We all know that feeling. Eating a great meal at a restaurant and wondering why the place is empty. Or having a craving for an amazing feast that you had a couple months ago, only to go back to the restaurant to find that the doors have been shuttered.
For Brice Gumpel, moments like these ate away (pun intended) at him. In 2011, after graduating from Brown University with a BA in economics, he moved to New York City to work as an analyst for Nomura. While he was getting an education in financial models and debt instruments at work, his girlfriend, an avowed foodie, was giving him a crash course in the city’s amazing cuisines.
While flexing his newly cultivated taste buds, Brice saw an opportunity to help restaurants. He left his post at Nomura to put the idea in motion and ended up pulling in Carroll, who he met on his first day at Nomura.
Gumpel’s friend and third co-founder, Attallah Attallah convinced him that the Harvard Innovation Lab, where he was already plugged in, was the best place for Seated to get its start. There they rounded out the rest of the early team with Attallah’s brother, Abed and another pair of brothers, Troy and Blaine Bolus. After countless sleepless nights and several iterations, Seated was born to change the way people find restaurants and bring dynamic pricing to the restaurant industry. The app allows diners to find available tables everywhere from Michelin starred restaurants to local burger joints, and gives rewards from the likes of Amazon, Lyft, Starbucks, Apple and Target, each time you eat out at their partner establishments in New York, Boston, Chicago, Atlanta, and Philadelphia.
Here Gumpel and Carroll, who has moved on to co-found Findigs, a startup focusing on innovating the real estate industry, discuss how to turn your passion into a business, how to mix making money with giving back and how to blend business with pleasure.
Gumpel isn’t picky. He’ll eat just about anything. It’s an outgrowth, he says, of being an athlete. “I grew up playing three sports, so I was always hungry. To get enough calories, I had to get creative, so I ate all sorts of things,” he explains.
There’s no better place for an omnivore like Gumpel than New York City, and he and his girlfriend took full advantage of every edible thing the Big Apple and its surrounding boroughs had to offer. Like anyone with an iPhone and an appetite, they started taking pictures of their delicious meals, and then went a step further.
“One day, we decided to start a food blog and, because my girlfriend is a graphic designer, the blog was beautiful,” he points out. “As we got more and more followers, we started getting invited to meet chefs, owners, and operators, so I got really close to the industry that way.”
And, seeing behind the curtain and into the kitchen, Gumpel realized that even though 60% of restaurants end up failing, they’re actually a phenomenal business when they are run at 90%+ occupancy.
“The problem is restauranteurs are so busy getting the food and hospitality experience right, they don’t have time to think about filling their empty tables,” he reveals. “What’s worse, their marketing options are limited; existing channels are largely unreliable and unattributable.
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Unable to stomach seeing great food go to waste and reputable businesses go under, the Seated founders called on their finance roots, creating models to understand the economics of every element of restaurants. “Looking at the numbers, we were shocked at the impact every single empty table has on a restaurant’s bottom line. We knew this is what we had to get them to understand.” Gumpel notes. At first it wasn’t easy, given the decidedly static nature of the hospitality game.
“The restaurant industry is one of the few left that doesn’t dynamically price. Rideshare companies, hotels, airlines, concerts/sporting events, retailers, you name it—they adjust prices based on demand,” Carroll explains. “For restaurants, the prices are the same rain or shine, Monday or Saturday. We saw an inefficiency that was dramatically affecting traffic/demand. To us, that was a good sign of an opportunity.”
“We set out to build an entirely new marketing channel similar to OTAs in the hotel and airline space and find a way to incentivize diners to fill empty tables without discounting the food,” Gumpel explains. “To do so, we had to change how restaurants get customers without upending the basic tenets of the diner/establishment relationship. So we created our own currency. Seated Bucks allows us to drive consumer behavior change without the deflating restaurants’ brands.”
They did just that, allowing them to sign up and fill tables for some of the hottest and most acclaimed restaurants in New York City. But even with an ever-growing roster of partners, Gumpel promises big things are coming. “Our partners see that Seated can unlock higher margins, we’ve now got grand plans to completely change how people dine out”, which is a testament to how positive disruption can occur when you take something that you love and interests you and apply your specific skill set to it.
HOW TO GET COOKING
Both Gumpel and Carroll kicked off their careers as analysts in the financial services/investment banking industry before going at it as entrepreneurs. Carroll thinks this a great way for young graduates who want to create their own startups to become familiar with the business principles needed to succeed on their own, not to mention a great way to develop technical and personal skills.
“While we had totally different roles within the bank, we share the opinion that especially for those with entrepreneurial aspirations, finance remains a great place to start a career,” Carroll advises. “To succeed there, you need to learn company politics, prioritization, and product-specific knowledge. It completely changes the way you think about opportunity cost on your own time and on capital investments..”
But their finance backgrounds didn’t bring them any credibility as entrepreneurs. As newbies, advice came their way whether they wanted it or not. They quickly learned to weed out the noise and focus on what had made them successful—their own instincts. Sometimes that meant acting firmly in their best interest and in the best interest of their company even if they had to step on some toes to do it.
“Startups come with a ton of feedback, solicited and unsolicited. Especially pre-product-market fit, we got critical advice from users, investors, advisors, restauranteurs, and other entrepreneurs,” Gumpel discloses. “But we also had to know when not to listen. For instance, deciding on our billing model, almost no one believed restaurants would give us a percentage of the bill on in-house dining. We knew we could dramatically improve restaurant margins, so we ran with it anyway.”
Of course, even with their success and in-depth understanding of their market, the founders had their share of things they had to learn the hard way. For his part, Gumpel remembers “getting ahead of myself and biting off more than I can chew (no pun intended).”
“As an early stage startup, any singular idea can be the thing that makes your company succeed or a huge waste of time,” he adds. “For our alpha product, we spent tons of time building all these crazy features and users only used one of them (getting rewards at restaurants!). So, after much wasted time/resources/energy we dropped all the other features and focused exclusively on restaurants.”
The team decided to test the app first in Boston because of the city’s dense population of grad-students and young working professionals, who they theorized were their target demographic. The local restaurant industry had yet to embrace technology so it was ready for a change. But, like all marketplaces, which must learn how to scale, and at the right speed, Seated had to solve “the chicken/egg marketplace problem”, which in their case hinged on finding a balance of bringing in new customers without overwhelming restaurants.
“For our business, we’ve learned there’s a formula for how much restaurant saturation is needed to drive user behavior. No one wants to open the app to see one restaurant in their neighborhood, just like Uber would be an awful experience if it were always a 20 minute wait time,” Carroll explains. “The first markets were the hard ones, selling the vision to restaurants without user numbers or a track record. Once we got traction, we expanded geo’s by convincing restaurants our success elsewhere was repeatable.”
As the app grew to include other US cities, Seated found a way to make a positive impact on a larger scale—something Gumpel learned from experience. You see, from a young age he coached a Special Olympics soccer team and at Brown, he worked closely with Project Goal, a nonprofit organization that inspires academic achievement through the passion and power of soccer.
“I saw how great of an impact a little effort made on people so I vowed to incorporate something charitable into everything I did,” he explains. That’s why Seated donates one meal per reservation to ShareTheMeal, an initiative of the United Nations World Food Programme to fight world hunger.
“We saw how much joy we were bringing to people by helping them find great restaurants and getting rewards for going, that we wanted to spread some part of that across the world to those in need,” Gumpel affirms. “We found ShareTheMeal and it was a perfect match—I can’t wait to do more.”
MAKING DOWNTIME WORK
Doing more is not a problem for enterprising folks like Gumpel and Carroll. As Gumpel continues to move Seated forward and Carroll sets up his new startup, they’re still figuring out their work-life balance. That means weekends disappearing when they find themselves tunneling into something at work that they say is just going to take a second, but ends up eating up all day Saturday and Sunday.
“Especially as first-time founders, learning on-the-fly, hiring, building, selling, it’s easy to get completely engulfed,” explains Gumpel. “For me, scheduling time in advance is the only way to force myself to set aside the to-do list (that doesn’t ever seem to get shorter)!”
For Gumpel, that includes man’s best friend, as he and his girlfriend spend lots of time with their dog Oliver. “I'm trying to teach him how to ‘play dead’ but he never budges without seeing a treat in my hand!” he exclaims. It seems when it comes to food Gumpel’s pet takes after him, because even though food is his work it also plays a big role in his life off the clock.
“I cook with my girlfriend a lot. Our go-to dish is chicken artichoke over rice or a Japanese salmon watercress salad,” Gumpel notes. “But, truth be told, I mostly unwind by dining out at great restaurants.”
He spends so much time eating out that when it comes to picking a favorite spot it’s impossible for him to pick one, saying it all depends on the occasion and mood he’s in. “On Seated though, I must say either Hanjan or Ferris,” he concedes. “Not on Seated though, Locanda Verde or Boucherie, maybe they’ll join Seated soon 😊.”
It doesn’t come as much of a surprise that Carroll concurs with Gumpel. “Both of us absolutely love dining out and trying new places,” he says. Inevitably, spending their free hours finding new places to eat pushes that work-life balance over to the work side.
“We can’t help ourselves though from counting the empty seats and debating the margins/operating costs of a given restaurant,” Carroll admits. “If we’re somewhere that’s not yet a Seated restaurant, we’ll always ask for the owner/manager.”
Luckily, with all the eating they do for work and pleasure, both Gumpel and Carroll stay pretty active. If you noticed how comfortable they look in Triple F.A.T. Goose parkas, that’s because they are winter sports enthusiasts. “We both love skiing,” Carroll says, before quickly admitting they even found a way to make trips to the mountains a networking opportunity. “Even when we can get away, we like to mix in some productivity by inviting other founders/advisers for a weekend on the slopes.”
Closer to home, the sport of choice is golf—and again they don’t let a little cold weather keep them from burning off some steam. “To stave off winter cabin fever more regularly, Steve and I love bundling up and heading over to the Chelsea Piers driving range,” Gumpel says. “Tossing headphones in and hitting balls is a great way to clear head-space, and they're open pretty late!”