Jess Ainlay: Jean, you live in New York, you have a very high-level job, a beautiful wife, two adorable young kids. Where in the world did you get the idea to become an entrepreneur and build an app?
Jean Payan: The truth is, we are really always thinking about building a business. We’ve had a few ideas, of course, but when we saw the gap in the restaurant market, we decided to work toward finding a solution for it.
Jess Ainlay: How do you divide the roles with Belen?
Jean Payan: I am the CEO, but Kadusia is really Belen’s baby. She works full time on the app. My brother is our Chief Technology Officer.
Jess Ainlay: Let’s shift gears and talk about your startup! What is Kadusia?
Belen Garcia: Kadusia is an app that creates loyalty between restaurant owners and customers using yield management functionality similar to the airline industry.
We knew we wanted to start an app, and we’ve watched our friends in the restaurant business having financial difficulties and making such sacrifices, and yet 80-90% of restaurants fail within the first two years. We started talking to waiters, bartenders, owners and learned that the window to ‘make it’ is incredibly short. It’s hard to cut through the noise for people to find out about you, to gain loyal customers and get a great reputation in that time.
Jean Payan: The hotel and travel industries employ the method of yield management to their business models, which means that businesses change different prices depending on whether they are busy or not. The restaurant industry doesn’t have that. But why not? It is a very sustainable win-win method that works in other industries, so why not in restaurants. Success requires you being able to be flexible and have control over your own business strategy.
That’s how we decided to create a yield management tool for restaurants.
Jess Ainlay: How is that different to Groupon?
Jean Payan: When a restaurant lists on Groupon, they do not have any control over what time guests come or how many people come in a day to use the coupon. Retention with Groupon is also a challenge - you are getting customers who are more interested in getting something inexpensive than being loyal to your restaurant.
I believe in creating sustainable win-wins. Enticing customers to come during normally ‘off peak’ times with ‘off peak’ prices and specials to fill up the restaurant, but also focusing on the relationship between the restaurant and the client – that’s what we are interested in cultivating.
Making someone a regular takes a lot of work. You need to allow restaurants to communicate with those people.
Jess Ainlay: Aren’t low hours inevitable? Don’t people just tend to eat at certain times?
Jean Payan: Historically, of course that was the case. But now the flexibility created in the new economy - in terms of freelancers, work from home, people eat all hours of day. People on both sides can have a good experience, being able to promote and having a better business.
Jess Ainlay: Let’s shift gears a bit and talk about the fact that you are still pre-launch. You have a family to take care of, why have you decided to take this big risk?
Jean Payan: We minimize that risk in various ways. First, I work full-time during the day, and I work on Kadusia evenings and weekends. Belen is not receiving a salary so we are assuming a financial risk, but still the time and emotional commitment are the real risks. We have set family time between 6-8:30pm. I am, however, incredibly tired. Between the full-time, high pressure job, two little ones and a start-up on the side, I’m actually nodding off in the middle of the day, so I am feeling the pain.
Jess Ainlay: Being in New York also has to add a little stress to this, too. It’s a very intense place to live.
Jean Payan: On the contrary, I don’t feel like we could do this in any other country/city quite the same.
First, there is a huge entrepreneur community here, so we have a bunch of fellow entrepreneurs to lean on. If we were in Buenos Aires, we couldn’t possibly pull this off at the same pace.
Belen Garcia: Most importantly, you have 24,000 restaurants in New York. It is the perfect laboratory to test our theories. If we can get a strong amount of restaurants participating here, we can get a real sense of proof of concept before trying to roll it out to other cities. We should have that within the month, so we’re very excited about that.
Jess Ainlay: Thank you so much for taking the time to share your story and for the peek inside what it takes to get an app off the ground in New York City.
Best of luck to you both!