In September, I started writing a post on The Melt, a new restaurant venture in San Francisco. Then school got in the way of me finishing it – here’s the post.
There’s been a lot of hubbub in Silicon Valley about a new start-up that recently launched. It’s not a cloud computing software or a new social network.
It’s a grilled cheese restaurant. Yes, there have been a few venture capital firms that have actually invested in The Melt, a restaurant that specializes in the art of grilling bread and cheese sandwiches. Even more peculiar – the guy who started The Melt has tons of experience in tech, but no experience in retail, restaurants, or (most importantly) food.
Their hook (to separate themselves from food-chain mediocrity): tech do-dad’s and thingamabobs that no restaurant in existence has really implemented before at the core of their business.
Examples of this include paying by mobile phone and geo-fencing with coupons and ordering when you are within walking distance of the store.
On the surface, this idea seems doomed for failure — you’re selling a low cost, easy to make sandwich at a high price that many people don’t usually consider gourmet enough or complicated enough to warrant ordering at a restaurant.
The truth is, The Melt will probably fail. But what if The Melt was designed with the idea that it may fail? What if this is all some big elaborate testing playground that has nothing to do with churning out some hot new chain restaurant that wants to go mano-y-mano with the Chipotles and Five Guys of the country?
The evidence proving this theory may just be there if you read between the lines:
1) This isn’t about grilled cheese, it’s about retail. If you look at the history of the investors and the board of directors to The Melt, it certainly doesn’t scream RESTAURANT. However, there are some members who certainly invoke awesome retail experience, most notably Ron Johnson. As the head of retail at Apple, Ron made visiting their stores an experience, not a chore. He redefined what shopping for a computer should be.
The restaurant industry is ripe for innovation in dining experience, especially when it comes to technological advancements. Why not create your own store as the model for what the new American dining experience should be and then license out your technologies to McDonald’s and Subway’s across America?
2) Low cost, high margin product + easy to make + quick entry into market = less risk. If the core product at The Melt, isn’t the product but the experience, why grilled cheese? It’s simple. The Melt’s variable costs are extremely low and more importantly, a grilled cheese at $6 a pop has an extremely high margin. In addition, making a product that’s easy to make means it’s easy to train staff and have a pretty low overhead (for a restaurant). Continue reading