Tag Archives: Business model

Ghost In The Machine

Foodie Friday and my question for you today is have you ever been to a ghost restaurant? I’d say probably not, because the entire point of a ghost restaurant is that there is no restaurant there. Huh?

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(Photo credit: Wikipedia)

Here is one explanation I read:

A ghost restaurant is a “restaurant” that people can’t actually physically visit. For us, it involves using our existing space, kitchen equipment, and staffing to execute a menu that’s not served in our normal restaurant. Customers place their orders and we deliver.

The key is the different menu. A normal takeout order from someplace would be the same food. Many of the “takeout” places I’ve patronized have a table or three even if the business is focused on preparing orders to go or for delivery. You probably would think of many Chinese or pizza places. Ghosts, however, don’t have to worry about decor or servers per se. Front of house is non-existent. Imagine a sit-down steakhouse that was also delivering pizza out of the same kitchen but not serving it in the restaurant other than as the odd special. Two restaurants, one of which is virtual operating our of one kitchen.

The beauty of this model is that it can overcome bad weather (which might keep people at home and not dining out) as well as maximizing the use of the kitchen, perhaps with the addition of a few more kitchen staff. You can close one restaurant at 9 while continuing to deliver from the other until midnight. Like on-demand grocery delivery, on-demand food service is a growing business and a ghost restaurant opened in an existing place can tap into that demand by formulating a menu that is delivery-friendly even if it doesn’t align with the base restaurant at all. I would never order eggs or a steak or pretty much anything fried because they generally don’t travel well (soggy fried food is gross).

Why do I bring this up and what does it have to do with your business? It’s a great example of out of the box thinking. How can you expand what you’re doing without major capital expenditures? What’s the worst, least efficient part of your business? In this case, while there is a nice margin in serving customers drinks, they tie up tables and require servers. What happens if you keep the customers but eliminate the need to have them linger or be served? A ghost restaurant eliminates the inefficiencies while retaining the base business and it doesn’t compete with it because it’s a different menu. What about your business can be “ghosted”?

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Filed under food, Thinking Aloud

Soap To Soda To Gum

It’s Foodie Friday and today we’re going to raise a glass to chewing gum. Well, not to the gum itself, but to the founder of the Wrigley Chewing Gum Company, Mr. William Wrigley. While he made his fortune selling gum, he started out to do something quite different and therein lies the thought I have for us today.

English: Doublemint gum Photo by User:Hephaest...

(Photo credit: Wikipedia)

Mr. Wrigley began selling soap. Like many of us in business, he tried to distinguish his brand by giving his customers a little something extra which would help distinguish him and his product from the competition. In his case, he would give away baking powder. After a time, he figured out that his customers liked the baking powder more than the soap and so he started to sell baking powder. Along with the baking powder, he gave away two packages of gum. You can guess what happened next.

There are two things in his story that I think are relevant to any of us in business. First, giving the customers what my Creole friends call a “lagniappe” – a little something extra – always pays dividends and sometimes they’re huge. I don’t know if Mr. Wrigley’s soap (or baking powder) were premium-priced to cover the cost of the extras he gave away, but the outcome certainly negated any cost. Always ask yourself how you can do more for the customer.

At some point, Wrigley realized that he had to pivot his business because his sideline was more successful and popular than his main business. He’s not alone in this. WeWork grew out of a baby clothes business renting unused space in their building. Instagram was something that grew out of the users of a whiskey lover’s app posting photos. The founders recognized that the photo sharing was more important to the users than the whiskey information. When Justin.Tv began letting users stream videos, (having started as just one guy streaming his own life) the “gaming” channel blew up and Twitch was born.

We need to keep an open mind when we see opportunities. Yes, we can’t always be chasing the new shiny new thing, but when one aspect of our business is screaming to be given a lot more attention, we need not be afraid of making a pivot. Mr. Wrigley pivoted (twice) a century ago, and while technology has changed, the basic business acumen he displayed hasn’t. Ruminate about that!

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Filed under Consulting, food

The Ludovico Technique

One of the most uncomfortable scenes in all of film is the scene in “A Clockwork Orange” in which Alex is made to watch scenes of horrible violence for an extended period of time. His eyes are held open and his head is immobilized. This is part of the fictional aversion therapy known as The Ludovico Technique. It’s forced attention to something.

That’s what a good chunk of marketing has become today. What got me thinking about this was the announcement by Snapchat that they will test a new ad format called “Commercials”, which will be unskippable six-second ads that run in select Snapchat Shows. You want to see the show? Then you WILL watch the ad. It’s not all that rare anymore for various media to force your attention. Been in a taxi lately? Maybe you were subjected to TaxiTV. Nonstop noise and motion that, unfortunately, we humans are wired not to avoid. Maybe your attention was grabbed at the gas pump. $15 of gas and a headache from the TV screen blaring the latest headlines and ads. Or perhaps you didn’t have your headphones on as you waited for your flight to leave and the sound of the overhead TV (and the ads) interfered with your reading. YouTube has a “skip” button after 5 seconds for longer ads but also sells unskippable 6-second ads.

All of these things as forced attention. Disabling the fast-forward button during VOD playback is another. I am well acquainted with the attention-value exchange. We give you free content, you give us your attention which we then sell to sponsors. I made a career in TV and media based on it so I’m a fan. I’m not, however, a fan of taking that attention without consent. You can always change the channel or flip the page if you want to skip the ad. The examples above don’t give you that option.

So where is the issue? Not with the media. Our job is to provide the sponsor with the opportunity to sell something. If the creative is awful, people leave. The focus needs to be on making ads that people want to watch. There is an ad running now with bulldogs substituting for bulls during the Pamplona run. I watch it every single time. There are many other great examples of ads you wouldn’t skip even if you could. Forcing consumers to watch is stealing their attention. It’s subjecting them to a bombardment of crap with any shelter available. Does that sound like a great way to do business?

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Filed under digital media, Huh?