“Hey, I’ll Have The Usual.” The Emergence Of Consumer Repeatability

Let’s face it, life as a consumer today can be somewhat frustrating.  Given the advancements in mobile phones, the social web and auto-payments, by 2011 one would think interacting with local merchants would be a bit more,  shall I say… enjoyable.

Yet here we are, still required to actually think about where we are going to eat, look up the merchant online, make the call, hope they answer, talk to the person (with possible language barriers), repeat the same thing I told them last time, read each number of my credit card and expiration date out loud, and then wait for my order with no idea when it will be ready.

Ever sit back and watch people as they are waiting for food in a restaurant or service at a local merchant?  You’ll notice heir heads are down, palms out and thumbs moving.  Most people I speak with seem tired of wasting precious moments of their life standing in line or being idle waiting for something; inevitably they resort to grabbing the closest thing they can find for distraction.  Indeed, they are using some device to surf the web, text a friend or read an email.

In light of the recent $50 million Series E funding for GrubHub and all the hoopla over the daily deals space, I thought I would evaluate the state of the local commercial market and the current web options.  Semil Shah does a fantastic job of starting a conversation about what is emerging on the merchant side of the equation, but since the local market is quite deep with numerous verticals this post will focus on the local restaurant and ordering experience from an end consumer  point of view.

My goal is three-fold:  First to describe where the market is currently; second to illustrate the inherent problems, and lastly to give an idea on the direction of where the local space is heading based on consumer and general societal trends.

The Current Local Consumer Experience

The current local consumer experience can be summed up by the word “discovery”.  Observing the options established thus far, most are built for a consumer to use when they are looking for a “new ” food experience.  Apparently we  have become obsessed with creating a plethora of ways to find the new, whatever  it may be.  Also interesting is the realization that most are already antiquated because they were designed with the online consumer in mind with little consideration of the mobile experience.  This is why, as you will see below, web based ordering and communications with local establishments has yet to experience mainstream adoption.

Online Ordering

  • GrubHub, SeamlessWeb, Snapfinger and many others allow users to place orders online with local restaurants.

Daily Deal Sites

  • Groupon, LivingSocial and the others bring users massively discounted deals on random things around the local community

Table Reservations

  • OpenTable is the king of online reservations for local restaurants

Local Recommendations

  • Yelp, Urban Spoon and a few others allow people to research comments and recommendations on local places of interest

Social Discovery apps

  • Downloadable apps help users find new places,including places others have checked into and commented on

It is obvious with a little research in the online ordering space for instance, a great chasm  still exists.  There are about 500,000 restaurants in the U.S. and 90,000 in canada. About half are chain (franchise) stores. About half the chains supposedly have some kind of online and/or mobile online ordering system (custom apps) but as we go into these stores to inquire about online ordering, nobody at the store knows what we are talking about.  SnapFinger has over 500,000 restaurants in it’s directory but you can only use it’s online ordering for about 30,000 of them. Grubhub (including it’s aquisitions –> CampusFood and AllMenus) has about 300,000 in it’s directory but only about 25,000 you can use online ordering. Eat24Hours estimates it has about 12,000 signed up for online ordering but when you check their directory there are lots and lots of restaurants listed as “closed”.

Going further, the user experience with current mobile ordering apps is atrocious.  Here is an experience I had recently during a trip to San Francisco in which I reported back to our team .  (specific names have been removed)

Mobile Ordering App A. To put it bluntly, they sucked.  And their execution, amongst many others, is why “mobile commerce” has not taken off.  The experience is just terrible and based on their current model there are just too many wires left unconnected.  When I got to  (local restaurant) I asked the guy at the counter if they accepted mobile ordering and payments and he said NO with a questioning look on his face. Interesting, I thought…  because there they were right on the app.

Using a nicely designed mobile app I was able to browse many different cities, restaurants, categories, menus, etc.. I found (local restaurant) and after minutes of clicking and scrolling I ended up trying to buy a “beer” (didn’t allow me to actually determine what kind I wanted) from the mobile app as I sat right outside the restaurant on the patio.  Yet, after going through the entire process and once I clicked purchase…. nothing happened. Pay $4 and nothing else?  No one communicated back to me and no one brought out my beer.  Seriously, nothing happened!  Weirdly, I received a message from ______ through the app the next day saying “Hi Nick”.  I responded with ” Hello” and then nothing else came back. This experience was just ridiculous….

Amazingly, this not-to-be-mentioned mobile app is being touted as a hot new app with great potential.  Unfortunately I must disagree.  The current online ordering websites are not any better, here is an perspective from a recent correspondence I had with a user of an online ordering site.

“…Should mention one more thing about online ordering at a restaurant with lots of chain stores. Most of the time you have to go to the brand (i.e. Subway, Five Guys, Pizza Hut, PF Changs, etc.) home website and then enter a zip code or some kind of locator information after which you find a store to order from. It’s not a local experience. It’s a top down kind of thing. I don’t think patrons like that. If I want to order something at the PF Changs in Bellevue, why do I have to navigate through all the PF Changs around the world?  I’m in bellevue. Just show me the bellevue PFChangs.

So, bottom line is the only tried and true option for a consumer is to just look up a phone number and call ahead or show up in person – ya know, what we did back in 1970.  This is a growing hassle and something needs to be done.

The Everyday Consumer

There is a certain disconnect right now in respect to 1) how we live as consumers and 2) available mediums for local merchants to connect with customers.  It might help to review a few obvious aspects of the local consumer experience that, when brought to light, will allow us to discuss what is now possible.   When I closely evaluate someone going about their everyday life I see peculiar phenomena not currently leveraged by technology.  First, people frequent the same places on an ongoing basis.  They go to the same coffee shops, restaurants, retail outlets, etc… you get the picture.  We are creatures of habit and if you stop for a moment in your own life you will start to see how you do this as well.   Second, at these places we mostly order the same things – lattes, pepperoni pizzas, t-shirts… you get the picture.  Again, we are very habitual creatures.  Think about what types of things you are ordering repeatedly…  Third, people love to be identified, called by name and have “uniquely personalized” experiences.  We love to feel special, to feel “in” and to feel like we have been upgraded.  When you walk into a bar or restaurant, how much better do you feel when the address you by first name?  And lastly, we are naturally mobile.  We are increasingly on the fly, in a hurry and the ever growing demand is that all aspects of our life keep up with our dizzying pace – using technology.  When was the last time you left the house without your mobile phone?

With all that being said, a quick glance back to the current state of the local consumer will show a void in the space becoming clearer.  Why is it that even though we are habitual consumers, all the consumer oriented options are built for discovery?  Why is it the industry is obsessed with bombarding our email boxes with half off deals at places we will never go?  Why is it that most local businesses live and die by their “loyal” customers, yet they keep getting trapped in the push oriented advertising?  Ask them, they will tell you they mostly see they same people week in and week out.  This was very interesting to us at Order SM.  On the consumer side, we found they want control of who connected with them and marketed to them.  We also found they demand immediacy when they want their food.  The current options for customers are anything but immediate.

The everyday consumer expects a frictionless interaction, one without miscommunications and mistaken orders.  The everyday consumer sends A LOT more texts than phone calls, and would greatly appreciate text based communications with local merchants, rather than having to speak to someone on the phone.  (funny we have become this type of society).  And consumers seek personalized interactions with local merchants, having them remembering previous orders creates an incredible consumer experience.  Ironically, with advancements in technology there seems to be is a growing desire for the way it was “back in the day”.

Where the Local Experience Is Going  –  “I’ll Have The Usual”

The era of Repeatability is now upon us.  All the pieces are in place – mobile devices, the mobile web, personalized networks and now direct web integration with local merchants.  Since almost all people carry some type of mobile device, customers now have a medium to communicate with their favorite local merchants, just like they communicate with their friends.  Now that we understand the everyday consumer, the idea of consumer repeatability driven through the mobile web starts to really make sense.  Being able to text “I’ll have the usual” to a local restaurant and everything else is taken care of behind the scenes is now possible.  Very Possible.

Think about it: just pull up the last correspondence in your phone and quickly send off a message to your favorite restaurants or cafes and say “Hey, I’ll have what I had last time, it was great!”  Since order history is provide in detail they will be able to respond with “got it Nick, your sandwich will be ready in 5 min…. Pay now or pay when you get here”.  Then you swing by, grab the order and go about your day.

Repeatability.  I have written previously on how utilities make the world go around.  This seems to be another area where utility comes into play – quick and easy communications with local merchants.  “Just make it easier for me to repeat the things I do each day of the week” is a statement I am starting to hear more often.  Just as the landline has been a century old utility for local merchants, something else is starting to displace wired communication – wireless communications.

That’s just kindergarden stuff.  Now imagine if that information was (anonymously) shot out to a public feed, where ALL orders and commercial information was aggregated and displayed (possibly twitter style) so people could quickly see what types of things were being ordered, purchased  and shared in a local area – in real time!  One could drill down into a specific cafe and see what is “hot” that day.  And if I found something interesting in that feed… with one simple touch I could purchase the same thing.  It’s now possible.

What if a merchant could know all their customers by name?  What if they could visually see Joe is a very loyal customer, this is his 55th visit, has an aggregated total spend of $1,445, his usual order is the #1 and tips well. To this merchant Joe is a very valuable customer.  Again, building around repeatability is now starting to make a lot of sense.

To make this a reality we need to get over this group deal stuff.  Loyalty is not found by offering bottom barrel prices; it is earned by providing quality products with great service.  Part of “great service” is meeting consumers at their level, and opening communication channels so they can connect with you.  Loyalty is going to be one of the most important actions in the next decade and every company – from small mom and pop shops to large tech behemoths – are looking for better ways to keep their customers.

@jnickhughes

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The Start It Series: How To Build A #Winning Team

Start It is a documentary series on how Order SM, an early stage mobile commerce startup, is approaching the launch of their company.  It is intended as a helpful guide to anyone looking to build or grow a startup in today’s fast paced technology space. 

What you read may counter “generally accepted” startup practices in Silicon Valley or elsewhere but that’s what happens when you are a bit different. We are not Stanford Grads; we are not ex-Googlers; we are located in Seattle, not San Francisco; and we did not start off with a large network or initial funding sources. We are 21st century entrepreneurs and this is our story.  It’s a good bet most of you are none of those things either so we hope this may help you get off the ground.  Please feel free to reach out with comments or questions.  This is the second of many posts in the Start It Series.

In the previous post How To Establish A Vision Worth Pursuing we covered how important vision is to the  success of startup.  You really need to know where you are going before you start the journey.  But once you figured that out,  the next question to ask is Who will go with me?  Or more importantly, what do I actually need to get done and who are the right people to help make it come true?

The story of the 1980 U.S. Olympic Hockey team can teach us a lot about leadership and team building. The movie Miracle details how the coach Herb Brooks (played by Kurt Russell) led the 1980 U.S. Olympic hockey team to victory over the seemingly invincible Russian squad. For many reasons Miracle is one of my favorite movies and Herb Brooks has been a great example to me of how to approach building a team.  His leadership approach is astounding as he prepares the team to take on what seems to be an insurmountable odds.  One moment in the movie stopped me right in my tracks.  Herb picks his team by bringing together a bunch of random players – young players and no-names –  going against the wisdom of his assistant coaches and team advisors.  The conversation went something like this:

Herb’s assistant: This is the final roster?  You’re kidding me, right?  This is our first day, Herb. We’ve got a week of this. What about the advisory staff? Aren’t they supposed to have a say in this?  You’re missing some of the best players.”

Herb responds: I’m not looking for the best players, Craig. I’m looking for the right players.

The last sentence says it all:  I’m not looking for the best players, I am looking for the right players.  You get a sense Herb knows what he is doing and understands just who should be in each position.  He had spent countless hours studying the opposition and knowing EVERY player he might possibly have on his team before he actually knew he was to coach the team.  Once the opportunity came to him he knew exactly which players were going to be on the team and why.  Ultimately, his strategy proved correct and his story illustrates why building the TEAM is one of the most important tasks a leader must undergo.

Counter-intuition, we see it all the time in sports.  Very rarely do “dream teams” with massive payrolls win championships yet most organizations try to land the biggest names and highest paid players.  Another great lesson can be observed in the recent movie (and book by Michael Lewis) Moneyball.  In the early 2000’s the average payroll of a Major League Baseball franchise was growing like a weed.  Oakland A’s General Manager Billy Beane came to realize if they were going to compete with the Yankees of the world, they needed to play a different game.  So he re-wrote the rules.

With a little “number crunching” help from his assistant he discovered success in baseball was not a result of big bats, MVP’s and inflated contracts, but actually due to higher on-base percentage.  Quite frankly, the more each player got on base the more likely he was to score.  And  baseball games are won by scoring more runs than the other team.  T

His assistant said: “Your goal shouldn’t be to buy players. Your goal should be to buy wins. In order buy wins, you need to buys runs.”

He started looking at the concept TEAM in a whole new way.  Countering the opinions of others and risking his job, he gutted the team of high-cost players and found younger, cheaper and more teachable players who fit into his game plan.  Like Herb, he didn’t want the best players he wanted the right players.  He the found players who not only got more done, but got it done at a tenth of the cost.  The A’s went on to win a record 20 games in a row and were one of the winningest teams of the 2000’s.

So my question, what is required for your team to win?  And who can just get it done?  Is it an all-start team or is it a team who can JFDI?  The founder who takes responsibility for forming a young team needs to have as much conviction as Herb when they are “picking their team”.  It’s easy when starting off to fall into the trap of looking for the best “dev talent” or “hot shot serial entrepreneur” when in reality you need to find the right players and place them in their correct roles.  Success for a start-up means actually launching a product and experiencing growth in usage.  This requires with speed and efficiency, and the optimal team is one where everyone plays a specific part for a specific reason so they can ship a product and grow a business.  JFDI.

Ask yourself: “Why do I want this person on the team and what are they going to own?”

I not saying don’t look for the best people you can possibly get.  Who wouldn’t want to have a team comprised of the best people you can find tackling a big problem?  Of course look for greatness in your people. But there is something counterintuitive about finding the “best”.  Unfortunately some of the best people around the world (in anything) are the most difficult people to work with.  At best these people are great at what they do and can really make a team shine.  But at worst, these people can become a cancer within the group and bring down the entire team.  It is the founder (leader’s) responsibility to make sure their company stays afloat and successfully gets to market .  You must mitigate as many risks as possible and because people can be one of your biggest liabilities, this issue cannot be overlooked.

The Startup Triad

If you are looking to build a technology or web startup you will mostly likely fall into the general founding position of needing a techie, a designer and a business guy.  Important: You may officially have more or less than 3 founders on your legal documents, that is up to you.  Why three individuals?  Why can’t a single founder do it all?  Well, most technical startups require specific skills and numerous areas of expertise.  It’s safe to say no one is great at all three descriptions and anyone trying to start something alone is wasting their time.  Do yourself a favor and find some complimentary teammates.

Here’s an approach to forming a solid founding team for those who are just staring out:

Founder 1: The Technical Engineer – the one who writes code and builds the product.

Founder 2: The UX Designer –the one who makes the product usable and look good from the end users point of view.

Founder 3: The Business Developer – the one who develops the business strategy and finds the money.

These roles are required to build anything that resembles a tech startup.  You need someone to think of the strategy, someone to build the product and someone to make it usable.  The key is finding the sweet spot where all three overlap.

Note: Don’t make the fatal mistake and think you can cut corners here.   As the leader, if you haven’t found someone for each of those 3 roles, drop everything and go find them.

The Order SM Founding Team – We have taken the triad approach to forming the Order SM team.

Jacques Crocker: The Technical Engineer

Jacques is an amazing Rails Jedi who worked hours on end to piece together Order SM earlier this summer.  He owns the code and with his expertise he has single-handedly changed the game by creating this incredible product.  Every startup needs to have a Jedi.

Gary Windels: The UX Designer

A extensive background in design has given Gary an eye for simplicity and elegance and is a strong compliment to Jacques’s engineering skills.  He always centers his designs on the end user’s perspective, and does so with well grounded reasons as to why design will make or break your product.   Every startup needs “end user eyes”.

Nick Hughes: The Business Developer

As the business developer I focus Order SM on value creation.  I answer questions such as “how and where does our technology add value to the current business ecosystem?”  “Who are our customers?”  Where are we going to find them?”  “How much does it cost to operate our product and can we create enough value to charge more than our cost?”  Every startup needs someone laser focused on the how, where and when of value creation.

Look for to the next post in the Start It Series, here is the previous post on vision in case you missed it.

@jnickhughes

Flickr image courtesy of chipgriffin


Order SM Takes Home The Second Place People’s Choice Award at Seattle Beta!

The first annual Seattle Beta was held on Tuesday October 11th, and Order SM took home second place on the people’s choice.  We were highlighted in TechnologyWeek:

Seattle Beta held its first event last night. It turned out great , the whole room was packed and there were plenty of people buzzing about the new companies.  13 companies were listed on the roster. The format was an open room with many booths. It was very casual and everyone was mingling the whole night. We only got interrupted once by Softlayer who was a sponsor, they wanted to announce an open bar for 15 minutes. The 13 companies were 9Slides, Cloak, Govpinion, Habit Labs, KindleGraph, MobileAppTracking, Omnom, OfferUp, OrderSM, ReadyPulse, Timber Software, Toolz.me, and Wiavia. The venue was packed and it was hard to walk from room to room.

 Order SM placed second among 13 Seattle startups, and it was a solid second place.  The results came from an email the day after:

We’d like to give a special thank you to the demoers, and announce the results of the voting you did with those poker chips.

The demo that got the most chips was HasOffers, showing off  www.mobileapptracking.com, with 95 chips.

In second place was OrderSM (thanks for helping route our drinks!) with 80 chips.

In third place was OfferUp with 56 chips.

Jay from TechnologyWeek was on hand and actually placed an order through Order SM.  His experience:

I used OrderSM last night to order a beer, it is a service that allows customers to text simple orders directly to the staff. This company is showing a lot of good effort to bring their product to market. The service remembers who you are and when you text in the future it uses that knowledge to facilitate making the process faster. They have plans to incorporate payment into the service as well. It is as simple as texting, “Bring 2 Blue Moons please”. I did this last night, I got a text back, “Sure thing Jay, where are you at?”. Me: “Backroom.” Five minutes later the beer was delivered directly to me and I didn’t need to leave the conversation I was in. Look for our article on this company shortly.

In addition to Jay, we saw a number of orders placed using Order SM and the attendees were quite impressed with the entire concept.  This event result was just another moment of truth for the Order SM team, proving once again we have a great product with a strong value proposition.

Video Shoots? Product Launches? All in A Days Work…

Thursday was a great day!  Shooting a video Demo and interview with the Bing team at Microsoft as well as using our own service to order lunch, we are now a real startup.  Can you feel it?  It’s all starting to happen…

First, we were surprised recently to be picked by the Bing team at Microsoft to shoot a video of our basic pitch, product, and some tips to other startups around the country.  It was really fun, and most definitely an educational experience for me as the CEO of Order SM.  They said I did great, but I believe I can do better.   I said to the others I felt 80% comfortable… there is just something uneasy about sitting in front of a camera and trying to remember the profound things you wanted to say.  What ends up coming out is usually less than profound, but in any case should make some sense.

Things like this are a great help in gaining initial buzz and attention in the web startup space, and we intend to use this momentum to attain other unique opportunities like this.   The video will be out in a about a month, so be looking for it!

Second, as Brent and I were driving from Seattle to Bellevue we placed an order with our first test customer, SkyUltra Lounge, using Order SM.

”This is my test run, I’ll have the pulled pork sandwich”

And wouldn’t you know it, a few minutes later my phone goes “buzz”, and a new message awaits from SkyUltra Lounge.

[Side note: Actually, the girl on shift at SkyUltra had never used the interface, and did’t know what to do.  Yet, she was able to intuit the communications aspect right off the bat, which proved someone who had never set eyes on our system was able to use it correctly.  This is a really good sign we have designed a great UX in that department.]

She sent back a message saying she didn’t know what/how to accept the order so we instructed her to go to “menu and add the pulled pork sandwich”.

Few minutes later, “buzz”. I received the “Your order has been accepted, to save time go here to pay” message.

Yes!

The striking thing about Order SM is how real it feels, just like you are texting a friend.  This is going to be our strongest value to mobile users; People have been trained for years on using text messages to communicate with their friends, now we are just folding that over to your other community interactions and ushering in a new era of activity in local commerce.  And realizing our society now wants to just send a text message rather than actually talking to someone (see the graph we put together through some basic research), we have a strong sense Order SM is onto something BIG.  Notice how fast SMS texting has grown in the last 5 years!  Yes, it’s a very good place to be as business.

I went on the pay through the mobile payment process to complete my order as we approached the restaurant.  All in all, a decent execution from Order SM tech standpoint.  There are some loose wires that need to be connected (payment alignment with the merchant, lessons on they take an order from Order SM and plug it into the POS) but I would say Brent and I were struck at how Order SM really does what we promise.

I used my own communications system to text my order to a restaurant and then a few minutes later arrive to pick it up.

”It’s alive!”