Business Rx: Where does this restaurant app want to go now?
When Reg Stettinius couldn’t decide on a restaurant for quick lunch with an out-of-town visitor, she had an idea for a smartphone app that restaurants could use to market their daily offerings. Stettinius hired her longtime friend Winston Bao Lord and his marketing firm to look into the idea. He was sold. Lord put aside his company and joined forces with Stettinius and a third partner, Sam von Pollaro, and Venga was born. The site launched in Washington in April and already has more than 80 local merchants using the service – from high-end restaurants to neighborhood bars.
“We realized there are lots of ways to find out what restaurants exist but no way to find out what’s happening there. We’re basically taking a restaurant or bar’s sidewalk sandwich board advertising daily offerings and putting that on your mobile phone (available for iPhone and Android platform phone users) and on our Web site. We give users deciding where to grab a drink or have a meal the scoop on exclusive offers, specials, happy hours, music and events. You can bookmark your favorite spots, find info about what’s going on nearby with our GPS function, see the venues your Facebook friends have A-listed, and check out reviews and recommendations from the region’s top chefs and foodies.
“We consulted with the owners and managers of more than 100 restaurants and our board of advisers consists of successful restaurateurs and chefs, including Rob Wilder of Think Food Group, chef Geoff Tracy, and Mark Handwerger and Geoff Dawson of Bedrock Bars. We are the first mobile marketing platform built specifically with their needs in mind. As a result, we are working with many of the top restaurants in the area, including those that have shunned daily deal sites.
“This isn’t about ‘deals’ [a word that has become taboo around the Venga offices] — restaurants are using this as an overall marketing platform. With a monthly subscription, restaurants can make updates to all social media platforms on Venga’s streamlined site to let users on Venga, Facebook and Twitter know what’s happening at their venue now. For example, restaurateurs might post that every Sunday they offer a live jazz brunch, tonight every dinner for two comes with a free bottle of wine, or right now the pizza is made with tomatoes fresh from the farmers’ market. The updates are not solely driven by discounts, which tackles the complaint many restaurant owners have about daily-deals Web services.”
“We plan to expand into other markets. Given all the activity in this sector, there is a case to be made to launch Venga in other cities as quickly as possible to box out any would-be competitors. On the other hand, one could argue that we should wait until we have perfected the model here in Washington before expanding geographically.
“Once we decide when to begin our expansion, we then need to decide where we should expand first. One school of thought is to enter the largest markets first to establish a toe-hold. Alternatively, we could expand to a smaller market when we’d have an opportunity to test various execution strategies and iron out any kinks before attacking a major market.
“When making these decisions we must consider long-term ramifications as well how we can best position ourselves for an institutional investment round in the next year or so.”
Elana Fine, director of venture investments, Dingman Center for Entrepreneurship
“To prove your concept and business model to investors, you need to show you can systematically acquire new restaurants and users. I’d suggest testing your model in smaller markets before expanding to larger markets that require more capital to penetrate. Identify local markets that have enough restaurants to be able to scale, but potentially less noise.
“Consider nearby small cities like Frederick, Columbia, Annapolis or Reston that have an attractive user base/restaurant scenes and may cost you a lot less to enter, but could pay dividends in providing valuable data on how to efficiently acquire customers.
“This strategy may also provide data on whether to differentiate from other players by focusing on smaller metropolitan markets outside of Washington, New York, Chicago, Los Angeles, etc. A diversified user base may also be valuable in the future as you look at potential exit opportunities.”
“What’s nice about our technology is it’s easy to expand. Obviously, being a first-mover is very important. This is a space with a lot going on, but no one is doing exactly what we’re doing. We want to capitalize on that and expand within the next year. We’ve got some strong partnerships with DC magazine, with sister publications and radio stations in other large markets, plus a great board of advisers that can help make warm introductions in new markets to help our expansion.”