In this episode, Andrea Tassistro, CEO of Foodetective, talks about how they used affiliates (who are food influencers on Instagram) to grow to 25k restaurants on their platform.
We talk about,
- What Foodetective is all about.
- How they hit 25k users (restaurants – including on trail plan) with ACVs in the range of $2.5k to $10k with around 3x YOY growth.
- How they convinced food influencers to become their affiliates.
- How they intend to grow using licensing model over the next few years & how their enterprise sales team is closing these deals
- Team, funding status & future vision
Transcript
So we. Around 600 influencers at the time, and we were asking them to send an email to all their database of restaurants following them, and we, we gave them a message to send out to. And so at some point, I think it was end of 2019 You have pretty much every restaurant in Europe that received a message from an influencer saying, do you know this platform Foodetective
UV:Hello everyone. Welcome to the SaaS podcast, and today we have Andrea Taro with us. Andrea runs a company called Food Detective. Hey, Andrea, welcome to the show.
AT:Hey, Upendra. Thanks. Thanks very much for having me
UV:today. All right, so let's talk about your company first, right? So what does Food Detective do and why do customers pay you?
AT:So our company does two things. The first one, it, it, it assembles integrates, aggregates the entire tech stack initially of a restaurant today, of a, of a merchant into a single platform. So what we do is we. Make operation run smoothly and, and automatically. And on the other side, we also improve the visibility of all our customers through our B2C platform.
UV:Okay. So, so who are you primarily selling it to? Is it restaurants?
AT:Yeah, restaurants are are our target. Mm-hmm. but we sell the platform. To large companies who then resell these product to merchants and restaurants. Ok. So let's take an example. For example Coca-Cola, or, I don't know in India you have zma. Mm-hmm. Maybe they buy licenses from us, let's say. Yeah. They, they commit to buy 10,000 licenses and then they resell this product to their existing merchant. And these
UV:existing merchants are restaurants
AT:usually? Yeah. We started with restaurants and now we're moving away. I mean, not away, but we're moving up into new verticals and, and this will woo or should be announced very soon.
UV:Okay. And what sort of verticals are this and is it an entirely different product, or is is it just an expansion?
AT:No, it's a, it's just an expansion. So realizing our technology could be applied. Anyone, right. It's restaurants have this problem of having to manage a lot of different tools, but maybe a hairdresser or a garage or an insurance has the same problems. Mm-hmm. it's just different tools or different integrations. So, we'll, we'll start to add more and more verticals. Sure. As we speak in order then, not only. Cover more business vertical, but also to increase our market size and ultimately to provide restaurants, clients, so B2C people with kind of a, a yellow page of everything where everything is integrated. So what
UV:do you mean by b2c? These are still businesses, right? Or something like a restaurant, I would assume Somebody who's, who practice. It's
AT:you and myself. Okay. So you, so it's, it's it's end users. Okay. Okay.
UV:I'm still confused. So for example, so all of your restaurants are businesses, so if you're expanding to some other vertical, for example, maybe some lawyers or someone, they're still running practices, they still have their own business, right? So it's still a business that, that you're selling to. Of course it's ma handled by a single person, but it's still a business. Right? Exactly.
AT:But what happens is when this, whatever business joins, they, there's a, there's a profile created for. A platform called Food Detective. Okay. Tomorrow that platform might be called differently. And you and myself, when we'll look for any businesses around us all around the world will be able to go on that platform and have all the data aggregated also on that platform for us to interact. With that business. So if that business, let's take a, a concrete example. Mm-hmm. So let's take a restaurant and let's say that restaurant runs on zma, sw, Uber, eat, OpenTable, the fork, Instagram, Facebook, Google Reviews, and so on. So not only the restaurant can manage everything seamlessly, so very easily from, from this platform that we provide him, but on top of that, you will be able. Interact with that restaurant through a portal where you can actually choose which service you wanna use on its profile. Okay.
UV:So when you say me, I, as a customer, I would typically order from these restaurants? Or are you talking about some of the use case here?
AT:Yeah, you either order or read or book table or pay. Okay, got it. Since he has integrated everything into one single platform now we can also provide you. You know? Yeah.
UV:It's profile. Yeah. It's essentially an online presence for all of these restaurants. And they could, they could, like you, you as a customer could do anything with them. Right. Got it. So alright, so let's talk a bit about your customers that you have as of today and the revenue that you're doing. So how many restaurants do do you serve as of today?
AT:So today we have approximately 25,000 restaurants. Five Listed on the
UV:platform. And how many of them have you directly managed to close, and how many of these are through these big agencies or whatever you call them?
AT:So today everything is, is direct now the, what we call licensing. Yeah. Started in September. Mm-hmm. But in this case, we speak about. Millions of merchants. So if you take a, I don't know if you take Uber Eats, for example. Uber Eats has 650,000 restaurants, right? They deliver food through, right? So it's, it, it's at the large the very largest scale. Then, then what we, what we do today in direct and, and ideally we went after like all the, the biggest players in the industry and said, We'll provide you with all the tools and, and platforms and integration you need to serve your merchants. How many do you have? Mm-hmm.
UV:So you, you're still figuring out this, this sort of business model, right? How do you sell to, to people who are already
AT:You figured it out already. So, yes. So what happens is that the. The direct part is now fully automated and online. Mm-hmm. So we've been doing a lot of direct sales for, for some time and, and have recently reduced direct sales. Okay. And automated the entire onboarding.
UV:Let, let's, let's come to that in a while. So I wanna deep dive into that. So let, before that, I wanna understand how much approximate revenue are you doing last month, for example, what was your doing last?
AT:I'll have to kill
UV:you if I tell you So ballpark range, approximately. You know, as vague as it can get, you can't. So I wanna understand like how big these deals are. Can you give me a sense of how, for example, if I'm a restaurant, how much would I typically pay you?
AT:You would pay between 89. So you have three, three different layers. Mm-hmm. So first layer is they're, they, they're registered for free and they use some free tools. Second layer, they pay about between 89 and 200, and then about a thousand. This is where we also do all the marketing on their behalf.
UV:What's the difference between a $200 plan and let's say a thousand dollars?
AT:It's that we will be marketing your business a lot more. Like the two $200 plan is, is really where you manage everything on your own. The $800 plan is where we manage a lot
UV:of. Okay. So things for you, when you say you manage sites, do you go to like huge sort of people out there who are literally sort of managing all these online marketing for. High value clients? Is that how it is? No,
AT:we have automated everything.
UV:Okay. It's, it's still software, is it? It is, yeah. So essentially you're just selling, selling software. There's no services layer here.
AT:There's barely no service yet. Okay. There is a, there is an onboarding, which is, you know, slightly different where you have one, one account manager who makes sure that he understands everything to then push these two automation
UV:mm-hmm. but post that it's just, it's software serving those customer. That's it. Right. Exactly. Yeah. Okay. And just to calculate how you're growing, right? So let's uh, an year before, right, how many. How many restaurants did you have on, on board?
AT:So we're trying to double every
UV:year. Okay. So can said it's 12,000 or something? No, it was
AT:actually a bit more than that. It was, I think around 18. 18. Okay. But ideally we would end up at 50 K restaurants by December this year. Right. So its' just start and Daniel start both months from now and. Tripling actually year on year. So we aim to have a hundred our 150 K restaurant by the end of next year, 450. For next years and then we double again because we, we cannot grow.
UV:These are really, really huge numbers and I really wanna dive deep dive into them. So let's so, so far 25,000, most of them are direct sales that you were directly reaching out to these restaurants and closing them. So how are you doing that? So how did you find these restaurants and how did you convert them to your customers in the first place? What growth channels have worked for you so far?
AT:We did a lot of email automat. Okay. A lot of robots on social medias. So where we actually sent out a message with a self-registration bottom to all the prospects that we had. A lot of cold calling pr marketing. And yeah, that's pretty much it.
UV:Yeah. You, you've mentioned a lot, lot of those things. So let's, I wanna pick one so that I can understand how your strategy exactly worked in this particular scenario. So, which one was your best performing channel? Was it email automation? Was it social media messaging? What, what really worked for you? What was responsible for most of this growth? So
AT:I think it was Instagram in 2019. So, It wasn't working quite the same as it is today. Mm-hmm. and we had a crazy conversion rate of like 80% I think. We were sending out thousand of messages, not only through our channel, but also through different Other people channel, which was working as a, a referral. Right. And we were kinda saying have you heard about this platform for restaurants called Food Detective? Okay.
UV:So at restaurants, so what was the process like on Instagram? Were you directly sort of using robots or whatever that you call it to sort of send message put into
AT:No, no. That, that, in that sense, I think it was manual. So we. Around 600 influencers at the time, and we were asking them to send an email to all their database of restaurants following them, and we, we gave them a message to send out to. And so at some point, I think it was end of 2019 You have pretty much every restaurant in Europe that received a message from an influencer saying, do you know this platform Foodetective
UV:Okay, so it looks like influencers are the key part here, right? So are these your affiliates? Would you call them your affiliates? Do you pay them any cut once they sort of help you close the deal?
AT:We did, we don't anymore. Okay. We
UV:did in the past. Yes. And how did you manage to sort of hire 600 influence influencers? That's, I wouldn't call it higher, but how did you manage to convince 600 influencers to send out a mail to their followers?
AT:So I think there's a very strong sense of community where we said, okay, we we all know the problem restaurants have right. They, they have too much on their plate. They have too many platforms to manage. They have a crazy tech stack, and, and who here wants to help us? And ver very quickly, you have a, a lot of people that not, not only work with restaurant, but maybe were restauranters before, were like, yeah, I want to help I wanna be part of this. And, and this way, you know, it's, it's kind of a, the ball gets rolling and once it's difficult to get in, but once you're in you know, people actually speak to each other. Mm-hmm. And so we created this database of, of food influencer, which we still were very closely work with as of today that that helped us get the voice.
UV:Got it. And so what happens once, once your potential restaurant, you know, lead gets this mail from one of their influencers? How
AT:do you close them? Well, they, oh, we don't, they just take control of their profile. Okay. And once they have once they have, then it's easy, right? Because you're an email away from. Or you can just simply tell them like, there's this new feature, or we want to feature you in this sky, or, or
UV:whatever. Yeah. So, so I'm talking more about the conversion. For example, I'm, I'm expecting all of this new sort of restaurants might just start your, start with your free plan. Now you gotta do something to sort of convince them to move, move them to the, that $200 or $800 plan. Right? So what exactly are you doing there to sort of con, sort of move them, you know, to a higher tire?
AT:I think it's it's just a matter of having them to use the paying features. Like a lot of them are on the free plan, right. And as soon as they want to do some more, then obviously they have to pay.
UV:So can I ask how many of these 25,000 are on one of paid plans? Or is that a secret?
AT:Yeah, if I tell you that I will probably reveal the,
UV:the venue. That's okay. That's okay,
AT:right? It's a smart move for you, but it's ok. It's ok.
UV:It's okay. That doesn't matter. So I was trying to understand your conversion, right? So my point is basically, so like your highest status around $800 per month, right? So $10,000 acv. So now, I mean, you could literally hire a bunch of people to sort of kind of. Sort of close those leads on free diet to a higher diet plan. So are you doing something like those, or, or is it just a bunch of email engagements? No,
AT:no. What we try to do, and to be totally transparent with you, we, we still have a lot of restaurants that are on the free plan, right? Yeah. Now, what we are solving here has a, has an issue or has a, has a goal, is. Don't have, you know, thousands of people reaching out on the phone to restaurants for, to, to sell them another platform. We would rather do this by automating some processes or making the product so valuable that they have to turn to us. And this is where you, you start to have. What do we call product led growth? Where the product leads the growth of the company?
UV:No. So product led growth. I mean, looks like you've nailed the top of funnel, right? I see you've got tons of customers coming to you right now. The question is how are you gonna convert them to your paid? Yeah, exactly. Yeah. So
AT:like, and, and you do this by, by adding integration, you do this by featuring them for a month on something that is usually Something that you should pay for. So they understand, or like they get a sense of like the value the product does for them, and then the others say, okay I could turn this whenever I need to in order to start. Having my operation more smoothly, manage my deliveries very easily, increase my visibility, have more bookings, manage my procurement, and so on. And
UV:so, sorry. So let me ask you a different question. So do you have people on your team, on your sales team who are quota and who are your closers who are just picking those people? You don't have, everything is just automated. You're trying to engage. Yeah. All right. It's the, the product should do that. And why not? Was that a conscious.
AT:No. If you look at different food tech companies, what's either what usually, you know, made their time hard is having like to manage teams of 650 employees who are very motivated when they come in and who are just, they hate the company when they leave. Restaurants are really hard customers. Right. Maybe the the hardest one. Yeah. And, and some companies have managed to do this just online, right? Mm-hmm. Yeah. Got it. And so why, why not us?
UV:I agree. Agree that that's your call, right? So, so you mentioned something that, that Instagram, influencer based sort of growth really worked for you a couple of years back, but you mentioned like it, it's not working anymore. So what's working as of today? So you, you've given us like some pretty high targets, right? So you were saying you, you wanna grow two x three x, right? You mentioned like 150 K by the end of next year. So where you wanna get out? New restaurants from,
AT:oh it's it's affiliate partnerships. It's licensing it's where you become more of an infrastructure on the B2B side of existing platforms. Right. So imagine ZMA buys for its entire database. Yeah. Products from. Then intimately you go from to, no, let's
UV:focus hundred thousand restaurants. Yeah, no, let that, that makes sense. So, so now let's focus on this licensing model a bit. Now I believe you've got to have people who are actually talking, sort of trying to close this deal because it's a huge deal, right? It's a really huge deal. You can't expect some automated engagement to sort of close all of these big deals, right? You can't really close. I don't know. Multimillion dollar deal is zomato. That's not going to be possible without a bunch of people talking to them for a, for at least few months.
AT:Yeah. This is where partnership managers and licensing people come into place. Right. But these are very highly skilled sales professional who do deals with these guys for three, six month in order to make that
UV:happen. And how many of such folks do you have on your team as of today?
AT:Right now we have four. And we're just growing a team as we. And what do you call them? We call them partnership managers or li enterprise sales.
UV:Enterprise sales. So that, that was the question I was trying to ask you before. So you mentioned that you would, you don't do something like that, but it looks like you are doing it, but at a much larger scale just for the licensing order.
AT:Exactly. So what we don't do, so don't, don't get me wrong here, but yeah, we do sales, right. But we do very large sales. Mm-hmm. we don't do. Call Kohl's sales. Right. We're not a kohl center. Yeah. At least not anymore.
UV:Agreed. Agree. Got it. So, alright, so, so did you close any such big licensing deal so far? Or are you. At those initial stages because, because from what I understand, right, 25,000 restaurants you've got as of today, and most of them were all of these restaurants, right? And that, that must have been a different journey to what you are sort of, to where you, you are willing to go, right? So now you wanna close this big, huge deals, right? So, So like, what's gonna change? And do you have any initial successes? You don't have to name anything, just just give us a sense of how things are changing and did you get any initial successes there?
AT:Yeah, so what we did is we identified the five largest companies and brands we could go after, like mm-hmm. who are, who have the biggest merchants database out there, and. It's been now more than a year and a half that we've been working on this project. Mm-hmm. and we, we, we now closed, I think four out of five of these deals. Okay. And once you close the deal, it's just the beginning actually, because you need to make sure everything is ready, not only from a product point of view, but legal and compliant and supporting who does the support, who does the payment, who does what here and there. And so it just started. So, so, so what I understand, we start, we start to see the, the, the, like the
UV:initial result you closed four outta five, right? That's pretty great. So you, you, you already sort of know what's, how you're gonna grow that. That's pretty great. No, I wanna understand, for example, like how the sales cycle look like. So onboarding somebody like them, right? And you mentioned it's been one and a half year, so did it actually take you one year or something to actually close a deal?
AT:Yeah. Maybe sometimes took actually more than that.
UV:And what
AT:happens? Some companies, the first discussion we had wasn't exactly for that, but it took us three years, actually. Three years. The sales cycles are just, are just not what What is interesting here is the, is that you, you understand at some point that all of them have. Have all, there's one thing they all want. That is in common and once you, you have that, then Then you can close the deal much faster. So maybe the first one took three years. The last one took six months.
UV:Right? All right, so let's pick the last one, right? So, so don't give me any details. I don't want any details, but I wanna understand what happens during those six months, right? So let's say you've introduced your product. Maybe you had a demo call first during that first month. Now what happens after that? What, what, what is taking those six months? Is it proof of. Is it that they wanna sort of, what happens? Look,
AT:it's, it's just that the people you're speaking with have no, have no time. Basically, you're speaking with the C position of the largest companies of this work, and when they give you a slot, it's our slot and the next slot is in the month time. So that, that already takes a lot of time. And once you have their attention, I think what's interesting is that You need to prepare, let's say your meetings and, and your partnership in a way that both get great value out of, out of this, right? So they have to understand that by taking your solution on board, they're gonna make either a lot more revenues on their top line or. Get access to much more information that maybe they don't have to today and stuff like this or, or like really help their user database in, in their daily operations. And, and yeah, it, it took us some time just to, just to get to like a good presentation for some specific partners. And, and, and we're still at the early phase with other partners, right? So now that we've open to anything we need to understand what are the benefits? I don't know, for the largest. Haircut distributor in the work because once we, we, we know that then we'll be able to address our solution to all, all the hairdressers are out
UV:there. So one question that I have here, right? So why are you sort of expanding it to new verticals? So you've still got lot of restaurants out there, which I think like you've built your product for restaurants. Now, why don't you sort of, so what's the reason behind sort of expanding it to newer verticals?
AT:The reason behind is that maybe some partners actually don't just sell to restaurants. And so making your product available for other verticals the, the deal is signed anywhere. Mm-hmm. So they just need the, the right tools or the right tag. To just sell it to, to one of their clients. Mm-hmm. which might not be a restaurant, but still is one of
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UV:clients. Does it take any engineering effort from your side to whenever you, you end up moving to a newer vertical? Or is it more or less same?
AT:It's more or less the same actually. I think a, a big, big advantage we have is we've built the platform from day one. Mm-hmm. thinking of scale. Right? Yeah. So, We, we need to be able to move to anything very easily. Mm-hmm. And so for us it was really a matter of adding tags. Yeah, adding, got it. Instead of saying type restaurant, you put this in, in our database, you put type hairdresser or garage. Automatically this goes.
UV:Yeah, it's exactly the same. So you can easily expand to new verticals and from product, it's the same. Exactly.
AT:Got it. Now, don't get me wrong, I'll, I, we won't just go like to any vertical right now because it's, it's, it's, it de focuses the company as a whole, but It's in our, it was in our DNA since, since
UV:day one. Let's say a C level executive, let's just say he expresses interest and he sees value in your product. After a couple of calls, what happens after that? What, how does the conversion look like?
AT:So it's a horrible process. You, you'll be speaking with with. With another probably 10 people that, that all one by one validates mm-hmm. and say, okay, actually we could do this. Can we do this? Is it possible to do that if I want to do this in my department? Yes. No, no. Yes, we can, we can work on it, et cetera, et cetera. And then it, it drop, everything is going, wrapping things up, and you all of a sudden have a meeting with all of them, and everyone is, has its interest, right? So you have one guy that wants to do a specific thing and another one who wants to do another specific thing, and you have to please them all. And that's, I think the, the hardest part is let's just
UV:working with, with, yeah. I'm trying to understand the onboarding process. Let's just say you've done that. So what, what, what's your KPI at that point of time? What are you trying to get them to do? Is it to a POV or is it a pilot, a paid pilot, or is it directly getting onboarded? Like what, what, what's your goal at that stage when you're trying to convince these
AT:executives? No, it's, it's really to. Hmm. I think it depends when you said, like you talked about pilots, sometimes you have a pilot because the company process is a pilot. Mm-hmm. and sometimes you have a, a market penetration because the company processes, okay, let's try this on this specific market. And so you actually tailor your product for them. They have the, the force to go. Market. They deploy it and then they come back with feedback and say, okay, this, this didn't work. This we need to change. This is extremely valuable. This and this and this. Let's make the changes. Mm-hmm. got
UV:it. So it, it's, you don't really have a set playbook. You basically tailor it based on the customers and what they want.
AT:Well, we have a set, we have a set playbook, we have a process, right? Mm-hmm. When we go like a go to market process, what we call the route to market at food detective, but the only thing. every partner has a different way of Yeah. Of operating and us being, you know, the product we have to, to make sure that we, we manage keeping scalability, global scalability in mind. Mm-hmm. Can, can, can, can go with these
UV:guys. All right. That's, that's a lot of insights that managed to sort of get out of you. So let's, let's just try to wrap this up. So when did you start the company
AT:in 2000? 18.
UV:Yeah, 18. And how many folks do you have on your team? As of day
AT:right now we're 34.
UV:And what's the split? How many engineers?
AT:It's a team of 12 engineers. The rest is
UV:four. You mentioned those closers, I would call them and whatever the rest of the folks.
AT:The rest of the folks is operation. Okay.
UV:Do you have any marketers who are still focusing on those direct sales? Yeah, we have a, a lot of,
AT:a lot of those people who, who just keep on pushing on the, on the direct sales. Right. Yeah. At the end of the day, it's more margin and more, more control.
UV:Sure. And what's your funding status? Did you raise any money so far? Yeah, we raised the seed grant seed. And are you planning to raise any, anything going forward?
AT:Yeah, we we'll be maybe announcing some something soon.
UV:Pretty interesting. We'll wait for the news then. All right, Andrea, thanks for taking the time to talk to me. Hope you scale, you know, scale your company to much greater heights.
AT:Thank you very much. Op was a, it was a pleasure speaking with you today and, and hopefully in India very soon actually.