January 31, 2011
First Look: Textaurant
Textaurant is focused on solving a simple issue that everyone can identify with: waiting for a table at a restaurant stinks. Even when the restaurant hands you a plastic pager, you still have to pace around the lobby and wait for your table. Textaurant aims to give convenience to restaurant patrons while increasing loyalty for their restaurant customers.
The founding of Textaurant goes like this:
One evening in early 2006, Textaurant founder Josh Bob was standing in a restaurant lobby. He became annoyed at the hour and a half wait for a table (it was where his friend the birthday boy wanted to go!). Unable to sit because the lobby was so packed, he received a text from one of his friends asking him to leave the waiting area and shop in the mall next door. To his dismay, he couldn’t because it was out of range of the plastic pager he was stuck with.
This brought forth a thought. If he could receive text messages in the mall as well as the lobby, why not replace the buzzing alert device from the restaurant (the pager) with the buzzing alert device people carry with them all the time (their mobile phones)?
Recently Textaurant was announced as one of the winners of the 500 Startups Twilio micro-fund award, and received $10,000.
I spoke with CEO and Co-Founder Josh Bob to find out what Textaurant is all about, how he plans to grow the company, and what’s in store for the startup in the future.
How Textaurant Works
NB: How are customers using the service? How are the end-users using it?
JB: It works in one of 4 ways right now, and these aren’t that dissimilar from each other, but are interesting enough.
The first is standard: you walk into a restaurant and tell them that you’d like a table. They say that there’s a wait, and ask you for your phone number. You give them your number, they send you a confirmation text to make sure you gave them the right number (which could also include a special offer), and then they send you a text when your table is almost ready.
The second: Instead of walking in, you call ahead.
The third: You can see wait times and join the queue if the restaurant has enabled it on their web site, or the fourth, you can go to Textaurant.com on any smart phone. People are able to enter their informaiton after they see the wait time, they join the queue, get a confirmation message, and then receive the “almost ready” message without ever setting foot in the restaurant.
NB: I saw a quote in an article that mentioned: “After the meal, the restaurant can follow up with special offers, loyalty programs or customer satisfaction surveys.” (Source: MassHighTech), I wonder about security and privacy. How do you protect customers data?
JB: Any messaging is done through our platform, and any future post-visit messaging or offers are sent through us, and have to be approved by us. So not only will customers not get spam, they will be able to set the frequency of messaging to say “I only want to receive messaging from any textaurant restaurant once per month” or they can say “I want to receive all messages that would have been sent to me” and anything in between.
The Twilio $10,000 Prize
NB: You recently won $10,000 from the Twilio micro-fund. How does Textaurant work with Twilio?
JB: Twilio’s API is super simple. It allows us to send our text messages (and soon our automated voice messaging) back and forth quickly. We have it set up so that when we want to send out a text message, it can be customized. Anything we need to do is done through the twilio API, and it’s done pretty easily.
NB: Aside from the $10K, what else do winners get?
JB: My team and I have spoken with Dave McClure, and really enjoyed it. He’s sharp, knows his stuff, and doesn’t swear nearly as much as you’d expect. He has, and will continue to work with us to guide the ship in the right direction.
Revenue Streams
NB: I saw a quote that it costs around $1000 up front for a restaurant to get on board. Is that still accurate?
JB: That’s an old number, and not correct anymore. There is no upfront cost. They just have to have the hardware, and we’re providing the hardware if they sign a contract with us.
NB: So tell me about your revenue streams then, if you’re not charging up front.
JB: It’s a strict monthly fee. Customers can sign a longer deal to get some perks, or they can sign just a month-to-month agreement. There are 3 tiers which range from $80-140/month ($80/$100/$140), and each one gets them more benefits and perks.We have 5 paying customers right now. Our revenue is greater than our outflow right now, but as we ramp up and add team members, we’re going to have to add new dollars to the top line.
NB: Other than the monthly cost, do you have any other revenue streams right now?
JB: That’s it right now. We are looking to develop a couple of other sources of revenue in the near future, one of which is our marketing engine. We’ll be building a CRM/loyalty engine, but that’s going to be provided to tier 3 customers at no additional cost.
NB: How are you planning on implementing a loyalty program. I’ve seen sites like foodler that give points and discounts the more you use the service, and is a way to get people to keep using the service. It would seem like a natural fit for something like Textaurant. What are your plans?
JB: We are absolutely looking to create a loyalty system, but we don’t necessarily feel that the patron needs to be loyal to textaurant. We would LOVE for the patron to be loyal to textaurant because of the great service we provide, but really we’re driving loyalty to our customers, and our customers are the restaurants.
So the way we envision that working is: if a patron has been to a restaurant 3 or 4 times in the past month (and that number is customizable, as is the time frame) then the patron will come up in the system as a VIP, so they’ll be treated accordingly by the hostess, and passed off accordingly to the restaurant manager or server as someone that deserves some extra special treatment.
Challenges and the Future
NB: What are the biggest challenges facing your company right now?
JB: There are two big challenges right now. One is that we’ve got so many features we want to add but need time to develop them all. That’s one of the reasons we’re looking for development help. The second big challenge is sales. There are an infinite number of restaurants from a practical standpoint, so: a) picking those ones that are the ideal target and b) just being able to connect with all of them in a meaningful way is a difficult way to do things.
NB: So how do you plan to overcome those challenges?
JB: Great question. So, the first thing we’re doing is building a sales pipeline which will hopefully be a lot more efficient for me to make those sales. And we’re out there recruiting sales and development help and at the same time we’re beginning the process of fundraising with the idea that those funds will go mostly toward sales and development.
NB: What would be the ideal size for your company by the end of 2011?
JB: By the end of 2011, I’d love to see our team at 5 or 6 people. I’d love to have enough accounts that there’s one person handling all of the accounts as an account manager, I’d love to have enough sales in the pipeline that we’d need a sales manager, and I’d love to see an additional developer.
NB: Where are you in terms of the fundraising process right now?
JB: We’ve raised some money from 500 Startups, and we’re at the very beginning. We’re developing relationships with people around the country. We had a number of people approach us after the TechCrunch article, and that led to some very interesting conversations, and we’re also trying to build up some traction so we’re an appealing investment. One of our advisors has given us some pretty solid metrics by which we measure ourselves against other companies that are at the point where we want to be, and when we reach that, we’ll be very confident in starting the fund raising process.
Nathan Burke is the Director of Marketing at Waltham, MA startup Aprigo. He is an infrequent writer at MarketingStartups.com and is uncomfortable describing himself in the third person in italics at the end of an article. You can find him on twitter at @nathanwburke.