After six years of slugging it out in the small business market, Providence-based Swipely is starting to really feel the wind behind it. The company provides a payments-centric data analytics platform specifically aimed at restaurants, and CEO Angus Davis says the company’s aim is to help restaurants use their own data to “make better decisions, to help them to make more money at the end of the day.”
Last year the company reported that merchants were using it to manage over $4 billion in sales annually, and Davis says that the company is seeing revenues more than double year-over-year.
Street Fight recently caught up with Davis to talk about the specific pain points for the restaurant business, what he thinks of the rise of beacon technology, and where he sees the industry heading.
In a lot of conversations with brands and retailers over the past couple of years, we keep hearing how excited people are about applying big data techniques in local contexts. But in general, it doesn’t seem like their companies are actually using most of the data they’re collecting. Is that gulf between information and action part of what you’re working to bridge?
If that’s the case with brands, then it’s an order of magnitude bigger with small businesses. We work primarily with independently-owned-and-operated restaurants, or with regional brands that have between 10 and 100 locations. The problem is that many technology firms have built big data analytics solutions that make sense to the technologists that are building them, but actually don’t make a lot of sense to the business owner. …
We don’t expect our customers to log onto our website and crunch data all day. Instead we crunch it for them and turn that into actionable daily reports, which we put in their inbox every morning. When they wake up, they can see at a glance what’s happening with their business.
Are restaurants still Swipely’s ideal customers?
We have great customers in other sectors. However, the vast majority of our new customers these days are in the restaurant space, and in particular, the folks who get the most out of our products are full-service restaurants, or restaurants that are providing a high level of guest experience. We generally aren’t as focused on small, corner-coffee-shop-kind-of-things.
An important element of why you go to a restaurant is not simply to grab the food and go but to enjoy the experience while you’re there, to have a server come to your table to take your order and bring the food to you. That’s where the guest database we provide to our restaurant customers comes into play. We’re able to tell the restaurateurs about who their guests are, what their preferences and past purchase behavior indicate, and things of that sort.
A lot of the local companies we cover start with very specific vertical services — like daily deals or mobile POS — then, over time, try to expand out of that to become an all-in-one solution for local businesses. Is that the end game on some level? Or do you feel like you can go deeper into what you’re doing with POS data analytics and loyalty?
Local merchants don’t want to integrate a whole bunch of different point solutions. So the idea of a one-stop-shop where they can easily manage all of the things going on [is appealing] — whether that be marketing; the finance elements of their business; the labor; their customer database, which is ultimately the most important thing they care about; and even the items, essentially the inventory of their business; all of these things.
Today, it’s challenging to do that. All of that information is in a bunch of different systems, many of which, frankly, were never built to talk with one another. What Swipely is doing is basically tapping into those existing systems —many of which are old-fashioned legacy point-of-sale systems — and putting all the data into a single place. Our vision is that over time we want to provide the operating platform on which a restaurateur runs her or his business.
Today, the pieces of that platform that we have include all of the payment information; a great deal of information about the performance of your staff; information about the performance of your menu items; as well as a database of who your customers are. We also provide some simple marketing tools for reputation management and loyalty.
What are some other elements that you’d ultimately want to add?
We’re right at that point of trying to figure out the parts that we want to build and the parts where we want to partner. I would say that to a great extent our strategy would be to partner with a market leader for these different point solutions, to help business owners more easily manage those different systems by putting it all into a single place.
Would beacons be a part of this future, or how do you look at something like that which collects business information in a different way?
We actually built a bunch of technology using beacons to do in-store mobile payments and stuff like that — we never really talked about it or announced it; we just deployed it to our customer locations to think more about it.
What we basically determined is that if you’re not going to fundamentally improve the guest experience, then there’s really no motivation for either the consumer to change the way that they’re buying in the restaurant or for the merchant to replace the operating practices they have for how they handle payments.
Things like beacons in theory could be used to do a bunch of cool stuff in a restaurant, like facilitate mobile payments, for instance. But what we found in all of our testing is that with mobile payments, the juice isn’t worth the squeeze. There isn’t enough of an improvement in either the consumer experience or the merchant experience that justifies driving a significant change in consumer behavior.
It’s something we keep a close eye on. Certainly, beacons are really cool technology. But I don’t think that credit cards are really going to go away as the dominant way people pay for things in a restaurant. Today, with the restaurants that we work with, 80 percent of their sales are from customers who are paying with a credit or debit card, and the percentage paying with a mobile phone is negligible. Even the most techno-advanced-type customers we have aren’t really into it.
Keep in mind part of that, too, is because we’re dealing with full-service restaurants. Where I could see mobile payments and beacons and stuff like that being a bigger deal is a quick-service restaurant, like a Subway, a Starbucks, a Dunkin’ Donuts. It’s a very different type of buying experience, and it can probably add more value there.
Having built Tellme in Silicon Valley, and now having built Swipely in Providence, what would you say is the biggest difference between those two experiences in terms of location? I’m sure a lot of things are cheaper in Providence — but how challenging has it been to find and retain tech talent?
The San Francisco Bay area tech talent pool is significantly better and larger than in any other tech community in the United States. New York is probably second. Being outside of that has some distinct advantages and disadvantages.
I would say the disadvantage is that it’s not as readily available — the talent that we’re looking for, the sources of capital, the business partners, and so on. On the other hand, nowadays, I think it’s easier to do things at a distance than it was in the past. …
In terms of the talent thing, I think it’s overall kind of a net positive for us in that within our market — in southeastern Massachusetts, Rhode Island, and Connecticut area we are certainly a differentiated employer. We’ve been recognized three years in a row as the best place to work in Rhode Island. We just got an award from the local media as the most innovative technology company in the state. We’re recognized by Inc. magazine as the largest technology industry job creator in the state.
That recognition and that differentiation within our local employer base makes us stand out to people who might want to work here. The challenge is for certain types of skills that are highly specialized — like an engineering position, for instance. We have to be able to attract people that not only live in Rhode Island, but sometimes we need to attract people that live up in Boston. …
The toughest type of talent to find is mid-level management, because there aren’t as many feeder companies in the ecosystem from which to cross-pollinate talent. Hopefully, that will change over time.
David Hirschman is co-founder and COO at Street Fight.
This interview has been edited for length and clarity.