By Scott S. Smith, California Business Journal.
When Barry Shaked and Nadav Solomon decided to help restaurants seamlessly manage every aspect of their operations in 2014, they knew the industry badly needed help. According to Cornell University, 60% of dining startups are out of business within two years.
Solomon had run a restaurant before joining the Israeli Navy, becoming a lieutenant commander in charge of command-and-control operations from 2000-06. He earned a degree in food engineering from the Israel Institute of Technology before spending two years as an Ernst & Young consultant.
A veteran entrepreneur, Shaked in 1982 co-founded Retalix Ltd., which developed software applications for the grocery and food industries; it had 1,700 employees. It was sold for $800 million to NCR Corp. in February 2013. Eighteen of the top 30 grocery retailers in the world were Shaked’s customers including Tesco, Publix, Whole Foods, BP, Carrefour, Winn-Dixie, Albertsons, Piggly Wiggly, Save-A-Lot, Food Lion, Sainsburys and Stop & Shop. He had retired in 2009 “yet I was hungry to get back into the food business,” he says with a laugh.
Solomon, president of Tabit, says they were amazed that no one had created an easy-to-use single platform that managed every aspect of a restaurant, allowing the back office, kitchen, managers, servers, greeters, online ordering, kiosks and customers to be connected.
Where others saw daunting complexities in a volatile business, “we saw big opportunity,” Solomon says. “The process when dining in normally involves the waiter writing down an order, entering it at the register, making sure the kitchen understands how to prepare it, dealing with changes or dissatisfaction, and back-and-forth to pay the bill.
“The technology from the register to ordering supplies has been based on grocery industry desktops, even for mobile, and information is in silos for different aspect of the operation and the software has to be constantly updated and integrated. We decided to design a completely mobile architecture from the ground up.”
When the server takes the order on the Tabit tablet or smartphone (“easier than using a pencil and paper,” says Solomon), she or he is prompted to recommend anything from a wine to dessert, based on the customer’s history or what others have liked who had ordered a similar entree.
There are no illegible instructions to the cook, no surprises something isn’t available, and changes are not complicated. Server errors have been reduced by 80% (the system and menu only need 15 minutes to learn versus two days for traditional training), which is one reason tips are higher. Everything is on one screen, a command-and-control interface that is simple to use even for those not comfortable with tech, “like going from Windows 95 to an iPhone,” he says.
Restaurants owners experience spending per diner rising 8-15%, table turn reduced 12-15 minutes, and productivity increasing 25%, requiring fewer staff, when using Tabit. In November 2019, Tabit acquired Shiftorganizer, which helps manage labor scheduling.
“Owners can now have their business numbers at their fingertips in real time, rather than having to go through spread sheets or rely on their gut,” Solomon says.
Some establishments doubled profits.
Yet, when coronavirus hit, it merely exposed fundamental problems with the way online ordering and delivery were being handled, Solomon points out.
“Aggregators are taking 25-30%, which could be ignored when delivery and takeout were 1 to 4% of revenues, but when it is all or most then it is unacceptable,” he says. “We converted 600 customers into exclusively takeout and delivery within 30 hours of our decision. We offered ‘TabitWheels’ free for six months, enabling restaurants to manage delivery by using their employees as drivers.”
Next up is the launch of neighborhood websites that feature Tabit clients, advertising to local customers for just a 1% maintenance fee, allowing restaurants to link this to their social media and offer loyalty rewards.
The company is based in Rishpon, north of Tel Aviv, and has 1,000 clients and 120 employees. It has 40% of the local market share and was on a recent annual Most Promising Israeli Startups list.
So far, Tabit has received $65 million in venture capital funding and the most recent round of $35 million will be primarily used to expand in the U.S. It recently opened its U.S. headquarters in Miami and has been working closely with leading restaurants such as Serafina, Gianni’s at the former Versace Mension, Rio Mambo, 400Gradi, Exxir Group, and Local Yocal in DFW. In January, it hired Ken Richard, a long-time industry veteran, including heading NCR’s global alliances, as vice president of sales.
“The fastest way for us to grow in the U.S. is to partner with channel integrators who have deep relationships with restaurant owners, who often are families who have been in the business for generations,” Richard says. “The ones we’re starting to work with have over 50,000 to 70,000 clients, and they appreciate our differentiation, with deep DNA of very high-quality customer service and the coolest technology.”
Copyright © 2020 California Business Journal. All Rights Reserved.