David Steen: Food and Beverage Startup

Food & Beverage Startup: A startup that partners with hospitality, food and beverage companies to deliver exceptional guest experiences through technology and consulting solutions. 

The Challenge

The founder had a vision for an IoT-based coaster device that would alert a bartender when a drink needed to be refilled, among other value propositions. The challenge was to validate the hypotheses around their new product and develop a data-driven business model to test in the market. Hypotheses included:

  • Customers sometimes feel they are waiting too long to get their beverage refilled at bars.
  • Customers would use a coaster if it meant they would get their drinks faster.
  • Bar owners would recognize more revenue from delivering drinks faster.
  • Bar staff would find an alert system beneficial to them and their workflow.

My Role

Strategy Consultant / Market Analyst

I provided market research and analysis and drove the lean startup process for the engagement, working alongside the project lead and development team. I was responsible for the go-to-market strategy recommendations and developing experiments to test hypotheses. 

The Work
  • Conducted secondary and primary research to understand target customers (pains, gains, etc.), market problems, competition, market size, and other key market information.
  • Developed a business model and evaluated potential go-to-market options.
  • Developed and ran experiments to test hypotheses and understand solution components and feasibility.
  • Developed a data-driven functional prototype in under six months to test in the market; the prototype was an IoT coaster created using an arduino board that sent a signal to a device when a beverage was below a certain weight. 
The Outcome

We discovered that the functional prototype invalidated some of the hypotheses we had, so the founder needed to pivot. Although early validation and research suggested it was not feasible to use a coaster and the problem did not seem big enough to solve for most bars, the founder wished to proceed with a prototype, so we built one as cost-effectively as possible

After pitching the prototype to bars and restaurants, the founder ultimately realized (as our research and testing had suggested) that it wasn’t going to work, and now understands the importance of validation before you build something as it can save you a significant amount of money down the road.

Although we recognized the product wasn’t going to work from the results  of our discovery and validation process, the founder was so in love with their idea they needed to see it through. It gave me an interesting perspective on human behavior: Even if the data doesn’t support a decision, sometimes people need to take the journey and fail in order to learn. The takeaway is that it’s extremely important when developing new products and business models to confirm there is a problem worth solving and that it’s big enough to solve (by looking at market data and talking to customers), otherwise people spend money, time and energy on something that ultimately doesn’t work.

––David Steen, Strategy Consultant