Suggested by 
Joel Salinger
over 3 years ago
There is a lack of local market research tools for the restaurant industry. Restauranteurs rely on DIY tools such as visiting competitors, scanning social media, creating their own surveys, etc. Many startup restaurants are actually doomed from the outset because of incomplete local market research. There is a need to for an easy accessible, comprehensive local market research tool.
A secondary issue is the economics of the food delivery model is unsustainable for restaurants. Delivery used to be seen as additional "tables" but they have now grown into substitute "tables." The normal costs incurred by the restaurant in addition to the costs associated with delivery (delivery platform fees, driver fees, etc.) result in a net loss for these "tables." The increasing popularity of food delivery has decreased in-restaurant dining. Restaurants need a solution that will bring profitable diners back into the restaurant.
2)
The restaurant industry has historically always been one of the most difficult small businesses to succeed in. The failure rates are extremely high. Failure reasons include insufficient market research - poor location choice, not understanding the competitive landscape, not knowing customer base, etc. And then COVID accelerated the trend of declining in-restaurant dining. Restaurants are not at pre-pandemic levels, especially in urban areas. An effective market research tool is needed.
Are you interested in addressing this Unmet Need?
Founder & CEO at OnlineBar @ OnlineBar
Hi Joel, I'm a bit late to notice what you have proposed for restaurants. We have developed a platform that aims to bring foot traffic back to brick and mortar - the initial MVP was focused on restaurants, and we have transitioned our model toward bars and any corner shop, bodega, brick and mortar that sells alcohol. We intertwine marketing for branded products (digital deals and promos) with redemption on-premise at the brick and mortar place. Let's chat
Senior Data Analytics Manager @ Platform Venture Studio
To play devil's advocate here, is "combatting the decline" the right language to use? It may be that we need to strike a new balance between in-restaurant dining options and delivery dining options. That would lead to a question a long the lines of "how can restauranteurs rethink the business model to balance delivery/in-person profitably?"
I do like the second thought here.
Increasing In-restaurant dining sounds better. But the issue for restaurants is that the economics of the food delivery model isn't profitable. Now there are two ways to approach this issue. One is reducing cost - this is where ghost kitchens come in. Restaurants have set these up to exclusively serve delivery without having to worry about the costs associated with maintaining the rest of a restaurant. But this is not an option for all situations - thus they need a solution that will increase in-person dining.
Chief Growth Officer @ Platform Venture Studio
How much of the problem is delivery vs. the delivery platforms charging massive rents to the restaurants? My perspective as a consumer is that doordash/uber got us hooked on delivery by subsidizing driver costs>locked in restaurants to running delivery on their platforms>have now increased rates to consumers without reducing prices for restaurants. Joel, not sure what you're building in this space but if you're interested in chatting let me know. I know of a founder building in this space to try to make the economics much more affordable for restaurants.
On the market research side, totally agree. This seems like a really cool concept, and I'm curious what you have in mind!
@Brett Wischow I will definitely take you up on that offer to chat about this to make sure I don’t have tunnel vision on this
Well it's true that the delivery platform fee is a significant driver of this problem - and my idea isn't solely rooted in solving this problem - but to collect the data for the market research part it actually does
Advisor, Product Strategy @ Various Startups
What data do you want to collect, and what questions would it help a local restauranteur answer?
Hey Francis,
I am going to reach out to you on LinkedIn with greater detail but if you look online you'll find lots of sites giving instructions to restauranteurs on how to do market research (as I said it's largely a DIY task). These sites explain how create a target customer market profile (generic info like age, sex, income, marital status, food preferences, hobbies, nationality, etc), how to create surveys, and how to do competitive analysis (visiting other restaurants). All of this information is obviously helpful for advertising/marketing efforts but also in crafting menus and the ambiance of the restaurant. And for startups, it is vital in choosing the right location.
My solution is this on steroids. All of these demographic pieces restaurants want will be collected in addition to where food was consumed, when food was consumed, what food was consumed, and and what price. Essentially, all these DIY tasks are being combined in one powerful tool. But what I have in mind has a big advantage. Let's say you are operating a restaurant in a territory and there is a beer that is particularly popular. You could learn this by visiting multiple restaurants in the area or pick up on it after receiving multiple requests. What I have in mind will show you in real time this particular beer is selling around you...so you are missing out. Or conversely, a restauranteur could see the market is saturated with a product and seek to stand out with differentiation.
CEO | Founder | Managing Partner @ Platform Venture Studio
@Joel Salinger - if you have a solution in mind, I encourage you to post it here as a solution - hit the "Propose Solution" button above.
Former VP of Finance & Business Strategy @ doorkee @ Babson F.W. Olin Graduate School of Business
Another component to consider are the costly long term commercial leases that restaurants are beholden to, which account for a significant percentage of overhead and risk to the restauranteur, especially with current and future pandemics/externalities that continue to threaten the model. While ghost kitchens are a way to optimize space, lower overhead costs to restauranteurs and hedge risk for the landlord, I’m still not convinced that enough has been done to improve the brick and mortar concept (ie, long term costly commercial leases).One thing that David Chang proposed was to rethink commercial leasing and brick and mortar paradigms by bringing the dining experience to existing, low cost spaces such as an individual’s homes. In essence, the idea is for cities to allow residences to host patrons and operate restaurants from their own backyards, allow diners to experience authentic cooking from the source/at the source (e.g. grandmas/nonnas cooking), and lower the barrier to entry for food entrepreneurs who lack credit and assets to open commercial brick and mortars. Zoning and kitchen licensing/compliance are issues that need to be addressed, but it’s an interesting approach that could have profound social impact and could spur a whole new genre of food entrepreneurs and bring authentic cooking to the masses.
That's actually a neat idea. Only issue I see with that is good cooking tools are actually rather expensive. And that actually does matter when you start cooking in volume. The cookware you probably have in your house is designed for a certain level of use. And if you want to make some things you need certain cookware you've probably never even heard of. My girlfriend is a chef so I've invested a lot in cooking things I never even knew existed (though fun fact for you, if you think I get to eat restaurant quality food every night you'd be wrong - I've learned that chefs don't exactly like cooking at home!)
The other thing that it doesn't address is that even if you somehow reduced the cost of maintaining a physical location, it doesn't solve the problem of whether it is the "right" location. Many restaurants simply fail because they are in the "wrong" location. They do not understand the consumers or competitive landscape.