Steve Simoni likes drinking beer. The problem is he just doesn’t like waiting for it.
But that’s exactly what he was doing every time he went to a busy restaurant. This meant getting up, heading over to the bar, and waving down the bartender.
“I really didn’t want to get up from my table,” Simoni told me this week in a Zoom interview.
So what does the engineering major turned software product manager do in this situation? Build a robot delivery system (obviously).
“I like to describe it as a sushi conveyor belt on the ceiling,” said Simoni.
Only instead of sushi, the conveyor belt delivered beer to the table. And while Simoni’s new company took on a robot-sounding name based on the first project in Bbot, it wasn’t long before he realized that the real opportunity to build a company was in software.
“The QR code (software) was part of the robot delivery system,” said Simoni. “After launching that bar in January of 2018, the next place was like ‘I’ll take all of it except the robots.’ That was March of 2018. Then we pivoted fully into that.”
While Simoni and Bbot initially focused on solutions for ordering at the table, Bbot eventually started dabbling with online ordering tools for restaurants. Then in early 2020, the company watched as the pandemic make off-premise mission-critical.
“When COVID happened, restaurants shut down for like two months straight, maybe more. During that time, we really started to double down on our delivery and pickup software.”
Today Bbot’s two sides of the business – in-venue and online ordering – are both growing fast. Any new conveyor robots, however, have been put on hold.
You can read my full conversation with Simoni below, where we talk about the future of online ordering, the importance of restaurant data, who has the potential to be a restaurant ‘decacorn’ and, of course, restaurant robots.
Michael Wolf: Steve, how are you doing?
Steve Simoni: Good.
Michael Wolf: Good. The last time we met face to face was in New York City. I think it was like February 28th, 2020. We just had a conference in Manhattan. And I think there was this cloud over all of us with the pandemic coming down. I think it was like the last official business trip I took.
Steve Simoni: Yeah. That was probably 15-16 months ago. And it’s good to see you on Zoom at least again.
Michael Wolf: Yeah. Your hair’s longer.
Steve Simoni: Yeah, I haven’t had it cut since we last saw each other.
Michael Wolf: Well, you have the pandemic cut, which is great, but we’re not here to talk about haircuts, but about restaurant tech. I’ve been following Bbot for a while and when I first got to know you guys, you were very focused on the in-venue at the table payment experience. That’s where you got your start. If you’re just going to give the elevator pitch, you’re telling someone at a party about BBot, how do you describe you guys?
Steve Simoni: The simple elevator pitch for Bbot is we make next-generation digital ordering tools for restaurants. And so that’s everything from their online ordering to their QR codes at the table. We handle that for our customers.
Michael Wolf: When you started the company, what was the original thinking? What was the problem you were trying to solve?
Steve Simoni: I had a little bit of a personal problem. I was in my late 20s. And I liked to drink beer and I needed a really convenient way to do that. I was like, ‘I wish I could just order another round and put it in’. And you know, servers are very busy hitting up all the tables, so they can’t be at every table at once. So I thought this would be a really good way to do it.
Michael Wolf: Right up until a couple of years ago, pay at the table wasn’t widely available yet. You had to go stand at the bar or catch the attention of the waiter. That probably frustrated you.
Steve Simoni: It did. And although the technology was able to be built for years before we did it, I realized why it wasn’t. It’s that restaurants are complicated. They’re hard to operate. There’s an expectation of service. There are just all these different reasons besides the tech that were stacked against us from the beginning.
Michael Wolf: So you start a restaurant tech company. Were you a programmer doing something else? How did you get into this?
Steve Simoni: The name Bbot is because I was side hustling as a robotics company. We were making an overhead ceiling robot.
Michael Wolf: I remember that. There was like some weird overhead robot thing?
Steve Simoni: Yeah, exactly. I like to describe it as a sushi conveyor belt on the ceiling.
Michael Wolf: You really wanted a robot to deliver your beer.
Steve Simoni: I really didn’t want to get up from my table. So that was the original idea. And we were kind of doing that as a side hustle at first. And then we launched it at a bar, and then kind of went full time on it basically launched it at a bar in Cincinnati.
Michael Wolf: And is that still in use today?
Steve Simoni: Yeah, still operational. It still powers their entire delivery in their bar.
Michael Wolf: At some point, you saw the light, you said maybe there’s more business to be had in writing software and digitizing the order at the table. When was that decision made?
Steve Simoni: So part of the robot delivery system was the QR code. After launching that bar in January of 2018, the next place was like ‘I’ll take all of it except the robots.’ That was March of 2018. Then we kind of pivoted fully into that.
Michael Wolf: You saw that there’s probably a lot more people who just want to use digital ordering than put big robotic conveyor belts in the restaurants?
Steve Simoni: Oh yeah, it’s very logical. (laughs)
Michael Wolf: So before you did this robotics thing, were you in restaurants? What were you doing before that?
Steve Simoni: My first career was in the US Navy. The career that I left to do Bbot was marketing software. I was a product manager in marketing tech. It’s helpful now because many restaurants are trying to help capture guest data and I’m very familiar with that world. And we build a lot of tools to help them.
Michael Wolf: So you made this pivot towards digital ordering. And when I think when we connected in February of 2020, you had started to expand beyond the table. When did you decide to move into a full suite of products, including online ordering?
Steve Simoni: So when COVID happened, right after we met in February of last year, restaurants shut down for like two months straight, maybe more. And during that time, we really started to double down on our delivery and pickup software. Just because what was the major request at the time. And, you know, we didn’t know it was going to happen in the future. With restaurants, they were very uncertain times. But that was around the time, like at the beginning of COVID, where we really started building a lot of that out more.
Michael Wolf: Okay, so you had some initial work in digital ordering, but you really started to flesh it out. For a lot of restaurants, you probably got a lot more inbound requests for online ordering. How would you explain the full suite of products?
Steve Simoni: We have online ordering, which comprises direct ordering on your website for delivery or pickup. That’s one piece. And the other piece is in-venue ordering, which is all of the tools you would need to run digital ordering inside of your restaurant. Those are the two product lines and we sell them separately.
Michael Wolf: It’s a competitive space, right? If you look at your peer group, you have everyone from Lunchboxes of the world, the GoTabs and Bentoboxes. All these guys are helping restaurants digitize. Are you going to head to head with a lot of these guys?
Steve Simoni: Yeah, so remember, I said there are two lines of business. There’s online ordering. And there’s in-venue ordering. And so, in-venue has different competitors than online. But yeah, it’s a very competitive space. So which keeps us on our toes to try to make it the best we can.
Michael Wolf: And we can’t talk about restaurants and what’s happened over the past year or two without going a little bit into ghost kitchens. I know that you guys do some business with ghost kitchens and some virtual brands. Talk a little bit about that side of your business.
Steve Simoni: Ghost kitchens and virtual restaurants a very fast-growing part of the business. The brands can scale really quickly. The concept is they’re taking kitchen space and launching delivery-only products out of there, essentially. They scale their unit count really quickly because they don’t have to build out new stores. So obviously, if they’re scaling, then the software is scaling. We work with companies like TiffinLabs, which are scaling it out of hotel kitchens for the Absolute Brands by Dog Haus. We work with stuff like that. Our eyes are on this market because what we’re looking to see is the order volume. To see how big the market is.
Michael Wolf: I wrote yesterday about NASCAR launching their own virtual restaurants. VDC is powering it. The tech is by Lunchbox. They’re the ones behind the MrBeast Burger. So there are all sorts of genres of virtual brands, or virtual restaurants. There’s a whole genre of celebrity-driven ones. Were you seeing success in the virtual restaurant space?
Steve Simoni: Yeah, what I see doing really well is people that are taking a strong brand, a simple concept like a burger brand that is strong regionally, and rolling out more areas to have it ordered via delivery. Dog Haus is a good example where they have a strong brand with Absolute Brands that they’ve made, and they’re just putting it in more of their kitchens regionally. With the celebrity stuff, I’m not too sure. I think that’s kind of gimmicky. But I have seen that taking a simple menu that has a strong brand and just getting it into more kitchens works.
Michael Wolf: Yeah. That’s the Wow Bao approach. They did really well, but they already had a decent brand that they built. And they’ve really doubled down on the virtual side. The question have I always asked about celebrity brands is what is the soul of the brand? Is it hollowed out? Is there brand equity there? Or is it just like a guy who’s a famous Youtuber doing a food brand? How committed is he?
Steve Simoni: I think they (celebrity brands) are good for things like a pop-up shop. MrBeast Burger, I don’t know if it’s a sustainable business. Celebrities aren’t restaurateurs. You have to care about the food.
Michael Wolf: Yeah, I think maybe celebrity chef-driven virtual brands might work. A Guy Fieri. People know him. They would order food based on his recipes.
Steve Simoni: That I definitely agree with. If it’s a real person who cares about the food backing the brand, that can work. Now if it’s Wiz Khalifa. I’m not exactly sure of that.
Michael Wolf: Talk about where you see digital restaurant tech going? I mean, it seems like most chains obviously now have kind of like a full digital ordering suite. They’re starting to digitize in-venue. Or am I wrong? Are there laggards, national chains or regional chains, that are still running behind in their digitization efforts, both in-venue and online?
Steve Simoni: I think most of them are getting online now. At least for their delivery and pickup, they’re coming up with solutions. They’re coming out with a program, they’re getting their packaging, their online menus, correct. I think it’s just that movement has really accelerated with COVID. The in-venue piece, I think in certain segments, they’re really starting to add QR codes at the table. Other segments, I don’t think they might ever do it. They’re not going to leverage order and pay at the table in the fine-dining segment. I do think that’s one of the crazy changes since COVID; In 2018, selling QR codes at the table is so much different than selling it right now.
Michael Wolf: You have these two sides of the business and so you have different competitive peer groups. But I think what we’re gonna see over time with restaurants is the consumer will have the ability to both order online and in-venue and the restaurant will have a full understanding of that. It will be a unified CRM, a unified profile. Is that something that you hear a conversation about? Are you working with restaurants that are trying to have a more holistic treatment of the consumer profile and customer data, both in and out of the venue?
Steve Simoni: Well, I don’t know if you remember, we used to partner with a company called SevenRooms. And we still integrate with them. The partnership is now changed to a product integration. So we have a lot of joint customers, and we work together to create that 360-degree view, I do think the reservation companies, like SevenRooms or OpenTable or Resy are really well equipped to handle the guest profile. As an ordering company, we feed them that data. And those are really good matches. I can’t announce it yet, but I got a new thing coming soon around that particular point, but I can’t talk about it right now. But I do think that those table management and CRM companies are really hot right now. Startups like Bikky, or bigger startups like Wisely, these things are going to be all the rage in the next 24 months to 36 months. Ordering companies like Bbot, we’re going to be the ones collecting the data but feeding it into those systems.
Michael Wolf: Let’s talk about some of the giants in the space. Toast has filed to go public. I’ve looked a little bit at their S1 and it’s kind of a weird S1, right? They make a lot of their money in ways that you wouldn’t expect if you’re trying to look at Toast.
Steve Simoni: Yeah, I wrote an article about this. Toast going public is the final of the three major restaurant tech players going public. We also have DoorDash with marketplaces, Olo for online ordering for enterprise, and then Toast as the best restaurant point of sale. They’ve all gone public now. And Toast is very interesting, much different than Olo. Olo makes their money from software fees, but Toast primarily makes most of their money from payments. And, you know, the S1 shows that payments are about about 75% of their revenue. And that’s just the difference in the buyer. Toast is selling to small businesses that don’t have a ton of money to spend upfront on software fees. So that’s like a pay-as-you-go model. Olo will lock you into a three to five-year contract with stable software revenue, and the big enterprises that they sell to are so big that they can beat them down and destroy all the payments margin. So they’re different companies.
Michael Wolf: And so, Olo is selling to the big national chain. And Toast is capturing the smaller restaurant players.
Steve Simoni: Yeah, Toast has a much bigger addressable market because there are a lot more small and medium-sized businesses than there are enterprises. And in that market, the way to monetize is through payment processing.
Michael Wolf: In Dan Primack’s newsletter today, he talked about how we need to move beyond unicorns to what he’s calling ‘dragons’. He’s essentially saying that It’s not that impressive to be a company with a billion-dollar valuation anymore. Let’s talk about the 10 billion-dollar companies. I was trying to think in food tech, in restaurant tech, will it be a dragon?
Steve Simoni: if I had to bet on a restaurant tech company that’s going to have a 10 billion dollar market cap or greater, I would definitely put all my money on Toast.
Michael Wolf: Do you think they got it? Do they have the model and the juice and can continue to grow in value?
Steve Simoni: Yeah. Olo can’t get there because they can’t monetize payments down market. Here I’m taking my CEO hat off and putting on my analyst hat. This is not investment advice, but Toast is poised to be the largest restaurant tech company in the history of the US.
Michael Wolf: Interesting. Well, because we like to nerd out on robots, where do you see automation going in the restaurant? We’ve seen some back-of-house stuff that is interesting. A lot of stuff on the pizza side. I feel like there could be more happening in the front of house. Where do you see things going in the restaurant robot space?
Steve Simoni: Okay, I love this space as you know. I think people are going to adopt kitchen preparation robots first. I think that you see that with the burger-flipping one (Flippy from Miso Robotics). And other robots like that are being made and prepping food. Delivery robots like BBot, or Savioke – they do delivery robots in hotels. Bear Robotics. We have joint customers that have a BBot ordering system plus a Bear Robotics’ robot. That’s cool to see. Those are going to come second. I think they still need some more work. But I think the preparation robots are ready now. Like the next two years, food prep robots should give more proliferation.
Michael Wolf: If you stand back though, and talk about AI and automation in restaurants. I think one of the big next waves is going to be voice interfaces and voice automation, whether that’s at the drive-thru, like some sort of bot taking your order, with maybe a human backup for that 5% edge case where things go wrong. Or, or even just in-venue, a fast-casual restaurant you walk in, I can see a lot more voice ordering there.
Steve Simoni: Alright, here’s my anti-voice pitch.
Michael Wolf: Okay, go for it.
Steve Simoni: When you talk with Alexa, it then technically goes and asks the cloud your question and then waits for an answer from the cloud, from the cloud servers, and then it comes back, and then it tells you the answer. That round trip time is actually pretty long in a real restaurant setting. As a New Yorker, look how fast I talk. I don’t want to wait for the server lag time, back and forth. It’s just not natural. So what I think they need to do is have a lot of the processing of the voice on the actual hardware device. Not make it cloud-based, make it on-premise, edge-cached, on-prem hardware so that voice processing doesn’t have to go talk to the cloud. Then it could be good. That’s my voice-is-nowhere- near-ready pitch.
Michael Wolf: I think you have a point there. That’s interesting. What do you think about something like this that isn’t just voice, but telepresence? Like Bite Ninja?
Steve Simoni: Yeah, I think Bite Ninja is quite disruptive because they’re using humans in the loop there to solve this lag time problem. I think I first read about them on The Spoon.
Wolf: Of course you read about it on The Spoon (laughs).
Steve Simoni: I’m on your Slack feed. And you guys always have the breaking news for us or the restaurant tech world. So I mean, thank you for what you do. But yeah, they’re awesome. That’s a cool model.
Michael Wolf: Yeah, yeah. Well, we got to hear your contrarian viewpoint on voice tech. I appreciate that. I always like a good contrarian view. Steve, always good to catch up with you. Thanks for talking to me about restaurant tech.
Steve Simoni: Thanks.