.jpg)
The meez Podcast
Josh Sharkey (Entrepreneur, professional chef, and founder/CEO of meez, the culinaryOS for food professionals) interviews world class entrepreneurs in the food space that are shifting the paradigm of how we innovate and operate in our industry.
The meez Podcast
Sterling Douglass on Bridging Tech and Hospitality with Chowly
#59. Join host Josh Sharkey on this engaging episode of The meez Podcast as he sits down with Sterling Douglass, the dynamic co-founder and CEO of Chowly, a trailblazing food tech company that enhances your sales through strategic first and third-party distribution channels, alongside sophisticated advertising and marketing support.
Sterling shares his journey from an actuary to a leading entrepreneur, revealing the challenges and triumphs of building a company.
This episode dives into the innovative concept of dynamic pricing in restaurants, drawing parallels with fluctuating airline ticket costs. Sterling offers his expert insights on how this approach could revolutionize profitability in the food industry.
Josh Sharkey and Sterling Douglass will both be present at this year's NRA Show as well as Utility, taking place from May 19th-20th. Drop by and meet them in person!
This conversation is essential listening for anyone at the crossroads of technology and the culinary industry. Whether you're steering a startup or operating within a large corporation, the insights and advice from Sterling can profoundly impact your approach.
Where to find Sterling Douglass:
Where to find host Josh Sharkey:
In this episode, we cover:
(04:32): Sterling's background as an actuary and why he changed careers
(12:44): Where the idea for Chowly came from
(17:08): What Chowly is and who it serves
(22:08): Why restaurants get the short end of the stick
(26:22): Chowly and first party ordering
(31:34): Should companies, "do it all"? Or should they focus on one thing
(41:05): The 11 star experience
(54:54): Being a parent and a founder
[00:00:00] Josh Sharkey:
You're listening to season two of The meez Podcast. I'm your host, Josh Sharkey, the founder and CEO of meez, a culinary operating system for food professionals. On the show, we're going to talk to high performers in the food business, everything from chefs to CEOs, technologists, writers, investors, and more about how they innovate.
[00:00:19]
And operate and how they consistently execute at a high level day after day. And I would really love it if you could drop us a five star review anywhere that you listen to your podcast. That could be Apple, that could be Spotify, could be Google. I'm not picky Anywhere works, but I really appreciate the support and as always, I hope you enjoy the show.
[00:00:40]
Hello, ladies and gentlemen, my guest today is Sterling Douglass. First of all, just a pretty cool name, right? Sterling is the founder and CEO of a company called Chowly. They're a food tech company that, well, basically they help you sell more food through third party and first party distribution and helping with advertising and marketing and things like that.
[00:01:09]
I've got to know Sterling. A bit over the years through, well, at least one similar investor and then we've just sort of started to run in some of the same circles and super smart guy has been in this entrepreneurial space for basically his whole career, except he was like an actuary and an analyst for well before that.
[00:01:28]
And, you know, independent of the, of the great conversation we had, I always find it interesting, you know, seeing someone. Who started from the beginning building, you know, a tech company, being an entrepreneur and sort of learning that whole thing. You know, obviously I started my career cooking and spent, I don't know, two decades cooking and learning that whole process.
[00:01:49]
And of course you just learn a ton when you do that. And when I think about someone like Sterling who has done that same thing, but from the lens of actually learning how to build a company and navigate that whole experience, he has just learned so much and he's been a big help for me and a bunch of other founders of just sort of, you know, an ear.
[00:02:09]
For listening and advice, and he's been, you know, quite a bit of a stalwart in the food tech industry. So of course we talk a bit about his company and how it started and why he does what he does and how he's sort of approaching small restaurants, small businesses in America, as well as he services large ones as well with this company.
[00:02:29]
And then we do dig a bit into this whole like dynamic pricing that's happening now in restaurants which to be honest for me when I hear it I'm like duh like you know if you go to buy like a plane ticket it's not gonna be the same price every day and if you don't buy it soon enough it goes up and if you buy it right before you fly it's usually more expensive and you know.
[00:02:49]
I think it makes sense. And, you know, obviously restaurants are pretty low margins. So I think there's something interesting there. I don't know nearly enough about the topic to speak eloquently, but Sterling does. And he shared some pretty smart insights that he has about it. And in general speaking, we just had a really cool conversation about this whole sort of restaurant tech industry.
[00:03:08]
This episode, I believe is airing just a few days before the NRA show, so he'll be out there in Chicago. I'll be there. Go say hi to him. Come say hi to me. I think he's probably doing an event with Chowly. He does some pretty cool stuff for that event. We have an event we're doing with Made In Cookware.
[00:03:27]
So if you're interested, there's a cool little cocktail party with some chefs and mixologists. And we're also doing this event with Tilit for utility. Anyways, enough about what we're doing. Sterling is super smart dude and has been just building in a really incredible company. And as always, I hope that you enjoy the conversation as much as I did.
[00:03:55] Josh Sharkey:
Sterling, so awesome to have you, man. So awesome to have you here on the show.
[00:04:00] Sterling Douglass:
It's awesome to be here. I've been, I've been waiting. I've been listening to all these amazing episodes. I've been learning all these different chefs that you're chatting with. So I've been waiting for the opportunity to hop on something like this.
[00:04:11] Josh Sharkey:
We slack a lot in a number of different mediums. If I was being just a hundred percent selfish, I'll be honest, dude, I would just ask you questions all day long about, you know, how you're running your business because, you know, you know, this is, I'm not just saying it because like everything I say about every company that comes on here, Chowly is not paying us anything to be here.
[00:04:32]
I just love what you're doing. And I love what you personally are doing. So. I'm stoked to jump in. We got a lot of stuff to talk about today, but I want to start with, I didn't know that you used to be an actuary. Yeah. So my first question is actually, do you play poker?
[00:04:48] Sterling Douglass:
Yeah, I definitely used to play a lot of, a lot of blackjack.
[00:04:53]
Anything that involves stats and numbers and data, like I'm all over the hilarious part about me personally is I'm a huge data nerd on the inside. I just haven't talked about it in seven years. I've been more focused on talking about restaurants.
[00:05:08] Josh Sharkey:
Yeah, I know. Well, you were a statistician, bio statistician, is that right?
[00:05:12] Sterling Douglass:
Yeah, yeah. That was internships. I worked for, uh, an immunoassay diagnostics company, which obviously everybody, all of your listeners will know exactly what that is. Yeah, I just, yeah, we were just applying analytics and different statistical models to tons of different stuff, right? And a lot of that ends up showing up in the Chowly world as well when we think about data.
[00:05:33] Josh Sharkey:
It's a really good foundation to have in starting any startup. I mean, obviously there's the, there's the left brain stuff, but you know, so much of this is at scale statistics. So I'm sure you're applying a lot of that to, to what you're doing today.
[00:05:45] Sterling Douglass:
Yeah, never enough, never as much as I want to, right. I wish we did that better, but I think I'll always wish that as just kind of my natural state of being, cause you can always do a little bit more.
[00:05:55] Josh Sharkey:
So why did you leave? Statistics and get into, you actually had a different startup first, right? Cause I think you did something with, it was called Nix.
[00:06:02] Sterling Douglass:
Yeah. Yeah. Yeah. Yeah. A bar app. Yeah. Like I, uh, my first job out of college, I was a practicing actuary. I had no reason to leave. My job was sweet. I had awesome, cool customers like United Airlines and Northrop Grumman.
[00:06:14]
My teams were cool. It was really challenging work. I had amazing mentors. My manager was great. The head of the entire Chicago office would meet with me monthly just so I could ask him, You know, questions that, you know, 21, 22 year olds young in their career ask. I got paid really well. I loved the people I worked with.
[00:06:33]
So obviously, you know, I had every reason to leave. There's one piece that was missing from that job. Everything that we worked on would start out with the same question. And that question would be, what did we do last time? And so when you start every project off with that question, you never think of things from first principles.
[00:06:53]
You never get to build stuff from scratch. You never get to rethink the model. You end up working on Frankenstein monsters. Which isn't the worst thing in the world, I learned a lot about iterative approaches to building things and solving problems. But I got to work on one project, and no one in the entire company of 40,000 employees had ever done it before.
[00:07:12]
And it was the most satisfying project that I worked on. And so I, it kind of gave me this clue and a scent that like, do you love building things from scratch? You love solving problems where they haven't been solved before. And so I wanted to do on that entrepreneur route. And so I left after, after two years, all I had to do is write like a short paper and I would have gotten letters after my name, but it was the time.
[00:07:36]
So I, I left and started my first company then.
[00:07:40] Josh Sharkey:
When was that?
[00:07:41] Sterling Douglass:
When did you leave? So that would have been kind of like early summer of 2015. We'd kind of been, me and my co founder at the time had been moonlighting a little bit to late 2014. In 2015, quit my job, went all in, gave myself six months of runway and I figured, hey, six months I'll know if this is a thing or not.
[00:08:00]
And if it's not, I'll just go get my old job back. And after six months, it was pretty clear to me it wasn't working. So now I was trying to figure out what was next. When did Chowly launch? So Chowly, we formed on November 19th of 2015. And on December 18th, we actually had our first client live who was paying us.
[00:08:22]
So we'd brought Justin and I, technical co founder of Chowly, we'd brought that product to market in 30 days, which was something that was really important to me because the bar app, Nix, that I had worked on, I mean, we were developing it for months and months and months before even getting our first customer live.
[00:08:38]
So big milestone for us, but that was the timing of it all.
[00:08:41] Josh Sharkey:
So it's been almost. Almost 10 years now.
[00:08:46] Sterling Douglass:
Yeah. Yeah. Almost.
[00:08:49] Josh Sharkey:
I am curious. At what point were you like, Oh, this is going to work. This is like a long term thing.
[00:08:55] Sterling Douglass:
You're assuming it's happened yet? No, I'm just kidding. There, there were a couple of moments along the way that I definitely remember.
[00:09:00]
I don't know exactly which one, like, which was the day I woke up and I was like, yeah, this is it, like we're set on December 2nd, I think we had our first order. We ever integrated, we took a grub hub order and with no manual entry, no nothing. It just printed a receipt on a speedline point of sale system at a pizza place in Wrigleyville in Chicago that I used to frequent.
[00:09:24]
And, uh, when I saw it work, both my co founder and I kind of had this, like, this could be really big, like. We are the, the, the bridge, we are connecting, like, this physical brick and mortar to things outside of the four walls in like an automated fashion, so we had We had like a moment where like, Hey, like this could solve a huge problem and be big.
[00:09:43]
So I remember that moment a lot. And then I think right around that series A funding, I think that that was like a big one. Math Ventures, one of the top VCs out of Chicago.
[00:09:53] Josh Sharkey:
Oh yeah, Troy. Shout out to Troy.
[00:09:55] Sterling Douglass:
Yeah, dude. He's got more fingerprints on this business than anybody. He's, he's helped me through a ton.
[00:10:00]
Been one of my biggest mentors. Love that guy. Yeah, we, we got that, like the series A, you know, it was like 5, 6 million, you know, back then. Yeah. That was how big Series A rounds were. That was a, that was a big moment mostly because it was like, Hey, maybe we know what we're doing. Right? Like, like we knew we had a good idea, but like, we actually know how to operate.
[00:10:19]
We know how to present, we know how to fundraise. Like it was a, it was kind of like a, Hey, like we're big enough for the moment. So I don't know. Those are probably the two top moments in those early days that I remember the most.
[00:10:30] Josh Sharkey:
I mean, the thing is, is, you know, there's like the inception moment of like, oh yeah, this product can be something.
[00:10:37]
And then, yeah, there's like this, you know, when you raise, we raised 9 million in our A round. I'll be honest, even then I was like, um, we'll see, you know, and I think that's the funny thing that is probably a misconception with businesses. There's never like that moment, right? Where you're like, oh yeah, next 20 years, we're all good.
[00:10:56]
I mean, maybe, maybe like if you're a, you know, it's your Microsoft or something. And maybe it's also a personality thing, but like, I don't know about you, but for me, I'm like, I'm never like, oh yeah, now I'm good. I'm always like, you wouldn't good things are happening or really good things. I'm like, what's around the fucking corner.
[00:11:13] Sterling Douglass:
Well, I did. It's always hard for entrepreneurs, right? Like if something good happens, you always wonder, like, did we get lucky? Cause you do like luck has a huge, huge thing to do with it. You know, did we get lucky? Or like, I didn't really do this. Like one of my team members did it or. You know, yeah, we landed this big deal, but that's cause like, you know, I developed a personal relationship with this person, right?
[00:11:31]
Like that's like, you always kind of like can rationalize yourself and battle that imposter syndrome. I think that you're just always doing that. I think one of the reasons is because especially like founder CEO, your job changes every 6 to 12 months. Like it's just a completely different job. So as soon as you feel like you may be getting good at your job, you usually get moved on and you have to go work on something else and relearn it from scratch.
[00:11:52]
So I always joke that you're, I'm, I'm perpetually unqualified for the job I have and always qualified for the job I used to have.
[00:12:01] Josh Sharkey:
It's so true. It's a constant. Your highest and best use changes so often. You know what I mean? I don't know how often it's supposed to change, but it definitely feels like it changes a lot.
[00:12:10]
So I get it started in 2015, but I don't really understand why you went after this ordering third party thing. How did that happen? What was like the origin there?
[00:12:19] Sterling Douglass:
Yeah, so it's a classic case of kind of just, you know, following the problem. Right. So I knew I wanted to be an entrepreneur, you know, about a year into, you know, my first year out of college.
[00:12:29]
So my first year into my, my real person job. And so I knew I wanted to be an entrepreneur. So I wanted to find a problem to solve. And I tried to, you know, what are the things I'm passionate about? Like we, You know, I'm passionate about like sustainability and like solar panels. We had some like weird ideas there.
[00:12:44]
Are we, I'm I'm passionate about like snowboarding and skiing. I had some ideas there and you know, as any 22 year old with disposable income living in a big city like Chicago, I spent a lot of time at bars and so there was a problem right to be solved. There's like, sometimes it's hard to get a drink, but wouldn't it benefit the business if it was easier for the consumers to, you know, purchase more items and so we, we chased down a few ideas and that was the one that we landed on.
[00:13:08]
And I made every first time founder mistake in the book during that six month period, starting the bar app. And one of them was, or one of the issues that we ran into is that the bars wanted us to integrate into the point of sale system. We were trying to give them an iPad, right? We were trying to put a tablet behind the bar and they didn't want that.
[00:13:26]
So we built a point of sale integration. We actually never even launched it, just barely learned enough to know what the problem was. And as we were shutting that down, one of the other guys who was kind of helping me out was like, well, if you can integrate orders, you know, from your app into a point of sale, could you integrate orders from GrubHub into a point of sale?
[00:13:44]
And I was like, well, yeah, sure, but that's a dumb idea. And he's like, I don't know, maybe you should go talk to some restaurants. So I went and talked to restaurants around Chicago. I just walk in random places and ask them. And they all said it was a huge pain point. And, uh, and so, you know, just followed the problem and, and learned more about the customers.
[00:14:02] Sterling Douglass:
And that's how, you know, we kind of discovered the idea for Chowly.
[00:14:05] Josh Sharkey:
I mean, Sterling, I owned restaurants back then, and I vividly remember, and we were one of the first restaurants in Brooklyn that had the first of Caviar, DoorDash, Grubhub, Seamless, because Seamless and Grubhub were separate. And we had a fax machine.
[00:14:20]
It was all in fax. We would get an order in via fax. There was a computer, but obviously the computer's down in the office, so you didn't like go to the computer for the orders. So we got a fax in, and then we would have to type that into the, into the POS. And it was insane. It was like, it's, it was insane how much time we spent just. To process one order for this delivery that we would also pay a ton of and back then also there wasn't like Relay homers that so, and the apps didn't do it.
[00:14:48]
So we had delivery drivers as well. It was like, it's funny you say like, Oh, that's a dumb idea because I remember being there. And if someone came in and said, Oh, you know what? You don't have to do anymore. It's going to come to your POS. I'd be like, please, I don't get what it costs us to bring it in.
[00:15:02] Sterling Douglass:
Yeah. So there's a company called campusfood.com. They, uh, they emerged with Grubhub. And that was going to be the original IPO for like the first marketplace. And then they discovered seamless and then they added that in. So. A lot of people always think that Grubhub and Seamless was kind of the merger that created the IPL.
[00:15:18]
But it was actually Grubhub and Campusfood.com. But the reason I bring that up is because Campusfood.com was the number one fax customer of HP in the entire U. S. It makes sense. In the late 90s because they were buying them and giving them to restaurants so that they could send them orders. So I have a lot of familiarity with the fax machine problem.
[00:15:40] Josh Sharkey:
Yeah, yeah, it was brutal, and then eventually it went to tablets, and then you would have like six tablets, because every one of them gave you their own tablet, which was locked, and you could only use it, which made no sense. It's like, alright everybody, at least Let us have one tablet and we could put them all in it, because you know we're using all the services.
[00:15:58]
But you would have literally like six tablets.
[00:16:01] Sterling Douglass:
I mean, back then it was to their advantage not to let you use the other ones, right? Like, it was, that was, I think that was one of the reasons that no one, like those companies didn't build what, what Chowly was and what Chowly started out as. Because that, the lack of integration was a barrier to entry for competitors.
[00:16:20]
Right, because some restaurant like not every restaurant would accept tablet Hell, a lot of restaurants said, no, I have a grubhub tablet and unless like if you're, if your only solution is to give me another tablet, then no, I don't want more orders. That was actually a very common response to it. And then once it was integrated, they're like, well, yeah, I don't care anymore if they're integrated, give me everybody.
[00:16:41]
And so that made it easier for the competitors to come in. So I think it's one of the reasons that. This problem wasn't solved for such a long time until Chowly came along back in 2015.
[00:16:51] Josh Sharkey:
Yeah, that makes a lot of sense actually. And there's just far less information you have when it's all offline. You actually, you don't really totally find out all your orders or who refunded until the end of the month and it's too late by then.
[00:17:03] Sterling Douglass:
Yeah, don't get me started on refunds and disputes. It's a hot topic these days.
[00:17:08] Josh Sharkey:
All right, well, let's talk a little bit about like the core of what Chowly is and does, and then just, you know, some of the people that you serve.
[00:17:17] Sterling Douglass:
Yeah. I was really focused on SMB restaurants, independent restaurateurs.
[00:17:21]
We definitely got some, some larger brands that our product works really well for. But I mean, everyone from the mom and pop to, you know, that 10, 20 location emerging brand, you know, groups that have established their brand, they've got their recipes, they've got their food costs locked in, they're ready to grow, but they need to get their tech stack up.
[00:17:37]
Thank you. Sort it out. I mean, these, these are the ideal customers and the ones that we get to help every day. So on the SMB side, that's, that's really where we're more focused than what we actually do. I mean, we're an off premise platform. So everything from your first party, online ordering, your third party marketplaces, your digital marketing, your Google ads, all of those things kind of wrapped in one platform and always leveraging the point of sale integrations that, you know, we've been using since day one to always make sure it's easy on the restaurant.
[00:18:04] Josh Sharkey:
Oh, you guys do Google ads? How does that work? So you, you actually like build ads for restaurants?
[00:18:09] Sterling Douglass:
Yeah. So we, we acquired a company called Targetable actually, uh, last December. That's right.
[00:18:13] Josh Sharkey:
Andrew. Yeah.
[00:18:14] Sterling Douglass:
Yeah. Andrew Nass. A marketing legend.
[00:18:17] Josh Sharkey:
Yeah.
[00:18:17] Sterling Douglass:
We do Google ads. We do meta ads. I will do organic social. I will do email marketing with the discoverability, listings management, reviews, uh, ratings.
[00:18:27]
Anything that's going to help drive more sales to the restaurant, more orders. Like at the end of the day, like we sell dollars to restaurants. Like, that's what we're doing.
[00:18:35] Josh Sharkey:
What does that mean? You sell dollars to restaurants
[00:18:37] Sterling Douglass:
If a restaurant wants to make more dollars, like we, we, We have about 50 different ways that they could do it.
[00:18:43] Josh Sharkey:
Oh, got it. So you're, you're essentially, Chowly is essentially just creating incremental revenue for restaurants.
[00:18:47] Sterling Douglass:
Yeah. And sometimes it's not even incremental revenue. Sometimes it's direct profit. You know, we do a lot of stuff with dynamic pricing. We have our smart pricing tool. That one, I mean, we've got locations that we're delivering $10,000 a year in EBITDA, like literal profit that just goes into.
[00:19:02] Sterling Douglass:
You know, the owner's. How does that work?
[00:19:03] Josh Sharkey:
So, I mean, everybody's talking about this surge pricing now, but what, how does that work for a restaurant?
[00:19:07] Sterling Douglass:
Yeah, well, we don't call it surge pricing. We, uh, the New York Post will get you in trouble. It's smart pricing. It's delivering the right price to the right customer at the right time.
[00:19:17]
And so for, for us, I mean, the classic example I give is we do a lot of delivery on third parties if it's Friday night and we know it's going to be raining, like the weather's going to be bad, the demand for delivery is going to go up. And so we'll increase the prices so that. You know, that demand will match supply.
[00:19:36]
It's a way to really increase profits for restaurants. And it's something restaurants have been doing for decades. I mean, happy hours, a form of dynamic pricing, right? You're lowering your prices to help drive more demand, right? When demand is low.
[00:19:49] Josh Sharkey:
Yeah. Well, we used to charge more for delivery. Like we just had different prices because.
[00:19:54]
I mean, it was funny because I remember when this, when everybody started using Caviar Door Dash, this was around 2014, 13, whatever it was. And everyone was like, do we charge more? And I was like, yeah, we've taken 20%. I got to deliver this to you. It's a whole other thing. And we would charge slightly more and customers at first were like upset.
[00:20:14]
And then they were like, well, I want this and I don't want to leave my house. It's not a new thing.
[00:20:20] Sterling Douglass:
Yeah. And we always tell restaurants to like, don't do this on your first party ordering. Like do it on your third party ordering. And that way, if a customer does get upset, you just go order from us directly and you'll always get the lowest price.
[00:20:31]
Yeah. Yeah. 100%. It's crazy, dude. When we first started back in like 2015, 2016, less than 5 percent of restaurants had different prices on their third parties versus, versus their first party. Fast forward to kind of like 2022 and after the pandemic, and as a lot of the price increases and inflation kind of started.
[00:20:51]
And you'll start to see like 20, 30 percent of restaurants were doing it. It's up to 60 percent now, 60%, uh, you know, Chowly 17,000 restaurants charge a higher price on third parties than they do either first party or in store.
[00:21:06] Josh Sharkey:
It is funny that it's, you know, that whole hullabaloo, you know, about the pricing, dynamic pricing, what it was in restaurants, because restaurants just get the brunt of so much You know, we can never charge enough that, as much as we should, I've probably sort of went far too deep on this in other, in other episodes about how, you know, you're paying for experience, not just the food, and that costs a lot of money, you know, you go buy an airline ticket, it's just obvious, if I go there right now, it's one price, if I go there tomorrow, it's a different price, and if I try to buy my ticket the day before the flight, It's a different price and that's okay for, for airlines, but for, but, and, and for a lot of other, you know, you know, things as well, like obviously when, when new lines of clothing come out, they're way more expensive than they are, you know, six months later, probably just a cultural thing that they'll just over time become, you know, more common.
[00:21:57] Sterling Douglass:
I haven't figured out why Josh, but restaurants always get the short end of the stick and I have to play by a different set of rules. I think I know why.
[00:22:08] Josh Sharkey:
I think the thing is, is that food is something we cook at home all the time. So, for some reason, I'm gonna, you know, I have to just repeat this thing I said last time, because it's relative.
[00:22:16]
We buy a ribeye at the store, and we go home and we cook it. And so we're like, okay, I know how much I pay for a ribeye, and I can make that at home. So if I go to a restaurant, It shouldn't cost me more than that, right? It should be like some small markup. Not realizing that, you know, somebody has to decide, you know, what kind of ribeye they buy, and they have to buy a lot of it, and they have to store it, and they have to, you know, make enough so that it lasts for X amount of people, and then you have to have somebody design the space that you're going to be in, and someone to clear your plates, and make you feel special, and all these things.
[00:22:50]
are a cost, and they're expensive, and you couldn't do it at home. Otherwise, you know, you would have a restaurant in your, in your home, which you don't. But we don't have airplanes in our backyard that we can sort of use and not use. We don't have clothing lines that we make ourselves. Like, there's very few things that we actually do that, that we also go out and buy.
[00:23:11]
Like, no one makes their own clothes and then goes and buys from fake crew, whatever, like not many people. But, they do that, you know, with food. You buy your food or you go out and order for delivery or restaurants and I think that's the thing. You don't make your own phone or decide to go buy an iPhone.
[00:23:26] Sterling Douglass:
The familiarity with the, with the basic product and, and the process on, on how to make it. Yeah, I mean, I could understand that from a consumer perspective, but consumers aren't the only ones that hold restaurants to a higher standard. I mean, investors. do you know the partners do regulators do everyone has this assumption that like SMB restaurateurs are millionaires like oh man this place is look how long the line is today this place is printing money like they're just cash and checks now realizing that like a good restaurant you know it's the 30 10 rule 30 if food costs 30 labor 30 everything else and 10 profit it's not a lot And so when you see so many, whether it be the regulations that are coming after it or like I don't understand why we penalize restaurants for being profitable.
[00:24:15]
When a tech company that's publicly traded lays people off, their stock price goes up because investor communities are like, sweet, they're getting more efficient, or like they raise their prices and investors are like, great, like the stock goes up. A restaurant raises prices and then there's regulators that are trying to say, well, we got to cap this because this is price gouging.
[00:24:33]
And it just seems so unfair that, you know, the restaurants always kind of get the short end of the stick and have to play by a different set of rules. It's one of the reasons that we're so focused on SMB restaurants. It doesn't seem like they have that many allies. So always try to make sure that we, you know, can help play that role for them.
[00:24:51] Josh Sharkey:
I don't know why that's the case. I mean, there are, to your point, yeah, obviously as a consumer, we have this familiarity. I think from a regulation standpoint, at least from the health department, I get that because people can die. And, and then it's hard to sort of, you know, toe the line between, you know, how diligent should we be versus how much do we let you be autonomously kind of running your thing?
[00:25:10] Josh Sharkey:
So I get the regulations piece, but, and I think on the investor side, it's a little bit, you know, like single unit restaurants typically do not have, you know, it's all friends and family, you know, like you don't have L caterton investing in, you know, in the, in the small shop around the corner. So. It's interesting.
[00:25:28]
I don't know, man. I don't, I don't know why there's, there's this dichotomy of, of like why restaurants get perceived differently because even you're right, the workers, you know, it's like, okay, you, you don't want to have a service charge. Cool. You also want everybody to be, you know, servicing you, you know, like faster and you don't want to have a, a wait and you, you know, you want to make sure you can get the, the exactly what you want at the right time.
[00:25:53]
It's like that all costs money. Yeah, it is tough, man. I am actually just curious, because it sounds like you've made some acquisitions and you've been around 10 years, so you've built a lot of stuff, like, I want to just understand more clearly, like, everything that Chowly does. So I got the third party integration, right?
[00:26:09]
So somebody orders from Grubhub, that automatically goes to your POS. Cool. Understood that. You acquired Targetable, and now you can sort of help people to drive traffic to their restaurant from Google Ads. What else does Chowly do?
[00:26:22] Sterling Douglass:
Yeah, we do a lot on the first party ordering side. So, I mean, if you've ever ordered from, you know, a group like Mod Pizza, for example, whether it's through the app or online, yeah, that's, that's our tack.
[00:26:30]
We acquired a company called Koala a little over a year ago, and I've been working on basically taking that, this kind of enterprise grade tack, and, you know, Simplifying it so that we can make it work for us in SMB restaurants, right? So we're taking something that's good enough for, for companies like mod and making it good enough for, you know, Josh's pizza place down the street, so you can have the same experience, right?
[00:26:52]
Like that's, it's a big part of kind of how we think about the tech that we provide to restaurants is how can we help these SMBs punch above their weight class. Right? The same thing that they don't have a ton of allies in the space. Not only can we be an ally in what we say, but we can also be an ally in what we do.
[00:27:10]
And helping Josh's Pizza Place on the corner give a similar experience to a consumer that they get from, you know, a five, 600 location, national chain, like Mod Pizza. That's a huge part of what we do and why we do it. And so anything outside of the four walls, I mean, I, I tend to categorize the, the restaurant tech industry into three kind of main categories.
[00:27:35]
We have the, kind of the POS in the center, kind of the heartbeat of the restaurant. Then we have kind of what I kind of call like the back of house, anything with like inventory or shifts or scheduling, you know, all those things that you need to have it run. And then you've got, you know, the off premise platform, anything outside of the four walls, whether that be digital ordering or digital marketing, any of those things, and that's where, where Chowly kind of sits and.
[00:27:59]
We, we found is that those categories, when companies stick to them, they do incredibly well. And when they try to branch off and try to be everything for everyone, they end up struggling. So it's been, uh, anything off premise, man. And if we don't do it today, you know, we're looking to do it tomorrow.
[00:28:17] Josh Sharkey:
Gotcha. Like who are the competitors?
[00:28:19] Sterling Douglass:
There's a lot of competition in the restaurant space. But my view is that. If there are more people building things for SMB restaurants and making it simple for them, I'm a huge supporter of it. And, you know, I talk to our, our competitors and I love when they join the fight, you know, the fight to help these SMB restaurants get started in here and help them on their digital journeys.
[00:28:41]
We're basically, you know, similar to what Olo does for Enterprise, we want to do for SMB. Uh, CLC companies like Ciao Now in the SMB space on first party online ordering. Companies like Slice, while they focus on pizza, Aaliyah has built an amazing company over there and helping, you know, these S& B pizza shops.
[00:28:57] Sterling Douglass:
Some of the newer startups that are, you know, nice VC backed like owner.com. These are the groups that, you know, we're competing with. The more of us that understand the problems and fix them the right way, the better it is for everybody in the restaurant space.
[00:29:12] Josh Sharkey:
This show is brought to you by, you guessed it, meez. meez helps thousands of restaurants and food service businesses all over the world build profitable menus and scale their business successfully. If you're looking to organize your recipe IP and train your team to put out a consistent product every day, meez in less time than ever before, then me is just for you.
[00:29:32]
And you can transform all those old Google docs and Word docs and PDFs and spreadsheets and Google sheets into dynamic, actionable recipes and mes in lightning speed plus stop all that manual work of processing invoices. 'cause knees will digitize all your purchases automatically. And there's a built in database of ingredient yields, prep yields, and unit conversions.
[00:29:52]
for every ingredient, which means you're going to get laser accurate food costs in a fraction of the time. Visit www.getmeezcom. That's G E T M E E Z. com to learn more and check out the show notes moving forward because we're going to be adding promotions and discount codes so that all of you lovely and brilliant meez podcast listeners get a sweet deal on meez.
[00:30:20]
Yeah, it's so funny we have such a different approach to the restaurant. Tech, like I'm so like, you know, third party is what we were talking before this, this show. And like, so much of that is just like, so far outside of the world that, that I live in, in recipes and IP and which I consider the, the heartbeat of a restaurant is like the actual product.
[00:30:40]
Yeah. Which is funny. Like, I think people often like they, they name everything that has to do with things that you do with the product other than the product itself. You know? I was going to sort of save this for later. You know, you're talking about all these things that you, that Chowly does, and it's really cool to see how you're being really smart about creating these acquisitions to help customers with more things.
[00:31:02]
So, two things. One, I want to talk about, like, kind of, your thoughts on, like, consolidation of the tech stack, which sounds like such a big deal. Dumb, like, like term to say, especially if you're in a restaurant, like, but you don't want a thousand tools to do a thing, obviously, but you also, you know, don't want to go to a steakhouse and order the halibut, right?
[00:31:21]
So there's, there's, there's good and bad to each of them. But how do you think about like, when it's good to consolidate and make sure that you're providing like a full stack of things and where you're like, you should, you should go somewhere else for that.
[00:31:34] Sterling Douglass:
Yeah. I think that there has to be a better together story. Like you shouldn't be doing it just to try to, you know, from a tech company perspective, like you shouldn't just be buying tech to try to get more dollars out of your customers. Like they, the tech that you need to buy needs to make sense. So when we, our first acquisition, when we did, you know, Koala, we were third party marketplace point of sale integration company.
[00:31:59]
So we already had menus, you know, at the time at like 10 or 10, 12,000 restaurants, we had all the menus and we could integrate orders. And so for us to then do first party ordering made a ton of sense. We have all of the plumbing for it. We have all of the data for it. And if we can find something that the consumer side, like they're experts in, which, which call was that story, like it's better together, right?
[00:32:22]
All my third party orders and all my integrations are to go through Chowly. Now my first party orders can come through too. Right. So it makes sense. And then when we looked at acquiring Targetable, It was the same thing, just going one step further in that customer journey, you know, the diner journey in that, all right, we can capture customers going to a restaurant's website, right through the first party ordering, and then we can convert that into the operational flow in the restaurant and the point of sale so they can actually execute on the order.
[00:32:53]
What if we could drive more traffic to that website on the forefront, right? Now we can take an ad, right, that that's served up to a consumer. know that we paid 24 cents for that click, follow them to the website, visit, follow them to see if they bought and then what they bought and make sure that the restaurant can actually execute on it.
[00:33:14]
All of a sudden you have this full journey. And this is something that enterprise restaurants have been doing for years and e-commerce companies have been doing for decades, but it was almost impossible for an SMB restaurant to do it because they would have to, like you said, cobble together like a thousand different tools to actually try and tie that story together.
[00:33:31]
And so for us, I just think it has to make sense. You shouldn't buy a company just to buy a company. So you get in trouble and you can struggle. Or buy a company because your competitor bought a similar company.
[00:33:41] Josh Sharkey:
Sounds like you lean towards buying versus building.
[00:33:44] Sterling Douglass:
No, I'd say build by partner. You go through every single time. The only way buy works out is if there's something that you want to do. And there happens to be a deal that makes sense at that time. And you don't necessarily get to choose when those times happen. We didn't get to choose that, you know, Targetable was open to that idea at that time. It just was, and it happened to be something that we wanted to do.
[00:34:05]
But I mean, if you, we've built in 2023, we built and released two new products, and we're always adding partners. So I think that we're always looking at all three. And it just so happens that the right deals happened at the right time, that buy made sense. But if you asked me if we were going to do more, I don't know.
[00:34:23]
I can't make a promise that we'll ever do one again because it's got to be something that we want to do. It's got to be something that makes sense and it has to be the right deal at the right time. A lot of things have to align to make those things actually work.
[00:34:33] Josh Sharkey:
Yeah. Yeah. I agree. It's such a tough notion, right? I mean, we deal with it all the time and, and I still think about it with my restaurants, which is the less bills that you have, the better, right? If you have one bill with, you know, with more things in it, it's better than having 12 of them. But we do find, at least I find that oftentimes there can be an approach where, you know, companies want to be an all in one.
[00:34:55]
And what ends up happening is you get like a couple mediocre things and then one really good thing. And you're kind of stuck with some of these mediocre things or you end up using, you know, A part of the product. And I think what I liked about what you've done, because you guys are 10 years in, you're not, you didn't acquire a company like two, three years into, into building is, and I think about it a lot with, you know, what we're doing is like, I kind of want to get the customer to a place where.
[00:35:17]
They're almost mad that you don't have this next thing. Like they're using so much of your product that they're like, man, we have this, it's working right now. The extension is this next thing. And I use this product or I don't have a product. Can you just please build this or offer it to us? And that's when I think it's like that really special.
[00:35:36]
I think too often people like. They're like, okay, what is everything that a customer would need? I'm going to build a little bit of all that and then offer that thing.
[00:35:43] Sterling Douglass:
Starting with the product instead of the customer. Yeah. Yeah. Usually out of order. All we did the first six years was integrate third party orders. It was, we just did one thing really, really well. And we were maniacally focused on it. We were getting asked from day one. Well, if you're integrated, can you do my website orders too? That was a question we got throughout the years. And I said, no, for a very long time for, for a number of reasons. But. We were incredibly focused and look, we're not, we're not total experts on, on that thing.
[00:36:12]
We've only been doing first party ordering for a little over a year. And the product didn't even really go live until July. So we're less than a year. And we're certainly not, you know, complete experts on, on digital marketing yet. You know, Targetable is still teaching us a lot of things. And likewise, we're teaching them.
[00:36:29]
But it, it takes time, like to actually get those adopted and to get them right. So setting expectations at the beginning is, I think, always really important because you can't, you don't just assume if you lob two products together, you're just going to get instant success. It takes time to become experts and make sure that it works, you know, for the restaurants in that cohesive environment.
[00:36:48] Josh Sharkey:
Yeah. Yeah. But when it works, it is pretty amazing. You mentioned this, but there's definitely a lot of M&A happening in every market right now. Like you, you see it so much, Google is pretty amazing. Not to buy HubSpot, which, by the way, is very similar to what you were just talking about, right? It's like, they, they, they know where their person is coming from and they can get you to buy that, to click on that thing.
[00:37:08]
And now they want to sort of carry it through to, you know, to the, to the paying customer. But why do you think M&A is happening so much more now? Like why are companies getting bought up more now than before?
[00:37:17] Sterling Douglass:
Yeah, I think you've got, Like a lot of times where things tend to get extreme, there's multiple at forcing actions that are, that are creating that situation.
[00:37:27]
One, I think that you don't have the same fundraising environment. Capital is more expensive. So it's harder to raise money. So you have more companies that may be running out. I think secondly, the restaurant industry as a whole is going through a bundling cycle. Every restaurant goes through bundling and unbundling cycles.
[00:37:43]
And right now it's key for restaurants to try to have less vendors and lower costs. And so you're just seeing a lot more companies trying to serve that. And you do that the quickest by doing acquisitions. And I think the third one that I think is creating as well is just The cost pressure is on the market, like especially on restaurants, food costs are up a ton, labor costs are up.
[00:38:07]
And all of these things just make it harder to run a restaurant. So they need to be maniacal about the expenses and make sure that they're getting the return on investment and the return on time that they put into these things.
[00:38:20] Josh Sharkey:
Yeah. The volatility of pricing is pretty intense in the restaurant space.
I was just thinking about dynamic pricing and times when I remember avocados went from like $38 a case for 48 avocados to like $112 a case. Like, where's the dynamic pricing, you know, like, you know, people were just like, stop. They just stopped selling guacamole, but it should be guacamole should be more expensive than
[00:38:45] Sterling Douglass:
Chicken wings. Like they went through like a crazy one where they went from $25 to like $150 for a crate. And if you're a restaurant that's like focused on this particular food item, which there are a ton in the US, like, ah, hey, my food cost just four x-ed. Like in a matter of months, like I can't 4x the prices that, that I have.
[00:39:08]
And then the interesting one was, all right, I raised my prices to help, but then they finally came down and it's like, all right, well, now all of a sudden I'm actually making a little bit more profit on this item. Do I bring it back down? Like to try to create more? There's a, the volatility on the supply side, I think it's something that consumers don't quite understand.
[00:39:26]
But I also think it's just gotten more volatile. There's a volatility index like VIX for, for restaurant food, the last few years would definitely be peaks.
[00:39:35] Josh Sharkey:
That's a great point. It actually helps the consumer as well, because what usually happens, and you see it even during COVID, not in restaurant, in restaurants, but in a lot of businesses where, you know, Supply chain was, you know, terrible and prices just went sky high, they never went back
down.
[00:39:53]
It's just more expensive now for things than it was, than it was before. You know, if you had that dynamic pricing, you could, you know, I remember when Limes went from like 13 bucks for a 48 count case to like $45.
[00:40:06] Sterling Douglass:
You start not automatically including that on those Corona orders, huh?
[00:40:10] Josh Sharkey:
I got a funny story about limes in a, in a bar in New York City, but I'll, maybe I'll show you at the end.
[00:40:17]
It was, what was this place called? Oh my God, it was, uh, isn't around anymore. It's where Scott Connaught's place is now. Somebody will remind me on 14th street in the city. And I was like, this was like 20 years ago. And I was drunk. I was like, you know, I must've been, I don't know. You know, I was just at the bar, and I had a shot of tequila, and I went and grabbed a lime from the bar, and just put it, you know, just like, you know, suck on the lime, and the bartender just starts screaming at me, and I'm like, what?
[00:40:44]
Why are you yelling at me? And she just keeps yelling, and I'm like, why is she just? And it turns out I grabbed a lime from the, like, the eaten limes. The ones that were already like, you eating
[00:40:58] Sterling Douglass:
I just thought she was yelling at you. I'd be like, oh, you know.
[00:41:01] Josh Sharkey:
Yeah. Yeah. Maybe you should ask next time.
[00:41:03] Sterling Douglass:
That's your punishment.
[00:41:05] Josh Sharkey:
Lesson learned. Check the lens before. Well, I did want to cool a little exercise. I don't know if you've ever done this, but I talk about it every once in a while. Like, are you familiar with the 11 star experience? The Airbnb?
[00:41:15] Sterling Douglass:
Yeah. Yeah. Of course.
[00:41:16] Josh Sharkey:
I mean, you're building all this new stuff into Chowly.
Have you, do you think about like, what is 10 years from now, what is the experience that someone is going to get when they, when they onboard Chowly?
[00:41:26] Sterling Douglass:
Yeah. I mean, I hope they're able to onboard it with a couple of clicks of a button. And I think that they have visibility into a part of their business, the off premise part of the business that they don't today.
[00:41:40]
I, they should be able to very easily tell how much money they're actually making from all these different channels. They should be able to add channels by just clicking a couple buttons. I think they should be able to have access to, to their data, the same level that an enterprise restaurant group would have access to.
[00:41:59]
And I think that anything that's going to make it easier and simpler on the operators, you know, our Northstar, when we think about how we build things for our SMB restaurants.
[00:42:09] Josh Sharkey:
Are there other parts of the ordering experience that you feel like you might take on?
[00:42:15] Sterling Douglass:
Oh, yeah, no, of course. I mean, we're going to listen to our customers and they're going to tell us.
[00:42:20]
And when, like you said, once they start demanding and yelling at you for, for not having something, uh, it's pretty clear you should probably build it, you know, to be frank, like I'm hyper focused on the product that we have today and getting it to be great because. If you were to look at Chowly in 2022, so you know, only two years ago, and you look at Chowly today, and you think about how much more product we've built, partnered, and acquired, We've got a lot of work to do and our hands are full and so I'm not super focused on what we're going to build next.
[00:42:57] Sterling Douglass:
We have a lot of things that we have today that I want to build better.
[00:43:00] Josh Sharkey:
Yeah.
[00:43:01] Sterling Douglass:
And so that's what we're focused on.
[00:43:03] Josh Sharkey:
It's so much fun, man. I don't know about you. Like I'm the same way. Like we have these, you know, we have our core products and a couple things that we've sort of added on. What's awesome is like I could see the next 10 years of just making these things better and better and better and I'm like You're probably the same way when someone's like, oh man, I love this thing.
[00:43:21]
I'm like, yeah, but you don't even you don't know
It's gonna get so much better You know, and that's what's so fun about this is we get to keep making these things better and there's definitely sort of a step function Improvement in our ability to build tech better, you know, whether it's technology or AI or whatever these things are, like new sort of open source things that like you can build things way faster now.
[00:43:43] Sterling Douglass:
I think the other thing for us too, since we're so partner focused, our partners are releasing new things and giving us access to new things that, that we can build to that, that make it better. Like, I remember when Toast finally enabled through their API nested mods. So that we could then build an improvement to support, you know, nested modifiers.
[00:44:00]
Like it sounds simple, but if you're a restaurant that relies on that for a big portion of your menu, it's, it's pretty critical. And so once they were able to release that and then we built to it all of a sudden, it's like, Oh man, this product just got so much better for, for so many of these restaurants, even if it might not be as sexy as, you know, cool new digital marketing tools.
[00:44:19]
It can be just as important to the restaurant.
[00:44:22] Josh Sharkey:
Yeah, yeah. All right. So I told you I was going to ask you this because I asked you a little bit on your LinkedIn post about a key hire you made. Oh yeah. And I asked you and you gave me a pretty, like, you know, like a one sentence answer and I want to know more, man.
[00:44:36]
So like early on you took a big risk on a hire. I don't know if it necessarily changed the trajectory of your company, but clearly put paid off and what was the hire and what are they doing? Are they still here? And just tell me, I'd love to learn more about why it was risky and how it played out.
[00:44:53] Sterling Douglass:
Yeah, we had a few trajectory altering events over the course of Chowly.
[00:44:59]
And a few of them are connected to key people coming on board or key people fixing things that we weren't doing well. One of them was pretty early on when we just didn't have a lot of capital. This is before kind of the, the series A and we're still seed, seed round, you know, I was still running. I was the finance team basically.
[00:45:24]
Uh, so I was closing the books. I was doing, taking support shifts and, and, and doing all these things. And, you know, it was a pretty slim crew and we brought someone on who had a ton of experience and was making a lot of money at a very big, at a pretty big company that, that he grew with. And I wanted him to come and take over a team that we were struggling with, a pretty important one.
[00:45:49] Josh Sharkey:
What team? Or just the team in general?
[00:45:52] Sterling Douglass:
If I show you the team, everyone will know who it is. He's still with us. I mean, I want to know, man. He's still with us today. And he's an amazing leader at our company. And Even though he took an enormous pay cut, it was still still that we couldn't afford it.
[00:46:09]
And it took our runway down from 12 to six months, roughly. And he cut our runway in half. And I even told him, I'm like, look, after three months, if you're not making an impact, like, you know, I don't know if we'll make it, took an amazing amount of pressure and made an almost immediate impact. And you can, if you look at the growth trajectory at Chowly, You'll see us kind of grow.
[00:46:32]
And then we get flat. That was when we couldn't figure out how to actually get restaurants live. And then Joe, our COO took it over, fixed it. And then we started growing again. Then we went flat again. And we brought this new person on, we started growing again, and I can keep going and show you every time we plateaued and what the big function was that, that unlocked that next level.
[00:46:54]
But yeah, I mean, we, we took the risk and it paid off, hit a home run, it was a big swing and made contact.
[00:47:01] Josh Sharkey:
That's risky, man. So If it didn't work out, then you would've let him go and you would've had three months of runway left.
[00:47:10] Sterling Douglass:
Oof. When you're in those early days, man, I tried so hard to get people to understand and I wasn't sure if I was, I was just a first time founder screaming, complaining about something cause I'd never experienced it before.
[00:47:22]
Or if I was actually being rational and I think back now and I'm like, no, I was right. Like, it was one of those few times like. When, when you're sub, uh, if you're a tech size company, you're sub a million ARR, like you're still figuring out product market fit. You are a fragile, fragile company. And you have no redundancy anywhere.
[00:47:42]
And you could potentially have a big client that you're relying on. You can have a key person that you're relying on. You can be real, be a subject to market trends that can just squash you immediately. You know, there's a very popular story of Chicago startup. They got funded on shark tank. They were growing like crazy.
[00:48:01]
And then Facebook basically just shut them off because they wanted to build a competing product. And it basically took the company out overnight. And so like when you're a smaller company and you're just starting out, like you're fragile and these like somewhat things, a lot of small things or things out of your control can do it.
[00:48:16]
So I was into taking risks cause I needed to get out of that. I needed to get big enough that we could sustain it. And so. You're not going to make big impacts without taking a couple of big swings, you know?
[00:48:29] Josh Sharkey:
Yeah, that was a big one, and well, it paid off. I tend to take a lot more risks on the product side, but not necessarily as much on the runway side.
[00:48:41]
I think partly because, you know, I'm 43, I have two kids, and well, you know, I guess it might be different earlier on in the company when we had a few employees now that we have a lot, I want to make sure we always have a lot of runway. I am curious though, like. If you have any, like, frameworks that you use for decisions like that, or decisions in general.
[00:49:03]
We use, sometimes I'll use, like, a Likert scale and a weighted matrix for something big. Where, like, I need to stack rank, you know, the, the results I'm looking for with the different, you know, options. Try not to have too many things that are that, like, you know, I'm going too deep into, like, how I make this decision.
[00:49:19]
But, I'm curious if you have anything, or if it's just first principles, or, you know,
[00:49:23] Sterling Douglass:
I didn't quite understand the importance of frameworks or even when I was using them versus not using them for a very long time. It's something I learned very late. And when I say late, I mean, like literally in the last two years, like the first six, seven years of Chowly, like it was so chaotic.
[00:49:43]
We were growing so quickly. We were on the triple, triple, double, double, double route. And like, it, hyper growth, just everything's on fire all the time. And I was just firing from the hip. I mean, everything's gut feel, even as a data nerd and as someone who understood the power of it, we just didn't have the time and we didn't give ourselves a lot of framework.
[00:50:03]
So a lot of it just relied on the people. And luckily we had some really great people who made some really great decisions based off of how they felt. And we got lucky from that standpoint. And over the last couple of years, I've realized and kind of done the pattern matching to see that things go really well when there's structure and structure means frameworks.
[00:50:21]
And so now they're everywhere, everywhere in my personal life and in my business life. So we have frameworks for everything. We have frameworks for how we think about, Product. We have frameworks for how we think about engineering. We have frameworks. How we think about sales, how our marketing strategy is.
[00:50:37]
I'm a huge fan of the demand creation, capture, and conversion methodology and framework that Chris Walker's populized big time marketer, influencer guy on LinkedIn, we tried that out and it worked incredibly well for us. And that's what we do today. So, I mean, we have frameworks all over the place.
[00:50:57] Josh Sharkey:
Yeah,
[00:50:58] Sterling Douglass:
That's how we make decisions.
[00:51:00] Josh Sharkey:
It's a great point though. You know in the beginning. It's a lot like the OKR process in the beginning It's almost dangerous to create that much structure because you don't know, you know, you're still figuring out. What are my first principles? independent of just general sort of like, you know generic first principle thinking and So I think those decisions that sort of gut decision that you make is something that you could then sort of retroactively look at and say, okay, what, why did we make that decision?
[00:51:27]
Cause it worked. And then use those to send, to then sort of operationalize some sort of framework because same way, right? Like I think for the first, you know, few years, we're only a few years into this company, but in my, in my previous companies as well, like the only thing that matters is why do we exist?
[00:51:43]
Like, why did I start this thing? You know? And as long as, Every decision ties back to that. It's typically a good decision. And then, you know, as you grow, yeah, you have to have some sort of like mental models of like how you're making decisions at scale. Cause you've got more people, more team, more customers, more people that it affects, but it's funny.
[00:52:03]
I think we're whatever, this is like 60 episodes in and we've had a lot of awesome, like successful folks on here. And a common theme I hear. Across the board from everyone about how they make decisions, gut comes up almost always, you know, so. You're in a good spot there.
[00:52:24] Sterling Douglass:
I'm a big fan of the hedgehog concept from a company perspective.
[00:52:27] Josh Sharkey:
What's that?
[00:52:28] Sterling Douglass:
From good to great.
[00:52:29] Josh Sharkey:
Oh yeah.
[00:52:30] Sterling Douglass:
Great book, uh, sitting on big sustainable companies. The hedgehog concept is kind of like three things. It's basically, what can you be best in the world at? What are you passionate about? And then what is like, how do you measure it? What is your economic engine for it?
[00:52:44]
And every decision you make should try to get all three. And that has been. Really helpful, especially on the really big decisions. Yeah. For us, like we've got to make tech simple for the restaurant. We are the best in the world at implementing, like getting an SMB restaurant live with new technology is one of the most deceptively difficult things, and every tech startup learns this when they first start out and the ones who make it over the hump get to the next stage.
[00:53:15]
And the ones that don't, you rarely hear about. But, like, that is one of our core concepts, and if anything that we're doing is going to make it harder to get them live, man, we better have a really damn good reason for doing it, because that's so key to how our customers work, right? When you're running, you know, an SMB restaurant, you, or your attention span, you can only spend so much time on things.
[00:53:43]
And so we know that if we don't get this live for you pretty quickly and you don't see results pretty quickly, you're going to move on to the next thing, whatever that is.
[00:53:51] Josh Sharkey:
Yeah, I totally agree, man.
[00:53:52] Sterling Douglass:
So we're maniacally focused on that. So, uh, hedgehog concepts are one I like, especially for the really big decisions.
[00:53:58] Josh Sharkey:
Yeah, great book, but speaking of books, I'm squinting and looking behind you and I see Traction, I see Hard Thing About Hard Things, Lean Startup, Blink. What else do you like reading?
[00:54:12] Sterling Douglass:
I'm not a big fiction reader. The last time I read a fiction book, I think was like fourth or fifth grade. There's a couple of books that would be missing from that collection there.
[00:54:21]
One of them would be From Good to Great. It's been a very influential book for me. What you do is who you are. Another Ben Horowitz book, but it's all about culture and core values, which is something that is just the difference it's made in Chowly when we really established core values and we took it really seriously.
[00:54:37] Sterling Douglass:
I mean, it is night and day. It's another one of those. You saw the growth and so I like that one, but I'm a big, big nonfiction reader, especially like on the business personal improvement side, seven to have, Habits of Highly Effective People. It's a big one for me as well. And then there's a, there's a hilarious book.
[00:54:54]
My sister got me up there cause I just had a kid like a year and a half ago. So she got me one that like helps you along the pregnancy and like the first couple of months and like tells you what's going on. So one of those things is not like the other.
[00:55:07] Josh Sharkey:
Well, you know, it's funny. I learned so much about people from, I have two kids from just like handling my, my children, just seeing the mistakes they make or the things that they do or don't do and how they handle it.
[00:55:21]
And you realize that everyone is different. Just an emotional being, you know, there's very few like bad people, but so often we look at, you know, once you're an adult, you look at, you know, somebody's actions and you just judge the action. I don't know if you see this with having kids, but, you know, when you look behind the curtain, there's always something there.
[00:55:41]
There's some reason why they did that the way that they did. And typically it's something, you know, that's just emotional or innocuous. But that's one of the things I love about. You know, having kids as opposed to being leaders, you learn so much from them every day.
[00:55:55] Sterling Douglass:
Yeah, the number one thing that I learned and I'm reminded of every day is how thankful I should be to my mother.
[00:56:04]
Because my daughter is apparently a lot like I was when I was a kid and she is tough. So that's what I'm reminded of each day.
[00:56:13] Josh Sharkey:
She's 18 months now?
[00:56:14] Sterling Douglass:
16, 16 months now.
[00:56:15] Josh Sharkey:
16, What’s her name?
[00:56:17] Sterling Douglass:
Sloan.
[00:56:18] Josh Sharkey:
Nice. How has that been for you as a, as a founder, CEO, and then having, having your first kid?
[00:56:23] Sterling Douglass:
It's really hard. I don't understand how people start companies after having kids.
[00:56:30]
I started one well before I had a kid and it was still felt like it was almost impossible. And now I would feel like it was even harder. So that's anytime I meet founders who started it after they have kids, I'm like, you're just playing life on expert level, man. Oh, Gary, you wanted to do it the hard
way.
[00:56:50] Josh Sharkey:
Sterling, I had my first, my son. So I was running this restaurant called Aurify Brands, and I was just an opening officer, and I was just kind of leaving that to launch Me's full time at the end of 2020, doing our pre seed round and closing that round while my kid was being born. And and then him being born in the first few months of that.
[00:57:12]
Just the amount of time I wish that you know that I could have had that I didn't have I don't know what it would Have been if I that didn't happen, but I tell you for sure now I'm very grateful for it, but I was so envious of like, you know founders that don't have that I do believe we figure out how to find time no matter what I mean, you know Cuz you could know like you figure out how to have the time.
[00:57:33] Josh Sharkey:
But yeah, it is definitely It's some work, man.
[00:57:37] Sterling Douglass:
Yeah. You always end up figuring it out, and then you think back, like, how did I even, how did I do that? When we were acquiring Koala, we signed the term sheet, like, right around Thanksgiving, and my wife was due on December 10th, so, or we had, we had the baby on December 10th, so we signed the LOI, had the baby right in the middle of closing, and then, like, the first month or so is like when we're, when we're trying to wrap it up, Yeah, it's crazy to think that we were able to accomplish that and get that done while I wasn't getting more than, you know, two hours of sleep at a time.
[00:58:09] Josh Sharkey:
Yeah.
[00:58:10] Sterling Douglass:
But yeah, we figured it out.
[00:58:12] Josh Sharkey:
You guys all done? You gonna think about having more?
[00:58:14] Sterling Douglass:
Probably don't want to talk about that on the podcast, but one and done.
[00:58:19] Josh Sharkey:
We're done. After two. I was on a call yesterday with this CEO group that I'm a part of, and someone was asking about should I have kids? Is it the right time?
[00:58:27]
I was like, there's never a right time. You know, it's all, there's always gonna be something, you know? I don't know anybody that's ever regretted having kids. I was gonna ask you about that because we are both part of one CEO group and I think you're part of a couple of them. These sort of like, I don't know what you call them, like, there's one called Hampton.
[00:58:43]
I really like it. The group that we're part of and there's a bunch of other CEOs in this group and you kind of, you know, chat and learn from each other. But it seems like you've done a couple of these. Like, do you find that like they're all equally valuable or?
[00:58:55] Sterling Douglass:
Yeah. So I'm in, I'm in two groups in Hampton, which I actually literally joined because of you.
[00:59:01]
You were the one who referred me to it. So thank you.
[00:59:04] Josh Sharkey:
Oh yeah. Wow.
[00:59:05] Sterling Douglass:
And then the other one is Pavilion. And pavilions generally been more kind of go to market focus, but they started a CEO group somewhat recently and are growing that. So I'm part of both of them and my renewals are coming up on both of them.
[00:59:18]
And I have some decisions to make. So once I make those all. I'll probably write and post about him, but as a general note, I wish I had sought something like this out earlier in my career. It would have made things easier and it would have allowed me to make the right decisions faster if I hadn't waited until I was seven years in to start looking for him.
[00:59:43] Josh Sharkey:
Yeah. Yeah. The one thing I'll say is, one, I think these groups are sort of, part of it is you get what you put in. So often I'm like, I find like that there's things I'm working on or questions I have. I'm like, Oh yeah, I should just post that in that channel. And whenever I do, I get like 30 people responding and giving all kinds of insights.
[01:00:02]
You've given him insights and it's, it's pretty cool because you can just throw a problem out there and just hear how everybody else is, is dealing with it. So I love that about it. I am curious, you know, just on the same thread of kind of founder therapy, how do you manage stress?
[01:00:19] Sterling Douglass:
Someone just asked me about this yesterday. Yeah, obviously it's a very stressful job, especially when you are running it like, like I was in the early days. Crazy, crazy stressful. I've always been a person that usually the more stressful the surroundings, the calmer I get. I don't know why, but just the more I see other people yelling and seeing their face flush.
[01:00:38]
the calmer and more logical I get. So it was a bit of a natural habit, I guess, or skill. And so that's been really nice. It allows me to kind of stay calm. Sometimes people get upset that I'm so calm when I shouldn't be, I guess. So I've had to remind people to not mistake my calmness for a lack of urgency or taking something seriously.
[01:00:58]
But I think that that's, it's always kind of been something that I've had. But in terms of dealing with stress, I mean, I do a lot of the things like I try to meditate as much as I can, you know, journaling. I live in Denver now so I can spend more time outside.
[01:01:09] Josh Sharkey:
Are you from there?
[01:01:10] Sterling Douglass:
No, I'm from Chicago originally.
[01:01:12]
Grew up in the way north suburbs, spent a decade downtown Chicago, and then just came out to Denver in the last couple of years. And a big reason was so I could spend more time outside so that I could do more biking, more hiking, more stuff on the water. And so for me, like exercise is really big. You know, food is medicine.
[01:01:30]
I'm a big believer in that as well. So if I'm not eating well, I can usually sense stress kind of creeping in a little bit faster than it might normally otherwise. But yeah, I mean, all those things, man, you got to take care of your mind. You got to take care of your body. And a lot of times you forget to do those and no one's perfect.
[01:01:46]
And then you get stressed sometimes, but it's all kind of part of it.
[01:01:49] Josh Sharkey:
Yeah. I was a chef most of my life. It was just I'm not working. I'm working for free somewhere else to learn. I'm going to stage here. And it was always just this constant drive and then opening restaurants was the same thing. And even starting obviously this business, but the kids was actually a good blessing for me to.
[01:02:09]
It's like as a forcing function of just stopping, you know, and I could never start about you. I could never stop, you know, but now I do to my calendar stop, you know, like for these things, like kid time, wherever these things are. And I'll be honest, it's such a, you have this fear of like, I could be working right now, but I'm doing this.
[01:02:29]
It ends up actually having the opposite effect where I think it actually makes us more productive, you know, when we have that time to go snowboard or be with our kids or, you know, what have you.
[01:02:37] Sterling Douglass:
Yeah.
[01:02:37] Josh Sharkey:
I don't know if you agree, but. Yeah.
[01:02:39] Sterling Douglass:
Yeah, no, I think it does. I mean, like I've turned this into kind of like the hustle porn conversation, but like, I am a big believer in hard work.
[01:02:45]
I did 80 to a hundred hour weeks for many years would work whole months without taking a single day off, including weekends. I mean, like that's, you know, in my opinion, it's just kind of. Part of what it takes. And if somehow you're able to be as successful without doing that, like, kudos, like that's amazing and not something I was able to do, but I don't know, work is rarely stressful.
[01:03:07]
Um, I'm an eternal learner. I'm eternally optimistic. I mean, these are traits that, that really help kind of get through that. And that's why I said, I think one of the reasons I love my job so much, something we talked about earlier, your job changes every six, 12 months. So if you ever don't like it, or if it's boring, like, all right, wait a few months, it'll change.
[01:03:26]
And you have another opportunity to get good at something else. And that's, that's the thing. I mean, that's just super rewarding. My opinion has always been, if you can find something you're so passionate about that you can work 80 to a hundred hours a week and still be okay. Like that's, that's amazing. A lot, most people wouldn't find that.
[01:03:43]
And so that's something that I'm really passionate about. And that's why I love entrepreneurship and helping other entrepreneurs.
[01:03:49] Josh Sharkey:
Couldn't agree more, man. That's a great place to end. This was awesome. Thanks for taking some time. Appreciate it.
[01:03:55] Sterling Douglass:
No, thanks for having me on. This is fun. God, we finally got to, you know, chat through some of this stuff.
[01:04:00]
Instead of exchanging kind of random Slack messages here and there.
[01:04:03] Josh Sharkey:
Now we'll go back to just random Slack messages.
[01:04:06] Sterling Douglass:
Okay. See you next year.
[01:04:08] Josh Sharkey:
Thanks for tuning into The meez Podcast. The music from the show is a remix of the song Art Mirror by an old friend, hip hop artist Fresh Daily. For show notes and more, visit getmeez.com/podcast
[01:04:18]
That's G E T M E E Z. com forward slash podcast. If you enjoyed the show, I'd love it if you can share it with fellow entrepreneurs and culinary pros and give us a five star rating wherever you listen to your podcasts. Keep innovating. Don't settle. Make today a little bit better than yesterday.
[01:04:36]
And remember, it's impossible for us to learn what we think we already know. See you next time.