Josh Sharkey: Wow. So can we, can we get in a little bit of the, of the weeds of, of the answers that came from it, because Sure.
It looks like you had, you got some sort of, you know, some wild ideas and then sort of narrowed it down a bit. It was like a manufacturer. I don't know if you remember any of these. I actually pulled them up too so I can share 'em with you. But yeah, no, I mean I've been, they're, I have them all pretty, yeah, pretty committed to memory.
Yeah,
Eli Feldman: just throw it out there man, because I think there's some interesting ones. Yeah, I mean, most of them actually were ones that I fed the LLM to get it to understand, you know, and sort of part of the inspiration [00:04:00] recently for this was I actually looked at the New York Times, 'cause I thought it was a really interesting point of reference here.
I think we're both kind of 19th century industries that are struggling in the 21st century media and restaurants. And the New York Times has figured it out. And I think a lot of the reason they figured it out is that they reframed what they are. They're in the news business, which doesn't make any money.
And so they realized they were actually in the attention business and started buying companies like Wordle and investing more in cooking. And so they're basically using entertainment and attention to subsidize. A no profit business that is media and or news. And not to be Debbie Downer about the restaurant industry, but we're also kind of a low to no profit business that needs other ways of thinking about making money.
And um, so that was sort of where the reframing came in. So some of them are, like, one of them is around that, [00:05:00] you know, restaurants are an increasingly large canvas for attention. I mean, you can't open a publication these days without seeing someone talking about restaurants. I did a back of napkin sketch with someone a while ago, and it looked like the average American follows about 12 restaurants on Instagram.
When you actually take the sum, you scrape the sum of all Instagram followers, uhhuh for all restaurants, and divide it by the denominator of the number of restaurants. We're following about somewhere between nine and 12 restaurants per person. So we're canvases for attention, I think. You know, one of the ways I talk about restaurants when I talk to, when people will listen is, you know, we are sort of the last bastion of industrial manufacturing.
You can think of a restaurant as you can reframe it as a sales and marketing floor, and a manufacturing facility jammed right up against one another. And I think a lot of our problems actually in challenges and opportunities as an industry are rooted in that simple [00:06:00] sort of first principle.
Josh Sharkey: What, and so, I mean, I think it, it's obvious obviously when you start to dig into it, but, but can you talk about some of those challenges?
Eli Feldman: Yeah, of course. I mean, I think it's, it's pretty relentless, um, these days. You know, you've got increasing cost of food, you've got increasing cost of labor, um, rents and occupancy costs are going up, you know, nationwide, I think we're around 4% average profitability as an industry. I've been doing this long enough to know when, like that number was double that triple that.
Quadruple that. Granted at times that was rooted in exploitation, and I'm glad that we're not doing that anymore. But we also employ one in 10 people and 4 cents on the dollar doesn't, doesn't bode well for all the people who rely on this industry for their, for their livelihoods. Yeah. If you're lucky, there's 4 cents on the dollar.
Josh Sharkey: Yeah. You know, I wonder like what other industries are there where [00:07:00] you manufacture and also sell in the same vertically integrated building?
Eli Feldman: It's, it's wild. It's really hard to think about what they are, uh, in the modern day. And that's why I think, you know, we really do need to look at some of these 19th century models that are still in existence and how they're shifting.
You know, it, it, it became economically indefensible to produce things in cities a hundred years ago. And so really all we make in cities now is food. Like in, in, in a, in an atomic world, I guess you could say we make, we make stuff in bids, but you know, you make stuff where land and people are cheap and you sell it where land and people are expensive and that just doesn't work for restaurants.
And sometimes we'll make the analogy of like, imagine you had a car dealership and you just got raw steel shipped in the morning and then you were like, oh, let's make a car today. Yeah, exactly. And [00:08:00] then a bunch of people rolled in at like seven 30 and were like, Hey, you guys got cars?
Josh Sharkey: Yeah.
Eli Feldman: And by the way, the, the rest of the
Josh Sharkey: steel you had to throw out the end of the night.
Right? Um, it's, yeah, it, it there. I I'm, I'm actually just trying to think as you're saying this, har what other industry does that and there, I, I can't think of one and, and especially one where everything is so perishable and where the business is so transient because restaurants are also an experience, but.
You know, you have to sort of pump these folks through this restaurant. You can't just have them sitting there all day because, you know, the real estate's really expensive and unless you're actually charging to be there, which you're not, um, you can't afford to just have them there all day long. So it's like a quick
Eli Feldman: experience as well.
It's, and you know, like in like anything in the world, I think our greatest strengths are also our greatest weaknesses. And, you know, I'm on a, I'm on a really strong kind of first principles kick, and I think when I think about restaurants, one of the ways that, [00:09:00] one, another one of our challenges is that we increasingly live in a world that's a mixture of atoms and bits, just generally in the 21st century.
And restaurants exist almost entirely in the world of atoms. And anything that exists just in atoms in the modern day seems like it kind of struggles.
Josh Sharkey: Yeah. I mean, I, you know, there's, and for, I mean, I think everybody probably knows, but atoms being physical things, bits being digital things. Yeah, sorry, the, the.
There are mean, there are a lot of restaurants that are 60, 70, 80, 90% digital in terms of their sales. Right. Where like a lot of the, whether it's kiosks or Yep. Or online ordering. So I think there is more of that, you know? For sure. And then there's things like wonder where there's an aggregation of, of IP and sort of a simplification of like, manufacturing so that you, you're almost like just doing the last mile of manufacturing.
So I think that there's, there's definitely some new things popping up, but [00:10:00] I agree. I think How do you, how do you change the, I mean, 99%, 99.99% of the restaurants or food businesses are not that you can't just pivot,
Eli Feldman: you know? Yeah. On a dime. And I think, like Wonder to me is one of the most fascinating companies in the food space right now.
Um, because I think that he's. He and that team are doing the reframing themselves and they're just putting it to work. And you know, I think they also recognize like he started, or they started, as I understand it from a place of attention, he started by locking down ip.
Josh Sharkey: Yeah,
Eli Feldman: well, I mean, and then he acquired taste made
Josh Sharkey: specifically to Right to, to market and advertise all this stuff that, that,
Eli Feldman: yeah.
So this end-to-end sort of distribution to content, to media, to food production, like the, the end-to-end verticalization of that I think is really, really fascinating. Most restaurants aren't that. What's interesting to [00:11:00] me is that we figured out how to bring the least profitable elements of restaurants into the digital space.
What's that? The food like the only, like what we figured out how to digitize was the commodity, the movement of generally pretty commoditized products from one place to the next. That's what DoorDash does. Yeah. That's what Uber does. That's what all of those companies are doing. But like, I think if you want to unlock things that are really game changing for restaurants, you wanna figure out how to bring more of the experience into the digital world.
Like I played around a while ago, and I think I mentioned this to you on our call, I played around a while ago with Matterport, the real estate thing. Mm-hmm. Yeah. And just stood in our restaurant and did the whole restaurant. And then frankly got in touch with some 18-year-old kid in Indiana and he built the restaurant on Roblox for me.
And I was just curious, what does it look like to [00:12:00] bring a restaurant into the digital space? And then what do you, what do you do with that?
Josh Sharkey: I mean, know there's, you know, there's companies like tables that are helping you sort of book a table, but what do you do with that? What, what else do you do with that?
Uh, at
Eli Feldman: this point I've
Josh Sharkey: honestly done
Eli Feldman: nothing
Josh Sharkey: with
Eli Feldman: it. 'cause I can't get it
Josh Sharkey: to, well, I mean, what do you think, what, like, what are, what are some things you're thinking that you would, you would do with that? Yeah,
Eli Feldman: I mean, I think that. I think that there are applications, I think I've been exploring for a long time, how do we, how do we monetize attention in restaurants?
And that might be something that people don't like and I imagine they probably won't. Um, but we need to find new high margin revenue streams in this industry one way or another. And attention seems to be the dominant currency for higher margin revenue. And so one thought is, would Diageo pay for digital real estate in a restaurant?
I bet they would for major food group. Mm-hmm.
Josh Sharkey: If the grill
Eli Feldman: they,
Josh Sharkey: they do often for some of these places, whether some glasses and things like that.
Eli Feldman: [00:13:00] Yeah. And you know, there's, none of this stuff is new. It's just not 21st century.
Josh Sharkey: Yeah. One of the articles that I read you were talking about, it was a really, really interesting premise that potentially delivery is undermining the social purpose of restaurants.
I'm, I'm kind of paraphrasing. You, you said it much more clearly than I think I did. Yeah. But maybe just, you know, talk about that. Well, let's talk about what, what do you think is the, the, the purpose of the restaurant because I do feel like they've become a lot more commoditized and we've kind of decoupled experience from product and, uh, and also brand because so many things are now like just delivered to your home.
That how much of that is actually the restaurant now? And, and are they just a manufacturing facility? And at that point, you know, what's the, is the economic model different anyways, all that to say. Maybe just, could you just talk a little about like why you think delivery might be undermining social purpose of restaurants and what that purpose is?
Eli Feldman: Yeah, I mean, I think the social [00:14:00] purpose of restaurants, and I just wrote about this and it's something that's been with me for 15 plus years now. Um, there's a Harvard Primatologist, his name is Richard Ranum, and he did this really interesting, has this really interesting sort of cooking hypothesis, which is that.
Literally the ability to control fire and cook food is what turned us into the species. We are homo sapiens, blah, blah, blah. Um, because it, at a, at a biological level, it unlocked calories so we could consume more calories. And the surplus of calories went to B, essentially went to growing a prefrontal cortex that made us humans.
But he also talks about how it created, like this sense of hearth and how that facilitated empathy and, you know, different types of connection. And I believe that's still true, hundreds of thousands of years later, that restaurants fulfill that, [00:15:00] that platform for connection and extension of empathy and relationship.
And you lose all of that, for the most part in the context of delivery and. I think it's borne out in a lot of different ways. I think you, I don't, I don't think, I don't think you can decouple sort of the epidemic of loneliness in this country from things like phones and things like food delivery. And I also don't think, maybe a little hyperbolic here.
I'm not sure you solve a loneliness epidemic, which is something that the Surgeon General has said We have in this country, I don't know if you solve it without restaurants. They're the social infrastructure for cities and we're an urban people. Yeah.
Josh Sharkey: But it is, it is siloed social interaction. It's not like going to a, to a gathering of lots of people that you interact with together like a bar.
You know, you're going with the person that you're with. [00:16:00] But I do agree that there's, you know, because you can sit at home and have a meal and it's just brought to you instead of going to the restaurant, that's still some social, you could have friends over and do the same thing. I. Yeah. I just, I think,
Eli Feldman: and, and, uh, I don't claim to have the answers to this, I just tend to be pretty curious and explore, have spent the last couple years really exploring it through substack and through reading and a lot of AI research help.
Um, but you know, I, I hear you. I do think that there's more ways that we socially like engage all the senses in a restaurant, whether we're just interacting with the guest around us, like our proximity to larger groups of people, our comfort level in larger groups of people. Like Yeah. Even if they're not interacting with them, I think there are a lot of things that happen to us.
No, I think you're right. I think, and, and
Josh Sharkey: there's, you know, at home obviously you also, there's a lot less impetus for it [00:17:00] being. Special, you know, you could just literally stand up, open the box, and e even if it's a, if it's something, you know, nice. You know, especially with kids, whereas, you know, at, when you, when you're at a restaurant, it's very intentional.
You're sitting down, there's music, there's lighting, there's a server that's gonna come talk to you and you're gonna talk back to them and you're gonna ask questions and you'll probably have a little bit of an interaction with them and maybe the people, um, you know, at least at the host end. And there's, and there's, you know, you're, you're getting dressed into something to, to, to go there.
There is, there is a lot of intent there to have social interaction. It's, it's a really interesting point. Like, I wonder how much of our loneliness has now been impacted by delivery.
Eli Feldman: I, I, I do think that it, I do think that they are very much connected to one another and like, there's a couple like super geeky, but you spend a little bit of time with the American time you survey, which I would not recommend anyone does you.
And you see how much time people spend eating and consuming food and it's. [00:18:00] You know, hundreds of billions of hours a year. And I think by 2030 they think that 60% of that will be food away from home. That's crazy. And so, like, when you think, when I think about my own dinners, like if I'm at home with my wife and a three and a half year old, dinner is 15, 20 minutes of like actually like focused sitting and eating.
Mm-hmm. And if you're three and a half, it's not even that. So versus 90 minutes and like they're just radically different. One is a biological need, another is like a social three dimensional thing sometimes.
Josh Sharkey: Yeah. I wonder, I mean, I wonder if that's a new thing too though. I mean, I remember even just growing up dinner was a, you know, we sat down and it wasn't very delicious, but, you know, you'd sit down and you'd have a, you know, you'd be there for 45 minutes and talk and talk about your days.
And I mean, I don't remember if that how it was when I was three. Um, I know my two kids. We can't keep in the [00:19:00] table for more than 10 minutes, but, but my wife and I, we'll try to stay longer.
Eli Feldman: Yeah. And I, I it might be, I mean, certainly a lot of life has sped up.
Josh Sharkey: Yeah. And
Eli Feldman: I wouldn't be surprised if like proportionately it's that sped up as much as everything else.
Josh Sharkey: Yeah. You know, it's interesting. I was gonna ask you about, you wrote an article and I think it was about in reference to that, that gentleman, Mr. Rangu, about potentially cooking being what made us human. And um, it made me think right away of, uh, Yuval Noah Hari. Yeah. His, his contention being that, um, cooperation in, in large groups is what made us human in the ability to actually assemble into, into larger groups.
I'm wondering like, what do you think about the, uh, about those two? About the, you is he right, is cooking right?
Eli Feldman: Is it both? I'm not sure that one didn't pre, I'm not sure that rang, them's thinking, didn't predate RAs a little bit like could you have gotten to cooperation without increased caloric intake and sort of that.
The function of [00:20:00] cooking in the context of That's a good point. Yeah. It's like a leading indicator. Yeah. I think like a lot of this, like anything in the world, like a lot of it boils down to biology and chemistry and physics. And if you didn't change the biology, the chemistry and the physics, I'm not sure you would've gotten to where Harari thinks we are.
Um, and I, I, I agree with both of them and I don't think they're mutually exclusive in any way.
Josh Sharkey: No, that's a good point. Yeah. 'cause to, in, in order to cooperate in, in large groups, there had to be enough food, right. Uh, and safety that, uh, you could do that. And that's, I'm sure
Eli Feldman: cooking was a big part of that.
Yeah. Man. Josh, you can cut this part out, but like. You are, you're, you're going deep cuts on this conversation. Oh,
Josh Sharkey: you know, I like, we don't have to cut this out. I, I, no, I love it. When I started reading all the, uh, uh, you know, all your substack, which I, you know, I, I should have read a couple weeks ago. I was like, oh man, this is, this is fucking cool.
Let's,
Eli Feldman: you know, let's take into this. Yeah. And the whole, the whole [00:21:00] purpose, like, I think we need to be thinking more and differently about restaurants. That's the whole thing about the, the newsletter is like, I just, we need to be bringing cool minds, curious minds together to think about restaurants in a little bit of a different way.
I'm trying to spark that a little.
Josh Sharkey: Yeah. So I mean, I mean, you talked about subsidizing the non-profitable part of, of a business. Right. In, in New York Times case it's news in restaurant's, case it's food. Sure. Um, what have you thought about some ways in which you could subsidize that?
Eli Feldman: Yeah, I mean, I don't know how far out here we want to get, but like, I certainly think that like restaurant as ad platform, restaurant as attention marketplace is one that I think a lot about.
I think we're a matter of a couple years away. Some of this, again, gets a little creepy and kind of Palantir esque, but I think that we're gonna be using, I think restaurants should be making money off of helping train large behavior models in the next five years. How so? Computer vision, I mean, there's a lot of privacy [00:22:00] issues, and don't get me wrong, I'm not necessarily in favor of this, although I am generally in favor of being creative about how restaurants might make money.
But you know, the large language models have already consumed most, I believe, of the digital content that's out there. And in order for them to continue to evolve and grow in the way that they have over the past three years, that's blown us all away. They now need to start to understand the physical world.
Yeah. And I think that there's a place for restaurants to make money in that. I think. Not to talk your book at all and. Why you're not an ingredient marketplace. For me to sell my data to Proctor and Gamble and Kraft Heinz as 60% of the food dollar moves to restaurants, they need to know where we're at.
And you have all my ingredients.
Josh Sharkey: Yeah, believe me, it's, uh, it comes up often. Uh, most for us it's mostly about, um, figuring out every [00:23:00] way that we can protect IP while still helping restaurants make money from their ip, which is what we're thinking about. But great. Glad to hear it's, I I do think there's a huge opportunity for, I mean, we have, like, I don't like a million recipes and me right now, and the actual recipes from restaurants all over, you know, all over the, well over the world.
And there's so much valuable data there to help understand more things that I would love for the restaurant to make money, to be able to like monetize that. But it's, it's interesting you bring up. Language models was sort of like this first phase, and now there's all this sort of like spatial models so that you can understand the, the world around you.
But there's also, I mean, I don't even know how they, they get to this, but if you think about, um, truly learning the value of taste and quality is going to take also understanding olfactory senses and reaction to certain things. And I mean, you can, you can sort of dial in the [00:24:00] science of why a food is this much salty, this much sweet and, you know, the, the, the, you know, the brooks level is this and, but at, at some point, you know, humans obviously like, will react to that a certain way.
And like, I think it's super interesting to figure out how do you, how do you start to learn that? Like how do humans interact with certain levels of sweetness balanced with this salt and this badness with this acid? Because that's what we do as chefs, right? We, we try to, uh, you know, we're creative, but we also have to sort of balance food and create something that's satiating.
I have to imagine that it's probably a long way away. Recipes are terribly terrible in ai, in AI right now, but I think there's definitely a future where that also can be understood. Why does somebody, why do most people like this thing? You know, there's a, there's a fattiness to it, but there's also enough of this acid and there's some sweetness and what's like, what's, what's similar about that?
You know?
Eli Feldman: Oh, and I, I think that those things are out there now and it's gonna be like, if you [00:25:00] think about the food scientists behind Mondelez and Nestle,
Josh Sharkey: yeah.
Eli Feldman: Like those, it is, if it's not already happening, I would be very surprised that no one, if someone isn't baking into an, a sort of specific LLM model or a pointing an LLM model towards understanding that.
I forget what some of the names of the companies are. There's one here in Massachusetts, it's called Chew.
Josh Sharkey: Mm-hmm.
Eli Feldman: Does a lot of work with like Mars and stuff like that. Yeah. But why is the future of restaurants franchises? So I'm definitely prone to hyperbolic headlines. I will say that I don't. Okay. Yeah.
We,
Josh Sharkey: I,
Eli Feldman: I,
Josh Sharkey: I don't think that you believe that a hundred percent restaurants, franchises, but you wrote an article for, for context that, that that futures franchises.
Eli Feldman: So the thought there is like, if you think about what a franchise is, it's an operating system and, you know, I, [00:26:00] and it, it's an instantiation of expertise at some level is what a franchise is all about.
And when you marry that up with knowledge bases and rag retrieval, augmented generation, like, so basically just, I have a file full of stuff that has a bunch of knowledge in it. Mm-hmm. Point an LLM at it, and then you can just kind of start to ask it questions. Yep. The idea that you could have the combination of knowledge bases and ag agentic tools in the context of a franchise.
So like, you know, getting a little out there and probably, I'm probably, I've been told I'm five to 10 years ahead of in my head of where the technology actually is. But you know, something going into Chad GBT operator going into toast on its own and pulling a bunch of reports and telling me how I should schedule next week and it gets me 80 to [00:27:00] 90% of the way there.
But then the human element of it doesn't know how Claire's feeling. Yeah, it doesn't know that. Joe gets tired if you put him on more than two doubles. This show is brought to
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You know what's interesting is I remember, oh my gosh, this was, this had to been 10 years ago when I first started. Using seven shifts at one of, uh, one of mm-hmm. One of my restaurants and, um, Jordan was Jordan Bosch, the founder of, of Seven Shifts. He was thinking about how to train, um, this model to like understand how to, how to, um, predict how much to how to schedule your, your restaurant.
And I thought it was so interesting. I mean, this was 10 years ago and he, and he and I asked him like, what, like, are you using regression models? Like, what are you doing to, you know, he's like, yeah, you know, we have, you know, we, we obviously like, are looking at forecast and things like that. And Jordan, you can correct me if I'm wrong here, but I remember him saying that [00:29:00] the sentiment from the, from the employees was one of the main drivers of how to think about scheduling.
Meaning like, after each shift, asking each team member, did you feel overwhelmed? Did you feel like it was too busy, not busy enough? And they would use that information to inform, like, is this, are you scheduling? You know enough people? Is it, is it too many people? Is it, is it not enough? I always thought that was so interesting.
I don't know what he's, I kind of, I have to ask them how they've sort of doubled down on that, but.
Eli Feldman: Yeah, it's interesting that most of the scheduling tools do have sort of like a, a sentiment thing for the staff on the back end, and I also think it's telling that every one of the tools gives you the option to turn it off if you're the operator.
Yeah. Which I think is interesting. Um,
Josh Sharkey: so if, if more and more restaurants are gravitating towards franchising, right, licensing their IP and, and scaling, you know, because they're able to, to standardize and operationalize like this idea that they have, uh, what does that look like? You know, what, what are restaurants that are [00:30:00] today not that, that you think will be, will be that, uh, you know, in 10 years?
Eli Feldman: Yeah. I think this is my great fear is like, I don't think, I don't think the dystopian future of the restaurant industry is the death of restaurants. I think it's the homogenization of them and that those who have. Fast, casual, kavas, sweet grains of the world will continue to have and aggregate more. And I think that's in one potential future to the franchise.
Like the, where this technology might take us is sort of accelerating kind of power laws and the those who have get more and those who don't have, get nothing. Um, and the hollowing out of the middle. But I, I also think that there's a world where, you know, I have a three location restaurant. We have three shy birds all within three miles of each other.
I also have friends who run restaurants in Philadelphia, and [00:31:00] I was down there two last month for the chef conference and got to talking with Greg Vernick briefly of Vernick food and why, if he has a landlord who's interested in all day activation, why should he start from scratch? Yeah. Like there's also ways, and it's interesting, I love that you brought up cooperation earlier.
'cause I think like one of the paths forward for us as an industry I think has a lot to do with like, how do we cooperate where it makes sense? Like obviously yes, in some ways we're competing with each other, but in a lot of ways we're not. And we're actually competing against DoorDash and we're competing against Netflix and we're competing against any disposable way someone might spend their money and That's right.
So I can see a world where like it's more micro franchises and you know, I think in the article I talked about, you know, then you start to [00:32:00] think about new forms of ownership and blockchain and like what is the idea of maybe, you know, a young person who loves restaurants having a micro ownership in a franchise.
That's interesting. Yeah. Yeah. I think there's a lot of different ways we can start to think about this stuff a
Josh Sharkey: little differently. And. I mean, I think I, I think one of the, one of the opportunities that will just become more ubiquitous, that happens today, but it actually only happens, I could be wrong here, but at the, but I think at the highest level, both in terms of very highly scaled, fast casual QSR restaurants and then the great, you know, full service brands in that they, they so deeply understand their customer.
And a lot of this is technology, but some of it's analog. So if you think about major food group, you know, and you, or you think about and you think about carbon, you know, very good food. We, you know, is it the greatest red sauce in the world? I think they would agree. It's probably like, you know, it's, it's really good, [00:33:00] but they create an exceptional experience because they know every single thing about you.
You know, the first time you come in there, they start to index that. And every single time, that's, that's a much more a part of their special sauce is that they are so good at crafting an experience for you and they're maniacal about it. And that will become easier for, for more people to do. And really, that's to your, to your point of like, this is a social experience.
As much as it's food is like that's, that's important is, is, you know, obviously you don't wanna be invasive, but I wanna know that when you, when you came in, you love this thing and you thought that, that this, uh, this, you know, this, this drink was really interesting and you, and you hated this table that you were at and you were with your girlfriend and you proposed or something, and now you're, you're married.
You know, all those things are like ways we can just make a better experience for you. And it used to be very hard to do that. You just make notes and then, you know, and a piece of paper. And it's become easier now. And I think the more that that becomes [00:34:00] easier and easier, the, just the more power these, you know, restaurants will be able to have to, you know, whether you have six customers in your restaurant or a hundred, you gotta give them an incredible experience.
And the more that you do, the more, the more you'll get. Um, but it's not easy to do
Eli Feldman: today. It's not easy to do and I, I, I do question whether it actually has gotten easier, frankly, because I think there's two sides to every coin. Like when we created Open Table guest notes to have sort of a sustained, persistent understanding of guests, I would argue we also atrophied the maitre d.
Yeah. And like that's a 10, that's sort of like a second order effect of these technologies is that they tend to create disengagement in the actual human level. Because now you walk into a restaurant, we've all felt it, like you walk into a [00:35:00] restaurant and a host might look down at Open Table or REI for a table recommendation.
No longer be making eye contact, no longer be thinking about me as the guest and where might I might be most comfortable. And just looking down at an algorithm saying 44. And there's a lot of history in this. Like there's a wonderful book by a guy named, um, Nicholas Carr called The Glass Cage, where he talks a lot about sort of the flip side of technologies that, you know, when planes became basically started flying themselves, you then had to create all of these reasons for the pilot to stay engaged.
And like he talks about that. And I think there's an analog for that. I think I wrote something about this years ago before I even had the substack, like, like when OpenTable went from dating myself here, slot based to an [00:36:00] algorithmic system, we kind of destroyed 125 years of what it meant to be a mare D and traded it for.
Basically a CRM. Mm-hmm. And so I, all that is to say like, I think some things have gotten easier, but other things actually are harder as a result of the technology at the high end.
Josh Sharkey: Yeah. I feel like, but I, I, that seems like an easier solve to, than the, than the flip side of how do you make sure that you stay engaged with your customer if things get, you know, if the, if the, the ability to index more and more of what makes them them when they, when they come back, you know, that part, the, the engagement.
I think the, the, the more that we take things off their plate, the more they can spend, you know, at the end of the day, you know, especially, I mean, kiosks are, are becoming more and more ubiquitous, but it doesn't remove the, the, the person in front. It might just mean that there's, you know, much less of them, but then their job becomes engagement, you know?
Eli Feldman: Yeah. And, and, [00:37:00] but I, I do think that there's a trade off there is like when you're doing less of it and it's starting with a computer interaction, do you stay as sharp at it? It is a muscle like hospitality. Yeah. Empathy, connection is a muscle and yeah. If you don't exercise it, it will atrophy. And I do feel like you see a little bit of that in the industry these days.
Do you remember,
Josh Sharkey: I don't remember all the context behind it. Do you remember, didn't Danny Meyer roll out some things with Apple watches that to help servers understand a little bit more about what was going on? I remember that
Eli Feldman: being like an early thing in conversation with resi. Like in the early days of resi, they were gonna do like alerts and notifications from Yeah.
The host stand to Apple watches. You know, I do think we're headed, we're very much headed down that path, like. Only meta glasses,
Josh Sharkey: things like that probably are, are, are a [00:38:00] better, you know, tool. I mean you can literally be looking at someone and get information, but that's a whole other skill you have to learn then too.
Eli Feldman: Well you do and you don't, I mean, you put on a pair meta glasses and you marry that up with the idea of, you know, I think they've gotten LLM models to be able to understand like 95% or I don't know if they're LLMs or something else, but like you get a proper read of emotion on someone's face. Yeah.
Josh Sharkey: What's funny is I'm actually terrible at that. There are so many times when like, I, I have trouble reading the room. I mean, my, my wife will tell you this firsthand and um, I would take meta classes just for that. I, I, that's, it's a funny idea. Uh, a couple weeks ago I almost got a pair and I was like, you know what?
They're just not there yet. There's not enough that I would do, 'cause I'd wanna like remind it, like capture notes and things like that. And it's not, it's
Eli Feldman: not there yet, but. Yeah, and I just, I actually did just buy a pair and would tipped me over into it. And I haven't, I literally, this was two days ago, so I haven't done anything with them yet.
The [00:39:00] translation as someone who's working in restaurants Oh yeah. 50 to 60 hours a week. The idea that, how does that work for, in the glasses? I, I don't really know yet, 'cause I haven't even tried it. But essentially you can, I think there's 23 languages you can choose. You have to download them to the glasses, but then when someone speaks to you in Spanish in ear, it's coming to you in English.
Josh Sharkey: That's nuts.
Eli Feldman: Oh, okay. I might need to get 'em just for that. I didn't realize that, that it did that. Yeah. And I, I, I do think like the unlocks of some of the technologies for restaurants where we haven't gotten them yet, but they're coming, they're coming soon. I think a big one will be around translation and yeah, actually meaningful connection between the diverse communities that actually make restaurants happen where.
Communication mechanisms can be really challenging. And how do we actually start to bridge some of that, I think could get really, really fun, really fast. Yeah. [00:40:00] I mean, with your product, like we have it, we have two tablets set to Spanish. One tablet sent to Portuguese and one tablet and one tablet set to English.
Yeah. And like what is, I'm sure, I'm sure a lot of operators use your
Josh Sharkey: Yeah. A lot. It's a lot. It's a lot of Spanish. It's funny, it's, it's uh, there's like this influx, uh, in Japan, uh, that they just, you know, they found us via, you know, our self-serve sign up. 'cause we were seeing all this Japanese people reading, you know, Meese and Japanese.
Interesting. But yeah, I mean, look, I think recipes are a great example of that. Uh, they are pretty, pretty translatable. Um, there are obviously, there's some challenges there, but I think there was one article you had about the trillion dollar tech company or the trillion Dollar Tech company draft or something like.
Yeah, and I think I remember like you putting like Louis Vuitton as one of the, um, you, I you had, you had sort of, uh, forecasted what you thought would be the, the trillion dollar company in food [00:41:00] tech, whether it was Square or Coast or DoorDash or Blackbird or Blue Vuitton.
Eli Feldman: Yeah, I, yeah, I did it. I, I do believe that someone will build a trillion dollar business on top of the food service industry.
Um, now I get
Josh Sharkey: When you say trillion dollar, do you mean trillion dollar valuation or trillion dollars in revenue valuation. Okay, gotcha.
Eli Feldman: Yeah. Okay.
Josh Sharkey: Yeah. Yeah. So
Eli Feldman: like, you mean like a hundred billion dollar revenue? Yes. Yeah, so I was saying market cap of Gotcha. Okay. Trillion dollars. That's largely built on the back of restaurants and food service and yeah.
I put Louis Vuitton on there because I think, you know, when you see. The migration from goods to experiences, affluence is pointing itself more towards goods, towards experiences than goods. And that's been going on for a while. And you can actually see it in Louis Vuitton's behavior in that they started buying up hotels.
[00:42:00] They just bought LaMi Louie in Paris. They're buying up and consolidating just like they consolidated luxury goods in the form of fashion and purses. I see them on a somewhat of a path to trying to do the same thing in the luxury goods segment or luxury goods, luxury restaurants. Um hmm. But then they also, when you think about what they did with makeup, there's Dior, but then there's Sephora and they're both LVMH companies.
And so if they start to, if I'm even incrementally right about this. I,
Josh Sharkey: that's why I put them on the list. It's interesting. I never thought about that, but it makes it, it makes a lot of sense. It's tough to get, I mean, there's only a trillion dollars in revenue in, I mean, it's only in the US it's a trillion dollars in, in, in restaurant revenue in the us So I, I don't know how much there is worldwide, but yet you, you kind of have to be either owning the, the sales or having an insane amount of [00:43:00] market penetration and owning a part of the transaction of the sale.
Well,
Eli Feldman: and and I also think that there's, yeah, but like, I think my number, I think, I can't remember, I think my number one draft pick might have been DoorDash, but like if you kind of game theory this out, and I find it terrifying. 'cause I, I really don't like DoorDash as a company, um, at all. Why not? I just think they're parasitic.
Um, tell me more. Brilliant but parasitic, I think it was his second quarter earnings call in 2024. The, the founder clearly a genius. Someone asked him a question of like, why restaurants? And he said his answer was something, and I'm, I'm gonna almost get it verbatim, but I'll, I might be off a little. We knew that if we penetrated the network with the most nodes in the physical world, we could go anywhere from there.
And we determined that restaurants have the most nodes in the physical world. [00:44:00] Yeah. I mean, brilliant. Yeah. Right. Borderline psychopathic in my opinion. Um, and then there was also the path by which they just went and scraped menus and didn't really care about whether the restaurant wanted to do takeout or not.
I think that was sort of the early days of them. Sorry, I geek out on this stuff, but like I happen to go look at what Chef's Warehouse, the market cap for Chef's Warehouse, it's around three and a half billion right now. Right? Give or take. Yeah. Yeah. Imagine DoorDash buys chef's warehouse. They have the distribution, they have, they have logistics and distribution.
They're kind of flanking the entire industry at that point. Yeah. You're reading rumors about DoorDash buying seven rooms. Yeah. I mean, chefs Warehouse is a pretty small
Josh Sharkey: player in the, in the space I, I'm saying of distribution space. But yeah, like if they, if they bought Cisco or something, that would be a Well,
Eli Feldman: and, and I mean Sure.
Sub it in like, and, but if you start to think about how someone all a company like DoorDash might need [00:45:00] to do is penetrate the supply chain Yeah. In a meaningful way. And they could be off to the races on that.
Josh Sharkey: Yeah.
Eli Feldman: I mean, what's, what's, what's DoorDash
Josh Sharkey: market cap right now? I wanna say 70 billion. Yeah.
'cause I think Cisco's around,
Eli Feldman: you know, 40 or something like that. Yeah. So my understanding at my core, I'm a restaurant manager, so I don't quite know. I have no idea what my understanding though is that that's not possible. A $70 billion company can't acquire a $40 billion company, but I could be wrong about that.
Oh, I'm sure. Yeah. But at any rate, it's, it's really just about like. I do believe that this is where DoorDash is trying to get to, is to really just sort of flank the entire industry. They do a lot
Josh Sharkey: more than restaurants now, though. The other day I ordered salt pellets for my water filtration system on DoorDash from Home Depot,
Eli Feldman: and that's where the brilliance of that was Insight.
DoorDash, no, wait a second. That was Instacart. But DoorDash you probably could have on DoorDash. That's where the brilliance of the [00:46:00] insight is around recognizing restaurants, ubiquity. Like we are another way when we talk about how restaurants might make money in different ways. We are the last quarter mile distribution system.
Yeah,
Josh Sharkey: that's you. You know, it's interesting, you, I, I was just thinking about that when we were talking about, okay, how do we subsidize, how do we sort of add incremental revenue? If, I mean the, the amount of deliveries that these restaurants are doing, um, what else could they be sending when they're sending
Eli Feldman: this?
I have no, like, this drives me crazy. Like in some ways, and I think, you know, Ben Lals piece recently about like, what did restaurants learn from the pandemic? Like I really wish we had learned more about that. We, we never closed, we had opened, we opened our first restaurant Shy Bird in August of 2019. So we never, and we never closed a day for the pandemic, but we were delivering, you know, we were deliver physically my, [00:47:00] my business partner and myself at, at one point we had six cars on the road and we're delivering microwave popcorn tampons.
Like you could add anything to your cart. Yeah, like we could put anything on toast and then they could add anything to their cart. But I don't think that was ever gonna sustain post pandemic. But it does fascinate me that DoorDash knows what their top 50 SKUs are. Yeah. Why isn't there just a vending, some sort of locker in my restaurant that has.
The top 50 skews and someone adds it to their cart and we save a driver a, a trip, and then I get either lower DoorDash revenue share rates or Yeah. This seems very doable to me.
Josh Sharkey: That's interesting. Yeah. Especially if they, if they're, and, and that top 50 might be very different depending on geographically where you are.
So they could probably get pretty
Eli Feldman: granular about that too. Yeah, and I mean, I think it's, Lord knows, like packing food is a challenge and that's one [00:48:00] that we're, if anybody has any good solutions for ensuring that we don't forget a sauce, I am all ears. So, you know, then also forgetting, I don't know someone's paper towels, like you gotta think through how it actually works on the ground.
But we are, we're on every corner, we're on multiple parts of every part of every block, and we all have underutilized. Time or space, and how do we just think a little differently about that?
Josh Sharkey: Yeah. And I think, you know, it's, it would be easy to, to say, well, wait a second, I got in this to build, you know, there's, there's obviously this art and and commerce problem we have, right?
But if you think about delivery as a completely different medium than your restaurant, and they're, you know, the restaurant is where you come to have an experience and, and, and then delivery is where you can have incremental revenue. You can have a piece of that experience. You're not, I think [00:49:00] that's the thing that a lot of people, um, forget is it's not your restaurant.
And let's be honest, like the idea of like, oh, we're gonna create an incredible digital experience. One, you can't control that if you're using DoorDash, and that's the majority of where your delivery is probably coming. DoorDash or one of those. One of those, yeah. You know, and it's just not the same. Right?
Sure. So. Like, why not? You know, why not capitalize on that and just get it, you know, increase the check average with other things that could be helpful. Yeah. And it is, it is a little bit strange if I got a, someone brought me like, uh, a medium or a steak and some toilet paper.
Eli Feldman: Yeah. And I, I do think, like, I think a lot of what's interesting about this is, and it's another reframing thing, is, you know, what we're really good at in restaurants if we're ex, if we're operating them well, is we're experienced designers.
Like, at the end of the day, if you absolutely put a lot of things back, what a restaurant is, [00:50:00] is a successful restaurant, all it's doing really well is creating an experience that you want to have again, like, uh, it's that simple and it's that hard, but it's also that applicable to so many different things.
Like, if I wanted to talk to someone about, Hey, how do I make the delivery of a steak and toilet paper? Feel good to the recipient, I might talk to a great hospitality mind because they're the people who actually know how to sort of navigate, navigate the awkwardness and bring the emotional intelligence to it, to connect the dots.
They're like, we're, yeah, when you reframe restaurant work and hospitality as compelling experience design, and then you start to look at the people who are really good at it, you, I think you end up getting unlocking some really cool, underutilized skill sets. The problem is
Josh Sharkey: you can't control the experience [00:51:00] because you're not the one delivering that food.
And it's too expensive for an individual restaurant to deliver all their own food. Like the unit economics just aren't there. Uh, now that said, if, if the check average went from, you know. $40 per person to, you know, $180 per person or something, then, then you probably could, you know, because you can only do four deliveries in an hour, typically in a, in a city, whether you're on a bike or a car or something.
So it's, you can't control that experience unless you actually do it yourself. And I don't know how many restaurants, there's not many restaurants that deliver
Eli Feldman: with
Josh Sharkey: themselves,
Eli Feldman: so, yeah. And, but I also think that there's a, there's a market opportunity there as well in the same way that, you know, wheelie I think is in London and is the really Highend Uber.
Mm-hmm. Uber used to be the really high end. Uber does Wonder end up with a higher, because of the IP and their focus on food they, 'cause I think they bought Relay in New York, if I'm not mistaken. And they bought GrubHub, they bought Relay. I didn't realize that. Yeah. [00:52:00] By way, whatever happened to goPuff. I mean, there was never, are they still around?
I don't even know what they did. They are, but like the 15 minute delivery
Josh Sharkey: thing was like a total erp. I honestly, I've never used goPuff. I don't know. Um, I mean, I don't think it's just, it just wasn't in, in, in my area. Like, what, what was that what it is? It was like grocery in 15 minutes.
Eli Feldman: Yeah. In 15. There was, yeah.
I mean there was goPuff and GTO and Joker and all these things, and you know, all of them in my opinion were kind of like Zer Fever dreams. Like the zero interest rate phenomenon is reefs that were barely,
Josh Sharkey: I
Eli Feldman: think
Josh Sharkey: they, I think they raised like 700 million or something.
Eli Feldman: Oh yeah. At least. And it, at its core, like an interesting idea.
Like that's Reef started out as you know, we think autonomous vehicles are gonna be a big thing and we're gonna end up with a bunch of discarded parking lots. That was sort of the [00:53:00] original premise of Reef.
Josh Sharkey: Yeah.
Eli Feldman: Yeah. How do we activate them? And the first place they went to think about how to activate, and I think this is telling about our industry.
The first place they went was food. Yeah. And that speaks to, I think, our collective power as an industry. Any one of us individually has none. But in aggregate, man, a lot of companies realize how powerful this industry is. We just gotta figure out as an industry how to partake of some of that power.
Josh Sharkey: Yeah.
And how to organize in a, you know, in a, in a meaningful way. 'cause that's also difficult.
Eli Feldman: Agreed. You know, I think there are some things, I'm, I'm a big believer that if, when, if and when sort of blockchain finds its way out of the trough of disillusionment, its path out will be restaurants, in my opinion.
Josh Sharkey: Hmm. I'm, I'm struggling to see that, but I, um,
Eli Feldman: I don't know. Talk, ask. You ask Ben Lal. I think he's the one making that bet. [00:54:00] He's making a big bet around that.
Josh Sharkey: Yeah. Well, I mean, I think his, his approach to, you know, creating a network, I, I didn't, I didn't realize that was necessarily blockchain. More so just like creating a network of,
Eli Feldman: well, it's all built on blockchain.
The whole thing is built on blockchain, and if you kind of read between the lines and he started talking a little bit more openly about it is, and it's absolutely audacious. I put them on my trillion dollar list too, and that was a stretch, but by a long shot. But he's trying to create an entirely new economy and economic framework for restaurants to operate on.
Yeah,
Josh Sharkey: I think it's brilliant. Actually. He was on the show a couple, a couple weeks ago and, um, I think it's, I think it's brilliant what he's doing. And the, it's also what I love about, it's, it's so accretive to like every part of the industry, the employees and the customers and the restaurants. I mean, that is, and that's
Eli Feldman: a hard thing to do.
It, it really is, and it's fascinating. Like, I mean, when I saw that they were doing the employee puck thing [00:55:00] mm-hmm. That was brilliant on so many levels. I also think there's a, there's like a hidden thing there with Blackbird that I love that they don't, I feel like they don't talk a lot about, is how fundamentally different it is when you bring loyalty to the front of the experience as opposed to the back.
Because like if you think about the way loyalty typically works, it's linked to payment, right? Mm-hmm. Because that's the thing, but that's at the end of the experience. So it doesn't allow me to actually do much as yeah, the operator. But if you actually bring loyalty to the beginning of the experience and then I get the next 90 minutes to capitalize on that awareness.
That's cool.
Josh Sharkey: Yeah. Yeah. I totally agree. I totally agree. I think it's, I think it's super smart. This
Eli Feldman: was a wide ranging
Josh Sharkey: conversation,
Eli Feldman: for better or worse, not it, it's really refreshing and nice to actually be able to, there aren't, I don't find that there's a lot of opportunities for conversations like this, but I think there needs to [00:56:00] be, I'd like to think that there's, we would benefit from more
Josh Sharkey: Yeah, absolutely. Wider ranging. I mean, I think we, we have to, and, uh, I, I love these kinds of conversations and I love that you, uh, want to talk about this and, uh, you have restaurants and, and there's a lot we could talk about with your restaurants, but this is impacting everybody, so I love that.
We did, and I'm super stoked that we're getting, you know, I got to know you and thanks for coming on the show.
Eli Feldman: Yeah, yeah. Thanks. I, I sort of, obviously we're, we're, we're a customer of you guys, but I've also just been following what you've been doing on, you know, the media side of what you're doing, the content side.
I was compelled to reach out to you because I saw in sort of how you were approaching me, a lot of reframing going on. As well. And I felt like there might be sort of an opportunity to chat and maybe learn some things from one another. And I, I know I have and along the way, and I hope we continue to.
Josh Sharkey: Yeah, absolutely. Well, I really, I'm grateful and glad that you did reach out. I, I'm sure we'll keep talking [00:57:00] about this, but, uh, I think we're just scratching the surface of where, how things are going to going to change. What I love most is that we don't know what we don't know. And, you know, I, I think we both probably agree that AI is, um, and, and just technology innovation in general is at, at first feels like a disruptor that will, you know, kill a bunch of jobs and kill a bunch of experience.
But like with anything, what ends up happening is it just creates entirely new opportunities and new jobs and new experiences that just never could have happened before. And these kinds of conversations, I think are, are super interesting because we start to think about what could be, because if you don't, they'll never get.
Eli Feldman: Yeah, I mean I, my, my piece that I put out today, it was just called Tell Me What You Want and like, obviously like a silly Spice Girls reference, but it was, the piece is entirely about, like I've learned over the past year and a half working, putting basically everything we [00:58:00] do in our restaurants through an AI to understand how it might contribute.
That if you start to ask these things in the right way for exactly what you want, you get pretty damn close to what it is. And so the article today was actually a call out to everyone in the anyone who reads the piece, Hey, it connects to a Typeform and it just says add a line. As a guest, I would love to know, be able to look at a menu and know without fail whether there's nights shade in it.
Yeah. And like there's a lot of different ways, you know, I'm a chef and my kitchen's going down every single night. Any idea what dish might be causing everything to back up.
Josh Sharkey: Yeah, this is, I mean, I went on a bit of a rant about this, uh, a couple shows ago, and I've been talking about it a lot lately, is the, the menu data has been pretty analog for a very long time.
And so we weren't able to query it and understand and learn and, and, and use that information to, uh, to help the [00:59:00] customers, to help staff. And I think there's, like, I really think there's this huge opportunity to know anything you wanna know and not, and, and reduce the amount of training or reduce the amount of mistakes and let sort of, let staff be able to focus on being personable.
And, I mean, this happens to me all the time, not all the time. 'cause I don't get to go out there and eat that that often anymore. Where I'll go to a restaurant and maybe it's a nice restaurant and I see a cocktail menu and it just has like three ingredients, you know, it'll see like coconut rum and lime.
Mm-hmm. I know there's, it's probably got foam, it's probably like whitewashed or something, all kind. And, you know, I have no idea what that is. I don't know what else is in it and I might have some allergies. And one, it takes a long time for the server to even get there to, to answer it. They might not know the whole thing either, and like, maybe there's like f learn a minute, they don't know what that is.
They give you kind of a, you know, whatever answer they can. And I might wanna know, like, you know, what should I, what should I drink with this ho much I'm about to have? And [01:00:00] tell me about, you know, this wine. All of that can be answered very quickly and more effectively. You know, with, with the use of ai, I don't know how you create that experience where you're not just talking to a, a robot.
If you could do that and the experience was exceptional, think about how much less time you'd have to spend on that part of the service with your team. And you could just actually focus on how are you,
Eli Feldman: how are you
Josh Sharkey: feeling?
Eli Feldman: Yeah. And it's, it's, it's interesting, like, 'cause I think there will be second order effects in there too, where.
You know, I think what got a lot of us into this industry and excited about it over time was, or early on, was passion for product. Like when you talk to a 20, something about what they love about restaurants, usually it's a combination of comradery, passion for great food. I love bartending. I want to geek out on natural wine.
Yeah. And so what happens, you know, when some of that stuff [01:01:00] becomes a little more technologically driven, I think is an open question. But Yeah, I agree. I mean, I certainly think one of the first things I started playing around with when I saw what these LLMs could do, someone should take this, actually me should take this allergy PT What?
What do you mean by pt? Aller allergy. PT. It's a silly name, but Oh, got you. Like
Josh Sharkey: A GPT.
Eli Feldman: Yeah, just you put a QR code on a menu or whatever. I know people don't love QR codes, but like if you wanna have edge case allergens. A server, you think you could just scan the menu and it goes and looks at me and,
Josh Sharkey: yeah.
Yeah, that's, that's what I mean is like, all that information should be like, at your fingertips with zero mistakes because it's, you know, if you have all that menu data, there's, there's no reason why you can't answer all of it granularly, you know, cool stuff. No doubt about it. Well, Eli, thank you. This was great and I'm sure we'll keep chatting about [01:02:00] this, but, um, and I'm excited to see, uh, what, what you keep building with Reggie and, and of course with, with Shy Bird.
So thanks for coming in.
Eli Feldman: Yeah.
Josh Sharkey: Appreciate the conversation. Thanks Josh. Thanks for tuning into The meez podcast. The music from the show is a remix of the Song Art Mirror by an old friend, hip hop artist, fresh daily. For show notes and more, visit getmeez.com/podcast. That's G-E-T-M-E-E-z.com/podcast. If you enjoyed the show, I'd love it if you can share it with fellow entrepreneurs and culinary pros and give us a five star rating wherever you listen to your podcasts.
Keep innovating, don't settle. Make today a little bit better than yesterday. And remember, it's impossible for us to learn what we think we already know. See you next time.
