An app that uses dynamic pricing to boost restaurant sales
As a fresh Mechanical Engineering Graduate from Texas A&M at Qatar, Hamza has little to no experience of operating within the F&B space. But, that doesn’t deter him from pursuing his dream and creating a business that he truly believes will help restaurants sell better. So, is he succeeding? We find out…
In a clothing or electronics store, when retailers are left with excess inventory that they want to clear out it’s quite normal to see them offer serious price reductions or organise a clearance sale. So, why should it be any different for food outlets? This is exactly the question that Hamza Abdurrahman asked himself when he noticed the high levels of food wastage in restaurants and places around him. He wondered if restaurateurs would be able to clear out food faster if prices were slashed down at the end of the day. “I observed a problem around me and came up with a solution. The problem was that the buffet at our dorms was too expensive and the food they had for lunch or dinner used to be thrown out at the end of the mealtime. The solution seemed to be to sell the excess food at a reduced price at the end of the mealtime. I wanted to deploy a model that would enable F&B outlets to implement this,” remarks the young entrepreneur.
To combat this market challenge, Hamza rounded up funding from close friends and family and start developing a mobile application called Kiwi (his company is called Halakiwi). The application’s purpose was to give leading restaurants a platform to feature their offers and discounts in a user-friendly manner.
Simultaneously Hamza undertook market research to test the feasibility and receptiveness of his concept. “Market research is the most critical aspect of starting a business. The feedback we received from literally shaped our offering. We learnt that the problem we initially set out to solve i.e. tackle food wastage wasn’t the right way to approach outlets. Rather, the real-time functionality of our app could be better applied to offering dynamic prices for restaurants to increase sales during off-peak hours.”
The app then shifted its core offer to “restaurants boosting sales during off-peak hours” by offering special discounts during those times. The app is completely free for users.
Hamza believes that the time spent on making this change was worth the effort and resources. “We’re in a dense market segment: F&B apps. I think it’s very important to identify your market segment and ensure a solid product-market fit before execution,” he remarks.
The realities of start-up life
Hamza’s app is gaining traction – both in terms of restaurants and end-users. He currently has over 1500 users and is successfully targeting communities like Dubai Academic City, Knowledge Village, Dubai Silicon Oasis and so on. “We love doing collaborations. Currently, we are working with student clubs in universities. We are always open to any offers for collaborations within our market space.”
In terms of restaurants, Hamza celebrated signing his first paying restaurant in November 2017 and more recently signed Cha Cha Chai in December 2017.
On the investment front, he has garnered interest from investors willing to invest in the team. But, Hamza is keen to bootstrap for another few months so he plans to hold out until he can get an investor familiar with the F&B market in the UAE; someone that can help open doors with bigger restaurant brands for Kiwi.
Even with all the positive advancements the start-up is enjoying, he’s still grappling with the realities of start-up life. Looking back at some of the hurdles he’s faced, Hamza shares: “We experienced communication problems with our tech partner and that increased our gestation time. It was unfortunate and easily avoidable if we’d taken time to draft a legitimate contract covering all the aspects of project completion. We also had a beta test executed in Sharjah. This brought to light plenty of operational problems with restaurants and it made me realise that our sales process was seriously flawed. We were talking to restaurants as though we were trying to sell them our idea. We learnt that the right way to talk to them is by showing them figures and projections of how their sales will improve if they sign up with us. And, that made a lot of difference.”
Of course, these challenges have made Hamza a hardened entrepreneur as today he finds himself better positioned to lead his start-up to new heights. “I’ve learned to always get any agreement on paper whether it is with your team, paying customers, users, or anyone else. Don’t take legal matters lightly. Always listen to your market, have an open mind and be ready to accept the fact that you may need to pivot or that your business plan if it’s not sustainable,” he advises.
Onwards and upwards
Hamza is now firmly focusing on the future of his app and is looking at ways to further his user base. “The short-term plan is to become the number one F&B app for students. The long-term dream is to introduce this concept of dynamic pricing across other industries like groceries, cinemas and so on. The UAE is a big market that we want to focus on for right now. We are also considering emerging technologies keeping in mind the industry trends. Blockchain applications are going to be big and it’s going to affect every industry including F&B. 2016 was the year for AI and many apps already have some element of AI included in them even though the user may not always be aware. We would love to sign up a major fast-food chain like Burger King, Hardee’s, KFC, etc. If anyone is reading this from any of the major fast food brands (or any restaurant from university areas), please hit us up on email@example.com,” beams the unstoppable entrepreneur.