This Week in Startups: SevenLunches Everyone Eats

Jeff Lee of SevenLunches was recently on This Week in Startups (#67) asking, "How do we get customers on a limited budget?".  Since the call he reached out to us to give us an update and let us know what has been working.  In a few short weeks they have over 300 restaurants listed.  They submitted an iPhone app (that should be available any day now).  Have new features in the works and have added another technical founder with an impressive background.  I thought you'd be interested in his story and Jeff was kind enough to share some of his time.

Q&A:

I’m curious how you came up with the idea?

Ryan Maturski is the founder and creator of SevenLunches and a long time colleague and friend of mine. He was in a local sub shop in North Adams, MA last summer and casually told the owner: “Hey you should email all of your customers your daily specials” and then it hit him: “Why not build an automated site that can send a single daily email alert to diners in the area with all of the specials from all nearby restaurants? And also send that E-mail to them right as they are deciding where they are going for lunch.” That was the genesis of SevenLunches.

Are the daily specials deals like a discount coupon or the “special of the day”?  As an end user how do I know if it’s saving me money or is it more about discovery?

It’s more the “special of the day”, which can be a deal, or just something the chef is trying out or happens to be in season. Some restaurants don’t want to offer deals or coupons but they do offer a compelling price or cool experimental items. Ultimately, it varies from restaurant to restaurant and they can use it as they see fit.

Is this just a lunch time offering or do restaurants add dinner specials?

Yes, restaurants do add dinner specials or specials that run all day. We even have coffee shops that don’t serve full food menus but they do promote things like cupcakes, pastries, or we have ice cream shops, bakeries, bars, etc. Focusing on dinner specifically is in the works, where we will send out a dinner only email or alert.

Are restaurants adding their specials daily?

Some are posting daily, but we give them the ability to load a week or even a month of specials in advance. But many places do it daily for flexibility because they may not decide what the daily special is until that morning. We also send them a reminder E-mail each morning if they don’t already have a special in the system.

You called about a cost effective marketing, did any of Jason or Adam’s ideas help?

We definitely plan to implement some of their ideas.

Have you been able to get restaurants to market for you (Jason & Adam suggestion)?

Now that we have some funding we are going to print out some low buck flyers, cards, stickers, etc and think of creative ways to integrate them in the restaurants marketing. We are even telling restaurants that currently have an email list and asking them to promote us to their lists so we can grow the local E-mail user base with them. We are even considering using things like old school faxes to promote us to local businesses and restaurants by pointing out how ancient and annoying some of these technologies are and that SevenLunches is the future of restaurant marketing.

Table Top Display

Any creative way to get people to refer friends to the service (Jason & Adam suggestion)?

We do have an invite a friend feature on the site, but we are working on a reward program to go along with it. We definitely want to do this. The mechanics are what we need to work out.

We also need to find a way to make the E-mails viral like Jason talked about. I have some ideas I am working on for viral E-mails and maybe videos to include.

Are you nervous FourSquare or Gowalla will turn this on?

For me the genius of this idea was the passive alerts from multiple restaurants you get via a single email or SMS, and the lowest common denominator of those technologies and the devices they are on. My grandma or even my parents will likely never have an iPhone to get our app or be on FourSquare, Gowalla, Twitter, or maybe not even facebook. But they do get E-mail. Many phones may not have apps, but most have SMS or E-mail and maybe a browser, as do smart phones. An app is not necessary for SevenLunches to work passively. I love Gowalla, Brightkite and Foursquare personally, but there is the general hassle of getting on your phone, finding the place and checking in, and then broadcasting something about it that will go all over twitter and facebook, and you get badges, rewards and stuff which is very cool. But I’m a tech geek. I love all this stuff. I don’t know if the general public does yet. And some people are more private about there whereabouts.

SevenLunches is designed to help people decide where to go to eat because of a special. Not give them a special after they already showed up or because they are the mayor. That is a frequency scheme like those punch cards, or green stamps I remember my mom getting at the grocery store as a kid. What SevenLunches is doing is just a different mindset than location based check-ins. We are also only focused on restaurants at this time. Our service is all about dining. And everybody eats.

How do you get restaurants to sign up? Do you have to go to each individually? A video explanation may help your efforts.

ATM we are focusing on the low hanging fruit and what I mean is we are focusing on the restaurants that already have a social media presence, they get the value of social media and digital promotion and can cheer lead for us. We will then focus on the non-technical restaurants and show them why they need to promote digitally. My goal is to have educated representatives or street teams that service a city or region to spread the word and take care of the restaurants.

I did make a screencast video, that I used for our Boston Open Angel Forum application and I plan to adapt that video or make a new dedicated video (with our new features) for sales and educating the restaurants on how to use the site.

I noticed you limit the message to 140 characters is that for Twitter?

Actually, I think it was more for SMS but once we recognized the Twitter tie-in Ryan was able to quickly integrate auto-posting of specials to the restaurant’s twitter accounts via the Twitter API.

You mentioned during the call you are focusing on BOS, CMH and now SFO how is that going? Is it an easy sell?

Primarily we are going to focus on Boston to start, but it’s going well, and is a very soft sell. When we approach restaurants they love the idea instantly but always ask me “What’s the catch?” Or: if it’s free for them to use, what’s in it for SevenLunches?. So many are waiting for me to say “it costs you $X a month” at which point they are used to saying “No, it’s not in my budget.” From there I generally have to explain the freemium model, meaning that it is free but we may eventually charge for certain account upgrades and features in the future.

My true goal however is to be able to walk into any given restaurant in Boston or any of our target cities a year from now demo the app and show them their competitors down the street using SevenLunches and say: “We can get your special out to 50,000+ people within X miles of you every single day and simplify your social media and digital marketing plan.” Of course they are going to try it. Right now we need to focus on Boston and those key cities get to that user number. Even though we will focus on key cities, everything is local, and SevenLunches can work in any size community anywhere.

Are franchisees able to make specials or do they have to get approval from the franchisor?

It’s no problem at this point. It doesn’t appear that franchisees need to get approval for this type of local promotion. We are also building some cool multi location features that franchisees and franchisors alike will love. At this time we have individual Subway, Quizno’s, Qdoba’s, Applebee’s and other franchisees out there using SevenLunches.

How do restaurants know it’s working? Is their a way to measure success? (is it the obvious inc. in sales)

I think they are A/B testing us in a way, by that I mean they only offer some of these specials through our service and they also ask customers where they heard about the special. We also want our users to tell restaurants that they heard about the special through us. We will be working in other ways of tracking things and showing that data to restaurants in the future.

What is the business model?

It will be a freemium to paid service but on top of that we will have the ability to place national or regional advertisements into the emails, on the website, and in our apps. Also once we reach critical mass we will have a lot of data that we will be able to use to monetize.

What is the teams background, did you build this yourself?

I’m the VP of Sales & Marketing but I also help drive the direction of the site by giving new ideas and listening to what the restaurants and diners using our service want. I am also the first Angel Investor and am a web designer at my day job as the Director of Internet & New Media for the International Hot Rod Association in Norwalk, OH. The IHRA is a drag racing sanctioning body and part of Feld Entertainment (Ringling Bros. Circus, Disney on Ice, Monster Jam, SuperCross). So my day to day is running IHRA’s website and using the web and social media to promote our events and organization. I also sell advertising and sponsorships for our web properties as well.

Ryan Maturski is the founder and creator of SevenLunches. He is an entrepreneur living in North Adams, MA and has been building businesses since 1998. Ryan's current role is Co-Founder and COO of Raceway Media, which is the parent company of the leading auto racing classifieds service RacingJunk.com which has over 450,000 members, 2.8 million monthly visitors and over 70 million pageviews per month. RacingJunk.com is basically the Craigslist of the racing world and assists all the major teams in NASCAR, NHRA, DIRT right down to the grassroots motorsports teams.

The auto racing industry is how I met Ryan. We have bounced ideas off each other for years. When he came to me with the idea for SevenLunches last summer I just said: “I’m In, let’s do it!”

John Albano recently joined the group. He is an amazing programmer developing the iPhone app, and helping with the website and API. Also very notable is that he was a lead developer for Macromedia and Adobe’s Dreamweaver web design program from 2001-2006. We are very excited and proud to have John aboard and he really fast tracked the iPhone app. Ryan and John have also started a mobile app development company together called FiveIron Software, and SevenLunches will be one of the first apps to come from FiveIron.

What will we get with the iPhone app and is that the future of SevenLunches? Will you make a Droid version?

The app is very straightforward and works as follows: The phones GPS gets your location and then organizes and displays the restaurant specials in closest proximity to you. It shows you the special, the restaurant’s location and you can call the restaurant by clicking their phone number. You can also get directions to the restaurant from your location and street view of the restaurant using Google maps. If there is not a restaurant near you, you can search by zip code.

We think mobile will be key to our success but we will of course maintain a web presence even though SevenLunches is mainly about the alerts via E-mail/SMS/Social & Mobile. Most people will have a smart phone soon and 200k+ Droid phones are being activated daily so by no means are we overlooking Android. Our developers are iPhone guys so they made the iPhone app first but I’m an Android guy so I definitely want to see SevenLunches on my Droid.

What’s next for SevenLunches?

We have many future plans for SevenLunches, but for the immediate future we plan to get this app out there, and focus on promoting and growing in our key cities in the next few months. We’ll continue to add new features to the site, apps, and alerts. Some of that we can’t talk about just yet. We also want to make signup easier, integrate social media sign-ins, make things simpler for and educate restaurants on how to use and promote the service.

How can the TWiST fans help?

We’d love for all of them to sign-up for SevenLunches and help spread the word to friends using the invite a friend form, and also have them ask their favorite restaurants to try us out. If the fans are in the restaurant industry or know anyone who is, please get in touch with me. At this time we are only in the US Zip Code system, but we will work on eventually expanding. And like most startups we are also seeking funding if anyone can help we would love to hear from you.

Comments

[Disappointed Restaurant Owner]

SevenLunches.com sucks! In the above interview, Jeff Lee of SevenLunches claims that "we give them [restaurants] the ability to load a week or even a month of specials in advance" which is definitely not the case. I am a restaurant owner and I was surprised to find that this important feature was not offered as of the date of this posting (March 13, 2011). When I tried to contact the company to inquire about this much-needed feature, I was surprised to find that there was no phone number or e-mail address for the company on their website at www.sevenlunches.com. Want to know how they have been able to sign up over 300 restaurants? I have good reason to believe that they have software that scours the internet for restaurants which publicly display the e-mail addresses for the restuarant's owner(s), manager(s), chef(s), and other staff on their website. Then they send an unsolicitated e-mail (SPAM) to the e-mail addresses that they have collected. IMO, there is nothing special about this company's business model and there is no way that they will be able to compete with companies such as Groupon.com, LivingSocial.com, FourSquare.com, Gowalla.com, etc. that are popular, well-funded, and that could easily integrate this "ho-hum idea" into their technology/apps. I give SevenLunches until the end of the year before they give up or file for bankruptcy. It's not just the major competition that they face - it's also the way this company does business that will lead to their downfall. Hopefully this post will prompt the company to get their act together. It's illegal (and unpolite) to send SPAM and a company that doesn't include a phone number or e-mail address on the "Contact Us" section of their website defies logic. And finally, the claim that restaurants can load specials on the SevenLunches website a week or a month in advance is totally false. A company representative confirmed that they are still working on this feature in an e-mail that I received from him last week (five months after the interview with Jeff Lee). Hmmm...either somebody is lying or they seriously have their facts wrong!