Food-related Startups of 2011
This is a post I contributed to TechCrunch in July 2011 about all the new food-related startups.
“Where should we grab some food?” Perhaps no other question has motivated more consumer technology entrepreneurs. Well, I say that only half-jokingly.
After the age of the Yellow Pages, we’ve all used multiple services that guide us to a restaurant seat. We’ve hunted for restaurants on Google, researched options on Zagat, and offered reviews on Yelp. The trend for how we search for restaurants has shifted from directories (phone books) to guides (ratings) to people influencing our decisions. Today, there’s stiff competition amongst mobile services to drive us to the next restaurant, whether it’s a Living Social daily deal, a Foursquare check-in reward, an UrbanSpoon recommendation, or simply word-of-mouth, serendipitous suggestions that filter through conversations on various social networks or, heaven forbid, in real life.
These services help drive us to eateries and hopefully create incentives between restaurants and customers to foster repeat business and loyalty. But the restaurant business is hyper-competitive. Many don’t make it. Turnover is the norm. And for those that are able to survive, either because of killer food or location, the majority of them offer adequate food, service, and ambiance, yet are able to turn a buck because we keep going back. Instead of competing on quality, most compete on offers and optimize to fill open seats. For the most part, it at least appears the majority of restaurants worry less about word-of-mouth goodwill and are more focused on accumulating badges and stickers to paste underneath their menus as patrons window-shop.
Having spent a decent portion of my life working in restaurants, I know markups and margins on tickets are healthy, even excluding those businesses with liquor licenses. People are perfectly willing to fork over two to three times the cost of goods sold, even if those goods are not so tasty. The time saved, the ease of ordering, and the feeling of eating out somehow translates to a juicy premium. All the while, oftentimes the food is suspect, both in terms of quality and nutritional value. Yet we continue to go back, line up, gorge ourselves, and repeat. And as the economy continues to recover (slowly), individuals and especially families are under enormous pressure to stock up at big box retailers and focus on food quantity at the expense of quality.
While restaurants and these services continue to compete for our dining dollars, a host of new consumer web startups have mushroomed to fill in some gaps and create interesting new ways for us to chow down. New companies like Gobble and Grubly create local peer-to-peer marketplaces for homecooked meals that are either delivered or available for pickup. Instead of heating up frozen pizza or ordering mediocre takeout, these services help home cooks build up a reputation (and a little extra income). Kitchit’s aim is slightly different, to free those who actually make the food (the cooks) and bring them into our homes so that we can have friends over for dinner and turn our apartments and houses into restaurants.
While these services focus on meals in the house, others focus on getting us out of the house and to grub with new folks. Grubwithus has a clever model for driving groups of friends or strangers to a new restaurant, offering the proprietor a number of seats under one pre-fixe bill while giving diners the chance to meet people at new or favorite dining establishments. Housefed is a service for people to eat homecooked meals with others at the cook’s home, whether in the city you live or while on the road. (Tip: Hunt for the Housefed blog, it counters much of the Silicon Valley groupthink.) We’ve all experienced the monotony of eating with the same people over and over again, or getting caught in tourist-trap restaurants while traveling, longing for that elusive home-cooked meal with local fare. Grubwithus and Housefed help break that monotony, and that’s a very good thing.
All of this is happening because of the convergence of a number of trends. Our economy is struggling to regain its footing. We’ve become more educated about the dangers of poor nutrition, the hazards of frozen food, and dietary effects of portion sizes. Diabetes is a legitimate health threat. We have to commute more, from suburb to suburb, as job tenures become shorter. We marry later in life. Then, we divorce. Both parents work, or there’s just one parent. Kids don’t take as much of an interest in cooking their own food, let alone having any curiosity as to where it comes from. And with technology to make us more productive and/or to distract us, we oftentimes get caught in situations where we turn one of humankind’s most social habits into an anti-social event, a means to an end.
As Robert Putnam, the author of Bowling Alone, might say, we’re also “Eating Alone,” at least some of the time, and we’re content with it. Despite the popularity of the Food Network, one of its most attractive personalities, Jamie Oliver, wasn’t able to take healthy eating and education mainstream—his show, Food Revolution, had six episodes in 2010 and was yanked off the air after two spots in 2011 because of low ratings, replaced replaced by Dancing with the Stars.
We are separated from what we eat. We lose that connection as to where the food came from in the first place, where it was planted, harvested, and how it ended up prepared on our plate. That’s what excites me about this particular batch of startups. They may or may not create a Google-like technology giant, but that’s not the point. They’re riding social networks and creating peer-to-peer economies, allowing us to connect with others around food and offering an interesting (and sometimes cheaper and healthier) alternative to frozen dinners and overpriced restaurants. Technology will probably never be able to answer the question “Where should we eat?” That’s OK. What’s important is that how we answer the question could be different in the future, and that’s a good thing. After all, we’re not just what we eat—we’re also where we eat and whom we eat with.