Paul Allen is the President and Co-founder of Nextbite, a virtual restaurant. Nextbite helps commercial kitchens add innovative, online food delivery concepts to their line-up. Paul has over 25 years of experience spanning technology sales, marketing, and product development. He’s worked with teams at Intel, Motorola, Adobe, Autodesk; the states of Connecticut, Colorado, and Ohio; and dozens of technology startups. He has been a founder, investor, and board member of numerous venture-backed technology companies and led two tech startup accelerators, including one backed by Dan Gilbert, Founder and Chairman of Quicken Loans.
Here’s a Glimpse of What You’ll Hear:
- Paul Allen explains virtual restaurants
- Why Paul created Nextbite and how it helps restaurants
- Paul describes the process of building a virtual brand
- How do restaurants get started partnering with Nextbite?
- How Ordermark makes online ordering and delivery easier for restaurants
- Why Paul fell in love with the restaurant industry
- A major turning point for Paul — learning to trust his instincts to innovate
In this episode…
Restaurants have downtime. They’ve got space, employees, and ingredients to make food — but there’s no way to use them without orders flowing in. Wouldn’t it be nice to use those resources for some extra cash flow?
Paul Allen started Nextbite to fill the gap. He’s created online brands that are made in local kitchens, using ingredients and kitchen space that restaurants already have. Consumers get delicious food orders to their doorstep, and restaurants fill empty hours with more revenue. It’s a win-win situation for the restaurant industry.
In this episode of the SpotOn Series, Chad Franzen is joined by Paul Allen, President and Co-founder of Nextbite, to discuss how he is helping local restaurant owners with a new virtual restaurant. Paul talks about why he’s passionate about keeping local restaurants alive, how his other company, Ordermark, helps businesses with online ordering and delivery, and the process of partnering with Nextbite.
Resources mentioned in this episode:
- Paul Allen on LinkedIn
- Traction: Get a Grip on Your Business by Gino Wickman
- Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campell by Eric Schmidt, Jonathan Rosenberg, and Alan Eagel
- Huberman Lab Podcast
- Chad Franzen on LinkedIn
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Chad Franzen 0:21
Chad Franzen here Co-host for this show where we feature top restauranteurs, investors and business leaders. This is part of our SpotOn Series. SpotOn has the best in class payment platform for retail. And they have a flagship solution called SpotOn Restaurant where they combine marketing software and payments all in one. They serve everyone from larger chains like Dairy Queen and Subway to small mom and pop restaurants to learn more, go to spoton.com This episode is brought to you by Rise25 We help b2b businesses to get ROI clients referrals and strategic partnerships through done for you podcast. If you have a b2b business and want to build great relationships with clients, referral partners and thought leaders in your space, there’s no better way to do it than through podcasts and content marketing. To learn more, go to Rise25media.com or email us at firstname.lastname@example.org. Paul Allen is Nextbite’s President and Co-founder he is a seasoned business leader and entrepreneur with over 25 years of experience spanning technology sales and marketing and product development. He’s been a founder investor and board member of numerous venture backed technology companies and led to two tech startup accelerators, including one backed by Dan Gilbert, founder and chairman of Quicken Loans. Paul, thank you so much for joining me today. How are you?
Paul Allen 1:31
My pleasure? I’m doing well. Chad, thanks for having me.
Chad Franzen 1:34
Good. So tell me what, uh, what is a virtual restaurant? Exactly.
Paul Allen 1:41
Great question. So there’s a lot of terminology being thrown around as the restaurant industry evolves and responds to changes in behavior of consumers. And in response to the COVID pandemic, and virtual restaurants, as we refer to them pertains to Restaurant Brands that are available primarily through delivery, whether that’s delivery through delivery service partners, like Uber Eats and DoorDash GrubHub order directly from the restaurant. And so you know that that’s somewhat distinguished from the term cloud kitchens. Although there are virtual restaurants and virtual brands being fulfilled out of cloud kitchens as well,
Chad Franzen 2:42
can you give us an example of I know, virtual restaurants is kind of a kind of a new thing, but maybe one that people might have heard of, that’s been a part of our lives, and you just don’t associate it as a virtual restaurant.
Paul Allen 2:55
Um, yeah, you know, our brands, we have a couple of celebrity brands. One of them is George Lopez Tacos, which is gaining and in notoriety and familiarity with consumers. Another one is Hotbox by Wiz Khalifa, the rapper. And you know, both of those are examples of brands that you can only order online, you’re not going to go into a brick and mortar, store and purchase those items. So those would be a cup.
Chad Franzen 3:27
So you talked about those being your brands, I think you’re talking about Nextbite, tell me introduce us to Nextbite. What do you guys do?
Paul Allen 3:35
Sure, sure. Well, so my co founders and I started a company called Ordermark, about five years ago. And it was really in response to a need that we saw in restaurants to simplify online ordering, and to consolidate all the orders that they were receiving from upwards of 50 different delivery service providers. So you have the big ones, like DoorDash, and Grubhub, and UberEATS, and so on. But then there are dozens and dozens of smaller ones, and restaurants at the time. And frankly, a majority still continue to struggle with us. If they sign up for more than one then they have more than one printer or tablet computer that they need to monitor busy restaurant, it’s very difficult for them to do that. So we started Ordermark to build a solution that will consolidate all the orders into one tablet and printer. And we’re in many 1000s of locations all over the country in Canada and Mexico. A couple years ago, we recognize that another opportunity to help restaurants of all sizes adapt to changing consumer behavior. This was prior to COVID COVID only accelerated things but was this phenomenon of virtual brands and virtual restaurants. And it’s deceptively simple to stand up these types of brands. You know, A lot of ways, we think of it as the e-commerceification of food, you have got to reach consumers online through a variety of different channels. You have to dialogue with those consumers to get their feedback and continuously improve the product that you’re producing based on that feedback and the way that you’re marketing it based on that feedback. And targeting takes on a new meaning as well, because you’re essentially targeting consumers, virtually online, wherever they live. And so we, we recognize that this phenomenon was was beginning to develop and grow. until about two years ago, we started to invest in building our own brands. Today, we have about 18, virtual Restaurant Brands, several celebrity brands in the works, but we find restaurants, and then pay qualified restaurants, and then pay them to prepare food for our brands. And then we do all the quality control and all of the marketing on a continuous basis for the restaurants to make it very easy for them to make more revenue.
Chad Franzen 6:12
Sure. Can you give? Can you kind of give me a snapshot or take me through your online restaurant brand development process? Like from start, you know where they’re going for when they’re up and running?
Paul Allen 6:24
Yeah, sure. Well, the brand development, we have a sizable brand development team, the majority of them are based here in Denver, Colorado, where we have our r&d kitchen, we employ lots of chefs, lots of creatives, in brand managers, for each of the brands. The process really begins with data, we have our own proprietary data, and then we licensed third party data. But our goal with every new brand is to meet a latent demand in the market. And so we’re continuously studying where there is opportunity to provide consumers with food that they don’t currently have access to. And in and so it starts with data. But it’s also informed by current trends. We have a team that just analyzing social media trends and what’s popular and what’s emerging. And we, our brand development team takes those inputs, and worked with our culinary team, in our supply chain team, to develop brands that will be exciting and high demand among consumers, but are also easy for restaurants to prepare, because it does not require them to purchase additional equipment. In most cases, it doesn’t require them to purchase additional ingredients beyond what they already use on on their on premise dining. And so we go through an iterative process. If there is a celebrity involved, then typically they or their teams are very involved in the process. We go through rigorous quality control testing in our r&d kitchen and the surrounding consumer market. And, and then we have a go to market plan and launch process that engages our brand managers and marketers and in promoting promoting the new brand
Chad Franzen 8:37
So you know a lot of a lot of the ways I determine where to go eat is i With that out with my wife and we walk by the place we should we say, oh, we should go check that place out. Obviously, you can’t do that with a virtual restaurant. How do you make people How do you invite people to eat at a place that they’ve perhaps not seen?
Paul Allen 8:56
Yeah, great question. As you can imagine, we’re talking about the E commerce application of food, we’re talking about reviews. And so whether those reviews are on Google or Yelp or on the delivery service provider sites themselves. That is the main way that consumers are making decisions about whether or not they should place an order at a restaurant they’re unfamiliar with. There’s of course familiarity that we can build through our marketing efforts. And so we have direct marketing, we have digital marketing, we have out of home marketing, for example, with George Lopez tacos, we rented a couple of taco trucks and drove them around and gave consumers samples of the great product in the markets where it’s available. So you could try it and then reorder on their own But the name of the game is establishing credibility through a good product, and word of mouth, you know, through quality, consistently good product.
Chad Franzen 10:10
And he also helped with, he also helped with packaging and things like that brand design, what the food or what the, you know, the containers look like when they when the food gets there.
Paul Allen 10:19
We do. Yeah, we have a supply chain team that works on both the food ingredients and the packaging, and provide support to each of our what we refer to as fulfillment partners. These are the existing restaurants in the market. You know, we we fundamentally believe as a company, and this really goes back to our DNA coming from the restaurant industry. One of my co founders and our CEO Alex Kanner, his family has had a very popular Deli in Los Angeles for over 90 years. And so from day one, our fixation has really been how do we help restaurant operators to survive and thrive as consumer behavior changes. And the when it comes to packaging, you know, we have a team that’s that’s available to support each of our partners in getting the right packaging ordered. There’s a lot of supply chain challenges right now across the country, and not just the restaurant industry, but everywhere. And but we provide them with as much support as possible so that they can get the right kinds of packaging. And then the consumer can have the right experience when they receive the food.
Chad Franzen 11:35
What kind of input does Nextbite have and setting up the delivery process then?
Paul Allen 11:42
Great question. So every Nextbite partner receives at no cost, in order Mark system, which they can also use for their brick and mortar to receive orders online orders. But they use that system to from day one, begin receiving orders for Nextbite. So it’s really, really turnkey in that regard. What a qualified restaurant does is work with our culinary team to decide which brands they want to launch. They receive their chefs receive training, they order any packaging, or in some cases, ingredients that they may not have. And then we schedule a launch date prior to that launch date, they also receive an Ordermark system that’s already configured to start printing orders. So our team does the legwork of signing up the restaurant with all of the relevant delivery service providers, the big ones, as well as the small ones. Ordermark is integrated with over 50 of these delivery service providers. So you may or may not be familiar, but there are literally hundreds of companies that are in the business of delivering food to consumers at home or at work. You know, some focus on vegetarians, some focus on people who are eating keto. And, and so we want to make sure that the maximum number of relevant delivery service providers are added to the quarter mark system. But once they go live, literally on day one, they turn on the machine that point in order to start to come out for whatever brands they’ve chosen.
Chad Franzen 13:28
You’ve mentioned Ordermark, that’s a company that you founded in 2016. How did that how did that kind of come about? And how has it evolved over the over the past five years?
Paul Allen 13:38
That’s a great question. You know, as I mentioned, my co founders and I observed that there was this challenge that restaurants were facing, trying to manage orders coming from different sources. It was apparent to us and many others at the time, that that was something that was difficult for restaurant operators. And so we set out to build a solution. Our our very first version of the Ordermark system was built at Canter’s deli, and we tested it there on the line and iterated and improved it and we were very quick to market. And, you know, we we’ve kind of embraced this minimum viable product philosophy very early on that we just added as many restaurants as possible and then took their feedback and, and work to improve the product.
Chad Franzen 14:42
How scary is it to embrace that kind of philosophy minimum viable product?
Paul Allen 14:49
You know, I think it’s terrifying. But it’s it’s something that I personally have grown accustomed to And I think it’s initially, you know, frightening to kind of leap so quickly into the market. And, but it’s something that you need to embrace and just get accustomed to. And you know, this distance between the consumer, whether it’s a b2b transaction, or B to C, and engineering, or in our case engineering and brand development, it needs to be as small as possible. And as you grow, I think as a company, it gets harder and harder, which is often why, you know, startups are more nimble and able to compute big companies, because they just think it was Ross Perot, that said, you know, if you see a snake, don’t appoint a committee, you know, to kill the snake, just kill the snake. And in the same regard, I think, you know, it’s easier when, at the time, we had a half dozen or a dozen employees, for us to just to have conversations with restaurant operators and find out what they needed and, you know, turn turn to our right and have explained it to an engineer and and fix what what was what they needed.
Chad Franzen 16:12
So you had Ordermark Kind of going going strong, and then you launch Nextbite? What What made you decide to do that?
Paul Allen 16:19
Well, from from day one, our mission with Ordermark had been to help restaurants adapt to changing consumer behaviors. And so what we observed about two years ago, was this opportunity for restaurants of all sizes, to make more revenue using underutilized resources. So equipment, personnel, real estate, the reality is, most restaurants are not busy 100% of the time, they may have day parts that are underutilized or non utilized. For example, it might be a dinner only restaurant, and you have breakfast and lunch, or very late night available to us your line. And so, you know, we recognize that there was an opportunity to help restaurants earn more revenue, without adding significant costs. And in and we just we approached it, as we do most everything, as a company with a mindset of curiosity, and kind of an experimentation mindset. So much of what we’re doing is new. And this requires experimentation to figure out the path forward.
Chad Franzen 17:46
You’ve had, you’ve had a lot of experience and success in multiple industries, what made you kind of interested now in the restaurant industry?
Paul Allen 17:56
Well, I have always loved food. And grew up in a household both my parents were creative cooks. And we kind of toured the world with our with our dinner, the dinners that were prepared and served to us as kids. My mother was born in Buenos Aires, Argentina. And I think that my father just had a natural passion for food. And so I was predisposed. And curious about the restaurant industry. And then I worked in the industry when I was in college and in high school. And my passion is working with smart people doing interesting things. And that was the opportunity that presented itself when we first came together to start Ordermark. And it could have been in any industry, for me, what was important was the quality of the people that I was working with, and, and the problems that we were solving. But I love it. And I wouldn’t change a thing for me. What excites me the most about what we’re doing is really helping restaurants, particularly in this time of the pandemic. And now we’re kind of in the in between stage of the pandemic and anything a pandemic has taught us is that you can’t predict the future and the impact, you know, that it’s going to have on business. So I like the fact that we’re helping Main Street restaurants, we’re helping neighborhoods retain their restaurants, which I think add texture and quality of life to the people who live there.
Chad Franzen 19:46
Did the pandemic set such guys back or did it give you a boost? I mean, it seems like you’re kind of like, right place at the right time almost or am I wrong about that?
Paul Allen 19:57
Um, no. You know, the pandemic forced nearly every restaurant operator to embrace online ordering. Before the pandemic 10% of orders for a restaurant were placed online, and now it’s upwards of 30%. So, you know, I distinctly remember conversations with restaurants when we first started Ordermark And they would tell us, you know, thanks, but no thanks. I’m not interested in online ordering. I got into this business to interact with people face to face and for disserve them are great food when it’s piping hot. And sadly, you know, the pandemic caused every restaurant to have to embrace it. So sadly, in you know, for Ordermark, it was an opportunity for us to grow. And the business didn’t grow significantly. In the same is true for Nextbite, although Nextbite was was growing quite rapidly prior to the pandemic as well.
Chad Franzen 21:07
For for restaurants for restaurant chains, what do you think virtual restaurants are a good business decision for them moving forward?
Paul Allen 21:17
Well, I think it provides more revenue. Number one, it’s first and foremost, on the minds of all restaurant operators. It also gives chains in particular, far more agility. You know, most chains are structured to introduce their products in a very methodical, controlled way. And, and that’s generally a good thing. We’re living through an era where consumers are increasingly fickle, and exposed to a wide variety of food options, and influences on those options every single day. And so I think that virtual restaurants also give chains a, a channel to be more agile, and respond to changing consumer demand. On a rapid basis to rapidly iterate.
Chad Franzen 22:23
Is there something that you’re particularly proud of, you know, since the days of founding Ordermark, and then Nextbite as well? Is there kind of a turning point or something that you’re particularly proud of?
Paul Allen 22:37
Way? You know, I think, I think for us, there’s a couple things. One is simply trusting our instincts to innovate. We had advice from very smart people who told us to stick to our knitting with Ordermark. In, don’t get distracted, don’t try to do too much. And how do we done that? Well, you and I probably wouldn’t be talking right now. Because we wouldn’t have created Nextbite, which is a big focus of our business today. So I’m proud of that. I think as an entrepreneur, you have got to innovate. You have to trust your instincts, you have to responsibility to take in inputs from people and be humble and put your ego aside. But then you also have to know when to make the decision, because it’s ultimately your decision. And so I’m proud of that, that our team had the courage of conviction to pursue our, our instincts. And then also just our values as a company. As you mentioned at the outset, I worked with Quicken Loans for four years. And something I learned there was the importance of documenting what you stand for and what you’re about as a company. And I used to think that was pretty fufu and unimportant to businesses, but because most businesses don’t treat their values as seriously as companies like Quicken Loans do, but what I observed there was just how it made business more efficient when everyone was held to very high standards and very specific standards of behavior. So we embraced a similar method here at Ordermark. Nextbite. From day one, we wrote down our values and they evolved over time, but we teach them to every new employee and we celebrate them continuously and I think that it’s been one of the secrets to our success so far.
Chad Franzen 24:39
Did you have prior experience as an entrepreneur maybe that wasn’t quite so as as a you know, as successful as order American Nextbite have been that that you learned a lot from?
Paul Allen 24:52
I’m sure I did. I mean, I had the privilege of running two accelerators in the Midwest, and was involved with starting both of those accelerators at a time where there was not a great deal of support. In in, it was Cleveland, Ohio. And so we invested in dozens and dozens of startups, majority of which, you know, failed and didn’t survive beyond a year or two. So I think that’s part and parcel of being an entrepreneur.
Chad Franzen 25:30
Sure. Sure. I have one last question for you. But first, just tell me how people can find out more about Nextbite.
Paul Allen 25:37
Sure, they can go to Nextbite.io and request more information. They can also reach out to me directly, that’s fine, too. I’m Paul.Allen@nextbite.io.
Chad Franzen 25:53
Okay, great. One last question for you. What are some books or podcasts that you’ve particularly appreciated and enjoyed reading or listening to?
Paul Allen 26:03
Ooh, good question. There’s a couple books that I think are worthwhile. One is called Traction. And there’s a few books with the title Traction, but it is the EOS entrepreneurs operating system methodology. And I think that it is as good as any system for organizing your business and tracking KPIs and OKRs. And we use it extensively here at Nextbite. Another one book that I read recently is called Billion Dollar Coach. It’s the story of Bill Campbell, who was a leadership coach to most all the luminaries in Silicon Valley. And I never met him, but he sounds like he was a terrific guy. And after he passed away, several of his proteges read this book. So it’s got a lot of good advice. And I think it’s a good read. And podcast. There’s a podcast called The Huberman Lab, which is a Stanford professor, and neuro psychologist. And it’s, it’s got a lot of he, he has a lot of good advice for just human performance. I think that that translates well for entrepreneurs. And I think that anyone who’s an entrepreneur doing something difficult as an entrepreneur not, can’t benefit from the podcast, just a good advice on wellness and relaxation, and how to maintain balance as you’re doing hard things.
Chad Franzen 27:45
Okay. Well, hey, thank you so much for sharing that with us. And thank you so much for your time. Today was great to talk to you. I really appreciate it.
Paul Allen 27:51
Absolutely. Happy holidays.
Chad Franzen 27:53
You too, so long everybody.
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