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A Bigger Truth About Restaurant Food Delivery

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Photo by Viktor Forgacs on Unsplash

I was listening to Dan Primack’s podcast on Pro Rata and he was interviewing Senator Klobucher who is now publicly and vocally speaking out against Uber purchasing Grubhub and has tried to mobilize against this.

Her argument is that if Uber buys Grubhub (which itself once merged with Seamless) it would mean that Uber Eats / Grubhub would control half the market and that with DoorDash the two together would control 90% of the market. I think that’s a largely flawed fight to be picking and of all the uses of Senator Klobuchar’s I could think of some much more productive fights to be having.

For starters Uber itself has had to lay off 27% of its workforce due to the pandemic and has been severely impacted financially from the crisis with no immediate respite in sight. Its core business was already struggling to become profitable, so having tertiary businesses like food delivery that can deliver needed profits would be welcome to their financial stability. And the market would still have DoorDash and PostMates duking it out as well as the potential that players like Instacart broaden their business one day or Amazon gets into food delivery.

Even more likely is eventual technology disruption where drones deliver foods and make it hard for existing car delivery services to compete. It won’t happen right away but I’ve seen some innovative companies doing exactly this in places like Australia where they are taking a more liberal approach to allowing drone deliveries. Therein lies the advantages of free markets and competition and if we really believed it were that easy to buy off your largest competitor and be a monopolist we’d all be surfing on AOL TimeWarner portals.

But the broader issue that hasn’t garnered much press attention is how the restaurant industry itself is being transformed and what tools a modern restaurant will need to compete. What is the Shopify of the restaurant industry? I have some compelling data that suggests it may just become ChowNow.

We know that the restaurant business already operates on thin margins and many struggle to survive. So when delivery services came along many were willing to pay the fee to try and increase business. It was only about 10–15% of their actual total revenue per month so for many it wasn’t a battle worth fighting — they just put up with the food delivery company fees. Customers were happy and restaurants focused on their in-store business.

The problem for the restaurants is that the more successful the “aggregators” of customer demand become over time, the less power the restaurants themselves have individually. This will largely be true whether you have 2 strong competitors or 5 because unless a delivery company can make a profit it won’t continue to stay in business.

The delivery companies own the customer relationship and can drive traffic to the most profitable restaurants for them. Obviously if you have a great restaurant brand with differentiated food people search for you by name but for many people looking for pizza, sushi, Mexican food, Thai food, whatever, you might go with the choice put in front of you if it’s being recommended or delivered more quickly. The delivery companies also own many of the assets like the photography so they can make certain options look much more attractive.

So just like when Groupon came out many small merchants welcomed the uptick in traffic, without owning the customer you lose the most valuable asset — the ability to re-market to your customer base and encourage them to become more loyal and more frequent customers. You lose the ability to up-sell and cross-sell products. And just like with Groupon the small businesses ended up having many unprofitable customers.

At Upfront we always took the approach that we wanted to back startups that enabled merchants to own the customer relationship and to increase profits by becoming excellent at marketing and serving ones most loyal customers.

So several years ago we backed a company called ChowNow that enables restaurants to offer self-service ordering for pick-up or delivery and the restaurant owns all of the customer information and relationship — ChowNow is simply a SaaS enablement product.

The company has done well over the past several year but never really captured the same press mindshare as the food delivery companies because when a company shows up at your house you get to know that brand rather than the tech that enables restaurants.

Covid-19 has changed all of that. Whereas pickup & delivery may have been 10–15% of a restaurant’s business before it’s currently 100% and when it’s your entire business the thought of paying huge commissions to a third-party delivery service becomes much less attractive. So while many restaurants knew they eventually needed to invest in better order management software, many had been putting it off.

But just as many product or apparel companies were happy selling at Amazon, Walmart or Nordstrom in the past and have lately realized the importance of Shopify and serving customers directly — so, too, are restaurants. Enter ChowNow.

What data do I have to make the case?

  • ChowNow now has 17,000 restaurants using its SaaS platform for take-out and delivery and is adding more than 2,000 / month right now (and trending up)
  • 10 million diners now use the ChowNow ordering platform vs. 24 million for GrubHub, so like Shopify while they built the customer base slowly and with capital efficiency they are now rivaling the bigger players in footprint
  • Last year they were serving 50,000 customers / day through their platform and did approximately $500 million in GMV (the value of the orders placed), this year they are on track to do $3 billion (with a B) and expect to end the year at a revenue run rate that may top $100 million (yes, I asked for permission to publish these numbers).

If you want to see a short spot that outlines the importance of the restaurant industry arming itself with better software tools to serve and market to their customers you may enjoy this 60-second video that makes it clear why it matters. It speaks volumes to why we all love our local restauranteurs and want to see them survive …

https://medium.com/media/dab8c9b98b12a45a4b06435888cc7fc0/href

Or if you want to see the argument laid out clearly by a customer, look no further than Motorino Pizza in NYC who posted this note that appears before you enter their website:


A Bigger Truth About Restaurant Food Delivery was originally published in Both Sides of the Table on Medium, where people are continuing the conversation by highlighting and responding to this story.



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6 Ways To Incorporate SEO While Building A Business in 2020

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There’s no quick fix, or “one and done” solution when it comes to search engine optimization (SEO). You have to be prepared to play the long game to see the full advantages of SEO when developing a site — and it’s worth it to see your site rank highly on search engine result pages.

That said, there are some methods that will give you a quick boost. Shift more attention to the most significant ranking factors and tactics that will give your site the ability to rise to the top of the search results this year.

Choose a Responsive Design

User experience is a big deal these days. Google loves to serve its users the best results possible. If your website isn’t easy to use on a mobile device, you’re going to suffer a setback in ranking. Think about it, have you ever landed on a site where you had to zoom in to read the text and scroll side-to-side to read all of the content? This was most likely the desktop version of a website. It was made for larger screens and doesn’t reformat to fit on different screen sizes.

Responsive sites will resize images and reorganize the blocks of content according to the size of the screen. If you want to test whether a website is responsive, open up a web page on a desktop or laptop. From the full screen, shrink the window by clicking and dragging, and you’ll see the sidebars move, the navigation and header will take on new positions and the content and images will line up differently. 

Mobile search volume accounts for more than half of the total searches made online (see chart below). A responsive, mobile friendly site is no longer an option, but a necessity, when it comes to providing an enjoyable user experience.

Create Keyword Clusters

Making a list of keywords that your ideal audience would use to find the content you’re offering will also boost your SEO ranking. Plug each keyword into a keyword tool to generate additional ideas. Assess the best options for keywords to include in your content strategy by grouping them into pools based on search intent. You’ll notice that many of those keyword options will be subtopics large enough to write an entire blog post about, in which you can provide more detailed content optimized for a related keyword.

For example, if you own a home improvement business, a central page on your site would be kitchen renovation. And because there are so many choices to make when renovating a kitchen, you could then go into depth and create a new page for every option, from counter tops and backsplash tile to faucets and refrigerators. When you’re planning your content, structure the website to feature central pages that are optimized for the most central, competitive keywords and most important aspects of your business.

Publish articles on the related subtopics in full detail in order to provide as much information on those major keyword topics, to show your expertise in your field, and to demonstrate authority within the content of your site. Google looks for this as partial evidence of your status as an expert in your niche.

Google also loves when there is a distinct organizational structure. By linking the subtopic posts to your major product pages, you signal what pages are most important to your site by creating a keyword cluster.

Image source: https://webstyleguide.com/wsg3/3-information-architecture/3-site-structure.html

Optimize Your Content

On-page optimization enhances the likelihood of your page being ranked for your target keywords. Avoid keyword stuffing and place your keywords strategically. For instance, use your target keywords in the front end of your titles, and keep your titles under 60 characters or they will get cut off in the search display.

Place your keyword in your URL. The most effective URLs are those that are under 5 words and summarize the title or content on the page. Keywords should also be included in the meta description. Using your keyword in the beginning of the meta description will improve the click-through rate for users. As will placing your keyword within the first 100 words in the first paragraph of your content, and using keywords and keyword synonyms in the subtitles.

Use structured data markup whenever possible. If you can provide a rich snippet, you may get a boost in the position your site is displayed.

Make Your Pages Quick and Nimble

With a heavy emphasis on user experience, page speed can make a huge difference in how your site performs. If you’re an ecommerce site, it becomes extremely important because every second your page takes to load will cost your business money from lower conversions.

 graph-seo-png

 mPulse Mobile Case Study on Page Speed Vs Conversion Rates, Image source: https://digitalducats.com/page-speed/

Test your mobile page speed here. You can improve your site speed by reducing image file sizes, using plugins, and using a content delivery network to give your website additional page speed.

  • To reduce the size of your images use Kraken or Smush.
  • W3 Cache is one of the most popular WordPress plugins that increase page speed, but you can decide for yourself by choosing one from this list.
  • Choose a CDN (Content Delivery Network) to reduce your pages load time from a list of options here.

Get Other Sites to Link to You

Establishing credibility and authority is a necessity to be competitive in search results. Backlinks are a powerful way to prove that your content is credible and authoritative because essentially it is being endorsed by the websites that link to you. But stay away from paid links, or any link scheme used to manipulate ranking in an underhanded way. Unnatural linking will lead to penalties and should be avoided altogether.

One approved method of link building is to become a guest author. There are guest posting sites in every niche and having knowledge about your business is all you need to create an article that can be submitted to a site for publication. It may take a few weeks to get a response, and you may need a few submissions before receiving acceptance. Get into a routine for guest posting to build backlinks as fast as possible.

Ask People to Share Your Content

A social network is a priceless asset for expanding your audience and getting more traffic to your website. Build your network by being active on the social media site that has the most impact on your business.

Install social sharing icons on your site and include a call to action to get the most shares. A retweet study revealed that content with share icons received 4 times as many retweets with the phrase “Please RT”.

Conclusion

Although there is a lot to put together to achieve a first page result, it’s a long-term game plan. Start building your website with SEO in mind to give your site the best chance at the top positions in search results.

 



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Building a product too difficult to use: How signups didn’t translate to active users

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Andrew Kamphey has been involved in the creator industry for more than 15 years. During this time, he has started several projects related to creators and influencer marketing.

This is the story about one of those projects that didn't take off: Creator Growth Lab. We want to know what went wrong, what were the lessons learned, and how those learnings improved the way he tackles new ventures.

How did he come up with the idea to build Creator Growth Lab?🔙

He had a side hustle where he would grow people's Instagram accounts. He got his clients anywhere between 2,000 and 5,000 new followers every month. Three years ago, Instagram started announcing policies that he knew would make that method not last. This is a natural thing with growth hacking. First, it works really well. Then something changes and it does not work anymore.

Creator Growth Lab helped Instagram creators to grow by themselves. They could log each day their growth tactics and measure how many followers they gained and their hashtag performance. Every single day you could go to the Lab and see your growth. Then figure out which was the best one. Optimize it and grow more.

How did he build it?⚒️

He had a monthly income from his clients. Every dollar he made, he put into Creator Growth Lab because he wanted to go fast. He quit his job in December 2018. Gave himself a month to mock a prototype. After a month, he realized he couldn't build it fast enough. It was going to take him about a year to figure out how to build it and then three more months to actually build it. He took all the money he had from his agency, and he used it to pay off one designer and one programmer.

He found a designer in Bali. And then he found through a friend, a Vietnamese programmer. His friend became an ad hoc Product Manager and they became a four-person team. It was fast. Within 30 days of working remotely, everything worked exactly how he planned.

What were his key levers to start growing it?📈

Initially, he had a dozen users that were paying him to grow their accounts, who he thought would also use this Lab. They were paying him between $100-$200/month each. It got 50 new user signups in the first month and the next month another 50 user signups.

He used his newsletter to promote Creator Growth Lab to his existing audience and got a dozen signups from that.

He sent direct emails to creators he knew because he had worked in the influencer marketing industry for five years.

What were the biggest challenges he had to overcome?⚔️

Signups weren't a problem. He ended up getting 50 signups per month for four months in a row. The challenge was to get active users. It took a while to get to the aha moment. You needed to use it each day for a week or two weeks before getting the aha moment. That's painful. Users will never get that far.

How did he realize the project was not going in the right direction?📉

Three months after launch, either lucky or unlucky, Instagram cut the number of actions you could do. That killed most growth hacks, but the product still exists. He could keep working on it. But looking back the actual problem was people didn't use it. He made a bunch of videos to explain how to use it. It was very complicated. Users needed to first decide to do growth hacks and then try to optimize them with the app. Not many people know 50 growth hacks.

He had been doing a bunch of automations on his client accounts. All of their actions were literally taken down to zero for 30 days. Within one month, he went from 12 paying clients to none.

He didn't charge them for Creator Growth Lab, it was free to sign up. He would charge later once he figured out who was it for, big mistake.

He did have the idea of Pro Accounts. Initially, it was created for individual users. He talked to a model agency that had thousands of models that were going to pay for using it. Could have been $9,000 a month. Then another person, a growth hacker, wanted to use it to manage 100 accounts. Their clients also left because of the change in Instagram policies.

In the end, how much money did he lose?💰

In total, he paid around $5,000 and never made a penny. The silly thing is that it doesn’t feel like he necessarily lost the money. Because he had been self-funded, never went above his means. Only put money into it he was making through social media.

From all your takeaways he learned from this experience, what advice does he have for other entrepreneurs who want to get started or are just starting out?🗣️

🍂One of the most important things was that he talked to users, but he was not listening to them. He had so much hubris and very little humility because he had been successful at helping people grow for five years.

🍂He went into Creator Growth Lab thinking he knew everything. You don't know anything. Even if you think you know everything you don't.

🍂He spent a lot of time educating creators on why to use the product. Every successful creator will tell you that they grew by making good content. Creators want to create. He had no competitors. No one was trying to do this, that’s a warning sign. It ended up being not needed.

🍂You need to talk with users, not just tell them about your product. It opened his mind. When he gets on the phone with a user he's not teaching them how to use the product. He gets on the phone once or twice a week with his newsletter readers and asks them about what's going on in their life. Just chatting with them.

🍂Your solution might not pan out and doesn't mean your business doesn't work. It doesn't mean you're not successful. It means that solution didn't work out.

🍂Figure out who your tribe is. Find them. If you talk to people for enough time, keep trying different solutions, and keep asking for their problems, you'll figure out a solution. You always have something to learn.

What are your favorite startup resources for makers and entrepreneurs?📚

🍂The Dip by Seth Godin. Winners quit. This book tells you to stop what doesn't work for you. If you work the muscle of quitting you can get to what works faster.

🍂The Mom Test by Rob Fitzpatrick. When talking to users, he realized he didn't have to go to them with a solution. He went to them pretending he didn't know anything about their problem and listened to what they had to say.

If you enjoyed it perhaps like or retweet the thread on Twitter

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#1948 How to teach your kids to build their own businesses

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Joining me as somebody who I’ve been talking to via email for a while, and I’ve wanted to have on here and I’m so excited that he said yes to an interview.
So many entrepreneurs that I’ve interviewed had little businesses when they were kids. They’re usually so freaking proud of then that they can’t stop telling my producers about it. But so many of the stories ended with the business getting shut down by the school, by a teacher, or by the principal.
Well, today’s guest said, “What if we create a way to encourage kids to sell and create businesses? We’ll teach them how to do it and we give them everything that they need.”
Scott Donnell is the founder of MyFirstSale, which gives kids the life skills and confidence
to sell their products in a safe, friendly online environment.
For a special listener discount, you can go to MyFirstSale.com/Andrew or hapbee.com/Andrew to see more.

Scott Donnell is the founder of MyFirstSale and Hapbee, a wearable device that allows people to pick the feelings they want to express, like happiness, calm and sleepiness.

Mixergy listeners can get the following promos:
www.myfirstsale.com/andrew ($20 off Sign Up)
www.hapbee.com/andrew (Indiegogo discount)

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More interviews -> https://mixergy.com/moreint
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