When we saw this article come across our desk we had to do a double take. “Someone has raised more than $12M to handle online orders for restaurants… from a piece of hardware?!”
Yes, you read that right: someone is using a printer to aggregate and make sense of the nightmare that is restaurant third party platforms.
But you know what: it makes sense. And not because it should make sense, but because the industry is so dysfunctional it must make sense.
The image above shows you what a restaurant’s countertop looks like these days. As the third party “partner” universe of delivery and ordering make clear, there’s a lot of money to be made when you charge restaurants 30% commissions. By consequence providers are proliferating – just like the daily deal bonanza of 2008-10.
But how did we get here? How did we arrive in a place where software and technology is improving everyone’s lives but brick and mortar merchants are piling up hardware like Asia Pacific just opened for export? Here’s where we put the blame.
Merchants. Merchants beat suppliers up on price then act surprised when rational functionality can’t be built. Hello, ever heard of the phrase you get what you pay for? Everybody always wants something for nothing which has made the notion of ROI a foreign concept in brick and mortar. In the civilized world there’s a 3:1 ratio: customers are willing to pay $1 for a solution that delivers an ROI of $3. In brick and mortar it’s more like $1 to $100. If your supplier can’t make any money how much better do you honestly expect their solutions will get? The only companies making money in brick and mortar are payments processors (who have a guaranteed demand), and demand-generation platforms like OpenTable and Grubhub which have merchants under a spell.
POS companies. We’ve consistently demonstrated how POS companies – particularly the legacy kind – can’t be bothered to invest in their own platforms. While legacy POS companies like NCR’s Aloha are trying to rake it on hardware margin they’re not investing in functional APIs or core software updates to maintain relevance. Legacy POS companies never bothered to answer calls either, making it virtually impossible for third parties to do proper integrations. Then there’s the whole other issue of crap engineering: have you ever seen what a legacy POS backend looks like? Even if an integration was mutually agreed upon it would be a brutal process to undertake.
Third parties. We’re going to share some of the blame with the third parties as well. Undoubtedly there are some of them that didn’t bother to phone up POS providers and work on a more reasonable path forward. These companies raised lots of venture money and believe their shit don’t stink. They’re busy bulldozing a path to show growth at whatever costs – even if that means merchants have to run 10 devices and add accountants just to reconcile the P&L.
All in all there’s enough blame to go around. Though we never thought it was so bad that we’d need another piece of hardware to solve the problem.
Shame on the industry.
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