How Foodetective CEO Andrea Tassistro grew Foodetective to $1.5M revenue and 226 customers in 2024.

hey folks my guest today is andrea testistro he's a swiss italian entrepreneur based in geneva switzerland he's specialized in the food and restaurant industry with a very strong technology need to digitize automate and optimize the entire value chain from production to consumption andre are you ready to take to the top i am having websites the website is food detective dot co tell me who's buying the product and what are they using you for so there are two types of clients either restaurants buy the product directly or we sell our technology to uh licensing partners such as uh ubereats coca-cola nestle and when you look at your total revenue over the past 12 months what percent was through partners versus direct relationships um so far it was mostly through their relationships because we just started to license our technology right now okay so 100 of your revenue past 12 months was direct you're now starting and turning on the partner ecosystem exactly yes very cool okay and what are people paying you on average want to use this technology so it varies from 89 to 400 per month what would you say is sweet spot as an average uh about 230 dollars and describe this person as at a restaurant chain who's paying you what are you building it's it's um most small and medium restaurants um located basically globally and what we provide them is a unified platform that enables them basically to manage their entire operation marketing and management and tech stack from a single platform and unified api when did you launch the business i think it was uh the business side it was in april 2019 but for detective was created in january 2018. and so what were you doing for that full year we were mostly researching uh on the on the restaurant space and building a consumer-facing app that helps us today acquire more restaurants cheaper and faster how were you funding like how are you paying your personal expenses did you have savings built up initially yes and eventually we managed to raise the two rounds of funding um that helps us basically keep on building the business when was the first round the first one was around 2019 okay how much did you how much did you raise there we raised about a million whatever your what your precede round yeah proceed and then we need uh an extension of that preceded maybe we can call this this uh initial money uh seed in that sense okay so so you raised more this year we raised more this year yeah we raised uh another another million um in uh in march this year and you'd call that sort of your seed round yeah let's go let's call it a pre-seed so we're sure that so you've raised two million over the past three years and you're bundling that all together calling it your pre-seed round exactly yes i see okay um tell me how you got your first customer back in 2018-2019 that's a good question our first customer was um my favorite restaurants here in geneva a friend of mine actually and i just told him like hey i need your feedback i'm building this platform for the restaurant industry and we're trying basically to gather everything into one single platform and he said but hey i'm actually looking for this kind of tool and i'll be happy to be your customer how much is it i was like it's 59 and the time was 59 say okay then this uh let's go let's do it half three restaurants and we deployed basically the solution across three restaurants very cool how many customers now today today i think there are 21 000 restaurants were registered on the platform and how many of them are paying uh that's uh that's confidential actually what sort of a range oh um a good good chunk let's put it like this like a thousand to five thousand or more than five thousand um let's say that that range one to five thousand yeah when do you think you can break five thousand paying customers oh i think um at the end of q1 next year and how were you able to build the wait list of 21 000 that's a lot of people yeah so basically it's all our goal right now it's basically to convert all these uh registered businesses into pink line to to offer them uh to learn my operating system but andre how did you get them signed up so restaurant owners are busy how did they find you 21 000 times oh um i think it's uh through our review platform and we reach out to them through a lot of different um kind of ways either it's online through instagram crm we call them we visit them we do a lot of press through partners three influencers and so on okay and you just told me sort of the range of customers was 1 000 to 2 000. if we assume the minimum there of a thousand times the rpu you told me earlier about 230 per month if i multiply those it would put you at about 230 000 a month right now on revenue i think that's probably larger than what you actually are is that accurate uh yeah it's uh it's accurate okay and and why is that is that because you have less customers or that rpoo is too high no because we just changed our business model we were transactional fees since uh three three weeks ago and we moved to a full sas uh very recently oh wait sorry what were you three weeks ago we were doing transactional fees so basically we were taking a small transaction a small percentage of every transaction that was going online basically i see what like one percent two percent yeah exactly okay and we moved away from that model and right now we are solely focused on selling subscriptions based on the number of uh verticals and integration they want to use on for detective so if a pizza shop in geneva was using you and they sold 100 pizza through your platform uh like is it a pos system they pay you a dollar of 100 exactly i see and why did you move away from that model that feels like a great model to me yeah actually the problem is that we had a freemium offer and this is why we managed to acquire a lot of customers very very fast but the thing is that converting them into paying we needed to basically increase dramatically the number of transactions and the marketing we were doing for them which was not our business model at all so we decided to shift into a full sas platform um and basically telling them okay if you want basically to manage all your tech stack from food detective now you have to pay i see so so how much like gmv was going to the system back in october in that month that i cannot disclose uh neither why not because we don't disclose this kind of information well why i mean you shut it down you're moving on to something else so it was a low number i'm curious how low it was it was very low then like like under a million per month yeah okay and why was it so low i mean 21 000 restaurants right if you just if they each only sell you know i mean even even if they each only sell a thousand dollars a month through your platform that's 21 million dollars in gmv yeah so why weren't they using you this is a usage issue why weren't they using you they weren't using us because we didn't handle the integration ready actually which integration with all the pos and delivery platforms i see would you ever build your own pos system to avoid that never okay and so how are you solving that now with the sas platform do you have all the integrations live yes okay so if that was the issue why don't why don't you stick with the transaction business with the new integrations and increase your gmb because again we needed to have a lot of of marketing going through our own platform to charge the the fee which was not the case right now with a unique like model where you pay a monthly subscription fee we don't need that well people are going to cancel if they're if they're not using you to transact right whether you're charging on on percentagemd or not if they're not using you to get make money they're going to cancel a sas fee or a transaction fee so what's the difference because uh for us it works better to have a sas fee rather than having a transaction fee transaction how do you know that though you just launched it three weeks ago yeah but before launching it three weeks ago we had three years of research with restaurants using the platform but none of them were on a sas feed they were on all on the gm gmv thing and the issue on the gmv side was that you didn't have integrations correct exactly yeah so why didn't you have machines i mean why didn't you build those integrations you had three years to build it because we had to finish the platform first we we cover over 20 verticals across the entire industry so imagine the amount of software development that we have we are making even one integration so is that a mistake i mean shouldn't you focus on one vertical and dominate that one vertical first no absolutely not because then it's very difficult to expand whereas when you come in with the with a full vertical sas then it's uh it's easier to expand okay so you're present you're just just to comment on this entering new kind of verticals having anything ready makes it much much easier for restaurants not only to use your software but also for you to increase your repu online who who cares about increasing your rpoo you got to get the customer first and get them addicted and then you can worry about building other products and going to new internet issues and verticals i just i don't understand why you would try and tackle 21 verticals at once right when you start yeah that's your point of view then but i'm asking you why why would you go try and tackle 21 things at once right at the...