Managing Efficiency in the Food Chain

by Adam on May 22, 2013

Over the past 3-4 years, I’ve met with a number of entrepreneurs, looked at a variety of business models and thought about everything from bifurcation and disruption to locality and “back to the roots” farming. Behind these ideas are smart entrepreneurs, micro- and macro-trends, and usually, a whole lot of tech. And while, most often, the prevailing forces of food + technology are in balance and aligned to create synergies for new business development, there are times when entrepreneurs try to throw tech at the food space in an effort to increase efficiency without understanding the nuances of the food space. The results, most often, are uninspiring at best and disastrous at worst. In these cases, the issue becomes one of trying to over-optimize food in favor of tech.

Food is and will always be a physical product. No matter what the business proposition, at its very core, food represents a commodity that has to be picked, packaged and shipped. Whether there are companies that allow consumers to discover, shop for, or talk about their food and food experiences, these companies always have to deal with the inherent tangibility of food products. Food will never be all digital, food will never be all about algorithms, automated processes or aggregated content experiences.

There are many companies that come to mind when thinking about “over-optimized” business models. Things like restaurant ordering apps that remove the server entirely from the process of dish discovery, ordering, and check payment are one example, as well as grocery delivery services that try to dissolve the infrastructure around the grocery store supply chain. In general, these models tend to oversimplify the process of food ordering, discovery and logistics, regardless of the specifics around particular companies. More often that not, these models come about because entrepreneurs don’t take into account the “food” portion of food + tech, focusing more on what technology does to maximize our ability to deliver service to consumers.

But, it cannot be all about tech, just as it cannot be all about food if the industry is going to change and evolve. With entrepreneurs  who are new to the space, I always recommend that they understand and balance both of these worlds and try to bring that understanding to their business practice. It helps to visualize the thinking around food + tech experience as a spectrum, with passionate foodies on one end, and creative programmers on other. The best balance in terms of talent strikes a middle-ground between passion and creativity. But, entrepreneurs should always remember that, in cases where they can’t check both boxes in food and tech, they can build a team that does. Some things to consider when building a team:

  • Look for engineers and programmers that have experience with food startups or other food-related companies.
  • Try to find co-founders or other team members who bring specific food experience as well. If you are building a restaurant app, don’t just look for team members who like to eat out, look for those who have been servers, line chefs, and front of house managers.
  • Remember the advisory board. There’s an informal network that can be built, especially for early startups, where entrepreneurs can circle industry professionals and advocates that can have a strong impact on their business.
  • Find, talk with, and engage other entrepreneurs who have built food startups. Find out what they did, how, and some of the pitfalls they encountered.

 

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