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by NaOH·10y ago·view on hn ↗
I’ve worked in the food industry for about 20 years now. For the last 3+ years my business has done nothing but sell to restaurants. I sell them food. Perishable food with a short shelf life. The most common responses to our products by people who have eaten them are. “I love them” and “That’s the best I’ve ever had.”

On average, my customers resell my products for about 2.5 times what they pay me. Depending on the customer, my products requires anywhere from no labor to 20 seconds of labor from restaurant staff.

The business was profitable its first month and has shown year-over-year growth every year in both product sales and revenue. Everything is done by myself and one other person (who joined after two years). We’ve spent $40 on marketing from that time I had business cards printed. We have higher per-month revenue than Dishero and there’s never been a monthly loss.

As food industry people, we use our understanding of the food environment to help our customers. We know the awfulness that is restaurant life and we accommodate our customers’ needs using what we know, what customers tell us, and what we see that isn’t stated.

Probably my favorite action is when I show up delivering what my customer has ordered, only to cancel the order because I know the customer does not need the items. These are not products I can simply sell some other day. When that happens—and it always does—my customers know our focus is taking care of them, not making every possible sale.

In short: We have relationships with customers, and relationships are always give-and-take arrangements. I’ve found that focusing on the giving ensures we make enough to keep giving.

All those self-congratulatory things said, I have no doubt that our success thus far can be attributed to customer service. No, that’s not saying anything novel, but—as always—it requires listening, watching, adaptability, frustration, flexibility, and a host of other behaviors/actions. It’s hard work and it’s not easy to get out of my own head to get inside someone else’s head.

The economic and non-economic results have been good. We haven’t lost any customers. The majority of our customers have found ways to get more products from us. All new business has come from word of mouth.

But I don’t think there’s anything novel in what we’ve done. I say that because I believe the success of every business come down to three factors: cash flow, logistics, and people skills. I don’t know of an instance in any industry where a great product overcame deficiency in those areas.

I was unfamiliar with Dishero prior to this piece. From what was shared, it’s hard to see if they did well with logistics or people skills (the author says they missed on cash flow). The author noted they had trouble overcoming the logistics of interacting with restaurant staff. If so, it’s difficult then to build relationships, so there goes people skills.

It certainly sounds, though, like the people behind Dishero had some good product-making skills. And I have nothing but respect for the decision to cut their losses. I can’t imagine the difficulty of that choice, and the accompanying pain, despite the apparent wisdom of that decision. My best to those people in their next pursuits.

5 comments
You are describing a traditional, organically grown local business. And absoulutely nothing wrong with that, but quite different from the Dishero situation of needing to find a viable path to an exit or at least the next round.
I don't think it is possible to scale a business before you've validated the concept on a smaller scale. Validation really should come first and that includes the business model.
You hit it on the head, this is everything wrong with the startup community, your path should be to a viable business, doing something you love, not just wealth.
I’ve found that focusing on the giving ensures we make enough to keep giving.

Money quote for me.

>Probably my favorite action is when I show up delivering what my customer has ordered, only to cancel the order because I know the customer does not need the items. These are not products I can simply sell some other day. When that happens—and it always does—my customers know our focus is taking care of them, not making every possible sale.

What do you do with the food from the cancelled order?

I give away as much of it as possible. Mostly to random strangers, but also to friends, work and home neighbors, and some to other customers who may have a use. There are times product gets thrown out, too. Unfortunately, local food banks and shelters don't accept products like I make.
You've probably thought of this but -- sample it to the next restaurant you drive past who looks like they could sell it? Back of house is always hungry, so you just need to make sure the manager or chef actually gets one, along with your business card.
I have thought of it. Still, thank you for the good suggestion. The reason I don't do it is logistical: until I'm in a larger facility I have limitations on production, and I make certain I don't create insurmountable complications on my end for supplying my customers.

>Back of house is always hungry....

True, but maybe even more potentially valuable is that getting to eat something other than what they usually eat makes the "new" product seem even better. This was learned as we often give away products to the food establishments where we pick up our lunch.

I think with Dishero, the issue is product-market fit, and without it, none of the other stuff matters. My guess is the restaurants understand your product better and can more easily see how they can make money with it.
Can I join you?