In this final episode of the Startup Scale Up series, we speak with FoodStory to get their thoughts on how to handle change at each stage of the business development.
How did the idea for FoodStory come about?
When we started Living Mobile Co., Ltd. six years ago in 2012, we had a small team of just three people, and one tiny office in an apartment block on Chok Chai 4.
Our team’s love of finding great food led us to notice certain problems in the restaurant industry – things that often left us feeling disappointed when we went to try a new restaurant. That’s when we decided we wanted to revolutionize the old way of managing a restaurant, and make it more efficient. We know that consumer behavior has changed significantly since the advent of smartphones and the internet, but more than half of all restaurants are still managed just as before. At first, then, we tried to connect customers with restaurants via a mobile application, but we found that many businesses did not have the equipment to make that connection. That’s when we came up with the idea for the FoodStory restaurant management system: to connect restaurants with their customers in real-time.
How many vendors now use FoodStory?
We now provide restaurant services to over 600 vendors in Thailand, Singapore, Australia, Laos, Cambodia, Qatar and Brunei. Our main customer groups are clients in Thailand and distributors in Singapore and Australia, but we have also expanded into other countries by teaming up with franchises who are growing overseas.
How has FoodStory changed up until now?
We are changing all the time. Every year we encounter issues that we make us adapt and learn, so it’s happening all the time. We started off developing a product that no one had ever used, and things progressed as expected. We hired a software house, brought it in-house, and we came up with a way of scouting for a first group of users and customers who would be willing to spend money so that we could keep developing. From 10 key customers we eventually reached 100, and now we are moving from 100 to 1,000. But still, every day we have to adapt the way we do business, as something which is good today may not be good enough tomorrow. Things are always changing, so our team can never sit still. Whether we have three people or 30 people, as we do now, the way we manage the team is always changing.
We created a system for managing the business, and if that system stopped working for just one minute, we could end up missing a chance to turn thousands of customers into tens of thousands of customers. It’s very high pressure, and it means we all have to work diligently, with no room for mistakes. The more customers we have, the more efficient we have to be, and the more we have to adapt to suit our customers. This is why we put a lot of importance on the strength and the stability of the business.
What have you learnt from these changes?
There have been three key changes which led to huge transformations in the business. The first was changing our business model from an app for food-lovers (B2C) to an app for restaurant owners and building a restaurant ecosystem (B2B).
Restaurants want to communicate menus and promotions to customers, so in order to do this in real-time, they need to have a strong support system – one that works every day and covers every part of the business. With this approach, we then noticed we could help to manage a whole restaurant more effectively. Previously, a restaurant would use only one system – a point-of-sale system (POS). But our team focused on developing tools and developing a system that could look after the whole restaurant business, by taking care of stock, front-of-house sales and the accounting system simultaneously. But when we changed the business model like this, our whole team realized that making a restaurant management system is no easy feat. And this is why you don’t often see the launch of new management systems in the restaurant industry.
Another change was in our revenue model. Previously, we raised revenue through a freemium model, whereby customers would have to pay a subscription fee to upgrade or use the complete product. But restaurant owners didn’t want to play games to get the upgrades, so we switched to a system whereby users who wanted to pay for the product directly could do so. Also, when the system could be used for free, customers had concerns about data privacy and long-term support.
The third change we made was to our business model (again). From building an ecosystem for individual restaurants, we switched to partnering with apps for food-lovers (B2C). The reason we did this was because we had no funding from investors to help us, and it would take a lot of time and a lot of cash to scale up to reach more food-lovers via B2C. Moreover, less people were downloading the app, which meant it was time to change the business model again. From this experience, we learnt that making a restaurant ecosystem was extremely difficult, because each part of that ecosystem is made up of many different business lines. So after years of doing business, this brought us to understand an important point: that we can build an ecosystem by partnering with businesses who have expertise in each area of the ecosystem, and that this would allow both of us to achieve success and make customers happy at the same time.
What does scaling up mean to FoodStory?
For us, scaling up means that our team can fulfil the needs of our customers every day. It means we can grow more efficient every day, and it means that our customers are increasing every day. We know we cannot increase our staff numbers every day, so we have to keep fighting and keep building the tools that will help our team provide services to customers faster and more effectively. We create innovations that allow our restaurant management customers to do business more easily and grow – because if our customers are growing, we grow too.
How do FoodStory’s internal operations help you scale?
Honestly, this is one of our priorities right now: How do we adapt our internal operations to deal with thousands of customers? After we passed 500 customers, we felt we had sufficient experience, and during that adaptation period, we tried to find and build different tools to help the team perform better. One thing we have to keep doing is to keep analyzing problems at the source, and trying to find safe and secure fixes for each one.
At first, we didn’t think running different operations would be so difficult, but we needed to adapt to our customers. We never thought we would become a hardware salesperson, but soon we became a one-stop convenience service for our customers. From these new experiences, we learnt that all operations need to be properly managed.
Where will FoodStory go from here?
Our direction has changed a little, but our focus on revolutionizing the restaurant management business has not changed much. We are determined to keep developing products that help restaurants manage themselves more easily, and we will keep expanding the limits of our business, from front-of-house sales to online sales, to capital management, production…
What would you say to young people who are thinking of launching a StartUp?
If you want to create a new StartUp, discuss your idea with your friends and other people you know, and see what they think. Don’t be afraid that people will steal your idea and do it themselves, because ideas are worthless unless they are not put into action, and in every business, there will be many changes further down the line.
Focus on people who share your passion, and as a team you will be able to reach your goals and go far. You should also focus on your first group of customers when making any product. Ask yourself: What do they need? How do they behave? After that, you will gradually find your style, whether to go large or whether to go niche. But the most important thing is always building value for your customers.
If your product has value, there will always be people who want to use it. We didn’t expand so fast as to go from tens of thousands of customers to hundreds of thousands in 2-3 years, but we were able to turn a profit, look after the team, and grow continuously.
And for active StartUps that are about to scale up?
We would like to give our support to active startups and say we hope they achieve success. You can be stubborn with your idea and your vision, but you must not be stubborn when it comes to getting feedback from people around you and from customers. You must adapt, improve and emphasize building value for the team and the product. When you have a product/market fit, you must find a sales, marketing and support process to keep improving and increase your strength, and then when you are ready to scale, you must keep learning and keep developing all the time, because every business has different challenges when it comes to scaling.
FoodStory joined AIS The StartUp in 2016, and has teamed up with AIS and Kasikorn Bank to launch Food Solution. We got to see the amazing growth of FoodStory from zero, to tens, to hundreds, to thousands of customers. AIS is now inviting a new generation of entrepreneurs to step up and partner with us, and from today you too can send your pitch to us at www.ais.th/thestartup.
