Gutsy app makes dining out in the Mother City a snap | Fin24
 
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Gutsy app makes dining out in the Mother City a snap

Oct 05 2017 16:01
Timothy Rangongo

Stuart Murless is a co-founder of Feastfox. (Picture: Supplied)

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Just over a year ago Stuart Murless, a former chartered accountant, and his co-founders started working on Feastfox – an eating-out app that allows you to book a table by showing you restaurants that have one available near you at that very moment. 

Launched in July 2017, there are currently over 80 restaurants – all Cape Town-based – to choose from, including Mondiall, Reuben’s and Nobu. 

Cape Town was chosen due to its high concentration of restaurants and active dining-out scene, says Murless, but the long-term goal is to expand to other major cities across the globe. 

The name was inspired by a smart animal, like a fox, going on the hunt for great feasts and specials for diners. 

How did you determine the need for this type of service in the market?

We did quite a lot of surveys to determine the market perception of this app in South Africa. We found that what people were looking for reaffirmed our anecdotal evidence. 

We looked at the way we operated, while the more qualitative stuff came out of our consumer interviews. 

What is your business model?

The model is that we don’t charge the user anything. The app is completely free for the user to download and use. There is no monetisation on the user side. 

But on the restaurant side we charge a small fixed fee per customer that we bring in. 

How many users have downloaded the app and are active on it?

It’s at around 2 000 downloads. We are getting nice download rates. 

We’ve only been live for two months but we’ve already seen positive signs in terms of the kind of super users. We’ve got some users that have used the app between six and eight times almost on a weekly basis, which is really positive. 

We’re seeing a really high ratio of people that use the app once, and then use it repeatedly.

Tell us about your first booking.

It was the first completely independent booking where we didn’t know the person at all – with absolutely no link to us. The booking was at Nobu, one of our dining partners.
 
It was positive to see people who appreciate fine dining and eating at a great restaurant were keen to use Feastfox as part of that experience.

How did you secure funding to start Feastfox?

Daniel Petz, one of the co-founders, led the fundraising effort. He is based in the US and is busy doing an MBA at Stanford. 

Having him based there opened a lot of doors and allowed us to access many networks. It’s been really great to have that funding in place; it has made a huge difference. 

We used a reasonably standard four-page agreement called the SAFE (Simple Agreement for a Future Equity) agreement. Before receiving the funding we had to fund the business ourselves.
 
We are sitting on about R2.3m that we raised and we try to spend most of it on business development. In the next few months we are going to be pushing harder on the marketing side.

What are the pros and cons for the SAFE agreement?

Lots and lots of pros. It’s very simple to understand. The funders don’t get equity in the business at this stage. They get a right to convert into equity when you do a first equity-based fundraising. 

The benefit to them of getting in early is that they will get to convert it into equity at an agreed capped valuation. It takes out the legal and regulatory burden that you’d have at this early stage, which makes a lot of sense. 

It doesn’t make sense to be spending a big chunk of what you’re raising on lawyer fees when you’re in such an early stage.

What are some of the biggest difficulties you’ve had to overcome?

One of the most difficult was convincing investors, particularly American investors, to invest in a South African pre-launch start-up that was launching in South Africa. 

The restaurant technology scene is not exactly hot and happening at the moment, so most of the guys are interested in other types of new tech such as virtual reality. 

Daniel met with a lot of people and was able to find guys who shared the vision and bought into the concept. It was really tough, but in the end the outcome was positive.

When we first started out it was also difficult acquiring restaurant partners. We had a very early version of the app that didn’t look as slick as the current. 

We also had a few restaurants that had signed up at that stage. We didn’t have a set date for launch. 

It’s really difficult when you’ve got four or five restaurants signed up and you go and chat to the next one, and they remark on how you don’t have too many names. 

They tell you, “Come back to me when you have a few more.” We turned a corner there and restaurants are now starting to approach us. 

How tough is competition in your sector, and what differentiates your product/service from others?

In SA, there isn’t really competition. Internationally there’s competition but only in aspects of it. 

We are in the restaurant-tech space and there are a lot of guys who do the pre-planned business, such as OpenTable. 

We haven’t found anyone really playing in that spontaneous booking space, which we think is a great space for us because we started chatting to people and looked at the anecdotal evidence. 

The majority of your modern diners make the decision to eat out spontaneously. 

So you’ve got a bunch of really great businesses playing this pre-planned stage and no one really playing the spontaneous side, which is a much bigger opportunity. 

At least in our view. I don’t think it’s going to stay that way forever but hopefully we’ve got a bit of a head start.

How many people do you currently employ?

There are four of us in terms of the founding team. 

In addition to the four we’ve got two people on the business development side dealing with the restaurants, and then we have a rolling internship programme. 

We’ve just had three international interns, two from Italy and one from Austria, who have just finished up. Our interns solve real-life problems based on their specific interests and career aspirations such as creating a marketing strategy for a new initiative. 

We have a new batch of interns who are starting shortly, a mixture of local and international. These young people bring incredible creative ideas to the table, adding significant value to our culture. 

Working in a start-up gives them a level of practical experience that they would never receive in a large company. 

What is the best business advice you’ve ever received?

To make decisions based on data rather than on intuitional gut feeling. It’s not always easy but we try wherever possible to base our decisions on data rather than on what the most influential person’s gut feeling is. 

What was unexpected?

Most of it is unexpected. I’ve got limited technical skills and knowledge so a lot of things are unexpected. 

I think what has been a little unexpected and what I have been impressed by was the amount of data and insight that you can generate, especially when you’ve got someone with the skills – like one of the co-founders, who is from a data science and machine-learning background.

They value the potential of data, which I think is incredible. I wasn’t exposed to this in what I was doing previously.

How do you stay motivated?

I think one of the biggest motivations is that you are building something that is your own. It’s important to us that everyone who does and potentially works for Feastfox has an ownership stake. 

We are very big on every permanent employee having an ownership stake. It’s a lot easier to stay motivated when you’ve got some skin in the game and you’re building something long term for yourself. 

What advice would you offer a budding entrepreneur who is thinking of starting out?

I think one of the things that is really key is that, where possible, to basically test every assumption that they’ve brought into their model before going on to invest a lot of time, money and effort into building something.

This article originally appeared in the 5 October edition of finweek. Buy and download the magazine here.

restaurant  |  eating out  |  dining  |  app  |  entrepreneur  |  tech
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