How to Adopt a Startup Mindset in Foodservice
Whether your restaurant is a large, multinational brand or a smaller independent eatery, new players are increasingly threatening to steal customers. Disruptive startups pay no attention to national borders and traditional methods, and often leverage new technology in their goal to better serve unmet needs.
Eric Ries, author of The Lean Startup, defines a startup as a “human institution designed to create a new product or service under conditions of extreme uncertainty.” While a risky endeavor, startup initiatives have the potential to create growth in a stagnant industry. Therefore many established restaurant brands are looking to implement a startup mentality into their innovation strategies.
Successful startups often use three main strategies that can help an organization find a new source of growth. These strategies include innovative company culture, agile processes, and customer centricity.
Innovative Company Culture
Innovative company culture is often a priority in a startup environment to constantly stay ahead of competition, maintain their position as a disruptive force, and attract top talent. Research of ideal Google teams, described in the book, Work Rules, found that one of the most important factors in building a successful team is “psychological safety” or the belief that each individual is heard, respected, and not afraid to express their opinion. Another insight from Google X’s “moonshot” department is that encouraging employees to fail is critical to generating innovative ideas. Therefore, “large organizations wanting to be more like startups need to give their employees the chance to fail safely” (forbes.com, 2015). This may not be an easy task in established companies, however, since the cultural norm is often risk-averse.
Restaurants can look to build a more innovative experience by fostering an environment in which employee input is valued and incentivized, and a failed attempt is seen as a positive step.
Another ability that startups often possess is agility. Lean companies are able to quickly adapt their services according to changes in the market, borrow ideas from unrelated industries, and test new technologies. While traditional companies may struggle through multiple approval stages and legacy systems, many startups are able to quickly take advantage of an opportunity. Experimenting with prototypes is seen as the fastest way to test new concepts, and products are often launched when they are “good enough” rather than completely developed (i.e., Beta versions), or in other words are a “Minimal Viable Product.” These methods filter out unsuccessful ideas quickly in a real-world environment and also lead to insights into the requirements for the next product or iteration. They can allow the company to be more nimble and respond to customer feedback in real-time.
Restaurants that want to be more agile and adaptable to changing market conditions may consider a more balanced approach between experimentation and risk-averse practices, and increase agility by entrusting employees to make good decisions based on their training.
Startups also thrive on finding an unmet customer need in the market and building solutions for it. For example, more convenient digital ordering platforms, such as JustEat, or subscription ingredient delivery, such as Chef’s Plate have gained popularity by eliminating customer pain points. Author Eric Ries (The Lean Startup) states that businesses “must learn what customers really want, not what they say they want or what we think they should want.” To this point, Apple’s Steve Jobs once said he was inspired by the Henry Ford quote, “If I’d have asked my customers what they wanted, they would have told me ‘a faster horse.’” Meeting an unmet need can build a deep connection with customers, and trigger growth. Startups often find these unmet needs through careful observation and empathizing and interacting with customers, or by trying to solve problems that are personal to them.
Restaurants that are looking to be more customer-centric must identify solutions to pain points in their experience.
Although risky, adopting a startup mindset represents an opportunity for growth. Knowledge of how to be more innovation friendly, agile, and customer-centric can be very useful in staying competitive in the market. Furthermore, established businesses generally have an advantage over startups: more resources, but they also have more to lose. Finding the right balance between risk-taking and safety is a key challenge that brands face today. And yet, it also represents a marketing opportunity, as many customers are excited by brands that are at the forefront of innovation.
What can your foodservice business learn from startup culture? How are you already implementing these lessons? Let us know in the comments below and subscribe to receive the latest Shikatani Lacroix insights in your inbox.