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Market assessment

Despite the explosive growth of the web, various segments of the business community have been underserved. One of these underserved segments is the restaurant industry. Despite eight years of the web, most restaurants have yet to utilize the web to enhance their business. The few that have jumped onto the bandwagon have yet to see the technology that fulfills all their wishes.

Currently, there are 40 or 50 different firms who specialize in web related services for the restaurant sector. The simplest provide a listing service. A good number provide graphic design and information web pages. Some provide reservations, gift certificates, coupons, and mailing lists. As of yet, No one firm provides all the aforementioned services. Everybody has a different piece, but no one has yet to put all the pieces into a one stop service experience for the restaurant sector. Neither has any of the firms achieved any dominance over the others.

The market has not become competitive enough for the number of firms to decrease. In fact, the market is far from saturated. A great number of restaurants have yet to adopt the web as a business tool, and among those restaurants who have joined, most have not progressed beyond static information pages. For those who are able to bring value to restaurants, there are real opportunities to make the web work for restaurants.

Web tools for restaurants

In terms of popularity, the most used web tool by restaurants is restaurant and menu listing. This information is static. Technically this is the easiest web service to provide, and it is also the cheapest as well. Those that specialize in this area charge very low fees or no fees, and gather hundreds, if not thousands of restaurant sign ups.

Beyond simple static information, the next most complex is reservations, gift certificate and coupons. Again, web sites who specialize in this service have hundreds, if not thousands of restaurants.

The hardest of all services to implement is food ordering service. Not only is it difficult, but it is also signifigantly more expensive. The better implemented sites charge $50 or $60 per month. The mediocre implemented sites charge half that amount. The cost is signifigant, but so is the value. This is the only way that a restaurant can connect with a customer such that the customer can actually place an order. It is also a time saver for restaurant and patron. There is no need to allocate a staff person to discuss the menu over the phone. Neither is there a need for a customer to wait in line. The customer orders food, pays for the food, and goes home.

Typically most web sites that do food ordering have a small number of restaurant sign ups, typically less than 50. The exception is a small handful that possess hundreds of restaurant sign ups. The standard strategy is to stake out a piece of ground and gather restaurants in that geographic area. That web site then becomes the choice web site of that city. The web sites become locally dominant in their respective cities.

The unmet needs of restaurants.

Given that there is already a large number of firms in the market, what is the point of a new player entering the market? Surely 50 different firms can satisfy the needs of restaurants, can they not?

Perhaps not. There are many deficiencies amongst the firms that currently serve the restaurants. The most notable problem is that different firms offer different services. No one place can offer the services as a one stop service shop for restaurants.

Also observe the state of food ordering. Food ordering is incredibly difficult and no one has yet to master all the features. Here are some of the requirements that make food ordering such a bear to implement.

Other than the first three requirements, none of the other requirements have ever been implemented in online restaurant ordering. Even with the first three, many web sites struggle with the technology to even meet these three requirements.

The eWaitress solution

So if these other firms are having so much trouble developing the feature set to satisfy customers, how is it that my team can do any better? I know my team can do better because I singlehandedly crafted a prototype in four weeks whose quality was on par with those of the existing players. And here's the prototype for all to see
Notice the additional feature of on-the-fly price adjustment as you change customizations.

The reason why it could be crafted in four weeks is because of an emphasis on crack level programming ability. This contrasts with the legacy of the dot com era. The dot com era emphasized the idea of hastily trained programmers. My team believes in training that takes 1.5 to 2 years. Training involves learning the trades of four different jobs: programmer, system administrator, database, and graphic design. It may not be possible to be an expert in all four fields, but it is reasonable for a person to have one primary skill and three secondary skills. The combo of the four job skills creates a staff member who is flexible enough to be deployed to any task in web site creation, and if the need demands it, to even create the entire web site singlehandedly.

Quality labor will not be enough. More important than labor is what the labor will be used for. Our objective in the new version of the web site is to create a site that implements all existing features on the market and then implement the other features that restaurants have wished for, yet have not received.

Technically, it is possible to build something that can accommadate every feature. Our approach will be to start with the hardest feature, food ordering and then do the simple features: gift certificates, coupons, and reservations.

Battle plans

Initial commercial deployment of our web site will feature all three standard food ordering features, plus two other features. This will give our site a feature advantage above competitors. Most notably, this will allow our site to compete against the dominant local competitor,

Our first objective is to vigorously steal as many restaurants away from as possible. has 1300 member restaurants, so they have excellent business relationships. What lacks is technology. Their website has been an almost unchanged drab, black-and-white text for the last five years. Admitedly, did add delivery services recently, so it's not possible to absolutely dominant in a contest of features.

Stealing customers from may cause to attempt to buy out my team's eWaitress web site. is weak in technology but strong in business relationships. Conversely, eWaitress is strong in technology, but weak in business relationships. Both organizations complement each other. Thus, it would be reasonable that will attempt to buy out eWaitress. If the price is high, a sell out may be a possible choice. Also, given the need for investors to recoup their money, this may be a way to insure that investors get a quick return on their money.

Another alternative is to partner with the other local player in the Bay Area, Waiters on Wheels. Waiters on Wheels performs delivery service on behalf of several hundred high-end restaurants. Like, Waiters on Wheels is weak in technology, but even more so. The food menus don't even allow for any customization. The food menus only contain static information. It could be possible to propose an alliance whereby my team could maintain their web site allowing them to focus exclusively on deliveries.

Playing as independent firm is a possibility for eWaitress, but in order to have the fastest possible growth, it is best to partner with those who already have strong business relationships. Otherwise, restaurant sign ups will be added one at a time, rather than hundreds at a time.

Fee structure

Once the sign up reaches the hundreds, it will be possible to expand out of the Bay Area. Unlike the other competitors, we don't depend on sales people. We have a totally different marketing plan, and a cost effective one at that.

The typical fee structure of restaurant ordering is at most $60/month. That's like selling DSL service. In the same way that using sales people to sell DSL service is not cost effective, it is also not cost effective to use sales people to sell restaurant ordering.

We will create a menu wizard that allows restaurants to self register themselves. This will do away with the need for a sales person. A restaurant will be able to create their own menus. For the more advanced web site features that demand an actual engineer, we can charge consulting fees, but for the basic stuff, restaurants can self-register. For large chains of 100 restaurant or more, a sales person could used, but not for the case of independent restaurants.

For self-registration to work, restaurants must be given a compelling reason to sign up with an unfamilar provider. This compelling value will be created through a multi-tier pricing structure: free, basic, medium and premium.

The aforementioned features are features that are available in the current version of the web site. As development continues, more features will become available and these new features will flesh out the pricing structure.

The eWaitress web site has a flexible design that allows features to be turned on and off at will simply by changing one line of code. Other competitors have a rigid design that prevents such dramatic change without signifigant amounts of coding.

To further encourage restaurants to upgrade to premium, teasers could be set up to annoy the restaurants. A teaser would watch for missed business oportunities and report this to the restaurant periodically. For example if a cross sell feature is not enabled, the teaser would tell the restaurant that the restaurant missed selling some drinks because no advice could be given to the customer to buy drinks. Every missed business opportunity will be reported in its full ignominy to the restaurant to encourage the restaurant to upgrade to a premium plan.

Point of viability

Normally when a business starts up, the first few months or years will be financial losses. eWaitress will be no exception. Initially, there will be no restaurant sign ups. Thus there is no income to pay for salaries or supplies.

For eWaitress to be self sufficient, enough restaurants must be signed up to cover costs. Most of the costs are fixed, and very little are variable. The cost to add one restaurant would perhaps be $1 or $2 depending on the marketing budget, but once added, that restaurant could generate $50/month. Let's say that we have 100 restaurant, each producing $50/month. $50/month equals $600/year. So with 100 restaurants the annual revenue would be $60,000/year. This is enough money to pay for one engineer. So if say we have a team of five engineers, salary must be supported through 500 restaurants.

Once 500 restaurants is achieved then other considerations have to made. On the web server, 500 restaurants would be treated in a way similar to that of 500 individual web sites. Once numbers get this high, then consideration must given to having more than one server handle the load.

Advertising to restaurants

To advertise to restauranteurs, various ads will be placed. Google word ads will catch the casual web surfing restauranteur. Ads in restaurant magazine will likewise get the name out. To generate rapport, a booth can be purchased at the National Restaurant Association Convention. Though expensive, mail to specific restaurants can be a viable means of promotion. E-mail could also work if one is careful about not behaving like a spammer.

Restaurant delivery service

Waiter on Wheels is not the only delivery service that would make a good partner. In general, all delivery services have almost no interest in maintaining web pages. The web pages that are posted are non-interactive, static food menu pages. A delivery service is focused on delivering food, not making web pages. That provides opportunities to provide excellent web technology to restaurant delivery service firms.

Delivery services seem to be quite numerous. Exact numbers are hard to come by, but they seem to exist in every state. Even some of the smaller cities seem to have delivery services. Again by partnering with delivery services, it is possible to sign up dozens of restaurants at a shot.

The terms of a partnership with a delivery service would provide benefits to both parties. My team would operate the web site at no cost to the delivery service. The delivery service would receive a feature laden web site for its restaurants. The restaurants themselves would be granted the same service of static HTML pages that they originally had, but would have the choice of upgrading to a higher level of service. This partnership serves the interest of both parties. The mere combination of ordering and delivery in the same package generates an aggregate value greater than the sum of the uncombined services. The more features a web page has, the more reasons a customer has for revisiting the site. The more visits, the more orders. And everybody comes out with greater revenue.

Payment infrastructure

Payments will come from two different sources, restaurants and restaurant customers. Restaurants would pay hosting fees every month or prepay in advance for a year long deal. Prepaying for a fee would be given some sort of discountr. Such payments will be handled via web page. Credit cards, e-checks, or auto payment would be accepted. Credit cards have the heaviest financial fees, so enticements will be given to encourage restaurants to pay by either e-checks or auto payment. Perhaps the enticements could be free services.

A similar thing would also apply to restaurant customers. Customers would be provided with the choice of credit card or e-check. For take out or sit down, the customer may choose to go to the restaurant directly and pay. An option should be provided for in person payment. Some restaurants may be uncomfortable about accepting customer payment via web, so customer payment options on the web page may be limited on a per restaurant basis.

Perhaps I should skip on credit cards and e-checks at least in the beginning. didn't seem to suffer too much from directing customers to go directly to restaurants to pay. It would be a reasonable plan if eWaitress also didn't accept payments online for the first few months of operation.

Security infrastructure

Credit card transactions demand a level of security. This means the apache web server will need OpenSSL compiled in. This also means that a digital certificate must be purchased from verisign. Storing credit card information on the web site may also be a possible tactic, but this should be done at the discretion of the restaurant customer.

I'm not sure how to do deal with passwords. Storing them directly in a database can be a security hazard. I would feel more comfortable if they were encryptically stored like UNIX passwords. UNIX passwords are stored encrypted and system administrators can not retrieve lost passwords. Of course if someone loses their password, they could be very unhappy if the web site can't mail them back their password. So maybe it is a good idea if passwords are stored directly in a database table.

Investment plans

See investment.html

Market domination and beyond

The ultimate objective is to attain domination over the entire US market. There is no need to have 50 different firms where one firm will be sufficient. Domination can be achieved through a fuller feature set, a flexible technical infrastructure and aggressive marketing.

There's no reason to stop until all the other competitors are beaten down. Even when the last have been beaten down, there is always opportunity to explore other complementary products and services and expand beyond the web: POS machines, inventory control, accounting, So much IT technology, too many vendors.

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