When we last heard from our FoodCircles Heroes in Martell Method pt. 1, a rich entrepreneur had bet $150 that FoodCircles couldn’t get 10 restaurants to pay $50 for something in 10 weeks. After 9 weeks, the team had secured $0 in payments. We didn’t know what to do.
We had gotten restaurants onboard. We knew if we could drive customers thru our website to these restaurants, we could go back asking for a $50 buy-in. But we couldn’t get enough people to use it. Seriously, free food at restaurants. We thought back to Dan’s conversation, why did he recommend asking restaurants for $50 upfront?
A. so restaurants actually weigh the worth of the product
B. if they pay, they’re actually invested in using it
C. if they don’t pay, you can learn why your product isn’t worth skin on their back
In the last week, where I was facing a $150 surcharge if I couldn’t come up w/ $500 in revenue, we decided to treat our user (everyday folks eating out) in that same way. We started charging them for a free website. I remember g-chatting David Wang, our backend guy,
jtkumario: “Hey dude, could you put a gate over our webapp? Where people can only access the app if they have a code?”
We added the “gate” and a social-good concept; any money we made thru a group using FoodCircles, we’d buy one meal for a child in need (via local hunger nonprofit). I remember walking out of a business plan session and asking a passerby,
“Hey, let’s say you could put 5 bucks down today, and for the next month any time you ate at one of 10 restaurants you got a free appetizer, would you do it?”
“And what if every time you did, the restaurant contributed to feeding a child in need?”
“Sign me up!”
Wow. Instead of 10 restaurants giving us $50 each, it would be 100 people giving us $5 each. It wasn’t as easy as all that. We tried selling codes to enter FoodCircles in Gaslight Village and were met with a lot of “No thanks, I don’t need my scam for the day”. The two of my friends with me refused to do the activity again. Dejected, I drove all the way past the westside to the Taste of Grand Rapids and stood to the side of one of the tents alone. More rejection. I pretty much thought I was going to cry. That was Saturday. $500 due next Friday 5pm. Sunday; church and a feeling of desperation.
Monday; 5 days left. Our first beta code sale. I poorly scrawled a beta code on the back of a business card and handed it over for $2 at a community college, then another for $5, then $5, then $5 more. Confidence. Tuesday, we headed back to the restaurants. We told them people had started paying us (we didn’t say “four people”) for this “eat so others can eat!” concept. They loved it. Several pledged 50 dollars.
Chris Wooldridge @ Georgio’s said something I’ll never forget, “This is the best idea I heard yet. I ask one thing; when you make it to the top, remember Georgio’s, remember the way we supported you from the start, okay?” We were at $267. Wednesday, we continued user sales at GVSU and Calvin College.
End of day, we were at $350. GoJo Ethiopian committed $100. We started getting Paypal’d money from users. Thursday was a formality; we smoked $500 as two more restaurants jumped in @ $50 each. Friday was a steak dinner for the both of us; we had spoken with about 40 users and 14 restaurants; 32 users had given us $191, 7 restaurants had given us $400. Dan Martell was going to be adding an extra $150.
If you are involved with the startup world much, you hear terms like $200M valuations, $6B acquisitions, $20B addressable markets. $591 really doesn’t seem like much, and it really isn’t considering how many hours we put into it, and it REALLY isn’t considering the fact we refunded a lot of it when the app crash and burned. But it meant the world to us that 4 out of 5 users would pay for what we wanted to give them for free. We just needed to do a better job of getting it to them. I’m still working on that one.