00:00 Tim Rowe All right. Meal kits can be expensive and frankly, they can take even more time to prep and cook than if you just went out to eat. And frankly, ordering from an app has gotten really, really expensive. So it might be faster than if you went to have a sit down meal. What gives? Where's the balance? And that's what we're going to talk about here today with eatmise CEO Robert Chen. Robert, welcome to the show. Thank you very much, Tim. I appreciate you having me. Absolutely. So for folks that might not know eatmise's yet, give them the 60 second commercial.

00:36 Robert Chen Sure, sure. So we're a food delivery platform in New York City. And we partner with some of the top restaurants in New York City like, you know, Luke's Lobster, Ivan Ramen, Bareburger, OBAO. And what we do is we bring prepped, ready to cook ingredients from their best dishes directly to your door so that you can cook them at home in under 10 to 15 minutes. So one way to think about it is last mile cooking. And you know, one of the things that I realized and I think a lot of our customers realize is at least in New York, there's kind of two sides of the spectrum in terms of eating at home. It's, you know, ordering, as you mentioned, DoorDash or Uber Eats, right? As we all know, it can be very expensive. It doesn't always…

01:19 Tim Rowe It was affordable.

01:20 Robert Chen It seemed like it was affordable for a while. Yeah. But there's some fundamental kind of logistical challenges that I think that they face. And there's a new legislation in New York that's going to cause kind of prices to go up even more. But anyway, so that's kind of one side of the spectrum. And you know, there's issues with delivery, soggy delivery and not everything travels well, right? Then the other side of the spectrum is, you know, cooking from scratch, where at a very simple basis, you go to the grocery store, you go through the whole kind of process of buying groceries, figuring out how to eat, cooking, prepping it, cooking it. There's a lot of ingredient wastage sometimes as well. And then meal kits try to solve that. You alluded to it.

01:58 Tim Rowe But when they say it takes 30 minutes to cook, it really takes like an hour to cook, right? It takes even longer.

02:03 Robert Chen Yeah. Yeah. It's a whole thing. And you know, it's like limited cuisine types of being shipped from a warehouse. So where we fit in, just kind of thinking about those both sides is, compared to, you know, delivery, we're selling at, call it the exact same dish, 30 to 50% cheaper, right? Than if I went to the restaurant or ordered it on an app. Exactly. If you go on DoorDash, same exact dish, we're going to sell 30 to 50% cheaper. And the reason is because we've set up a logistical model that I think benefits the ecosystem and we can pass those savings on to the consumer. And also you're cooking kind of fresh ingredients from the kitchen, right? So you never have that soggy. It's always very fresh and very, you know, a lot of people say it's better than going to the restaurant, you know, ordering delivery. And on the other side, kind of the cooking from press side, because the restaurants already prepped everything for you, you're just doing the last 10 minutes of the fun parts of cooking. So we essentially outsourced the annoying parts, right? And so make you the hero. Just let me plate the dish and impress my friends.

03:09 Tim Rowe That's really all I'm trying to do. Exactly. Okay. So the idea here is I'm getting the ingredients like, like I'm getting essentially meal prep directly from the restaurant for dishes that I'm familiar with or wanted to try. So it's that at home cooking experience with the, obviously the savings of, you know, ordering ahead and taking advantage of that. Yeah, that's right. Were you working like in the food industry before? Like, how did this idea come to be? Right? Obviously there's enough meal kits and enough groceries, you know, to buy.

03:44 Robert Chen So how'd you find this in between space? To answer your question, I've never worked in food actually. Most of my career, so I've been in New York for almost 20 years now. I went to college here as well. And most of my career was in finance, so investing at various funds. And I think through that over a kind of a decade of experience, I very much kind of just understanding businesses, logistics, margins, profitability, the economy, and it really helped me understand what makes industries and businesses work versus not work. And then during the pandemic, you know, I think everyone had this kind of like, what's going on? What's, you know, what's the meaning of life moment? And I definitely had that. And I think there was two angles for me why I went into this route is one is restaurants were really suffering during the pandemic, right? I think, right. And there are a lot of short term solutions, right? Like, you know, PPP loans and everyone had all these ideas. And I think just putting on my business hat, I was like, there's got to be some longer sustainable solution here. Because even before the pandemic, they've always suffered with thin margin profiles, right? And I was thinking, OK, how do we help them access a huge addressable market without really increasing their costs? So that's kind of this idea. So that's kind of one side. And the second side is just on a personal basis, I've always really wanted to start a company. And I think the pandemic really pushed me to do that. I felt like with the pandemic, it was kind of perfect time, right? Because long term consumer changes and things like that. So never worked in food, but kind of what the pivoted this way.

05:20 Tim Rowe But I couldn't be more grateful. Makes sense. And it's it makes sense when we look back, right? It can rarely make sense when we look ahead. We think we have these plans. We just kind of shoot towards it and see where see where things end. But maybe come back to that for a second. This is a broad global audience. You've got a lot of folks on the kind of sell side of media, media companies, and then a lot of folks on the buy side as well. Brands, agencies, folks like that. For those for those listeners, what makes business and industry work? What are like kind of you have like three fundamentals, things that you've seen after observing so many different scenarios like what are those common themes that you've

06:03 Robert Chen seen? Yeah, it's a good question. I think, you know, just diving into kind of us as an example, the first thing I wanted to understand is why does this opportunity exist? And what I mean by that mostly is, again, because I come from a finance and business background, is do the margins work here? Right. Because and the reason I say that is because I think what I've seen across a lot of businesses is there is businesses, if you strip a kind of a part what they're doing, some truly create value in an ecosystem and some don't. And the ones that create value and what I wanted to find out here is how can we actually make it economical for both the restaurant and the customers to succeed? And that's when we dug into the logistics. OK, let's go into the off peak hours of restaurants between lunch and dinner, where the incremental cost for them is not real estate and labor, which is about 60, 70 percent of costs. It's just ingredients and they have procurement advantages on those ingredients. So if we design it correctly, we can pass those savings on to the customers. And there's a large kind of gap for margin. And then the other way is kind of thinking about delivery costs, right, through cooking, through delivering ingredients. We can batch our delivery. So our deliveries per hour goes from one point six, which is what Dordash and Uber is doing, to five plus. So I think logistically, I wanted to first solve that. OK, there's a real math equation that we're solving here that can translate correctly to the customer. And it's kind of like the way I would describe it is creating more out of less. Right. It's taking what's there and creating value. And it's a I'm sure there's a better way of explaining this. That's kind of a concept that I think is important because a lot of companies that I've seen, it's very much a zero sum game, right, where you're they're not not all, but you're not always creating value, but you're just kind of robbing Peter to pay Paul. And when that happens, sustainability and long term viability of the company is not always there. So I would say that's one big thing that I've always kind of dug in. And obviously, other things in terms of like the question was always, OK, what if Dordash comes in? Right. Like, you know, what if I have. Right. So there's a lot of those kinds of questions. What's your defensive moat and things like that. But and also I could talk about this for hours. But the other thing is just like addressable market, we can make a multi-part series. Exactly. The dressable market, like making sure that the formula you create can be applied to a large scale. Right. And so food, restaurants, massive markets. So lots of people.

08:42 Tim Rowe It's I mean, I just wrote these words down. It sounds like monetizing excess value creation. Right. Like there's this there's inherent value between a restaurant and someone who eats at a restaurant. Right. Like that relationship exists. We don't need you to change that or improve that at all. Yeah. But can we use can we take advantage of this unused kitchen capacity? Right. We've got all these fixed costs that are baked in. But we've got these times of day where the kitchen is slow and and we have some leverage as a business and that we can buy more tomatoes, buy more we can buy in bulk and then increase our margins. And it sounds like the big key here as a consumer is that logistics unlock then being able to take advantage of that at steeply discounted rates. So maybe double click into that. There's a lot a lot of we talked about a global audience, but specifically there's a lot of folks in New York City listening right now. How does it work if I were to order? How does it do I have to order weeks in advance? Is this like something that I need to plan out my meals or how on demand is this?

09:45 Robert Chen Yeah, so it's it's one day in advance. So basically, if you want it tomorrow, you have to put in your order before midnight tonight. OK, we're actually shifting to a same day model where it's in the morning. But so that's and the reason we're doing that is kind of I would attack it from two angles. The first is by setting it up that way. When we have preset routes, we can again get our delivery cost on a per delivery basis from call it. If you order from Uber or Dordash, it could literally cost a system that one meal that you get maybe 11, 12 dollars.

10:21 Tim Rowe I mean, I'm not trying to rag on it. I've I used to order off a door to a lot like just being a startup guy, right? Working crazy out. It's just easier. I have now I have to think before I order, because with the delivery fee, with the tip, it's like, wait, I'm ordering a twenty dollar burrito and I'm paying another twenty dollars to get it brought to my house. Like, yeah, this is no longer fiscally responsible to him. Like, just go make a damn sandwich. So it's it's changed my decision making profile. I live out here in the burbs, so we don't have a lot of stuff too close. But I think that everybody experiences it in their own unique scenario. So to have another option that makes so much sense. I like to cook. I like to cook. So what what's been the hardest part in building a company like this? There's obviously a lot of right. You're building a two sided marketplace with the logistical element. Like there's a lot of the light, three sided right. Thank you. That's we're getting into like five dimensions here. Right. You're building a lot of the thing like getting restaurant one, I'm sure, was its own big achievement. Yeah. Maybe what's what's been that really like that that war story that you tell folks,

11:39 Robert Chen you know, like, oh, there was this time. There's pictures of me just on a city bike, just doing deliveries.

11:46 Tim Rowe And that's one of our go to pictures like hardcore. But it's founder stories.

11:51 Robert Chen Yeah. Yeah. I mean, it's real. And that's one of the things that I loved about it. I wanted to embrace this and embrace this challenge. And and I really believe not to diverge too much is like, I really believe that to make a business successful as a founder, you have to do everything because I want to know what it's like to deliver. So then I know when I hire couriers, when I would I know what they go through. I want to sell to the restaurant. So then when I hire a salesperson, I know what they're so, you know, honestly, for the beginning, it was just all me and literally designing the recipe cards. You know, I don't know. Right. And I think it was a very humbling experience, but it also gave me the tools to kind of understand how to grow and scale this. But the answer your question, man, like the I mean, the first restaurant that was huge, right, there's a huge milestone, very challenging. And it's very much traditional founder story, like email blasting everyone running door to door to actual restaurants and just like, hey, I have this idea, you know, like this, I don't even have a prototype.

12:50 Tim Rowe But what do you think? What do you think? Like, were they like, this is ridiculous? This makes no sense.

12:56 Robert Chen The benefit is like it was during the pandemic when I think people's ears were perked on, you know, like, hey, you know, the world's on fire. Like, let me think of ideas. Let me be open to that. Crimed, receptive audience. Exactly. Exactly. But having said that, it's like if you're some random guy just Instagram DMing like, you know, it's like, hey, what's up? Like, it's pretty hard. I think what I've learned is that you have to sell the vision and you have to find people that believe in the vision, because when you don't really have, you know, it's just a concept. You don't have a prototype or anything. You have to be able to sell it and you're going to find people that understand, give you a chance and that don't. Right. So that was, I mean, that that was a big thing. And I think you alluded to it as a marketplace. How do you get customers without restaurants? How do you get restaurants without customers? You know, it's the chicken is at the egg. I don't know. Yeah. So that was tough. But I think, you know, knock on wood, finally, we kind of got to a place where at least we have a stable kind of marketplace. So a lot of war stories, a lot of war stories.

14:02 Tim Rowe It's as you were sharing the story on the city bike reminded of there's a great podcast episode, Masters of Scale, Reed Hoffman's interviewing Brian Chesky. Brian Chesky from Airbnb talks about that very special time in the beginning as a founder and the opportunity to hand craft your product. Yeah. And and it's that and I think it can get so oftentimes overlooked with the infusion of capital and lots of money and this allure of being a startup. Yeah. At the end of the day, it's about rolling up your sleeves and doing the work and then building a product around that experience, solving a problem for customers along the

14:43 Robert Chen way. I think if you skip the painful, annoying steps, you miss out on a lot of the gold. Right. Like, I mean, even our recipe card, for instance, it's like, again, I don't really cook. Like, I have no idea what works. Right. And I think sometimes that naivety, sometimes that ignorance is a blessing and it gives you an advantage because I come in with open eyes and I just kind of like write some recipes. I get feedback. I iterate and kind of I think it's a little bit more of the process mentality and having that perseverance as opposed to having some pre-existing knowledge that it takes longer. But I think it gets you to the right answer.

15:21 Tim Rowe Outsider is the new insider. That's a that's a little saying we have around here. It seems to hold true. You're in New York now. When you think about scaling, what does what does that look like? What is is it more markets? Is it a wider variety of restaurants, more neighborhoods? What's next when you when you think about that next chapter?

15:42 Robert Chen I think I look at it in kind of two phases almost. I think the next phase is definitely geographical expansion. I think we I think New York alone, New York City alone, so special in such a massive market. And I think there's a lot that we can do here. And I think once we kind of scale efficiently here, the idea is to take this formula and go to other cities, obviously similar to Door to Ashbury. And I think just putting on again the business and logistics hat, you know, there are tweaks that you have to make for certain markets. But ultimately, this formula is scalable for on a nationwide basis, on kind of a global basis. And I think the other way I would think about it is I really think there's a dearth for a restaurant platform that partners with the restaurants that is trusted as a food brand. And what I mean by that is, you know, Door to Ashbury, a lot of these companies are they're they're delivery companies, right? So their their goal is first restaurants and now they want to deliver everything, grocery, everything, alcohol. Right. And it makes sense. Because that's their core competency. And I think where we stick out is we create a more intimate connection with the restaurant and the diner because we're literally taking their dishes. We represent their dishes. We have ingredient level data and a lot of things that we have where that gives us a lot of different type of platform opportunities. And, you know, a lot of it's called food related. Like, can we help restaurants create sauces to have CPG and to retail partners? You know, like, there's a lot of things that I think we can do by being this unique food trusted platform that others, you know, the other incumbents can't. So I think that the way I think about it is they're kind of the delivery vertical. We're attacking the food vertical.

17:29 Tim Rowe Yeah. Robert, you said this. This is your first. This is the first podcast you've done. Do I get that right? Yeah. I'm just excited that we're going to be able to look back at this moment in time and say, remember when remember when when eatmise's is in every neighborhood around the country and the this audience is indulging in lots of local treats. It's incredible to think about that vision and that opportunity. And we've seen it. Right. I think my first job, my first job was as a sandwich engineer at Panera Bread. They didn't call it engineer. I added that. But but then Panera, you saw they had the salad dressings in retail and right. And you've seen brands and Chick-fil-A sauce. You can get it at Target. Right. And yeah, but I've never seen a door dash for anything in my food aisle.

18:17 Robert Chen And not there. It's not their business. You know, it's their delivery company. Right. So it makes sense. And I think and I think the big thing is and not to, you know, talk ourselves too much up is I we found that the type of the type of the type of relationship that we have with restaurants are very different. You know, like the the ratio of restaurants to accountants are very different from other things. And what what that and because as I mentioned, it's a very intimate process where we have to walk through their meals, recipes that's afforded us kind of more ways to not partner with them, not only on a marketing front where they help us market, they're creative. It's like, hey, maybe we can give a free appetizer to your, you know, you know, there's a lot of things that they work with us on that I think makes me feel like we have all these opportunities that we can help them tackle because there's that relationship and trust between us and them.

19:12 Tim Rowe Just reminded me of I'd like to make an introduction for you after this. Some parallel space, I think there's some overlap in. Wow, Robert, thank you so much. If folks want to if folks want to learn more, if they they're probably starving at this point, give them that we use Latin long to to give folks direction on the real world. Tell tell tell the audience where to go. Where should they go to learn more about you? Check out the brand.

19:39 Robert Chen Yeah, yeah. So definitely our website. So each means dot com E A T M I S E dot com. Check it out. And, you know, we have dishes on there. You can check it out. We have a subscription that they kind of share more about it. Very really designed to be kind of the New York lifestyle where very flexible. There's no fees. You know, cancel a day before. And I'm not like the other American companies. You can just order one per week. So it's very much, I would say, an experience that designed for spoiled New Yorkers, at least at this point, where we're so used to convenience and all that. So food. Yeah. Yeah. Yeah. Seriously, we're so spoiled. I feel like so. So spoiled. So spoiled. So yeah, yeah.

20:24 Tim Rowe Cool. We'll make sure to link to all that. Maybe just touch on that. You mentioned subscription. There's a I can subscribe to this.

20:31 Robert Chen Yeah. Yeah. Yeah. So the way it works is and there's actually a little bit of backstory to this where we realize that people wanted a subscription. They wanted that order reminder. They wanted that weekly thing. And so what we did is we set it up where, you know, when you subscribe, you basically get kind of weekly orders that are up to you based on you can set it in advance. You can. And we also recommend things to you based on your preferences. But I think two things I call out that I think are pretty special with this. Well, one is more that when people hear subscription, they're like, oh, is there some weekly monthly fee? There isn't. It's just pay as you go. It's really kind of an ordering mechanism and a reminder mechanism. We call it a concierge service, actually. Oh, I like that.

21:15 Tim Rowe Someone to someone to remind me, hey, Tim, you're going to get hungry. You're this thing you ate tonight. You're going to want it again in two weeks. We're going to set like at the end of the day, that's ultimately personally why I so oftentimes turn to an app. It's because I didn't plan ahead. So I have a concierge who can be so thoughtful as to remind me about that bacon cheeseburger I'm going to make.

21:39 Robert Chen The other thing I would say is like, you know, we want to make it as easy as possible, meaning that you change your plans. You cancel right, you know, a day before you can order just one per week. A lot of these meal kit companies, you have to order, you know, seven meals per week and cancel seven days in advance. And it's just not didn't work for me and I didn't work for a lot of people. So I think there's that flexibility that a lot of people appreciate.

22:02 Tim Rowe Really modern SAS approach to obviously a space that we can all appreciate. Something I didn't ask that I meant to and I'm curious if you have any any details insight that you can share the impact to the restaurants. Obviously it makes sense. And we talked about it. It's all very logical that it's this is good for everyone. Do you have any like cool stories? Hey, they increase their bottom line this much or you have any exciting case stories of the restaurants you've worked with?

22:33 Robert Chen Yeah. Yeah. I mean, I think there's that obvious aspect from a revenue standpoint. I would say several things that we get excited about. I think just going back to the core model that we have is we created a process for them that is so easy and not disruptive to their operations where it's the kind of joining us is extremely easy because if you think about the daily process, they just get orders, they prep more ingredients than they're already prepping during the day. And then they put it in packaging that we provide and then we ship it. Right. So there's really no work on their front. And I think they get really excited about that. I think another benefit that they're seeing is that we can deliver farther. Right. So extended reach for the restaurant. Yeah. Like we're door dashing over each because there's a time decay. As soon as you order, it's like, Oh, I need to get it hot and fresh. Because of our delivery system and the fact that, you know, we have insulated packaging, et cetera, and it's order ahead. We can help restaurants that are in lower East side delivered to upper West side. Right. Where it's in. So they like that access. I think another thing that Mark, what we've found is restaurants really like is it's a really great marketing tool because if you get influencers cooking at home, it's like such a great content generator. It's like, Oh my God, I'm cooking this at home. So they love that marketing aspect that, you know, we've, we've kind of provided to them. So a lot of, I would say ancillary benefits that have, we've discovered through this process that has made kind of the value prop pretty strong for restaurants.

24:05 Tim Rowe I'm subscribed. I'm looking forward to what comes next, seeing how the company continues to grow. It's exciting. New concept. Is there anybody else doing anything similar like in any other city around the world that you know of?

24:19 Robert Chen Um, there are some, I mean, actually during the pandemic in New York, I would say four or five of these companies popped up. Um, what happened? Some of them are around anymore.

24:28 Tim Rowe Um, they just didn't make it.

24:29 Robert Chen They didn't make it. And I think the, I mean, I'm biased again, but I think what, what we realize right away is like, we have to do it the hard way for it to work, meaning that we have to own our own delivery network. Cause that's the only way they get cost down. Right. If other people are outsourcing, we're doing USPS, you just, you just can't do it the right way. Um, we realize that you had to standardize the recipes. You had to standardize two servings per kit, like, because you can't order one. That's like 10 servings and there's shitty recipe or sorry, sorry for my French. Um, it's okay.

25:01 Tim Rowe We're not, we're not, I don't think we're anywhere that we're going to get censored. Maybe I'll, maybe I'll even go back and add a bleep. I don't know that I've ever added a bleep before we could do that. That's a first. I'm usually the one drops an F bomb. You're good.

25:15 Robert Chen Um, yeah. So I think there, you have to be thoughtful about it to, to get it. Um, there's some other ones that are tendentially similar, but nothing really like us.

25:25 Tim Rowe Awesome. Again, Robert, we'll link to all of the information and links that you provided us with before can't thank you enough for, for having been here and sharing as much as you have.

25:35 Robert Chen Thank you so much for having me. I mean, it's a, it's been a blast.

25:38 Tim Rowe Definitely. We'll do it again. Uh, we'll, we'll maybe we'll book the next one. Now we'll book in advance. If you found this to be helpful, please share it with somebody who could benefit. As always, make sure to smash that subscribe button and leave the podcast or review wherever you're listening. That's how you help us grow. And we'll see you all next time.