This is part of the made up start up series.

My mother-in-law has a problem when she goes out to eat. The problem is a combination of information, imagination, and conceptualization. The problem is: my mother-in-law doesn’t know what to order.

But she’s 70 years old. She has solutions. Is it familiar? Is there a picture? Is it recommended? Everything she orders falls into those three buckets. And thanks to Covid19 all that can change.

Part of the (uneven) Covid19 strategy are QR menus. These codes mostly link to a pdf version of the old menu. Consequently, these menus mostly suck. PDF or HTML menus take all of the worst parts of ordering food and make them more difficult to see. But things don’t have to be this way. QR codes for menus are the perfect opportunity for this peripheral technology to become a main course.

Here’s the pitch: a startup that builds interactive menus.

This is a hard problem. Restaurants are hectic, restaurant retention is tough, and there’s not a lot of excess capital for investment, but QR code menus may be a wise pairing thanks to framing.

Restaurant menus are terrible at framing. A paper menu is static and the only form of framing is the relative price framing. I’m not buying the most expensive or cheapest so this middle item seems fine. A digital menu can be dynamic. The options for choice architecture are abundant.

  • Guests who liked this also liked this.
  • The chef recommends this with that.
  • Add in this appetizer for only $3 more.
  • This item has been ordered 1,000 times this month.

All this startup needs is a few salespeople, a copy of Cialdini’s Influence, and an AWS account!

Restaurants are hired for multiple jobs: food, atmosphere, social status, signaling, and so on. Restaurants are also hired to make things easier: I don’t have to cook, clean, plan, or shoulder the burden of honey-what-is-for-dinner-tonight? A well built menu can reduce the diner’s decision demand.

This startup isn’t obvious because customers won’t articulate why they had a nice time at Dariano’s Diner but they will have a nice time because it’s a better experience which begins with the menu.

Yes, there are many restaurants to sell to – but this startup is competing with non-consumption. This isn’t a better reservation system (though it could be) or a better procurement provider (it could be that too), it only has to be better than a PDF or webpage.

So join me in raising funds for some QR IQ, a business that will build on human psychology to create a better dining experience.

March 3, 2022 update: This works! At least for automotive. The full video is here but according to one ex-industry person the digital signing of documents can increase (via framing I’d wager!!) back-end profits by 25%.

TTID Restaurant

Restaurants are an interesting case study. In part because of the accessibility, everyone has can cook something. So much like making movies or winning wines there’s a fair bit of “I’ve seen that done so I could do that”.

But restaurants are difficult businesses. The pricing power belongs to the landlord not the chef. Staffing is brutal. Inventory expired expediently. Examples like Chez Panisse, Five Guys, McDonald’s, and In-N-Out provide great history through industry, but are outliers in business.

I’m reminded of Sir David Spiegelhalter’s (OBE FRS) comments about health news. Basically the Brit wants us budding Bayesians to not update. Health news, David said, is only news because it is novel.



This time is different.

One template for TTID is to ask if the technology has changed the system in an important way. For hobbies it was the internet. For air travel it was deregulation. For tickets it might be NFTs. For high jump it was the landing materials.

Another way to think of technology is: rules of the system.

For restaurants it might be robot. A restaurant rule of thumb is that food, labor, and real estate each tend to eat up 30% of the costs. Yet just with location is the issue of “wholesale transfer pricing“. It’s the same idea behind Netflix’s original content: Can my suppliers raise prices faster for me than I can for my customers? If the answer is yes then we don’t need Admiral Ackbar to note it’s a trap.

But the pasta robot changes that:

“The robot means Cala saves 60% on real estate costs, which it says it puts into spending more on the cost of food ingredients, allowing it, Richard says, to deliver higher quality meals at a better price. The company’s labour costs are similar to other restaurants — they still have staff serving the meals to customers.” – Freya Pratty, Sifted, October 2021

Cala, like ghost kitchens, has shifted the 30/30/30 economic equation. If the JTBD of food has changed then maybe the economics have changed too. Maybe future restauranteurs will feel a little more full.

Even TTID is subject to Spiegelhalters’s scorn. It’s attention grabbing to say that things really are different this time. Hopefully our series helps us figure out when it truly is.

Danny Meyer is an Alchemist (and you can be too)

“A question that stymied me for years and years, a question I got almost anywhere I went, it seemed like every organization asked, ‘How do you manage to hire so many awesome people?’.

“I said to look for fifty-one percenters, people who are emotionally wired to be happier themselves when they delivery happiness to you.”

Danny Meyer, ILTB

The central idea to Alchemy is to optimize important but overlooked things, with especially large returns from inexpensive yet important finds. How to find these things? Numbers provide a good clue.

When things are easy to measure, they are numerate. These numerate items are easy to discuss, to compare, to enter into spreadsheets then sum, average, and compare again.

Danny Meyer has succeeded (in part) because he competes in new areas. In the beginning of the podcast he tells O’Shaughnessy about competing on food and wine and ambiance and all that, but that’s what everyone does. It’s hard to have THE BEST food when everyone is trying to have that.

THE BEST food has convention. It has history. There are norms. There is price. Having THE BEST food in New York City is like being the best investor in New York. Good luck.

However, being the best at something slightly different is quite a bit easier. There’s a lot more area and a lot less competition if you do things off the beaten path.

Meyer found this in hospitality. Listening, we don’t get the impression that the tag wags the dog, but it’s got to be part of the reason Meyer is around, and talking on the Invest Like the Best Podcast.

Often Alchemy is using (free) psychology rather than (costly) structure. Better service rather than better linens.

One story Meyer tells in the book is about ‘the medicine cabinet’. One establishment was having the normal rumble of friction getting its legs under it and when patrons had a bad time, Meyer and staff offered a glass of dessert wine to soothe their pain.

Not only was the wine complementary, but it was special. At the time, dessert wines were novel so it was a special treat. The kicker was that they were the cheapest wines Meyer stocked.

Alchemy is like improving weaknesses, there is a lot of return for the initial effort, often much-more than optimizing factor f for the tenth time.

Danny Meyer is an alchemist. From the people he hires to the businesses he starts.

You are an alchemist. Find something that’s important but not measured, and deliver that.