Ryan Spong’s career was the tale of two paths. Half of it was spent in restaurants and catering and the other half was spent in corporate offices in finance. He decided to bring the two worlds together.
“If you’ve ever worked in restaurants, it kind of gets under your nails. It gets in your DNA. It’s a fun environment. I was in it for a long time when I was younger. I got out of it, but it was always in the back of my head. It was always something I thought was fun.”
After a stint in New York City on Wall St., Spong moved back to Canada to run a couple of businesses, including a few restaurants in the area. He eventually hooked up with the founder of a company named Foodee, a corporate food concierge app service based in Vancouver.
The founder didn’t have experience in restaurants and corporate offices and the company was still figuring out the right business model. Spong came on board and helped get the company on the right track. He recognized that great restaurants didn’t need a huge lunch order and would only use the corporate concierge service if it was done before 12 pm.
Spong talked with Chief Executive on how Foodee has been able to grow, some of the challenges the company faces and more. Below are excerpts from this interview.
What have been the keys to Foodee’s growth in the last few years?
The number one competitive advantage we have in the restaurant space is that restaurants absolutely love us. We have a 100% close rate. Restaurants very rarely say no, if ever. If you compare that to the consumer world, where [app competitors] that come to town are probably closing about 25 to 30% of the conversations that they have. And they’re typically closing with not the best restaurants in town. That’s about the value proposition, but it’s also about how the business is fundamentally structured and managed to the software.
On average, we have at least 24 hours’ notice from our clients because these orders are so big. Executive assistants and admins have a fair bit of anxiety around feeding a large team. So they’ll book ad hoc orders with 24 hours’ notice and in some cases, a week’s notice. And so the restaurant knows that these things are coming and they have a chance to prepare the staff. In addition to that, 80% of our business is high-frequency users, so [companies use us] one to five times per week. And these are typically like yield programs, companies that want to feed their staff on a regular basis. And so we can plan that out for a restaurant several weeks in advance. They know they’re coming. They can staff accordingly for it. So our competitive advantage is coming into a new market with this big value proposition to restaurants. That’s where we’ve made good inroads into any of our markets. There’s also buzz on the restaurant side about our service.
What are the big challenges Foodee is facing?
The competition with [apps in] the consumer space, these big Silicon Valley-funded companies, it sucks up a lot of the PR oxygen. That’s fine because that’s a consumer-facing business, our business is corporate and very targeted. But I think the biggest challenge is getting the word out. There’s not a ton of places where office admins get together, where I can have a big marketing program and spread the word.
[Even with a large company with thousands of offices], there are not a lot of conversations between the office we’re in and the office in the next city over. So it’s been hard for us to scale. But one thing that’s started to change for us is we have logistics partnerships. And that’s allowed us to release the constraints of geography and do more top down selling from an organizational standpoint. I was filling out an information security policy this morning for a big company—we’re going to be servicing 10 of their markets. We’re selling to CFOs or BP admins that want to have a tool to plan and manage all of their food ordering across all offices. We’re now able to accomplish that because of these partnerships. We don’t have to launch city by city.
As you expand to different markets, how do you manage operations in remote cities?
About 24 months, we started moving to an asset light model. In terms of the assets themselves, because of logistics partnerships, we don’t have to have delivery bags and jackets. In terms of restaurant partners, we can drop ship Foodee labels coordinated through our software platform. The relationship is formed at the beginning. There’s a three-to-four week period where we’ll have kind of a team of Navy Seals go in, establish all our restaurant partnerships, stay in the city, learn what we need to learn about it, and then they can move on to the next setup. You don’t need to physically be in the market after the initial training is done for the restaurants. There are periodic visits. We have business development managers that are building relationships with our current corporate clients on a regular basis.
Also our DNA is very much about being remote from each other. We have people in Vancouver, Toronto, Austin, Denver. All of our offices are in WeWork. I think from the company’s standpoint, we are set up to be working remotely from each other. And I think the modern office caused that. You have to have these systems in place because we have so many folks that want to work remotely. We have folks that work from home a couple days a week and so forth. The rhythms in the office are born out of this desire to be remote.