, we were able to tell them that they could get another 49 cents for a combo upgrade and that customers were not going to notice the difference. And so the reason that there’s so important, it sounds like 49 cents, what does that mean? We probably wouldn’t notice. But let’s go through the unit economics they’re making 31 cents on average on a $10 menu item.
Jillian: That’s just unbelievable.
Ben: So what does that mean? If we can increase the price by 3% to $10.30, that 30 cents drops to their bottom line, they have doubled their profit margin from a 3% increase in price. And so that 49 cents had in the tens of thousands of dollars of value to this restaurant over the course of, I think it’s quarterly that we were looking at it. And we’re charging for this SAAS product right now $99 a month. Of course we’re going to have to find a way to capture more value.
Michael: So that’s the idea. You’re going to go into a restaurant and change them $99 a month for a SAAS product to essentially tell them what prices they should be, what the tolerances are.
Michael: And they’re going to get a lot more than $99?
Phil: So do you integrate with their POS?
Ben: So our first integration is actually going to be with a white label app company that’s already built the point of sale integration. It’s the perfect sort of first step. Because what this company does is they build apps for restaurants as well as online ordering portals. We’re actually layering on top of that app and that way we can ingest all point of sale data, which of course is very valuable to us and it allows us to actually allow them to set rules and parameters up. Like, say, hey if we’re below our $4000 sales target between 3 and 4, we’re willing to offer a 15% extra discount to customers
If you don't know, what this white label app company would do is essentially sell an app in a box, so to say, to restaurants, so that all a restaurant owner has to do is enter in their deets, their website logo, and beep boop bop! A brand new app appears in the app store and a restaurant owner can say check us out on the app store"
Phil: Tell us a little bit more about the white label app company. Is that a signed deal?
Phil: And what are they doing for you?
Ben: So what this white label app company does is they build restaurant branded apps as well as online ordering portals for restaurants. They integrate with 12 different point of sale companies, which is why it was such a great first partner for us and it's a win win win for everyone, because clients...
Michael: What happens to your gross margin, though, between that white label, that $99, how much do you get and how does it work?
Ben: The white label app company actually sees this as adding a lot of value and stickiness to their clients that they don't even want anything from this deal. They're not looking for anything.
Michael: So they just pass through $99 to you?
Ben: Correct. The opportunity of this first integration is about 1.4 million if we convert the clients that are using this white label app company that has taken our product and integrated it with their product.
Jillian: And how many clients would that be?
Ben: That's 1200 clients
Michael: And you’re just starting to charge the $99?
Michael: And so 12 months from now, what do you think the monthly, the MRR would be?
Ben: $65,000 is what I’ve modeled out for our forecasting.
Michael: In 12 months?
Ben: In 12 months from now. Yes
Michael: 65K a month.
Phil: $99 a month seems very low to me for an enterprise SAAS solution.
Ben: Per location? But still. Yes.
Phil: Okay. How’d you come up with that pricing?
Ben: So that’s from sitting down with our restaurant partners right now. The beautiful part about this, is this is coming from the restaurants. We’re working with all these restaurants right now, they’re asking us for this product. And so they’re the ones, when we talked about price point, we felt like $99 was a good starting point. As soon as we can really demonstrate the value and show them ROI, the general rule of thumb is you want to give them about a 10x return on that. So as soon as we have a really good case study to understand what we can drive, we’ll divide it be ten and charge them that. That’s the truth.
Phil: Yeah. Got it
After the break, investors sink their teeth into what this pivot means for Ben ... and how hard it could be.
Sarah: Let's go deep for a second. Like, you know everything. What keeps you up at night?
Welcome back. Founder Ben Walters has the investors eating out of the palm of his hand. By the way … we should tell you that Michael has met Ben before … Ben pitched him in 2017 on the original idea for Feedback. But they haven’t talked in a while and this is the first time Michael’s hearing about this new direction for the company.
Michael: Can you just comment though on how you would attain a client. Like, you go to a Freshii, you go to a Popeyes. Do you have to sign them at the very top level? Do you have to do it at the individual store level? How do you physically sign a restaurant?
Ben: So these would be head office deals. these would be an enterprise client.
Jillian: But they haven't been as of yet? Correct? Okay.
Michael: How does.. let’s take your. Let's take Freshii. How would they push out dynamic pricing to 400 Freshiis? How would that actually happen?
Ben: So Freshii just invested a lot of money in building their own application. So they have a mobile app that they spent a lot of money on pushing out So the restaurant has their own channel, online ordering, they have their own application that is branded with that restaurant. The first step is to work in those channels. And it gives them an amazing opportunity to test, find price discrepancies and opportunities, that they can actually change across all their channels. Including their menus
Michael: But isn't the holy grail you and the dynamic board at the top? Like, their board goes digital, and isn't that the holy grail? Like, I come to the counter and the sandwiches change because it's 2:30 on a Tuesday. Right..But you're not there yet?
Ben: No. So I believe that in five years from now we're going to be laughing at this conversation.
Michael: Because everyone's going to be dynamic pricing.
Ben: Everyone. Prices are going to be changing at restaurants. I'm convinced. And I've had a lot of conversations with a lot of smart people. And everyone is also with me, that the way that the pricing is working right now, it just doesn't make sense
Michael: Yeah. It's been around for a thousand years.
Ben: The peak and valley demand, the amount of food waste, there are so many reasons that it doesn't make sense
Jillian: With so many changes in prices, do you actually, isn't that... Do you lose customers that way? Because they lose a trust in the brand that one day it's this cost price, and one day it's this price. And I'm not quite sure if that's how this is all working.
Ben: So it's a great question. The cool thing, Jillian...
Jillian: It is? Oh good. I know nothing about this.
Ben: What's been so cool, is so what we've seen, is in our app, the more times we actually change prices, the more people check into the app to see what the prices are.
Jillian: Oh, that's very cool.
Ben: And so it actually increases engagement. And we see conversion rates stay pretty flat. So when you put those things together, the more prices change it actually could create the opposite effect. Where people are going in to look more.
Jillian: Is it sort of like gaming?
Ben: Yeah. It's a gamification of pricing in some ways.
Michael: Can you walk us through... You raise 800,000, at what valuation, how far does it take you? Tell us about your idea about raising money from us today.
Ben: Yes. So first of all, US dollars I'm talking right now.
Michael: Oh. Real money?
Ben: I don't know if you can afford it, Michael.
Ben: So 800k US. It's a 4 million dollar cap. It's going to be a convertible note. 20% discount.
Michael: And do you have any of the 800 filled out right now?
Ben: Yeah, we have about half of it filled out
Phil: So, you know, selling into enterprise space makes sense with what you offer. Who on your team has that experience of enterprise SAAS sales?
Ben: Yeah, so sales is going to be me. That’s my job as CEO at the beginning. We’re going to keep all the technical talent and I’m going to be the one who is selling this product to begin with
Michael: If you raise $800,000, would… I’m going to restructure what Phil’s asking. If you raise 800,000, would you be open to hiring a strong sales leader who could help you accelerate things faster?
Ben: For sure.
Michael: Would that be something that you would commit to?
Michael: Because look, the best salespeople in the beginning are founders. But to grow, to where we’re asking you to grow, do you think that, you know, you the visionary, which clearly you are, would you bring someone on who maybe has a lot of restaurant connections and can accelerate?
Ben: No, yeah, absolutely.
Michael: Because you can’t do it alone.
Ben: No definitely not. And I do see us being able to get through the next 12 months without that The 800 is going to be used for almost exclusively technical talent
Sarah: So what about this business? Let's go deep for a second. You're super strong, the way that you're selling this. Like, you know everything. What keeps you up at night?
Ben: So right now, this pivot is what, is a tough thing to go through. I always say human psychology hasn't wrapped their heads around sunk cost. And so we have this...
Jillian: That's a great line.
Ben: So we have this app that we've put our heart and soul into for 13 months, we've got 35,000 people that use this app on a quarterly basis. Everything seems to be going well. And we're like now jumping ship. What that means is it's going to have to mean shaking up the team, which is unfortunate, because we've got a great culture and a good vibe and a great energy. And it means, in some ways, giving up on... It doesn't feel like it's ready to say, hey, let's scratch this off and move on to the next one. But we realize that that is absolutely what we need to do. And so I'm still digesting that myself, I'm slightly nauseous, also really excited about what that looks like, because that's just where my mind is right now.
Michael: That's one of the best answers I've ever seen on this show. Like, honestly, one of the best answers. It's real, it's true. I mean, I think all of us just in our minds just went back in time into when we had to make a jump. And it's a very brave pivot you're making.
Ben: I appreciate that, Michael.
Michael: It's really fantastic.
Phil: And it's also...
Sarah: No companies don’t go through something that is going to scare the shit out of them.
Sarah: Like, the best companies have all had rifts, they've all had pivots, this is not a straight line.
Ben: And I've read about it, I've listened to it, it doesn't matter.
Phil: But also kudos to you for, I think, pivoting at an earlier stage than many companies. Like 13 months in and you have some initial traction. It's a pretty early stage to come to the realization that hey, if we want to really succeed, we have to pivot. Most companies do it too late in the game, when they're really desperate and things are really failing and they're out of money and everything else. Then they're like, all right, let's pivot. But you're doing it at an earlier stage, which is great.
Ben: I appreciate that And we are, we've got five core values. And one that we always preach is transparency.
Jillian: So what are your core values?
Ben: Positivity, impact, transparency, courage, humility.
Sarah: It says pitch. Holy shit.
Ben: Yeah. It actually does spell pitch. So transparency for us, is something that allows all of these things to come a little bit easier. Because it’s not going to be a surprise. We have an amazing advisor, Joe, who is the chair of our board. And he has always said that unfortunately you have to let people go, but you always need to make sure that it doesn’t come as a surprise to them.
Jillian: That’s a really good...
Ben: There need to be those conversations before that happens. And we have been really good at having tough conversations. I believe in tough love. That’s how my family has always operated. And I think that the tough love is going to allow this to be a little bit more acceptable than maybe it otherwise would, because it’s not going to come as a shock or surprise to anyone. It won’t make it easy, but yeah
Sarah: I mean, I have no poker face so when I like something, I really like it. And I am completely struck by you. You remind me of some of the best founders that I've worked with, because you're visionary on this. When you were defending that in the next couple of years this is going to be a dumb conversation, because everything is going to be dynamically priced in restaurants, I saw the future then. And I am so excited about this. So I think I would like to put 25k in, personally, as an angel. And then continue to stay in touch and when when you do this classic seed, I think Accomplice could be a good partner for you.
Ben: I really appreciate that
Charles: Umm I really like you. I just want to echo everything that was just said. I think the only thing holding me back from saying yes right now is For me, one of the most important things in early stage SAAS companies that I've learned is you have to be aligned with the founder in terms of where they're going to take the business and how they're going to get there. And I'd like to make sure that you and I have the same view of how much selling can Ben really do in the next 18 months with the Ben only show? And I don't have a point of view on that yet. I'm sure if I spent a little bit more time with you, I could get comfortable on that. And that would be the one thing I would need to do in order to get to a yes.
Ben: Sounds good
Charles isn’t quite able to make up his mind yet. Here’s Michael, with similar concerns about Ben being a one man sales team.
Michael: I'd like to spend a bit of time with you just to make sure, just like Charles, that you're going to commit some money, and maybe go over that 800,000 to a million, and you commit some of this to getting a sales leader to help you move that number. Because my fear is that you don't accelerate sales fast enough to do our next raise at 8, 9 or 10 or 12 million. I think you are a five star entrepreneur. I think you're coachable, You've never given me BS. So for all those reasons I would like to invest 50,000.
Ben: I appreciate that, Michael.
Phil: umm You're the real deal. You know, I believe that you have a clear vision for the business and for the future of restaurant pricing. You know the industry, you know the pain point. As I said earlier, you're smart enough to be pivoting at an early stage, which I appreciate. I think the round is priced very fairly, even though you're early. So I'd like to invest So either I'll invest 25 or 50,000 as an angel today. Or I'd like 200 or 250 to share with my syndicate. And if I don't do that now, I'll do that at the next stage.
Ben: Thanks a lot.
Phil: You're welcome. Thank you.
Jillian: We do, Structure Capital, we do invest in this space in different dynamics. We have Foodie, we have Chefs Feed, we have Copia, we have a lot... And we have six Canadian companies Except for Michael, I like almost every Canadian I've ever met.
Michael: Wow, she couldn't hold back.
Jillian: I like the fact that you’re so self-aware, self-assured. I like investing in confident without cocky. And I always invest, as we all do, in the person, because it’s a long term investment. So with that, I would like to invest 100,000. And I know that you’re going to make this huge.
Ben: Sounds good.
Michael: Well done.
Jillian: It's good. It's really good
Ben heads out. But not before scoring commitments from Sarah, Phil, Jillian and Michael. Overall, pretty good news for Ben. Now it’s the time when the investors to talk amongst themselves and tell us what they really think….
Jillian: Okay, well first of all, how long have you known? Did you ever meet him before?
Michael: Yeah. I've...
Jillian: So where is the...?
Michael: So I met Ben when he started the company. And it was nothing close to this. It was basically, what he did, he'd go to stores and try to take their leftovers and try to sell it to you The problem is there wasn't margin, it wasn't working. But what he is saying, is going to happen. Dynamic pricing is happening, I just don't know how it's going to happen. I'd like to be part of it. And also, let me ask you this. Do you see getting at 4 million, and we invest, who do you think, do you think, and I'm going to throw it out there, which company, do you think a Ritual or somebody would acquire these guys?
Michael: I mean, why wouldn't an app like Ritual want to have dynamic pricing, and just take these data scientists and go, or another one like it.
Jillian: That's exactly what I was thinking.
Michael: That's exactly. I mean, this would be a ___ for these guys.
Jillian: Even before they get into the next, in like 12 months. The next 12 months.
Michael: Dynamic pricing just makes sense.
Charles: It doesn't even need to be dynamic. It just needs to be better.
Phil: Just do A/B testing, that's all! Simple A/B testing.
Michael: We've been pricing food the same way for 2000 years. Literally.
Phil: 2000? I don't think they've been selling food for 2000 years.
Michael: Well, I hope so. I hope we've been... Like in the time of Christ, I think they were selling food. Yes, they were.
Jillian: Sure they were.
When we come back, we’re going to check in with Ben 5 months later. Which is just about enough time for I don’t know... maybe for another pivot?
Welcome back. So Ben left the pitch room on a pretty big high. But when we got in touch with him 5 months later it was clear right away that things were not going as planned. His first big customer, that white label app company he was so excited about? Well...
Ben: what they said is that the implementation was going to take longer than expected and that they had other priorities that they needed to get into at the time. And so they essentially pushed back the contract.
Josh: Ah, okay.
Ben: And so as soon as that happened I just immediately reached out to all the investors and just let them know that because I realized that that was going to be an important piece of information for them to have.
Josh: Yeah that's smart.
Ben: And at that point Phil said OK thanks Ben. please keep in touch. But I think it's just a little bit early for us at this stage.
So Phil’s investment didn’t work out. And we found out pretty quickly that there were complications with some of the other investors too. We’ll start with Charles, who wasn't able to come to a yes in the room.
Ben: it was pretty tough to get in touch with him just because he had a lot of things going on on his end and in the end he sort of said Hey our timing is unfortunately not going to align but just please keep us posted on how things go. And so I just I brought that news actually just a couple days ago from from him.
Josh: Ahh man that’s frustrating umm we followed up actually with Jillian And she said she decided not to invest because she didn't know enough about the space.
Ben: That's fair. Yeah I hadn't spoken to Jillian much. But again I got the sense that if Charles was going to come in then Jillian would have came in also just because she had more confidence that he knew this Bavin quite intimately and so one Tyrel said No I that a lot of that.
Josh: Ahh man that's a bummer.
Ben: Yeah it's a bummer if you expect that what happened on the show was going to materialize into wire transfers to your bank account that I really did walk away from the show feeling like it went as well that possibly could have gone. But I didn't expect too much and so that's just part of doing business. I should say that Sarah Downie was just absolutely incredible and so responsive was on it gave me some feedback on the deck got me. We had a hangout call with her and her partner very quickly thereafter. And it was yeah so far down it was an incredible and and Yeah ready to wire the check whenever we decide to close that round.
Josh: Oh sweet that's great!
Ben: Yeah.Yeah that was that was really great.
Josh: So one of them came through!
Ben: Sarah was really just yeah, so on it and awesome.
Our last investor standing is Michael. And he could be promising. After all, in the pitch room, he really seemed like he was on team Ben ...
Michael: Full disclosure I've known Ben before the pitch and and so I've been watching him for a while and he's pivoted a few times. It sounds to me like it's not quite working again umm he's not really picking up the client basis as he could he can't have really landed. It's not that the business model isn't working for him. So we had a very candid discussion. when I spoke to him last only spoken only a few days ago. In fact he called me on his vacation so he didn't want to terrorize him too much. The candid conversation I had with Ben is like look do you have something or not. He's like well I don't know yet and he just sounded like he needed to go back to the drawing board And I think he needed to just step back and he might have to pivot again or rethink it So what I offered some of my times what I offered was to sit down with him and relook at the business model uhhh It sounds like what he's doing isn't working yet. That's fundamentally why I haven't invested.
We asked Ben about this, and it’s clear he sees things a bit differently.
Ben: So no I would definitely not say that we're going back to the drawing board. What I would say is that we're exploring potentially applying our product to new verticals. Like as we know dynamic pricing is being applied to airlines and hotels and taxis and e-commerce platforms two friends actually in particular have the e-commerce brand and we were telling them the product that we had built them even demo’d it for them and they immediately thought applications to their e-commerce website. And so the big question that comes up as a founder is are you willing to bring on new customers no matter who those customers are in order to bring in revenue or do you want to really stick to a vertical and create an ease and stay laser focused as possible. And so what I what I did suggest to Michael is that we are open to the opportunity of potentially applying the tech that we've built to other industries before exclusively focusing on restaurants even though that always our long term vision.
Josh: I mean different verticals that sounds like a whole new pivot to me that sounds like a whole new business.
Ben: Yeah I definitely don't feel that way at all I think what we're constantly looking for is ways to bridge the gap between where we live in the world we live in today and where we see the restaurant of the future going and we feel like we have a clear vision of what that looks like in the future. But we also realize that we're just not there yet.
Josh: Like the market isn't ready? like you're too far ahead.
Ben: Yeah the market's just not ready for sure. It's a scary concept. Like even just thinking about the idea of dynamic pricing applied to a restaurant is a scary concept for a lot of people. For good reason man the customer it scares me too. Like I would be lying if I said it didn’t. And so they want exactly what we can offer but it's just not going to happen as quick as we would. Of course like it to.
Josh: What happened in the past six months I mean you just started this pivot what happened the last six months that makes you feel like the market isn't ready for this product?
Ben: It's just that we're at work company and so we need to be consistently growing. But when you're dealing with companies that have really long felt like that we we pitched originally to you in November so So that's the start of what's really going through this pivot. That's now been five months. we would not have been able to bring on any large restaurant chain in the span of five months. And so in order to continue to push growth we've needed to open our eyes a little bit and be open minded to applying it to places that we didn't really originally see applying it to.
Josh: Okay. So essentially like you build this thing you've been working on it for ever since the patch and it's just not selling as well as you'd hoped and you're kind of looking at like okay where can we actually sell this thing bring in some money right now to build this business.
Ben: Yeah exactly. Exactly.
Josh: Yeah. Do you think investors are seeing maybe some of the trouble you've had so far selling to restaurants. As a sign that this isn't working
Ben: That’s interesting. Clearly it sounds like Michael had that perception. So I think that you don't really need to read much. I think Michael did have that perception. umm I believe that we. On this team wear our hearts on even are more transparent than a lot of people are. And I think that sometimes that's going to hurt us and slow things down. But in the long run it's going to be what sets us apart. And so I would much rather just be overly transparent and say it like it is and and deal with the repercussions and consequences of that and move forward knowing that everything on the table. And so yeah.
Josh: So where are you at with the round?
Ben: Yeah so. we actually accepted entrance into a prestigious accelerator called founder fuel based in Canada run by real ventures which is a bigger venture capital firms here in Canada.
Josh: does founder fuel actually give you fuel as money to build your business.
Ben: Yet when they look like they may make 120k investments. And the reason that that is so crucial for us is that five thousand ninety five or six months to really sort out some of these questions and bring on some of the bigger customers that we want to knock down before we go out and raise that large around. So the timing was just a little bit off with this raise where we really needed these three to six months. And so this is giving out exactly that 3 to 6 months that we need and then we can go to demo day present to a roomful of investors and raise them build around that we've been wanting to raise the money.
Josh: I see. So then have another pitch day essentially exactly.
Ben: Everyday is a pitch day in the life of the founder.
Josh: Well I'm not going to lie despite your endless like never ending optimism. I'm still a little bit bummed. This seems like it should be a bummer. I didn't expect things to follow through like you did so well in your pitch at least the investors seemed to respond so well to it like four out of five people invested. Like I thought you're going to raise hundreds of thousands of dollars [sigh]
Ben: Listen I think Josh, and I'm not I can't tell the future that in the next let's call it four years from now. The connections that you help made on the show will amount to more than just a couple hundred thousand dollars in the bank account. So again who knows what's going to happen but I feel really confident that the relationships that we just planted the seed for back in November are going to blossom in a real way in our future. I just don't think we're ready for it just yet.
Josh: All right. There's a food pun in there somewhere. The the seed blossoming in the barn.
Ben: Yeah I don't know any sense to be honest, thinking about it again.
Josh: Best of luck on everything and founder fuel I hope it's I hope it's the rocket ship you hope it will be but it sounds like it's not you're going to take it all with a grain of salt.
Ben: That sounds like the end of a podcast that I've heard you do like many a times
Quick recap, here's how things ended up ... Ben will walk away at least from our show, with just the investment from Sarah; she's going to put in 10k ... and then Michael has promised to give him some feedback ... on Feedback.
And as for Ben ... well, my guess is that he's ready to pivot as many times as he needs to to make this business work. Because what's the alternative? It's either pivot or die, right?
Our show is hosted by me, Josh Muccio, Produced by, Kareem Maddox, Heather Rogers, and Molly Donahue. We are edited by Blythe Terrell.
Theme music by The Muse Maker. Original compositions from Breakmaster Cylinder, Bobby Lord, and The Muse Maker. We are mixed by Enoch Kim.
Lisa Muccio planned the recording of this pitch.
This is our disclaimer, no offer to invest is being made to or solicited from the listening audience on today’s show.
You can find more episodes on Apple Podcasts, Spotify or wherever you listen. We’ll be back with a brand new episode, next Wednesday.
Investor on The Pitch
Phil Nadel is the Founder and Managing Director of Forefront Venture Fund and of Forefront Venture Partners, one of the largest syndicates on AngelList. He has started and sold several companies and has invested in more than 200 startups with several exits.
Investor on The Pitch Seasons 1–10
Jillian Manus is Managing Partner of an early-stage Silicon Valley venture fund, Structure Capital. Branded “Architects of the Zero Waste Economy," they invest in underutilized assets and excess capacity. She was named one of the top 25 early-stage Female Investors by Business Insider in 2021. Jillian serves on numerous corporate and non-profit boards, these include: Stanford University School of Medicine Board of Fellows, NASDAQ Entrepreneurial Center Board of Directors, Fuqua School of Business at Duke University.
Investor on The Pitch
Michael Hyatt is a serial entrepreneur and active investor. He is the co-founder of BlueCat, (acquired by Madison Dearborn Partners), and previously co-founded Dyadem (acquired by IHS). He currently serves as a Director of BlueCat and is also a weekly business commentator on CBC, is the Host of “Business Unplanned”, a podcast to help small businesses.
Investor on The Pitch Seasons 2–10
Charles Hudson is the Managing Partner and Founder of Precursor Ventures, an early-stage venture capital firm focused on investing in the first institutional round of investment for the most promising software and hardware companies. Prior to founding Precursor Ventures, Charles was a Partner at SoftTech VC. In this role, he focused on identifying investment opportunities in mobile infrastructure.
Investor on The Pitch
Sarah Downey is Operating Partner at Accomplice VC, and a Co-Founder of Yubari Angel Fund. She likes to invest in things that feel like they’re out of sci-fi and video games, like augmented/virtual reality and AI.