Comstock’s Startup of the Month:
Pay-what-you-want app a win-win for restaurants and customers
If you want to eat out but can’t decide which restaurant to go to, try asking yourself a different question: How much do I want to pay?
That’s the idea behind Requested, a name-your-price app that’s been turning Sacramento’s dining arena into a digital bidding zone. Similar to Priceline, users choose how much they want to pay for a predetermined value (i.e. $40 for what would be a $50 tab), then choose and submit to select restaurants to see who bites. Whoever responds first wins. After the payment goes through, the customer receives a mobile voucher to be redeemed at the time reserved or within 15 minutes.
But Requested isn’t just a good deal for diners on a budget. The free app benefits eating establishments as well. In fact, co-founder Sonny Mayugba came up with the concept primarily to help restaurants and clubs boost traffic during off-peak hours.
“I really want to give discounts and promotions, but only when I need it — not on Friday and Saturday nights,” says Mayugba, who also owns Red Rabbit Kitchen and Bar.
But while attending a technology conference in San Francisco, he realized current marketing models had no way to target promotions around the less busy times.
“I was listening to people from Google, Yelp and Groupon talk about how to market to restaurants and thought, ‘These guys are getting it wrong; they don’t get it,’” he says. “They’re not thinking like a merchant. We merchants want to be able to communicate with our customers in real time and only provide discounts or promotions when we really need it.”
Mayugba came up with the basic idea, then assembled a team of software engineers to build the app. The four co-founders raised $250,000 from friends and family, which funded a private beta launch last fall. Early prototypes were more comprehensive, allowing customers to request window seats and skip ahead in the reservation line. But beta testers said that version was too confusing, so developers simplified the process for the initial launch. The startup makes money by taking 10 percent of the requester’s discounted payment. The restaurant keeps 90 percent.
In March, the app went live in Sacramento, Roseville and San Francisco, and Mayugba hopes to expand to five cities by year’s end. So far, the network of restaurants consists of 70 venues, chosen specifically by the Requested team.
Jon Modrow of Hook & Ladder Manufacturing Co. accepted the offer to join, hoping to bring in more patrons when business is slower (i.e. Monday through Wednesday and during lunch hours). He says the app’s been working well, though he’s declined requests for discounts of 30 percent or more.
“It’s a learning curve, and everybody’s still in Groupon mode,” Modrow says. “If people request 10 to 15 percent off, they would be more successful with acceptance.”
Mayugba says the app has already increased business not only at his own restaurant but also some of his competitors’ establishments. But he says this isn’t a problem because his real mission is to get people to dine out more often and discover new places. Recently, he and his friends wanted to eat somewhere they’d never been in Sacramento. With the app, they sent out a request to three spots. Masullo Pizza in Land Park said yes.
“Masullo accepted, and we saved $12 off our dinner,” he says. “None of us had ever been there, and the experience was great!”
By: Russell Nichols
May 20, 2015