The sharing economy model has revolutionized the way organizations do business in a wide range of industries. It transformed the transportation industry (think Uber) and the hospitality industry (think Airbnb), as well as office spaces and many other industries.
A tech-based sharing economy model, by definition, has a high potential for growth and can leverage underutilized assets and resources in a collaborative way such that all physical assets and resources transform into services.
How It All Started
In the past 10 years Mo’ and I have helped customers in the F&B sector with their digital transformation, we spent days and nights:
- Analyzing their day-to-day business activities
- Understanding their food production workflows
- Automating their supply chain cycle
- Developing their integrated point of sale system
- Optimizing their stock control
- Calculating their food cost, among other functions
Thinking of all the cost burden that restaurant owners carry, we asked ourselves shouldn’t the food industry in Egypt be transformed into this sharing economy model? If instead of paying for the resources they own, restaurants and food producers can just pay for the time and services they use, the heavy assets capital will transform into a minimum subscription in an on-demand service as and when needed. Consequently, the owner of the classical restaurant kitchen will transform into a subscriber in a commercial kitchen which they can use on a “Kitchen as a Service (KaaS)” basis.
Assuming we’re a restaurant/food brand owner who wants to expand their business to Egypt, we pulled out an excel sheet and started building a business model right away. We kept aggregating the capital needed for:
- Licenses
- Equipment
- Long-term commitment rentals
- Employees
- Logistics and warehousing
- Supply chain
- Operations
- Energy consumption
- Marketing
- Delivery
- Customer success and call centers
We also started calculating how dramatically we can cut this cost and avoid unnecessary or unrewarding capital if we shift the model from owning the resource to utilizing the resource.
As a result of this quick study, the challenge was clear enough, and the solution was obvious: we must build a reliable A-class Cloud Kitchen in Egypt (AKA Ghost Kitchen or Dark Kitchen) backed by a solid technology infrastructure that fulfills the needs, minimizes the cost, and maximizes the benefits for our subscribers.
But how can a Cloud Kitchen work smoothly with all the different menus and SKUs for each restaurant? What about the different cuisines and the massive variety of supplies and ingredients? Let alone the special cooking procedure of each recipe!
Also, how will the financials work here? How should the delivery be optimized? And how should the quality be maintained for each food brand in terms of consistency in taste and packaging? The devil is in the details, and those were the hard questions that needed to be answered first.
You can probably imagine how two data-driven tech gurus and serial entrepreneurs co-founding a startup would work. Sounds nerdy, no?!
Adopting a Data-Driven Approach
To us, data is everything — it mandates our steps and drives our decisions. So, we opted for the services of a trustworthy F&B market research agency in order to dig deep into the F&B market. They provided us with a sophisticated market research report about the market size of the food delivery business and the other cloud kitchens in the MENA region, their successes and the pitfalls they ran into.
Using that report, we came up with the strategy of when and where to open our kitchens, which cuisines we should host, and what subscriber profile we should look for. Now we know specifically who our customer is. Check!
In parallel, we hired an F&B operations consultancy firm headed by a team with an entrepreneurial mindset yet corporate organizational experience. The very same team has previously built so many chains of restaurants and is already familiar with the language of franchising in Egypt and the GCC.
We spent months with them understanding the 6 different models of cloud kitchens, the pros and cons, the operations, the equipment, the food cost optimization techniques, the last mile delivery algorithms, and everything we need to learn about a commercial kitchen and how it works. Now we know specifically how we will operate. Check!
Before we noticed, we found synergy with our F&B consultants, and they jumped in for this exciting journey. Now our team’s key players are complete. Check!
Meanwhile, we chatted with a couple of old friends who love food and startups to tell them about our new food-tech startup and the vision we have in mind. Guess what? They immediately said yes, let’s do it. Now our initial seed capital is complete: Brito Cloud Kitchens was born!
Six months down the road, Brito has:
- 33 employees
- Multiple subscriber brands
- A set of innovative own virtual brands
- Corporate Catering contracts with big organizations in Cairo
- A 1000 square meter Central Kitchen in New Cairo
- A 440 square meter flagship satellite kitchen in New Cairo
And the best is yet to come!
A Little More About Us
I’ve been working with my longtime friend Mo’ for more than 10 years. We both come with 22+ years of experience in building and scaling tech-based businesses in Cairo, Alexandria, San Francisco, Berlin, Dubai and Riyadh.
Together we’ve built beautiful products and provided technology services to dozens of customers throughout the years, many of them were Food producers, chains of restaurants, and central kitchens with huge warehouses.
My Two Cents
So that was Brito in a nutshell! And the key takeaways are:
- Understand the challenge you’re addressing very well
- Define your proposed solution very clearly
- Put together a killer team
- Find your early adopters as quickly as you can
- Business partners are business spouses, so choose carefully who you bring in as shareholders
- Don’t worry if it takes you a month or a year; just do it the right way
- Be flexible and adaptable to local and international challenges
- Always have a plan B and plan C; growth can take many routes
- Business stability and profitability are as important as growth rates
- Constantly work on containing your stress level, and remember, you chose to do this, so at least enjoy it.
We’re super excited about the future of Brito, and we’d love to have you on board!
Let us know more about your brand to get started.