The Founder of a Lunch Delivery Startup Is Banking on a Harsh Stance: The Customer Isn’t Always Right
Minneapolis-based Foodsby’s revolutionary approach to food delivery is making office workers, restaurants, and commercial real estate firms very, very happy.
PHOTO CREDIT: Getty Images
On any given morning, in the sprawling office parks outside Dallas and Minneapolis and Kansas City and hundreds of other U.S. metro areas, employees are asking the same question: What's for lunch?
For most of those office workers, there are no good answers.
They're too far from the efficient density of urban hubs to enjoy a multitude of delivery-minded restaurants. They're stationed in buildings or clusters too small to attract a variety of on-site eateries. And the restaurants close to these office populations can't reach them or the lunch money in their pockets; the cost, unpredictability and inefficiency of delivering to an office are simply too high.
But if Foodsby, a Minneapolis-based food delivery startup founded by Ben Cattoor, has its way, all of this is about to change, and office workers and restaurant owners are about to get a lot happier.
Foodsby creates a simple online exchange that aggregates the countless hungry office workers that restaurants have never been able to reach efficiently, and gives them access to local eateries than they've ever had before. Active in six cities, expanding to more every month, Foodsby's drawing the interest of real estate firms and the investment of serious VC firms--and it's offering a way of thinking about value discovery that could inspire other market segments to pursue similar disruptions.
How It Works
Foodsby can do all this "By taking the standard delivery dynamics and tweaking them just enough to open this enormous market for restaurants," Cattoor says, "while improving the quality of daily experience for workers in these areas."
Cattoor's tweaks are simple, but radical, eliminating one by one the logistical pain points for restaurants:
- First, working directly with building managers and companies renting office space, Foodsby signs up hundreds of office workers at dozens of buildings in a delivery area. Giving restaurants what they most need: a guaranteed lunch delivery crowd.
- Second, Foodsby replaces the traditional idea of on-demand ordering with pre-ordering: Users of the Foodsby app have to place their order by the late-morning cut-off time, giving the restaurants a bulk order instead of a stream of individual orders. "This makes it feel more like a catering order, and all restaurants are able to execute that well," says Cattoor.
- Then Foodsby replaces the idea of on-demand delivery with a predetermined delivery window instead. When you order through the Foodsby app, you know your meal will arrive in a predetermined time slot.
- Beyond letting restaurants choose when they deliver, Foodsby also lets them choose where. Each day local eateries pick the route they're willing to run to deliver--and even if they want to deliver at all. "We sign up dozens of restaurants in this model, but they're not locked into delivering every day to the same places. If you're an office worker, and you open our Foodsby app, every day you'll have a different assortment of restaurants that are active on your route. This increases variety, and keeps each restaurant's incoming orders at a certain level."
- The above tweaks also happen to solve common restaurant staffing challenges. "All restaurant have underused staff in the run-up to lunch hour," says Cattoor. "We help them put that staff to good use, prepping and delivering Foodsby orders." That a restaurant doesn't have to have on hand dedicated delivery staff is a big win too. They can use existing staff to run their one delivery route once a day.
The Secret Ingredient
When founding Foodsby, Cattoor made one disruptive choice that's obvious in all the points above. In the Foodsby model, control is taken away from the customer and given to the restaurant. "The assumption that the consumer needs to control every piece of the food ordering process has kept this idea from being effectively implemented," says Cattoor. "Once you realize that customers don't need or even care about all that control-when they order, for instance, or from how many restaurants they can choose, or exactly when it gets delivered, etc.--the opportunity becomes clear."
Or at least it becomes clear to someone like Cattoor, who tends to have an eye for such opportunities. Of course, there are plenty of competitors in this space, including DoorDash, Amazon Prime Now, and UberEats. But Cattoor is confident in the distinctive solutions Foodsby provides. "A previous boss used to call me 'The Bottlenecker'--and not because I caused them! Because I was addicted to finding out where the problems were in a process or a system, and then charging after them until it was solved. With Foodsby, we're breaking one of the most common bottlenecks for restaurants and employees."
If that idea has hooked real estate companies and hungry professionals, it's also proven appetizing to investors. Foodsby's Series A investor list, led by Graycroft Partners, includes some all-stars: Sam Yagen, Rally Ventures, and former NBA Commissioner David Stern. That capital raise is powering a rapid expansion into the non-city centers where more than 70 percent of American workers spent their 9-to-5. With each city, Foodsby gets smarter, analyzing user data, order velocity, and trends from its multitude of delivery zones to better serve restaurants and users.
So how big does Foodsby plan to get? How many office lunch hours will it reinvent? "Let me put it this way," Cattoor says with a chuckle, "We've been really successful in Des Moines, one of our test markets, and it's the 89th largest metro area in the U.S. So at very least, we've got 88 to go."