Speaker 1: Welcome to Chopping It Up.
Speaker 2: I'm your host, Mike Halon, the senior restaurant and food
Speaker 2: service analyst at Bloomberg Intelligence. Today we're joined by Matt Tucker,
Speaker 2: the CEO of Talk. Talk is a reservation platform for
Speaker 2: high end restaurants. So thanks for doing this, Matt.
Speaker 3: Thanks for having me, Mike, looking forward to the conversation.
Speaker 1: Yeah, same, And we mentioned.
Speaker 2: As I mentioned to you before we got started, I
Speaker 2: noticed that you're a fellow Hoya. You're the third I'm sorry,
Speaker 2: the second Hoya. Actually a fun fact, our first guest
Speaker 2: ever was also a Hoya. The gentleman's younger than both
Speaker 2: of us. Greg Frankfurt covers restaurants stocks for movies.
Speaker 3: Yeah, yeah, I know the name. And you're going to
Speaker 3: have the Sweet Green Guys on at some point as well.
Speaker 3: They're kind of famous Holier restaurant tours. Yeah. I mean,
Speaker 3: I grew up down the street from Georgetown and my
Speaker 3: mother worked there for forty years. So proud to have
Speaker 3: gone there for grad school. Like you played football on
Speaker 3: the roof of the building a little bit, then you
Speaker 3: did it for real. I did it for fun in
Speaker 3: grad school. But yeah, it's great to be on with you.
Speaker 2: Yeah for sure, man, Yeah, George sounds a great place.
Speaker 2: I love getting back.
Speaker 3: There's amazing, It is amazing. I mean that's why I
Speaker 3: got a lot of my formative hospitality experience. So oh yeah,
Speaker 3: yeah for sure.
Speaker 2: So yeah, okay, yeah, so you had mentioned you mentioned
Speaker 2: you worked as a bouncer, what other any other.
Speaker 3: Hospital I've worked in restaurants too, So yeah, I worked
Speaker 3: as a bouncer at some bars in Georgetown and nearby
Speaker 3: that I'm sure you remember. And I worked as a
Speaker 3: bus boy, a bar back, a waiter very very briefly,
Speaker 3: I want to I won't call it a samlier. That will
Speaker 3: do a disservice to incredible professionals in that business. But
Speaker 3: I recommended wines and a private club downtown. And it
Speaker 3: was terrifying because after maybe the first question, I had
Speaker 3: no idea what I was talking about, and they just
Speaker 3: prepped me in the morning and I was certainly not qualified.
Speaker 3: But it was a new private club and they moved
Speaker 3: me off of that job very quickly to just a
Speaker 3: regular waiter job. But yeah, so a lot of formative
Speaker 3: years in Georgetown related hospitality establishments.
Speaker 1: That's really cool.
Speaker 2: I actually kind of regret that I didn't work more
Speaker 2: in restaurants. I did a little stint as a short
Speaker 2: order cook, you know, on a kind of an as
Speaker 2: needed basis for a friend of mine, but that was
Speaker 2: really it. So I definitely wish it, you know, now
Speaker 2: that I'm you know, covering the restaurant industry, I wish
Speaker 2: I had some more experience being a server and stuff
Speaker 2: like that.
Speaker 3: Yeah, there's I mean, the restaurant is so broad. You
Speaker 3: described talk for fine dining, and certainly that's the category
Speaker 3: or the segment we started in, but there's so many
Speaker 3: different segments. Even if you had an amazing experience, you know,
Speaker 3: in one segment of the restaurant industry doesn't even necessarily
Speaker 3: translate to others. I mean that the vast difference in
Speaker 3: experience between someone like me, who was just a waiter
Speaker 3: briefly and professional staff who work in these fine dining
Speaker 3: restaurants who have worked in the industry for decades. In
Speaker 3: many cases, it's hard to even compare. It's like professional
Speaker 3: basketball player versus junior varsity So sure, yeah, it's not
Speaker 3: one industry, that's for sure.
Speaker 1: Yep, all right, good stuff.
Speaker 2: Let's start with I guess if you could give us
Speaker 2: a little information about your career prior to Talk and
Speaker 2: what attracted you to this opportunity.
Speaker 3: Yeah, sure, happy to talk about that, Micah. Prior to Talk,
Speaker 3: for just under ten years part of Talk, I was
Speaker 3: the president and chief operating officer of a restaurant tech
Speaker 3: company named Olo, or called Olo. You know some of
Speaker 3: the Olo folks. You had one on recently, Juwan George,
Speaker 3: who I must say did an amazing job. That was
Speaker 3: a great podcast. Juan was awesome. So I was there
Speaker 3: for nine years, Mike and joined Noah Glass, the founder
Speaker 3: and CEO, when there were ten people and we were
Speaker 3: doing I don't know, two million dollars in revenue, and
Speaker 3: left a year after we went public with a couple
Speaker 3: of hundred million revenue and probably eight hundred or so employees,
Speaker 3: a very different company than when I started there and
Speaker 3: prior to Olo, I've been in the really the software
Speaker 3: and e commerce space for a long time since the
Speaker 3: late nineties, starting at the first startup I worked at,
Speaker 3: which is called lending Tree, which is still around. It
Speaker 3: was a startup when I joined, eventually went public. It
Speaker 3: was eventually acquired by Interactive Corp. Then it was spun
Speaker 3: back out as a standalone public entity, and so I've
Speaker 3: been the e commerce and software space for a long time,
Speaker 3: like and yeah, joined Talk. Asked me why I joined Talk?
Speaker 3: So it was really I wasn't sure I wanted to
Speaker 3: stay in the restaurant technology world, to be quite frank,
Speaker 3: you know, after nine years and watching the growth of
Speaker 3: Volo and the digital ordering part of the restaurant industry,
Speaker 3: I wasn't totally sure I wanted to stay in it
Speaker 3: solely because I like learning about new industries. I always
Speaker 3: find that fascinating, and I didn't want to, you know,
Speaker 3: get bored in a certain area, and I again like
Speaker 3: I like to learn. But in meeting with Anthony Caslanoos,
Speaker 3: the founder of Squarespace they acquired Talk about two and
Speaker 3: a half years ago, and spending time with Nick Kokonas
Speaker 3: was the founder of Talk. Those two guys are incredible entrepreneurs,
Speaker 3: and you know, I felt like I was in a
Speaker 3: good place. And I felt ultimately like like, you know,
Speaker 3: the fine dining category was one that is, like I
Speaker 3: was saying in the intro, like it's a different business
Speaker 3: in a different world, and I felt like I really
Speaker 3: needed to understand that I have my own perspective on
Speaker 3: fine dining, having not historically you know, been you know,
Speaker 3: had been someone who had grown up in the fine
Speaker 3: dining world at all, wasn't used to find dining as
Speaker 3: a consumer to a very large extent as well. So
Speaker 3: I felt like this is a great opportunity to learn
Speaker 3: a very, very different part of the world. And the
Speaker 3: more I dug into talk, the more I realized we served,
Speaker 3: you know, beyond fine dining. We served the hospitality industry,
Speaker 3: you know, outside of restaurants and hotels and private clubs
Speaker 3: and wineries, which is a big part of our business.
Speaker 3: So the challenges were were interesting and clear, and I
Speaker 3: felt like my background was the appropriate one and I
Speaker 3: felt like I could learn I had I've learned so much, Mike,
Speaker 3: it's been It's been an amazing experience.
Speaker 2: Yeah, fine dining is definitely a different animal, uh than
Speaker 2: a lot of the companies I'm sure you worked with
Speaker 2: with Olo for sure.
Speaker 3: Yeah. Absolutely, it is a totally different animal. And I
Speaker 3: had a perception based on some fine dining experiences when
Speaker 3: I was younger, that you know, we're radically different from
Speaker 3: you know, what I found when I joined the industry,
Speaker 3: and the people who are in the fine dining industry.
Speaker 3: Their passion for service and hospitality, for the food, for
Speaker 3: the wine, for the experience. It's just amazing. I mean,
Speaker 3: they're they're I was going to say they're artists, but
Speaker 3: they're way beyond that. They are incredible people to work with.
Speaker 3: And you know, we do our best to Talk to
Speaker 3: create an incredible software and e commerce product and get
Speaker 3: out of the way, you know, get out of the
Speaker 3: way of hospitality, make the product is easy to use
Speaker 3: so they can do their job and that's served and
Speaker 3: serve them with passions. So it's been great to watch
Speaker 3: and participate.
Speaker 1: Very cool. And can you talk a little bit of
Speaker 1: how Talk is unique?
Speaker 3: Yeah, for sure. So when Nick started the company about
Speaker 3: a decade ago, his original idea, Mike, was pre payment
Speaker 3: for reservations. And you know, so the idea of pre
Speaker 3: buying something isn't unique, but the applying of that idea
Speaker 3: to the restaurant industry was indeed unique. And so you know,
Speaker 3: we're buying tickets ahead of time for lots of things,
Speaker 3: you know, sporting events, concerts, and Nick's idea was, well,
Speaker 3: wait a minute, we have you know, demand that far
Speaker 3: exceeds supply. Yet at the same time we have this
Speaker 3: no show issue at restaurants in the you know it's
Speaker 3: in the twenty percent still, twenty percent of people just
Speaker 3: make a reservation don't show up. So his thought was, well, wait,
Speaker 3: I could charge for this. I mean, I should charge
Speaker 3: for this. If I charged for this, I know the
Speaker 3: revenue I'm gonna have, I have the cash in the door.
Speaker 3: I could pay my you know, my food providers. I
Speaker 3: could pay my service people properly. I could pay my rent.
Speaker 3: I know the money is coming in. And the original
Speaker 3: idea behind talk was merely that was the pre payment
Speaker 3: of reservations. Obviously, going along with that is you know,
Speaker 3: the table management and everything else you did, and the
Speaker 3: sort of core reservations platform. But that was the idea.
Speaker 3: The company started inside of the linear group that next
Speaker 3: in a linear and then really spun off from there.
Speaker 3: But I really caught fire amongst the fine dining world
Speaker 3: because you know, they had the same no show issues.
Speaker 3: They had the same high food cost, high labor cost.
Speaker 3: I mean, we talked about people who worked in fine dining,
Speaker 3: they've done it for decades. They cost more, they turn
Speaker 3: over less, but they cost more the food they serve.
Speaker 3: You the component parts of that dish costs more, and
Speaker 3: so you know, talk really took off from there and
Speaker 3: really spread, you know, very rapidly into fine dining establishments
Speaker 3: all over the world. Today we serve restaurants in thirty
Speaker 3: three countries, and we've moved beyond fine dining. But that
Speaker 3: was the original genesis of the idea. That was one
Speaker 3: way we're different. We continue, certainly, in my opinion, to
Speaker 3: be by far the most innovative of the the reservation
Speaker 3: platforms out there. There are many of them. They're probably
Speaker 3: more than a dozen reservation platforms out there, because every
Speaker 3: point of sale provider now has basic reservations that they
Speaker 3: give away to get you to buy the point of sale.
Speaker 3: But what we do from an innovation perspective continues to
Speaker 3: lead the industry across the board.
Speaker 2: What's a typical amount that the high end restaurants will
Speaker 2: charge for those reservations and are they able to set
Speaker 2: that themselves.
Speaker 3: So they can absolutely set it themselves. It's a great question.
Speaker 3: What's typical. I mean, there's probably an average might but
Speaker 3: typical is completely up to them. So and they may
Speaker 3: charge differently at different days of the week, different times
Speaker 3: of the day. So you're all a card you, you know,
Speaker 3: on a Tuesday night could be very different from your
Speaker 3: price fix on a Friday night or a Saturday night,
Speaker 3: And so we don't take control of that pricing at all.
Speaker 3: We leave it in the hands of our customers, the
Speaker 3: restaurant tours, who are far more capable of pricing. They
Speaker 3: know their guests better. But we do create products that
Speaker 3: allow them to experiment. We just release something called multi
Speaker 3: Experienced tables that we allow you now to take the
Speaker 3: risk out of pricing an interesting meal on a table.
Speaker 3: So you know, if I have a table available, a
Speaker 3: four top on a Friday, I may want to put
Speaker 3: a six course tasting menu on it and charge five
Speaker 3: hundred dollars, But maybe I'm a little nervous about that.
Speaker 3: I'm not sure people will buy it, so maybe I'll
Speaker 3: put a I'll have that on there for a couple
Speaker 3: of days, but after two days, if no one's bought it,
Speaker 3: I can also offer a five course tasting menu for
Speaker 3: four hundred dollars or an ALLA card menu. So we
Speaker 3: allow you to control not just everything that's going on
Speaker 3: inside the four walls of the restaurant, but down to
Speaker 3: the table level. You can have this dynamic pricing at
Speaker 3: a table level. So again, we don't tell the restaurant
Speaker 3: to our customer what to charge, but we do give
Speaker 3: them the tools to sort of maximize revenue. I've described
Speaker 3: TALK before as a revenue management company, and I think
Speaker 3: that's probably a decent way to think about us. So
Speaker 3: you know, if you have a restaurant, we can help
Speaker 3: you maximize revenue. Yes, we know, we help drive butts
Speaker 3: and seats, which is critical. We help manage the tables,
Speaker 3: we help the front of house staff, but all of
Speaker 3: that is in service of maximizing the revenue for the restaurant.
Speaker 2: Yeah, it's an interesting way to apply dynamic pricing, right
Speaker 2: because I think surge pricing has people and it tizzy
Speaker 2: at the moment. Oh yeah, so doing it at the
Speaker 2: table level is really interesting.
Speaker 3: Yeah, I mean I think you know, it's interesting because
Speaker 3: we're obviously laughing at you know, the Wendy's example, right, So, yeah,
Speaker 3: they really stepped in it there. Well, I suspect it
Speaker 3: wasn't their intent, just poorly communicated, you know. I think
Speaker 3: in retrospect they said they were talking about lowering prices.
Speaker 3: But you know, the qs R consumer, you know, I've
Speaker 3: done a lot in the QSR space before they you know,
Speaker 3: generally speaking, you know you're if you're hitting the drive
Speaker 3: through line at Wendy's, you know, in a lunchtime crowd,
Speaker 3: you know exactly what the price is going to be.
Speaker 3: You may even have the exact change in your hand,
Speaker 3: and so you're really potentially screwing around with something that's
Speaker 3: almost sacrisanct to the guests and can drive the guest
Speaker 3: away to another store. For for talk, restaurants, they do
Speaker 3: have the ability to dynamically priced. They could do it
Speaker 3: by day of the week, they could do it by table,
Speaker 3: they could do it by type of meal. Again, all
Speaker 3: the card versus price fix. But the consumer still has
Speaker 3: a choice. I mean, they're not pulling up to the
Speaker 3: drive through asking for their regular burger and being charged
Speaker 3: something differently. They are pre paying in many cases, but
Speaker 3: they know exactly what they're paying for, and they can
Speaker 3: make some of those choices before they go to the restaurant.
Speaker 3: They can also make choices once they get there. I mean, oftentimes,
Speaker 3: I'm sure you've seen it. You go into a restaurant,
Speaker 3: you have a reservation, they want to potentially upsell you
Speaker 3: with the you know, the wine selection. The seller selection,
Speaker 3: maybe it's a caveat upgrade, whatever the case may be.
Speaker 3: So it's very clear, I think to the consumer, you know,
Speaker 3: how the restaurant is, you know, is sort of marketing
Speaker 3: the products that they're putting out in front of you.
Speaker 2: Very cool and talk allows the customers to keep their
Speaker 2: data ring.
Speaker 3: Oh yeah, for sure. I mean we are not stepping
Speaker 3: in between our customer, the restaurant and their guest data.
Speaker 3: I mean I saw it alllough with third party delivery
Speaker 3: providers that we worked with and Uber that they would
Speaker 3: take the data from the restaurant and the data being
Speaker 3: the guest data, and then convert that guest or that
Speaker 3: consumer into a door dash consumer in a sense, a
Speaker 3: very real sense, stealing that consumer from the restaurant. And
Speaker 3: there's no way we would allow that to talk. Now,
Speaker 3: some of our competitors own that data as well, and
Speaker 3: they're going to market to that guest. They may try
Speaker 3: to steer that guest to a different restaurant if they
Speaker 3: open that app. That's not our job. Our job is
Speaker 3: to help the restaurant, help the restaurant market themselves. Restaurants
Speaker 3: are amazing marketers, and so we want to give them
Speaker 3: a platform to show great videos and great pictures and
Speaker 3: great descriptions, but we are not stepping in the middle
Speaker 3: of that relationship that.
Speaker 2: Is their guest awesome, you know, And you mentioned talk
Speaker 2: is more of a revenue management tool. Can you talk
Speaker 2: about how you're helping restaurants generate repeat visits?
Speaker 3: Yeah, well, that's kind of the key. I mean that
Speaker 3: that's something that is almost regardless of the segment you're
Speaker 3: at QSR fast casual, regular casual dining, elevated casual, fine dining,
Speaker 3: wineries for us, you know, private clubs and hotels that
Speaker 3: we work with, it's trying to figure out a way
Speaker 3: to get the guest back. And I think you're seeing now,
Speaker 3: you know, in some of the economic data coming out
Speaker 3: with you know, how people are spending their discretionary income.
Speaker 3: To the extent they have discretionary income, they don't want
Speaker 3: to always go back for the same old menu. And
Speaker 3: so I talked earlier about this multi experienced table product
Speaker 3: that we just released. That's a way that we help
Speaker 3: the restaurant market something different to the guest. It's not
Speaker 3: just about the regular menu. It's like, here's an experience.
Speaker 3: So if you're a you know, an oyster bar, you
Speaker 3: know in Georgetown, you know, have an oyster shucking class.
Speaker 3: You know, if you're known for your your beer selection,
Speaker 3: you have a beer tasting menu. Like these are things
Speaker 3: that are not unique. And again, restaurant tours are so creative.
Speaker 3: They come up with this stuff on their own. We're
Speaker 3: just trying to help them touch the guest additional times
Speaker 3: and show the guests something that could be just another
Speaker 3: occasion to come back into the restaurant, you know, not
Speaker 3: just Mother's Day brunch, not just you know, Saint Patrick's Day,
Speaker 3: you know, green beer that you have, not just the
Speaker 3: Thanksgiving you know, takeaway meal, whatever the case may be.
Speaker 3: We want to give restaurant tours the experience, the ability
Speaker 3: to be creative, be thoughtful. It's not just about experiences.
Speaker 3: But that's one way that we, you know, help them
Speaker 3: drive guests right back in. And we also give restaurant
Speaker 3: tours a marketing platform to reach out to guests. Again,
Speaker 3: we don't own that guest, so we just need to
Speaker 3: provide the tool to the restaurant tour so they can
Speaker 3: continue to have a conversation with their guests at the
Speaker 3: appropriate time.
Speaker 2: Right, and you're looking to expand into other restaurant types
Speaker 2: right outside of fine dining.
Speaker 3: Well, we've certainly spent a lot of time over the
Speaker 3: last year expanding beyond fine dining mics, So it is important,
Speaker 3: you know, I think that certainly our heritage is in
Speaker 3: fine dining clearly, and that's still a category that's incredibly
Speaker 3: important to TALK. But if you look at just a
Speaker 3: product advisory board that we formed early in twenty twenty three,
Speaker 3: you could see across that just that product advisory board,
Speaker 3: we have very much fine dining folks on that board
Speaker 3: who are incredible contributors and upscale casual, neighborhood casual restaurants.
Speaker 3: So you know, the total addressable market for restaurants is
Speaker 3: quite large, but the total addressable market for fine dining
Speaker 3: establishments is a tiny segment of restaurants. So, no doubt,
Speaker 3: in order for TALK to grow, we have to look
Speaker 3: at restaurants beyond fine dining. Now we will never not
Speaker 3: be in that category. And we're really lucky, Mike, Like
Speaker 3: when I walked in the door, we've done so much
Speaker 3: for fine dining that it's a matter like so much
Speaker 3: innovation had occurred at TALK, we can apply so much
Speaker 3: of that to casual dining establishments to upscale casual. You
Speaker 3: know I just talked about experiences. Well, I'm very fortunate
Speaker 3: to have spent nine years at OLO, and now I
Speaker 3: know a lot of restaurant tours at much larger chains
Speaker 3: who can use the same exact concepts. They're probably not
Speaker 3: going to do pre payment. That's very unique, I think
Speaker 3: to you know, fine dining to a large extent, but
Speaker 3: there are plenty of other features and products that Talk
Speaker 3: already has. That's just a matter of marketing them to
Speaker 3: a different segment in the restaurant industry.
Speaker 1: Great, it's exciting.
Speaker 3: Cool.
Speaker 2: Let's talk a little bit more about fine dining, just
Speaker 2: because I find it to be one of the more
Speaker 2: interesting segments of the industry this year. I mean, we
Speaker 2: spoke a couple of weeks ago, and I mentioned to
Speaker 2: you it's hard to figure out where things are going
Speaker 2: because ye of year comparisons are easing, but the consumer,
Speaker 2: especially low end consumer, seems to be weakening. Fine dining
Speaker 2: had a really bad year last year, and so they
Speaker 2: have pretty easy year over year comps coming up. But
Speaker 2: we haven't seen things really improve that much just yet.
Speaker 2: So I guess, you know, if you could share any
Speaker 2: trends that you're seeing with fine dining covers and check
Speaker 2: sizes in that segment of the industry.
Speaker 3: Right now, we're seeing covers. Yeah. First of all, you're
Speaker 3: right like, we're still suffering from post COVID comps a
Speaker 3: little bit, you know, twenty three twenty four over twenty three,
Speaker 3: I think will hopefully normalize. We are. We are seeing
Speaker 3: cover count about the same in Q one as we
Speaker 3: saw Q one twenty twenty five three. We have seen
Speaker 3: a lot of variability and check size. We have seen
Speaker 3: less interest in some of the supplements that are offered.
Speaker 3: I talked before about you know, Cavea ourselves wine supplement
Speaker 3: that has kind of going up and down certainly over
Speaker 3: the last year and a quarter. And the year over
Speaker 3: year comps for Q one are difficult to understand. And
Speaker 3: I'm talking about sort of same store sales. I'm not
Speaker 3: talking about new customers in twenty four over twenty three.
Speaker 3: I'm talking about the exact same customer cohort. Now, the
Speaker 3: problem is sometimes you know, dates change, or a number
Speaker 3: of weekends in a you know, in a month. We
Speaker 3: had leap year this year, which throw things off, throw
Speaker 3: things off a little bit. Easter shift, Easter shift exactly.
Speaker 3: So we feel that pretty acutely in the numbers that
Speaker 3: we see come across the board. I will tell you though,
Speaker 3: I think to your point a minute ago, like it's
Speaker 3: so hard to read what's going on, and you see
Speaker 3: the numbers from this week. So now the FED may
Speaker 3: not be cutting this year, is what I read in
Speaker 3: the journal, you know, like who knows, and you know,
Speaker 3: Bloomberg's re pouring similar stuff, Like the numbers that are
Speaker 3: coming across are really hard to figure out. I had
Speaker 3: an exec at a well known chain come and speak
Speaker 3: to the Talk team recently, and he was saying, I
Speaker 3: was talking about sort of wine and caviar, people buying
Speaker 3: that or not buying that. He said the same thing
Speaker 3: in his chain. He said, it's not wine and caviar,
Speaker 3: but it was hot peppers and cheese sauce. And they
Speaker 3: saw a similar thing that people in twenty four and
Speaker 3: in twenty three as well were just not spending on that.
Speaker 3: So you know what's going on with income and you
Speaker 3: know interest rates. I think consumers are across any category,
Speaker 3: any demographic. You know, fine dining, I think you know
Speaker 3: incomes over one hundred thousand dollars. You know, they're driving
Speaker 3: a lot of revenue to the restaurant industry. I think
Speaker 3: it's like sixty percent of the revenue the restaurant industry
Speaker 3: is one hundred thousand dollars income and above. But I
Speaker 3: think even that category is uncertain. What's going on right now?
Speaker 3: So cover count generally the same average order value, average
Speaker 3: check size, what however you want to call it. It's
Speaker 3: it's really fluctuating very heavily right now. So I'm playing
Speaker 3: a poor economist, so my apologies for that, but I
Speaker 3: can't figure it out. I can't figure it out, and
Speaker 3: so it's varied, and again like the holidays and easter
Speaker 3: and leap year, that's just making it even harder to
Speaker 3: figure out.
Speaker 1: Yeah, for sure. You know, I've been I've been saying it.
Speaker 2: It's very difficult to project and protict where things are going.
Speaker 3: That Ploomberg's you know what, you guys, what your economists
Speaker 3: are are saying. But you know, it's it would be
Speaker 3: a tough one, right how to try to predict the
Speaker 3: rest of the year.
Speaker 2: Yeah, the cover is being flat. I think that's a
Speaker 2: good sign. I mean, I'm hopeful that the rise in
Speaker 2: asset prices will support spending by people that making that
Speaker 2: are making one hundred thousand.
Speaker 3: And talk about bitcoin.
Speaker 2: Bitcoin stuck at the Nasdaq s and P. I mean,
Speaker 2: you know, at home, prices are still elevated, so inflation
Speaker 2: has taken its toll, and inflation remains higher for longer.
Speaker 2: In my opinion, I don't see how the Fed can
Speaker 2: cut rates.
Speaker 3: But I think you're right about that. I mean, but
Speaker 3: the Nasdaq, the Nasdaq is up, but if inflation stays high,
Speaker 3: the Nasdaq will drop. H I mean, the Nasdaq is
Speaker 3: a tech heavy index, and so you know tech is
Speaker 3: hurt in a high interest rate environment. So maybe the
Speaker 3: Nasdaq is artificially high right now.
Speaker 2: But it's been underperforming over the last few weeks, and
Speaker 2: we've seen inflation. We've seen commodities outperform over the last.
Speaker 3: Yeah, commodities are outperforming, bitcoins outperforming with I'm gonna touch
Speaker 3: with a ten foot poll. But you can't You still
Speaker 3: can't use bitcoin in most restaurants, I know, and certainly
Speaker 3: you can't use them on talk so not yet. But uh,
Speaker 3: I'm I'm always nervous for our customers. Uh right now,
Speaker 3: I see them. You know, in many ways, restaurant tours
Speaker 3: are in their element only because you know, they're so
Speaker 3: creative that they can. You know, if you maybe through COVID,
Speaker 3: you're going to make it through this period. But you know,
Speaker 3: I was talking to a consultant in the restaurant industry
Speaker 3: here in New York the other day, and he was
Speaker 3: saying his restaurant partners are are feeling it acutely right
Speaker 3: now in New York too. So if it's bad here
Speaker 3: in New York, you know it's bad in the US.
Speaker 2: Yeah, all right, let's switch gears a little bit. I'm
Speaker 2: a big concert guy, So bots really pissed me off?
Speaker 3: Did I?
Speaker 1: Did? I hear right?
Speaker 2: People are now using bots to buy up reservations at
Speaker 2: high end restaurants.
Speaker 3: Yeah, you heard right, But what what's the concert that
Speaker 3: really pisses you off the most that you could you
Speaker 3: got priced out of?
Speaker 2: Listen, man, I'll you know, I'm blessed. I have a
Speaker 2: great job, you know, So I'll pay up. I'll pay up,
Speaker 2: But you're always paying I'm always paying up. Recently, I
Speaker 2: went to tool. I saw a tool and MSG and
Speaker 2: I saw Run the Jewels nice uh in in the fall.
Speaker 1: They were both phenomenal.
Speaker 2: So yeah, I love concerts, man, and I'll pay it,
Speaker 2: but it sucks for the regular consumer.
Speaker 3: It does suck. I mean, there is this it's it's
Speaker 3: really it's infuriating for consumers and guests who want to
Speaker 3: go to these restaurants and you know, folks published like
Speaker 3: a top hundred list and you can't get into any
Speaker 3: of them. It's really, really bad. We are fortunate to
Speaker 3: work with some of the you know, highest demand restaurants
Speaker 3: in the world, and you know, they they will drop
Speaker 3: a reservation, let's say, on the first day of the month,
Speaker 3: and it will be gone very quickly. You know, we
Speaker 3: do our level best to you know, to make sure
Speaker 3: that bots are not hitting talk. It is a constant
Speaker 3: effort of our engineering team. We use our own tools
Speaker 3: that we've created, we use third party tools that do
Speaker 3: a wonderful job. But you know, Mike, sometimes a bot
Speaker 3: can slip in there, or you know, just a regular
Speaker 3: human who wants to who has no intent of going,
Speaker 3: who just wants to try to resell something, which broadly speaking,
Speaker 3: our restaurants really can't stand. And the reason they can't
Speaker 3: stand it is, I mean, there are several reasons, but
Speaker 3: number one, they want to know their guest, you know,
Speaker 3: who's coming in the door. Tell me about Mike. Okay,
Speaker 3: Mike's made the reservation. You know, I want to know
Speaker 3: who Mike is. I want to know what he likes.
Speaker 3: I want to know where he wants to sit. I
Speaker 3: want to know what kind windy drinks. I want to
Speaker 3: welcome him by name. I want to re welcome him
Speaker 3: if he's a regular, you know, I want to you know,
Speaker 3: bring something over to his table from chef because you know,
Speaker 3: you know, I know Mike and he's always been great
Speaker 3: to us, and like that is destroyed in this bot
Speaker 3: and resale environment and that kind of hospitality, which is
Speaker 3: what if certainly in the fine dining world they practice
Speaker 3: every day they wake up out of bed for is
Speaker 3: to have that kind of experience with their guests. They
Speaker 3: hate that too. And by the way, the other idea
Speaker 3: that you know someone's going to it's like your concert
Speaker 3: tickets a tool someone's gonna you know, go and resell
Speaker 3: it and charge a fortune for restaurants. Even in fine dining,
Speaker 3: people have this idea that you know, when I talked
Speaker 3: about sort of high income people, they do drive the
Speaker 3: restaurant business. But it's not always high income people who
Speaker 3: are going to these fine dining establishments. Oftentimes, you people
Speaker 3: who are saving up for a long time to experience that,
Speaker 3: and these resta runs want those guests coming in. They
Speaker 3: don't want them to be pushed out of the restaurants
Speaker 3: because someone's going to resell a ticket. So it's really
Speaker 3: it's a bad thing for the industry for so many reasons,
Speaker 3: and so we do our best. We work a lot
Speaker 3: a lot on trying to stop this. You know, I
Speaker 3: actually worked in the security software space for a long time,
Speaker 3: and you know, it's it's a game of whack a mole,
Speaker 3: and it's kind of a game of pushing the bots
Speaker 3: to somewhere else, right, Like, don't attack us because we're
Speaker 3: pretty good at this. Go find it somewhere else where
Speaker 3: you can you know, you can attack. And that that's
Speaker 3: the security software game, I think to a very large extent.
Speaker 3: But we won't really rest on our laurels here because
Speaker 3: you know what, the good damages the restaurant industry.
Speaker 1: Cool.
Speaker 2: Are you still seeing earlier reservations at dinner time?
Speaker 3: Yeah, we're seeing that for sure, Like we are definitely
Speaker 3: seeing that. This is a I suppose you know, your
Speaker 3: guess is probably bear in the mind, this is a
Speaker 3: permanent byproduct of COVID that you know, we're seeing people
Speaker 3: out of the cities still. You know, I see it
Speaker 3: every day when I walk to the office in Manhattan
Speaker 3: or Chicago where talk is based. Either way, it's just
Speaker 3: not as populated as it was. And so therefore, if
Speaker 3: people are coming into work, you know, they're coming in
Speaker 3: generally Tuesday, Wednesday, Thursday, and you know, so a few things. One,
Speaker 3: you want to get them before they go home if
Speaker 3: they're commuting back to Jersey or Long Island, if they're
Speaker 3: in New York. Two, it's the people who are working
Speaker 3: from home in the cities who are finishing up early.
Speaker 3: They're not commuting home. They're already in the city, and
Speaker 3: so they're going to go and have an earlier meal. Well,
Speaker 3: they don't have an hour and a half commune anymore. So,
Speaker 3: for lots of reasons, meal time has changed. The six
Speaker 3: pm the six pm reservation is way more difficult to
Speaker 3: get than it used to be, and the nine pm
Speaker 3: reservation may not even be something that a restaurant takes
Speaker 3: any more. I mean, we absolutely have customers who, many
Speaker 3: of them in big cities, who have stopped serving after
Speaker 3: a certain time for several reasons. One is sort of
Speaker 3: population density, commuter density has changed, and also crime is
Speaker 3: going up in certain cities. So in the big cities
Speaker 3: like Chicago and New York and others San Francisco, you know,
Speaker 3: they're feeling that pretty acutely, and they are adjusting to
Speaker 3: make sure that they are guests and their employees who
Speaker 3: are closing up and then going out late, you know,
Speaker 3: bring stuff out into the alleys and bringing the trash
Speaker 3: like that is a more dangerous proposition that it used
Speaker 3: to be in some places. So yeah, things have changed.
Speaker 2: Okay, how are how is staffing? Are they fully staffed yet?
Speaker 2: In terms of the high.
Speaker 3: End, Irond's fully staffed, I mean the high end. Listen,
Speaker 3: the turnover rate you know is significant in QSR casual dining.
Speaker 3: You know, you walk into your favorite casual restaurant, Mike,
Speaker 3: you know you're going to recognize the host or hostess
Speaker 3: for a month or two and they're probably going to
Speaker 3: switch over. You know, in the fine dining world, they
Speaker 3: have folks who have worked there for years and in
Speaker 3: some cases decades, and in some cases with the restaurant
Speaker 3: tours or the chefs at multiple places. So it's it
Speaker 3: is different. It is a it's more than just a
Speaker 3: job there, It is a career for those folks. You
Speaker 3: can feel it acutely and how they you know, how
Speaker 3: they interact with you as you're if you're a guest
Speaker 3: in these places. So staffing is you know, across the
Speaker 3: restaurant industry, staffing is is a challenge. I'm very lucky
Speaker 3: to be on the board of a company called seven Shifts,
Speaker 3: which does scheduling for restaurants, and you know, we could
Speaker 3: see it there. We serve you know, much more casual dining,
Speaker 3: but also SMBs outside of casual and you know, no
Speaker 3: doubt that across North America, staffing is an issue and
Speaker 3: fine dining will always be less of an issue.
Speaker 2: Great, are your customers in California feeling an impact from
Speaker 2: the law raising the quick service minimum wage of twenty
Speaker 2: dollars an hour. You know, we've written that we think
Speaker 2: you know, the damage isn't going to be limited to
Speaker 2: fast food because you know, people cooks and people that
Speaker 2: work in the kitchen are going to want a spread
Speaker 2: and assistant gms and tenured manager tenured employees and gms
Speaker 2: are going to want to spread between a new employee
Speaker 2: and what they're making. So you know, what are you hearing.
Speaker 2: I guess from your fine dining customers.
Speaker 3: They're not feeling it yet. They feel it's coming. You know,
Speaker 3: many of them pay you know, beyond that dum wage
Speaker 3: of course, and you know, folks are salary. It can
Speaker 3: vary greatly, but you know, as an industry, it's it's
Speaker 3: it's going to be interesting and it's going to be
Speaker 3: problematic and it's gonna you know, it's certainly going to
Speaker 3: drive more innovation because you know, in the QSR world,
Speaker 3: people will not be able to afford you know, this wage,
Speaker 3: and that's an issue and the path for growth in
Speaker 3: the restaurant industry, you know, oftentimes starts as a cashier
Speaker 3: and a qs are and you know what this, what
Speaker 3: this minimum wage law can do is eliminate, you know,
Speaker 3: a traditional job for so many people. And it's such
Speaker 3: a great way to grow and get into this incredible industry.
Speaker 3: And you know, I don't know how the average restaurant
Speaker 3: tour can survive some of these some of these changes
Speaker 3: in the law. I mean, people think of these unfortunate
Speaker 3: at all to have worked with some many of these
Speaker 3: large chains. And people think of these large chains is
Speaker 3: you know, massive companies, but typically they're a franchise or
Speaker 3: franchise e. So a franchise e is a small business person.
Speaker 3: The name may say McDonald's, but it's not McDonald's, you know,
Speaker 3: it's like, you know, Mike and Matts is really the
Speaker 3: company it's And so you know, I really fear for
Speaker 3: what this will do, and it will change a lot.
Speaker 3: The fine dining world will be changed less, no doubt
Speaker 3: about that. But you know, long term, you know, if
Speaker 3: you are choking off the entry point to people into
Speaker 3: the industry, it will affect fine dining. You won't have
Speaker 3: people who want to be in the restaurant industry because
Speaker 3: plenty of people in fine dining start out, you know
Speaker 3: as cashiers McDonald's.
Speaker 2: A lot of times they start as teenagers too, right,
Speaker 2: and so like if it's twenty dollars an hour, you're
Speaker 2: going to be less likely to give a teenager a shot, right.
Speaker 3: You got it? Like absolutely, I mean that's really problematic,
Speaker 3: really really problematic. And you know, we don't have the
Speaker 3: labor to fill some of these jobs. So you know,
Speaker 3: the price is going up, labor force is choked off,
Speaker 3: so technology is going to step in the middle of
Speaker 3: some of this stuff. And you know, for better and
Speaker 3: for worse, again, it's not gonna happen to fine dining.
Speaker 3: You're not going to walk into the French laundry and
Speaker 3: go to a kiosk to place. That's not going to happen. No, no, no,
Speaker 3: it's not plus you know, you know the plus many
Speaker 3: other types of restaurants. But you know that certainly will
Speaker 3: happen almost everywhere else in California. And I really I
Speaker 3: just think the downstream effects of a law like this
Speaker 3: have not been carefully considered. You know, wages, you know,
Speaker 3: the tax rolls from taxing payroll like like, I'm sure
Speaker 3: there's some smart people in California. I'm not sure they
Speaker 3: worked on this law.
Speaker 1: Yeah, it's going to be interesting to see.
Speaker 2: You know a lot of the companies we cover are
Speaker 2: you know, just gonna build less stores, if any in California, right,
Speaker 2: they're going to move to to low tax states and
Speaker 2: lower wage states and where they they're going to have
Speaker 2: you know, better ROI on their investment.
Speaker 3: Yeah. I think it's was not carefully considered. I get
Speaker 3: the desire to do it for you know, the votes,
Speaker 3: like so many other things the politicians do for the votes,
Speaker 3: but the downstream effects the restaurant industry are gonna be
Speaker 3: significant and for guests too, Like your choice will shrink
Speaker 3: for sure, Yeah, and your prices will rise. It's already happened.
Speaker 1: Yep.
Speaker 2: All right, let's talk about the restaurant tech industry a
Speaker 2: little bit. How's the M and A market looking. Is
Speaker 2: it showing any improvement in this rise in asset prices
Speaker 2: that we've seen?
Speaker 3: Well, I think so, yes. We are seeing seeing deals
Speaker 3: get done, certainly along the margins in the edges. I
Speaker 3: think that will continue to occur, not just because of
Speaker 3: the you know, sort of the economic issues, but because
Speaker 3: of the sort of over availability of similar concepts. From
Speaker 3: a technical perspective. Actually, I think Juwan on your podcast
Speaker 3: did a great job, an amazing job, and that was
Speaker 3: great conversation you guys had on just kind of the
Speaker 3: sameness of so many of the solutions, very very hard
Speaker 3: to distinguish between the technical players out there. We all,
Speaker 3: I'm guilty of it. We are all using the same phraseology,
Speaker 3: the same nomenclature always, you know, every sale, every tech
Speaker 3: salesperson ever uses the same language, and it's it's extremely
Speaker 3: frustrating for the operators, the restaurant tours, the owners, and
Speaker 3: it's very hard for them to tell the differences, and
Speaker 3: so oftentimes what you see is a flight to sort
Speaker 3: of a single provider. And so the whole idea of
Speaker 3: best of breed is going to go away if you
Speaker 3: can't prove you're any different from anyone else. And if
Speaker 3: I'm a restaurant tour and I'm not a technologist, you know,
Speaker 3: and it's just easier for me to do a deal with,
Speaker 3: you know, a point of sale provider, because they're going
Speaker 3: to have point of sale and payments and labor scheduling
Speaker 3: and reservations and it's one neck to choke. And oh,
Speaker 3: by the way, because of wages, I can't really afford
Speaker 3: a tech guy or gal anymore, and so I don't
Speaker 3: really have someone, you know, I can't you know, maybe
Speaker 3: can call my nephew or my niece and they know
Speaker 3: something about technology, but that's really not a long term solution.
Speaker 3: So there's this flight to sort of single neck to
Speaker 3: choke that is problematic because that's not where the innovation happens.
Speaker 3: And so for me, as sort of a best of
Speaker 3: breed provider, it does give me pause and I think
Speaker 3: that will also drive some of the consolidation that will
Speaker 3: inevitably occur in twenty twenty four. There are too many
Speaker 3: players out there, and consolidation has already happened a few.
Speaker 3: We were lucky Tolo to get out into in the market.
Speaker 3: Toast was able to get out. You know, some other
Speaker 3: folks are out like door Dash as well. I don't see,
Speaker 3: you know, certainly, depending what the FED does. IPO markets
Speaker 3: have opened a little bit, y'all. I don't even know
Speaker 3: who would be on the docket from a restaurant tech
Speaker 3: perspective to get out right now. And if that doesn't happen,
Speaker 3: depending on how long their investors have been in the companies,
Speaker 3: then they're going to look for other exits and that's
Speaker 3: going to look like M and A.
Speaker 1: Yeah.
Speaker 2: Yeah, I'd expect the public chains to be active because
Speaker 2: there's that public pressure to you know, grow your TAM
Speaker 2: and grow your customer base and all that.
Speaker 3: Oh for sure, you know, Yeah, I mean so from
Speaker 3: a tech a restaurant tech perspective, see it from a
Speaker 3: chain perspective, I'll see it as well. We'll see it
Speaker 3: as well, no doubt we'll see private equity guys playing
Speaker 3: a much larger role there. And some of that may
Speaker 3: have to do with stuff like what's going on in California,
Speaker 3: right because they're plenty of California based chains with let's
Speaker 3: say thirty to one hundred locations that you know, private
Speaker 3: equity may have to not have to may want to
Speaker 3: go take over. Now, we may want to move that
Speaker 3: concept somewhere else. So across the board restaurant tech, restaurants themselves,
Speaker 3: this will be an interesting year. We saw some interesting
Speaker 3: small deals recently, child Now just did one. Chill is
Speaker 3: great company similar to Olo but serving SMBs based out
Speaker 3: in La Their CEO Chris, just did a good deal there.
Speaker 3: So we'll see, you know, marginal deals like that. I
Speaker 3: mean marginal in a pejorative way, I mean smaller deals,
Speaker 3: and you know, we'll see if there's you know, growth
Speaker 3: beyond that. But certainly in terms of absolute number of
Speaker 3: restaurant tech companies that will that will decline in twenty
Speaker 3: twenty four.
Speaker 2: Yeah, this is going to be a really interesting year
Speaker 2: for restaurant tech, for the restaurant industry all around.
Speaker 1: And we have a front row seat, man, So.
Speaker 3: Yeah, for sure, you're do you do have an amazing
Speaker 3: seat for sure, I'm just a participating but you you
Speaker 3: have a much more interesting macro perspective than so many people. Yeah,
Speaker 3: I'm jealous.
Speaker 1: Yeah, it's fun.
Speaker 3: Fortunately I get I get emails from you, and I
Speaker 3: get to read those, and that's super helpful.
Speaker 1: Yeah.
Speaker 2: Well, I'm glad they I'm glad they help. All Right,
Speaker 2: let's just I got one last question, probably the most
Speaker 2: important one of the pod.
Speaker 1: What's your favorite restaurants?
Speaker 2: I know you're your workout of you know, you're living
Speaker 2: in New York and Chicago as well, so you have
Speaker 2: one in each that you're willing to mention or are
Speaker 2: you scared to, you know, piss off maybe some of
Speaker 2: your Michelin starred customers.
Speaker 3: I have way more than Michelin starret customers. I have
Speaker 3: Michelin Start James Beard, and I have regular old folks. Gosh,
Speaker 3: I mean how that's like such a question, Mike. That's
Speaker 3: so unfair, man.
Speaker 2: This is the least I could do for you talking
Speaker 2: smack about my mix.
Speaker 3: That's true. I did. I did tweeted you and Juwan. Listen.
Speaker 3: You should feel bad for me. You know, I grew
Speaker 3: up in d CMO. Still a Wizards fans, possibly worse
Speaker 3: favorite restaurants.
Speaker 2: Just give me a good meal recently, maybe an in
Speaker 2: each city.
Speaker 1: Well let's do it that way.
Speaker 3: Okay, good meal in each city. That that's that's easy. Well,
Speaker 3: I went to an amazing meal at a restaurant in
Speaker 3: Chicago that's a top customer fortunately called Next. Next is
Speaker 3: an a linear group restaurant. And I've given Nick a
Speaker 3: lot of kudos before for founding Talk, But I've been
Speaker 3: to Royster, which is amazing in the office, which is
Speaker 3: an incredible bar, incredible bar. But I went to X
Speaker 3: for the first time and that's where Talk really started.
Speaker 3: And they did a Julia Child and you was just
Speaker 3: like the food was out of this world. The service
Speaker 3: was out of this world. But the experience, you know,
Speaker 3: I talked about experiences, Like at one point they served
Speaker 3: the beef bourgignon that Julia Child was famous for, and
Speaker 3: they brought over like this vintage little TV and plopped
Speaker 3: it on the table and it started to play like
Speaker 3: an episode of her show. It was like brilliant, and
Speaker 3: all the plating was on like her types of plates,
Speaker 3: and you know, it's just again, the food was incredible,
Speaker 3: but the experience and the way it was presented and
Speaker 3: the way it was described and and you know her
Speaker 3: books The Joy Cooking, the joy in which they took
Speaker 3: and presenting. It was like it's special. I mean, that's
Speaker 3: part of the fine dining world I never knew about,
Speaker 3: like honestly, I mean, you know, I was more of
Speaker 3: a booeyemonger's guy if you remember those Oh yeah, well exactly.
Speaker 3: So a great sandwich shop in Georgetown that great sandwiches.
Speaker 3: But the way that you know, the folks at Next
Speaker 3: did you know, did this sort of meal and experience
Speaker 3: and it's just like it was. It was just like breathtaking.
Speaker 3: So I'm gonna I'm gonna shout out you know Next
Speaker 3: the Linear Group and the spectacular experience I had there.
Speaker 1: Check there.
Speaker 3: When you're in Chicago. But New York so I live
Speaker 3: out on Long Island. I mean, god, there's so many
Speaker 3: great restaurants in the city. I I'm I have to
Speaker 3: think about that. Well. I mean, we have a restaurant
Speaker 3: up in a up in Westchester, Blue Hill at Stone
Speaker 3: Barns Restaurant, which is yeah, I just like it's it's
Speaker 3: a college of food. Like the smells and the the
Speaker 3: feel of walking around and the the pride and what
Speaker 3: they take for I was there once just for a meeting,
Speaker 3: and I was getting a coffee as I was leaving
Speaker 3: driving back to Long Island. You know, the person who's
Speaker 3: serving the coffee didn't know who I was, didn't know
Speaker 3: why it was there, but the way they described the coffee.
Speaker 3: And then a guy walked in and the person behind
Speaker 3: the counter said, oh, and this is the farmer that's
Speaker 3: delivering the Milton I'm putting in your coffee. It's like, whoa,
Speaker 3: this is incredible. So, yeah, there are some amazing places
Speaker 3: out there. There really are, and I think, you know,
Speaker 3: we need to continually do a better job at talk
Speaker 3: at allowing those types of places to promote themselves better
Speaker 3: to their guests and just give them more tools to
Speaker 3: provide that sense of hospitality that you know, quite frankly,
Speaker 3: you're not going to get at the bootymonger. It's a
Speaker 3: very different world. And so we need to do a
Speaker 3: great job of, you know, helping them, you know, promote
Speaker 3: themselves and you know, get more guests in the door
Speaker 3: more often to experience you know what I'm fortunate to
Speaker 3: be able to experience from time to time.
Speaker 2: Man, I'm confident you'll be able to help them out.
Speaker 2: I look forward to following the story and keep it
Speaker 2: in touch.
Speaker 1: Man.
Speaker 2: I wish you a lot of luck. Where can the
Speaker 2: audience go to find out more about Talk.
Speaker 3: Well, come to explore talk dot com or download our
Speaker 3: app and visit all our restaurants wherever you are in
Speaker 3: North America. We have an amazing number of wineries. If
Speaker 3: you want to go to tastings from where I live
Speaker 3: on Long Island to Napa and Sonoma and neverwhere in between.
Speaker 3: And that's the place to go. And if you're a
Speaker 3: restaurant you want to work with Talk, explore talk dot
Speaker 3: com also, but backslash join that's where you go.
Speaker 1: And yeahs good stuff.
Speaker 2: Thanks again for doing this, Thank you Mike, good to
Speaker 2: see you same and big thanks to the audience for
Speaker 2: tuning in. If you liked the episode, please leave us
Speaker 2: a rating and click the bell.
Speaker 1: If you'd like to subscribe.
Speaker 2: Check back soon for a conversation about restaurant m and
Speaker 2: A with a. Sheesh Seth, the founder and managing director
Speaker 2: of Harrington Park Advisors,