Mathew Focht, CEO of EMERGING, had the pleasure of speaking with Rom Krupp, a visionary, disruptor, and thought leader with more than 24 years of experience creating innovative technologies for the restaurant industry. He’s the founder and CEO of Marketing Vitals and OneDine and one of the leading founders and CEOs partnering with EMERGING to create the EMERGING Fund.
Marketing Vitals offers the most comprehensive analytics software for the restaurant industry and is used in hundreds of restaurant brands to drive top-line sales using data-driven insights. It helps restaurants optimize their marketing efforts, capitalize on customer behavior, and motivate and train team members.
OneDine is a single platform that offers contactless mobile browsing, ordering, and payment and currently sees over 3 million monthly transactions.
As is evident, Krupp is excited about the tech industry and has helped restaurants adopt the latest technologies that provide tremendous growth opportunities. Let’s see what he has to say about the EMERGING Fund and supporting tech startups.
Supporting Early-Stage Startups
Focht: “In regards to EMERGING Fund, where do you see the opportunity? How can we help early-stage tech companies and restaurant operators? In addition to investing in them, we’re working with the founders from a tech and operating standpoint. So, for a tech company that is just going to market, what are some things you’ve learned that they commonly could use support for?”
Krupp: “I think one of the most important things which are often overlooked is setting them up from day one to be a good actor. One of the main challenges is that many tech companies enter our space and try to figure out how to take margins away from restaurants.
“And that happens because tech in the restaurant industry is so fragmented. Think about retail. If I have to get all the major retailers in one place to have a meeting, they’ll take up the boardroom in my office, and we’ll be at 80% of all retail in the country. But to do 80% of restaurants, it would take a football stadium to make that happen. So, because we’re so fragmented, it’s easy for bad actors to enter our space and sell services there are taking away margins.
“Educating them about the value of being a good actor and then preparing them for that will resonate really well when they talk to restaurant groups because they’ll be talking to them about how to improve their business, such as how to create better margins and increase the retention of their employees. If we help them think about their business plan and their product and how to solve restaurants’ pain points, then the restaurants will reciprocate with the same kind of behavior.”
EMERGING Fund: The Stamp of Approval
Krupp: “If we become known as a company that prepares these new startups to be good actors, then restaurant groups can feel comfortable doing business with companies that EMERGING invested in. In essence, it’s due diligence and a stamp of approval.
“Restaurants know they don’t have to worry about every detail of the contract or consider where the company is trying to squeeze margins away from them. One of the principles I’ve applied in my business is to provide value, making it easy for operators to do business with me. I’m a partner and a good actor, which resonates with those in the restaurant industry. It’s important to understand that differentiator; otherwise, you’re just one more company, and it’s all about price negotiation. In both companies, we’ve never discounted our products by customer requests or offered price concessions.
“It can’t be about contracts, as so much of the industry focus on. We start with a month-to-month contract and allow them to cancel at any time. That way, they know they can cancel if we don’t provide the value we intend. We know we’re worth the money we’re asking for. Then, a few months later, they ask to lock in the current price. At that point, we can do a three-year contract and a price guarantee. This focus on value and enabling restaurants to see it before submitting a long-term contract will be very valuable for startups.”
Focusing on the True Needs of the Industry
Krupp: “Another way to help early-stage concepts is to educate them on the true needs of the industry. I always tell people that there are cool things, and then there are things that will make money. Cool doesn’t drive manufacturing decisions. For example, the reason drone technology is in our industry’s future is because it’s something that’s heavily adopted on the consumer side. So, a lot of R&D dollars are being spent there, and drones are becoming more affordable. In the future, I see every restaurant having its own drones.
“However, if I create some crazy technology that’s so niche that it costs $50,000 to put in the restaurant, it will never become viable. For instance, if I create a projection system that, when I click a menu item, projects a 3-D image on my menu, and I can see exactly how the food would look at my table—that is very cool. But how do you monetize that? How do you ever make the technology affordable enough? It’s a cool technology that can never be economically feasible for restaurants to employ.
“So, companies have to think about that. How do you leverage that quantization of technology to the point that you can drive the price down so it can be affordable for brands to adopt it? That’s another area in which we can help guide startups, making sure the concept and product are viable and scalable. Because, at the end of the day, restaurants run on a very tight margin, and we work hard to try to improve that for them.”