'We will go back to business as usual pretty quickly': Why TouchBistro believes in a restaurant resurgence
TouchBistro's CEO Alex Barrotti on the bright future of indoor dining: "I can't imagine me saying to my wife, 'Happy anniversary, let's get Uber Eats.'"
There are dozens of companies, most located in Silicon Valley, that see the pandemic as an opportunity to reshape the restaurant industry in their favor. These dreams of disruption are dressed in terms that wouldn't have made much sense even a decade ago — things like "cloud kitchens," "on-demand meal delivery logistics platforms" and "made-to-order meal food robots" (not vending machines, they'll have you know).
TouchBistro isn't one of those companies. For starters, it's based in Toronto. But of greater importance, the success of the point-of-sale software company is predicated on traditional restaurants thriving post-pandemic. "We're starting to see bars open up, restaurants open up — we're starting to see transaction level approaching pre-pandemic levels," Alex Barrotti, the founder and CEO of TouchBistro, told Protocol.
As for the threat posed by those Silicon Valley tech companies? Barrotti says he thinks there's a time and place for things like meal delivery, but at the end of the day we're social creatures and restaurants appeal to an intrinsic human need. "I can't imagine me saying to my wife, 'Happy anniversary, let's get Uber Eats,''' Barrotti said.
TouchBistro was founded in 2010. Barrotti came up with the idea while on what he called a "sabbatical" in Turks and Caicos (he sold his previous venture, INEX, for $45 million in 1999). A friend who owned a sushi restaurant on the islands asked Barrotti for help developing a software system that would enable him to send meal orders from the patio to the kitchen without staff having to return indoors. In April 2010, Apple introduced the first iPad, which Barrotti saw as the perfect device to enable the software system to become a fully-fledged business. "That's kind of the moment the apple fell from the tree and I returned to Canada to start TouchBistro," Barrotti said.
The company has since grown to serve over 25,000 restaurants in 100 countries. It offers a proprietary ordering system that makes it easier for restaurants to split the bill. TouchBistro has also expanded to help restaurants manage online ordering, reservations and loyalty programs. Protocol spoke to Barrotti to better understand the unique challenges of developing software for restaurants, what the industry will look like post-pandemic and why Toronto is a great place to run a tech company.
This interview has been edited and condensed for clarity.
What were some of the early features that helped TouchBistro gain traction?
One thing that is unique to TouchBistro is we have a design patent on the way we take an order. Because we were mobile from the get-go, we decided to reimagine how you take an order at a restaurant. Every [other] point of sale worked by assuming that you took the order on a pen and paper and then you walked over to a server station and entered the order by course, which would be like drinks, appetizers, mains, desserts.
We reimagined that whole process and said, "well wait a minute, I'm standing at a table, I can see the people sitting at the table — let's start with a digital representation of the seats at the table." I could tap on the table to order items that would be shared by all the diners. And I could tap on each individual chair as I took the order, which then would allow me to instantly build an order for each person. And if I needed to split the bill, I could [do so] with a simple tap. That became the cornerstone of TouchBistro and to this day, it's our hallmark in our design, and it proved to be a differentiator in the market.
What are the unique challenges of designing software for the restaurant industry? For instance, the industry tends to have high staff turnover, so does that impact how you think about the user interface?
We made sure that all of the gestures and user interface conventions mimic exactly what happens on the iPhone. We're part of a program called the Mobility Partner Program, where Apple actually gives us feedback and critiques our products to make sure it's Apple-compliant before it goes out the door. To delete something, you swipe to the left on a list, just like you do on the iPhone. If you tap and hold an item, you get a list of help.
When we see people new to the product, about half an hour later they're just at home with it. And I always ask them, "How is it you picked this up so quickly?" And the answer is almost always the same: "Well, I use an iPhone." Or any smartphone for that [matter]. If they use Android, the conventions are pretty similar.
How has your business been impacted by the pandemic? As restaurants adapted to the restrictions, has their use of TouchBistro also changed?
When the pandemic hit, we expected a sort of doomsday scenario where we were going to lose half of our customers and we weren't going to get any new sales. Thankfully, that did not happen — we continued to get new customers and we only had minor churn.
Some customers called in asking to put a hold on their license [and] we were happy to help our customers [in] their time of need. But I started having a dialogue with them, saying: "Well, we're happy to suspend your license for a month or two, but I'm skeptical that $69 a month is going to put you in bankruptcy. So what is it we can help you get?" And of course the obvious answer was they wanted more customers.
We said, "OK, well had you considered selling online?" [Customers] said [they] didn't want to give so much commission to the different marketplaces. So we said, "Well, what if TouchBistro launched a free online ordering service with no commission?" So we started getting customers to sign up or convert to our system so they could sell online.
No. 2, we have a reservation product that we actually saw an increase in demand [for] because local jurisdictions have different restrictions. Some only allow 10 diners, some allow 50% capacity, you name it. So in order for the restaurant to prove that they were compliant on any given night, or for contact-tracing purposes, they started using our reservation system.
And then the same thing with loyalty [programs]. Owners would call in and say, "How do I send a mailer to all of my customers letting them know I'm open on St. Paddy's Day?" And we said, "You need to have a loyalty or CRM solution."
What are your thoughts on the speculation about how the pandemic will change the restaurant industry overall? Is it overblown at all? Especially for some of the more out-there predictions for post-pandemic, like cloud kitchens gaining momentum or customers choosing delivery services over dine-in experiences.
I think we will go back to business as usual pretty quickly. I was in a restaurant last weekend in a jurisdiction that finally opened up and they were turning people away like crazy.
There's a time and a place for everything. If you come home late from work, are tired and just want to grab something to eat, [then] you can certainly order from any number of online marketplaces. That is very convenient.
But we're social creatures. If you want to go on a date, you're going to want to go to a restaurant. And even more importantly, we celebrate important milestones by going out to restaurants. I can't imagine me saying to my wife, "Happy anniversary, let's get Uber Eats." We would be looking forward to a night out and someone serving you — and more importantly, cleaning up the mess afterwards. Obviously we have ordered a lot during this pandemic, but it's nowhere near the same experience.
TouchBistro is based in Toronto. What are some of the pros and cons of being a technology company there?
I can't think of any con actually. Toronto has really come into its own as "Silicon Valley North." Every major company has a subsidiary here. There is no shortage of skilled labor or talent.
The only negative, if I had to think of one, is that now salaries are becoming quite competitive. And the one thing the pandemic has done — because everyone has gone virtual for this year — before you would have to worry about other companies in Toronto poaching your people, now we get companies from the States calling Toronto companies trying to poach the staff. With the exchange rate it's cheaper labor even though it's just as qualified or skilled labor, and it becomes more economic for the U.S. company to pay the developer in Canadian dollars. So that's the only negative right now, which is really the flip side of a positive.
Is there anything you're particularly excited about moving forward?
We're starting to see things pick up with the vaccine rolling out in the U.S. The U.S. is our largest market, 70% of our sales are [there], 20% are Canada [and] 10% rest of the world. We're starting to see bars open up, restaurants open up — we're starting to see transaction levels approaching pre-pandemic levels.
When I talk to people and I ask them, "What's the first thing you're looking forward to when this pandemic is over?" The first answer I get from anyone is going out to restaurants — before travel, before returning to work, before any of those things.
Correction: An earlier version of this story misstated the term "point of sale." This story was updated on March 24, 2021.