2022 Trends: My Shameless Predictions

I did this last year, and it was fun. That’s what predictions are all about, right? Having a bit of fun, making wildly speculative guesses based on macro trends, and getting 1 out of 10 right. I met another 500+ startups in 2021, and for me, it’s a nice exercise in consolidating the meetings and readings from the last year into a few bullet points. It’s fun to look back to see how some trends accelerate much quicker than expected, and how some are actually years off. Last year, I anticipated ‘the year of psilocybin’ and a massive leap for social e-commerce in the West - but now, it feels like those are still a way off. 

I go again, and as ever, ranging from the mildly obvious to the ludicrously speculative, to be taken with a NBA-player-hand-size punch (definitely not a pinch) of salt.

• The rise of the Software Engineer

There are currently only 27 million software engineers in the world. For context, there are around 80 million+ teachers. From the mobile device in our hand, the email that we send a client, the game we play in the evening, the commute home, the Amazon delivery we eagerly anticipate, to the way we store our money, and just about everything in between, software engineers are literally building our future. 2022 will see a sharp rise in the programmes to upskill people into the developer space - see HyperionDev as great example of this. Not everyone wants to learn to code ofcourse, so No-low code platforms will take a massive stride into mainstream consciousness to allow idiots like myself to build something that people could actually use - see Bubble as example.

• NFTs become useful

Unless you’ve become a millionaire from them, I’m sure you’re getting mildly annoyed by seeing people getting so irrationally excited about pictures of a mutant ape shooting a laser-beam from his one eye (only $3.6m to earn this beauty). It’s absurd.

But, every game-changing technology starts off looking absurd and a little useless.

2022 will be the year of NFTs becoming digital pieces of ownership with utility. Songs, event tickets, in-game purchases will be the initial progression. We’ll see more of Twitter, Facebook and Instagram embracing NFTs as part of social status and even community building. Influencers will get more and more involved and will attach their brand to NFT projects, possibly building a community dedicated to a social cause, or to give first access to fan content -  Hasbullah and Justin Bieber have created their own collections already. I warn you - It will get more irritating and more useless in the mainstream view before it gets better - there will be boom and bust cycles, but behind the scenes, there will be real life use cases emerging that will move the world forward.   

• You'll [nearly] have your first VR team meeting

Last year I said that AR and VR are 2-3 years off. 2021 took a much bigger stride than I expected. It may be as a result of the big year web3 had in 2021 and Facebook’s rebrand to Meta. Omicron is a key catalyst for this too. Children who can’t yet talk are talking about “the metaverse”, and VR is now a big winner. Oculus was #1 app download in US for Christmas (and top 5 in 14 different countries) and the Quest 2 has finally made at-home VR a fun and high quality experience. The ability to play table tennis or poker with friends from around the world while chatting to their avatars and highly realistic physics is a mega step forward. VR won't quite be ready to be an integrated factor in your work life, but it won't be far away (think 2023-2024). It won’t all be at home, yet, either - people crave IRL activities with friends more than ever - we’re willing to pay £30 to throw axes at a wall (bizarrely enjoyable), but we're not all ready to spend £250 on an Oculus Quest for home use. Experiences like Otherworld in the UK will be the go-to VR experience with friends on a fun night out (also saving you from inadvertently punching your window at home while doing VR boxing). 

• You’ll consider naming your dog DAO because you'll hear the word so often

DAOs - Decentralized Autonomous Organizations - These are communities in which decisions get made bottom-up, organized around a specific set of rules which are set by smart contracts enforced on a blockchain. The communities engage on a discussion tool like Discord, have a common set of values and a common purpose like an ordinary organization, and typically have a pooled budget with which to enforce the vision of the community. Each DAO has its own mission, and smart contracts which determine the set of rules. Remember the news about Constitution DAO? They had the purpose of pooling funds together (>$41m) to “put the Constitution in the hands of The People” by seeking to buy a rare first printing of the U.S. Constitution during a Sotheby's auction. We have only scratched the surface of what type of DAOs we’ll see - it may not be in 2022 - but the future will see Limited Companies take the philosophical view of starting as DAOs which are entirely bottom-up and employee driven. In the short term, I believe 2022 will see early iterations of Venture Capital DAOs, and modern NGOs with people from around the world who want to solve big problems and want to be directly responsible for how the money is spent. 

• B2B and B2C Sustainability platforms flourishing

There will increased focus (and increased pressure) in 2022 from early stage startups all the way to mega corporations to show off their sustainability credentials, and proving that they’re on a path to carbon neutral / carbon negative. Platforms like Ecologi, Earthly, Treeapp and Pawprint will be excellently poised to help companies with this, and will see strong growth in 2022

• Play to Earn Games will hit mainstream

Axie Infinity was the pioneer and winner of Play To Earn in 2021. They’ve paved the way for the model, allowing anyone on the planet to earn money by playing and getting more skilled at the game. There are still tons of barriers to entry for the everyday person, and Axie Infinity feels more difficult to earn money on than getting a regular job as a banker (more or less). 2022 will see many more instances of games like this on the blockchain; more mainstream, with less barriers to entry, and providing an alternative source of income. It’s absurd, but it’s happening. Can you see the convergence of e-sports and play-to-earn games coming in the next few years? Our children are going to have some fun…

• The developed world gets even more plant-based

Fairly self-explanatory here and pretty safe guess. As the years go on, plant-based food gets tastier and more interesting to omnivores like myself. Unlike 99% of London, I have no philosophical stance on the “plant-based versus meat” debate, but when I cook now, I rather use THIS or Heura than actual chicken-chicken. And when I get fast food, I prefer Ready Burger (low price plant-based burgers) than McDonalds. At the end of the day, if plant-based food is accessible, and as tasty as meat, why not eat it if it may make some kind of a difference to the planet?

@Plantbasednews - study by Nurishh

• Fintech neobanks embrace crypto and DeFi

We will see mobile-first neobanks we know and love and use everyday provide the option of payment with crypto like Bitcoin and Ethereum, taking another step into the mainstream use case. Imagine “going back in time” with your Curve card and spending from your Eth rather than your Monzo GBP account. Along with that, some will add in DeFi lending into their product. Imagine earning 10% APR instead of 1%, and accessing that through your Monzo or Revolut account. Decentralized finance through your centralized bank may sound counterintuitive (and it is), but there is currently a significant barrier to entry for the everyday person to get set up on a DeFi exchange and they are missing out on much higher yield than what is possible with centralized lending. Traditional fintechs may look to be a gateway into DeFi for the everyday person, starting 2022, providing a slick user experience otherwise not currently possible on a purely decentralized channel. 

• We go even more hybrid

We’ve tried fully at-the-office, and we’ve tried fully remote. Countless employee surveys around the world have shown the answer is in between. Last year I spoke about believing in a future of “work-cations” (do productive work in Barbados), and my belief that Airbnb’s future will be in enabling people to work remotely from around the world. I still absolutely believe this to be true. A barrier until now has been tax compliance, and managing how to treat employees fairly based on their work environment (including compensation - should someone working in Guatemala get paid the same as someone working in New York if they’re doing the same job but have different living expenses?).  Startups like Deel, Hofy and Omnipresent are looking to solve these challenges, and I believe 2022 will be a big year of enabling employees to work with optimum productivity while getting the best of office and remote.

• Mega step of converting illiquid share options into tangible cash for employees

We'll see a few big name private companies offer their staff the opportunity to cash in some of their vested share options for cash in secondary share sales - allowing a win-win for all, and will signal an exciting new piece in attracting top talent. This will be a key year and inflection point in this becoming the norm (perhaps to be done on an annual basis by growth-stage startups). Crowdcube (shameless plug) are facilitating this.

• The year of cell-based meat

There are many exciting, well capitalized, startups in late R&D phase of taking a few cells (non-intrusively) from farm-raised animals, and multiplying them into full meat meals. Ivy Farm, one such exciting startup, says their meat will produce up to 92% less carbon emissions and will require 95% less land than traditional means. We won't be eating cell-based meat in 2022, but we will be hearing a lot more about it as we get ready for it to be released into mass retail around 2023

Some Web 3 Thoughts

Web 3, the metaverse, crypto, bitcoin, Layer 1, protocols, blockchain, NFTs, Zuckerberg, Meta, Bored Apes, Crypto Punks, Ponzi scheme....

You’ve heard all of these at least 786 times in the last 6 months. 

Are you early? Are you late? Should you even care? 

I must start off by saying I might just be on the threshold of being an idiot, and I’m not technical at all, so even though I’ve listened to hours of podcasts and read many blogs on these topics, I still only have a very surface level understanding. 

With that said, I meet startups every day as a profession, and having met over 1000 in the last 2 years, there’s a certain subconscious and conscious understanding of trends going on. I could write 500 pieces about the different learnings, but one trend that comes up often is the unfairness of the current system for the Creator. I’ll refer to the Creator with an ‘uppercase C’ in this piece as the person who seeks to monetize a blog, their music, their art, their skills, their ideas, their influence etc. This really can be anyone. Currently, the world is set up for organizations to take anywhere between 50% to 90% of the financial benefit away from these Creators. For example, on Spotify, creators get *only* up to 20% of the financial benefit. 

The current system is broken.

So let’s take a step back and define some of the terms. Disclaimer here is that any definition or idea I give here is an amalgamation of learnings extracted from people who *actually* understand the space, and I highly recommend you follow them on social media,subscribe to their newsletters and listen to their podcasts if you want to explore more - including Naval Ravikant, Chris Dixon, Balaji Srinivasan, Tim Ferriss, Vinny Lingham and Packy McCormick.

Also, I’m going to give overly simplified views of everything, because simple mental models may effectively describe up to 80% of these ideas. But it’s definitely worth digging in more to get the full picture. 

To start off, I heard a simple explanation of the difference between Web 1, Web 2 and Web 3 from Tim Ferriss that stuck with me:

Web 1: Read (Dominated by Microsoft)
Web 2: Read + Write (Dominated by Facebook, Twitter, Instagram etc)

Web 3: Read + Write + Own

Web 3 is dominated by no-one. It is decentralized. It cuts out the middleman organization that seeks to own your data. Web 3 is an internet that is owned by users and builders, and digital tokens are the currency that facilitates it. 

Web 3 is all about value and control given to you, and to me, and to all Creators, builders, users. No longer is Facebook using your data against you. No longer is Spotify benefiting from Adele’s latest song. No longer is the “poor struggling artist” a thing. In theory at least. 

It’s going to take a while to get there. At the moment the user interfaces are mostly atrocious (by everyday user standards). There are countless applications being built upon different layer 1 blockchain protocols. We could talk a lot more about layer 1 protocols, but for simplicity, these are essentially “the operating systems” of Web 3 - Ethereum is currently the biggest, and other growing ones include Solana, Cardano etc. The smartest developers around the world are being increasingly attracted to work on Web 3 and are building on top of these “operating systems”, and it’s just a matter of time until we see applications as easy to use as the apps we have on our phones now, but fully decentralized. 

Now let’s take a look at NFTs. Non Fungible Tokens. 

It has been so interesting to see one side of the world so excited about them, and the other side saying “lol people are buying Jpegs bro”. 

The beauty of NFTs is that they look so simple. Phase 1 of NFTs is ridiculous monkey Jpegs. But under the hood, there is so much going on. This is my understanding:

NFTs are programmable web pages / digital certificates, which can have an infinite number of properties that apply to the owner/s. For example, you could buy an NFT of an ape, but within that, there can be specific rights that apply uniquely to you as the owner of that digital certificate. This could be sell-on commission rights for if/when that NFT is sold in future - ie. The creator makes money every single time that NFT is sold on; that’s pretty exciting for the Creator world. This could be the right to attend community events with fellow owners of that NFT. This could be exclusive access to discounts of related products or partnerships of that NFT. 

We are seeing a sense of belonging to a community associated with NFT purchases. Jungle Cats, a project on Solanarts, attract people who are passionate about animal conservation - A person buys a Jungle Cat NFT - in exchange the Creators contribute to conservation NGOs, and the buyer of the NFT becomes part of an exclusive Discord community where the passion of animal conservation is a central discussion topic. If they happen to sell their Jungle Cat NFT, they can benefit financially above and beyond the sense of belonging to the community, but it’s not necessarily a “buy to sell” trader mentality only. 

NFTs can facilitate building a community unlike we’ve seen before. Giving extrinsic and intrinsic ownership of a piece or a full asset. Then, if that asset is sold on, the original Creator can benefit every single time a transaction happens with in-built commission. To reiterate an earlier point - this is significant because the current model is for a Creator to take a tiny commission (1-20%) commonly, and only once off. As a piece of digital art propagates around the ecosystem, everyone benefits, the community grows, Kevin Kelly’s idea of “1000 true fans” becomes more powerful than ever. 

Then there’s NFTs in gaming. In the old world, you buy a piece of armour, a weapon, a skin, or cool outfit for your character etc, and it has no real value outside of that game. The value is only really the value you place on it by virtue of playing that game. It’s basically just us pretending the game has value and the things within the game have value, because it’s fun. 

In the new Web 3 world, those gaming elements will be NFTs with real financial value associated with them. In online games, there could be the ability for players to create NFT weapons, outfits etc, and sell to other players. You’ll be able to trade these elements with others, and the original Creators will benefit financially each time. This will facilitate an in-game economy with real-life financial benefit. In this idea, this is a closed system just for that one game. But where this gets really interesting, is where interoperability comes in - where you can buy an outfit for a character in one game, and carry that across into another game. This is where game NFTs will have real-value. 

Now let’s talk Metaverse. Where we place real life value on the virtual experience. 

NFTs are going to be a key catalyst to the metaverse, and having interoperability between different virtual experiences will be key to this. Zuckerberg with Meta may want a closed metaverse (where Facebook essentially “own” the virtual world), but consensus thinking is that’s not a good thing. Consensus thinking is that would be, well, kind of terrifying. We want an open metaverse - where there are countless creators of virtual experiences, and these virtual experiences are interlinked and shared and where you keep the digital assets (NFTs) you buy and use them across the open metaverse (with the option of selling on, allowing yourself and the original Creator to benefit). You buy a digital Louis Vuitton for your avatar (NFT, which can also give you exclusive access to their launch events), and you keep it with you everywhere you go in the digital world - and you keep the social status that comes with it. 

It’s going to take quite some time until we live in a Ready Player One-esque metaverse, and I don’t know that we ever want to / should. But I see a world in which digital assets take on similar importance to physical assets. In this new world, Creators win, and there are countless exciting possibilities that are not dystopian. 

So this is where we are now…

Bitcoin opened everyone’s eyes to a world where digital currency could have a real use case. 

Now the world is trying to figure out how we can give digital assets a real use case. 

Blockchain protocols are increasing in speed, decreasing in cost, and becoming more attractive for world class developers to develop upon.

Covid has catalyzed the world into living the majority of our professional lives online, in virtual rather than physical meetings. 

Gaming has progressed to the point where world class gamers are getting paid and revered as much as world class sports players. And the business model of gaming is shifting away from up-front buy to in-game purchases. 

The world is fed up with Facebook, Google, Microsoft, Apple, Spotify etc using and owning our data, and keeping Creators from experiencing the value that they deserve.

And now. We’re in a transition period. A convergence of trends. 

We’re in a period where Web 3 has come alive. Where decentralization is here to bring all of these concurrent trends together. As Naval Ravikant has said, where Creators can get real financial value instead of “likes” and “hearts” only.

It’s an uncomfortable moment. Something big is bubbling under the surface. As difficult to describe as the internet was in the 90s. 

I believe we’re still very early. 

Overall, I’m very hopeful and excited about this progression.

Let’s buckle in and enjoy the ride.

What is luck?

Just luck?

I recently read a short blog post by Seth Godin on luck. It stuck with me. It made me wonder about the role of luck, chance events, serendipitous moments in my life that have led me to where I am, and if they didn’t happen  - where would I be? What if I had been more conscious about seeking to create luck? Where could I be? Godin’s conclusion was - “luck may not be a strategy, but setting yourself up to be lucky might be.”

Ofcourse so much of the startup world is about luck. Building successful startups, and for investors, picking the winners. What is the percentage of luck, and what is the percentage of skill? 

There were countless social networks before Facebook “won”. Was that because Zuckerberg was simply lucky? Did he do anything to earn that luck? Was Justin Bieber just lucky to have made it out of all the young singers in 2008? Is Warren Buffet the luckiest investor of all time, and millions of others just lack his wild fortune? What about the luck of Switzerland knocking the World Champions France out of the Euros?

Did they do anything to earn that luck? It would probably be a stretch to believe they formally systemized their luck, but I’d argue that there are things we can do to optimize the chances of getting lucky.

Annie Duke, poker champion, author, genius etc says “The quality of our life depends on the decisions we make plus luck”. In poker, we are dealt a hand. That initial hand is fully based on luck, but that is not in a vacuum. That hand is in context of the hands your opponents may have, then in context of the bets on the table, then in the context of the cards that come onto the table as part of the flop, turn, river. A lot of context and variables. These variables lead to dynamic situations, and dynamic situations require good decision-making. As each layer of context is added, there is more opportunity for quality of decisions to either compensate for a lack of luck, or to increase chances of attracting luck.

Good decisions beget luck.

Zuckerberg was at Harvard; a breeding ground for network effects. Put himself in the right place. Heightened his odds of getting lucky.

Bieber exhibited his singing on Youtube in a time when the platform was experiencing exponential growth. Put himself in the right place. Heightened his odds of getting lucky.

Buffet remained disciplined and stuck to his investment thesis in a field where emotions sway the vast majority. Put himself in the right place. Heightened his odds of getting lucky.

Switzerland won on penalties, where player quality becomes neutralized. Put themselves in the right place. Heightened their odds of getting lucky.

“Luck is a tactic. An unpredictable one, sure, but if it works, it works. A useful strategy might be: I’m going to establish a pattern of resilience and apply information and testing to discover what works. And one of the tactics to support that strategy could be showing up in places where luck can help me out. If I can persist long enough, I’ll get lucky.” From Seth Godin’s post. 

If we do the right things. If we persist long enough. We’ll get lucky.

Putting ourselves in the right places is an interesting one. Something we have to be very intentional about. Places where we are exposed to opportunities that we want. Where there is access. A founder who seeks funding would be better geographically placed in Silicon Valley or London, that they would in Sudan or Sri Lanka. An actor seeking a big break is better placed in Los Angeles than Latvia. An aspiring software engineer is better placed in a tech company than in a fashion store. I attended a workshop the other day led by Henning Piezunka, and he said something that really struck a chord with me in speaking about Venture Capital and Angel investing - having access to great deals is more important than the skill of being able to evaluate deals. He argued that we should spend more time getting in a position where the pool of startups available to invest in is top quality, because then you’re allowed more margin for error. If you have a terrible pool to choose from, excellent ability to evaluate a startup is broadly, well, useless. 

We need to give ourselves access to top opportunities.
Put ourselves in the right places. Be conscious about it.

How do you want to be lucky?
Is there an area in your life where you crave that luck?
Is there something intentional that could be done to put yourself in that position? 

2021 Trends: My Shameless Predictions

Over the course of 2020, I had over 500 meetings with founders of diverse backgrounds, all who were trying to create the future they desperately crave. From discussions with them, from research and reading, and with a heavy-handed sprinkle of intuition and gut feel, I have compiled a list of trends I expect to see in the startup world of 2021 (and some beyond). Some are obvious, and some are slightly more left field. 

They are my predictions, not fact. Not investment advice. Take with a pinch of salt and a glass of wine:

• Food & Beverage will get plantier, buggy and more low/no

No one is doubting the plant-based trend right now. From meal subscription kits, to ‘fake’ chicken (THIS is a pretty awesome brand), to endurance drinks and protein powders, the revolution has just begun. Also expect to see insects take over the pet food space with companies like Aardvark entering the exciting market, and low/no alcohol take another huge step towards mainstream consumption 

• Psychedelic medication

Psilocybin will take another step towards mainstream as a legitimate medical treatment, and we may see breakthroughs in clinical studies relating to treatment for mental health disorders. A listed company like Compass Pathways could be well poised

• Voice-based social 

As everyone and their mom now has a podcast, voice calls provide respite from back to back video calls, and tools like Echo, Siri and ‘Hey Google’ facilitate our lives, the power of voice has become front and centre. Instagram / Twitter for Voice may be next

• Telemedicine for humans and pets

Visiting the GP and many specialists virtually will become first choice, and there will be a big boom in pet owners embracing remote appointments with their vets

• Still not the year for VR

Although we may see some more use cases of Augmented Reality that adds value, 2021 will be too soon for Virtual Reality. Let’s talk again in 2-3 years

• Social e-commerce comes to the West

The online shopping experience will take a step closer to resembling the real world and will become ‘fun’. It probably won’t be Amazon, but companies like Poshmark seem to be paving the way for social integration in Western e-commerce. Watch out for replications of China’s Pinduoduo model, with team shopping, easy sharing with friends, mini games and big group discounts. We will also see a rise in social-media-first platforms like Pinterest becoming more ‘commerce-y’

• E-sports rising

A handful of top e-sports players will become household names as some of the biggest brands in the world will partner with e-sports clubs and organizers - increasing mainstream exposure. Viewership numbers sky-rocket. Clubs like Fnatic will grow, and companies like Gfinity are well poised to facilitate the growth of the industry.

• Biotech gets hot

Gene editing, mRNA treatments and senescent cell therapies will take mega strides. Existing public companies in these spaces like CRISPR Therapeutics, Editas Medicine, Moderna, BioNTech, and Unity Biotechnology will have huge uplift, and a series of private companies will secure massive investment rounds. This is the year of treatments aiding the body to fight it’s own disease; clearing out cells that accelerate age-related diseases; and repairing broken genes and fixing diseases at source. 

• Tech for kids

Children spending more time at home than ever - this obviously opens up the edtech market. But more interesting could be expected rapid growth of children-focused games, secure and private social media for kids, and safeguarding tools. Companies like Roblox, GoBubble and SafeToNet could win in short, medium and long term

• Decentralized Finance

As much as your grandmother is even talking about Bitcoin nowadays, there really is something in it (maybe). But more interesting and important in 2021 will be the advent and appreciation of Ethereum and Ethereum 2.0. There will be a sharp rise in sexy products built on this technology, and the words “smart contract” will drive you crazy by the end of the year

• The tools that build the climate revolution

There will be a steady increase in mega funding rounds to companies providing alternate energy sources. Lithium and rare earth metals will get (nearly) as much airtime as Tesla, as the core tools that form the foundation for the EV movement. Listed companies in this space like Bacanora and MP Materials could soar, while private companies like Orbital Marine may get a lot more attention in alternate energy sourcing

• Big Tech unbundling

2021 might not be the year it finally happens, but it will be close. As we reach a climax in discussions around privacy, and sharing between products of each of the Big Tech giants (see ‘Whatsapp to share data with Facebook uproar’) - we will see steps towards Apple, Google and Facebook having to split up into their constituent parts, preventing sharing of data between each constituent

• Open-sourced equivalents of Big Tech will rule

In line with the decentralized movement, secure and private forms of messaging, search and others will gain mass market momentum. The user is in control. Expect to see the usage surge of Signal in messaging, and Ecosia in search

• The future of work is not offices

A beautiful middle ground between rigid offices and working from home will be the future. 2021 will be another transition year in this. The big winner? Airbnb. Their rentals will start to become more having a “work-cation” abroad than a holiday, and by 2030, I expect Airbnb, or a similar entity to be the biggest ‘office’ provider in the world

• Private businesses get liquidity

Gone are the days where Exit and IPO are the only forms of liquidity for early stage investors. Equity crowdfunding will take a major step towards offering sale of shares - Crowdcube’s Direct Company Offering as an example, and there will be a rise in platforms which sole purpose is for pre-seed, seed, and Series A investors to be able to exit in that awkward phase where a company is 2-3 years away from going public. Buy your shares in that startup, you may get liquidity sooner than you thought (not investment advice, capital at risk, etc etc)

tastePal Failure Series - Part 1

This will be the first in a series of posts in which I attempt to deconstruct the failures and the learnings of my maiden fulltime startup attempt, tastePal. I think transparency and vulnerability is key in any part of life, and no more so than in startup culture where survivorship bias thrives. Funny how hindsight brings so many learnings.

While in the process, I could see that there was a lot wrong, I was unable to zoom out to strategically implement corrections to each of the challenges to right the path.

The hope is that this will be somewhat enlightening to very early stage entrepreneurs that face some of the thinking that I was facing, and is also a selfish form of catharsis for myself as I look back and reflect. Here we go, part 1 of about 53 (let’s hope not that many).

Context and Go-to-market strategy

My initial go-to-market strategy was transaction-commission based at trendy restaurants. The MVP value proposition was, very simply:

1. Customer sits at table
2. Customer scans QR code which assigns them to table and opens restaurant menu on app
3. Customer orders to kitchen via app
4. Customer receives the order from waiter

I saw infinite possibilities in expanding this model to solve all the pain points of the restaurant experience, and use aggregated data to inform ordering decisions for customers based on other people’s orders and pairings. I’ll dig more into the learnings of this phase more in a future post.

After multiple failed attempts there (43 client restaurant meetings to be exact), I realized the product-market fit was off, and they were concerned about tastePal affecting their existing operations, which without oversimplifying too much, was:

1. Waiter takes order from patrons
2. Order is printed in kitchen
3. If kitchen capacity is full, waiter hides in kitchen until kitchen has capacity to receive further orders
4. Waiter collects more orders when kitchen has capacity

The restaurants in my market were not ready for technological disruption to this process, and they saw many potential operational challenges that implementing an app would bring. Their mantra was, If it’s not broken, don’t fix it.





The ‘pivot’ (yeah, we all hate that word)


So I had to take a slightly different path - the office canteen market.

In South Africa, it’s not practical to walk out of the office to a nearby takeaway store or restaurant. The walking infrastructure is just not adequate, so it would require getting into the car, driving 3-10 minutes, finding a parking spot, ordering, walking back to the car, parking at your office, and walking back to the office. Impractical on a daily basis, and a waste of 20-40 minutes. So most offices for SMBs and corporates have their own in-house catering solutions. This was an interesting market from a tastePal perspective, because each catering company provides anywhere between one and 1000 SMBs with canteens.

The new tastePal (MVP) value proposition for office canteens became:

• Employee sits at desk
• Employee opens the app, views their canteen menu
• Employee orders directly to canteen
• Employee pays via a pre-loaded digital wallet, or via credit card
• Employee receives Push notification when order received
• Employee receives Push notification when order is ready
• Employee collects order
• Employee saves 20 minutes per day from wasted waiting times in queues

So I thought - if I can build a good relationship with these catering companies, prove the concept, it’s possible to roll out the product to their entire office client base.

I had some success early on. After a stressful and exciting pilot process (to be discussed further in a future post) with a catering company that supposedly provided office canteens for 400 SMBs, I was awarded the contract.

The Business Model

Let’s look at the pricing model. This is what I really want to focus on in this piece. Rather than committing to a commission model, I decided it made more sense to pursue a onboard + monthly retainer fee model. Why? Firstly, I liked the predictability of a retainer model in a B2B - easy to predict revenue, and easy to plan for costs. Secondly, office canteen meals in South Africa are greatly subsidized, so a typical meal would cost £1. If I was able to charge as much as 20% commission on each transaction through tastePal (optimistic), we would have been collecting £1 a day for the first few months of operations (with a measly 5 orders a day only per canteen). In hindsight, one potential benefit of a commission model would have been that it would have been seen as risk-free by the catering clients - if no-one uses the app, they don’t have to pay, less barrier to closing the sale, shorter sales cycle.

A counter-argument to the commission model, was that without committing to the monthly fee, the catering company had no ‘skin in the game’ and no reason to push the use of the app on our behalf, which was a key part of my thinking as a strategy to getting awareness, adoption and eventually engagement. I thought, if the catering company commits to a setup fee and monthly retainer per canteen, they’re fully incentivized for the app to be adopted - they’re locked in - and that would save us from too much time commitment in getting adoption and engagement. It didn’t quite work out that way.

So what pricing model did we go with? In GBP terms, I charged around £300 for setup at the canteen, and around £80 monthly retainer per canteen. The thinking behind this was that if we’re able to secure contracts with 3-5 medium-to-large catering companies - it would be realistic to have a captive market of 1000 canteens under contract within 18 months, which would have had us in a reasonable position of £80k MRR.


Why did this fail?

A few reasons.

Our product was sufficient but elementary. Not the tried and tested product at scale that medium-to-large catering companies needed. I thought I could be “scrappy” and scale gradual product development as we gradually increased our revenue, and re-invest all revenue into product improvement. The problem with that, however, is that major corporations who would be making a major commitment, needed to see the product that fit their needs now, and not the promise of a gradually improving product that would learn / adapt / improve over time.

Rather than committing to this go-to-market strategy of medium and large catering companies, and investing heavily in product, I re-focussed sales time on the smaller catering companies, which I perceived to be lower hanging fruit with shorter sales cycles. I thought I wouldn’t have to invest in product (at least in short-term) if I went this route, because our MVP would be sufficient to solve the problems for these smaller catering companies. These smaller catering companies would provide canteens for 1-10 SMBs, but would allow us to further prove our concept, and would at least provide some revenue on the table which we could hopefully leverage to pay part-time software engineers.

What went wrong here?

It turns out £300 up front cost per canteen and £80 monthly is still too high a price point for smaller catering companies, if they aren’t 100% sure it will drive further revenue to compensate for cost. The reality is that smaller clients are more price sensitive, and are open to SaaS products that are as close to a guarantee as possible of either cutting their costs or boosting their revenue. They need some evidence that this is the case to outweigh the spend on the software. I had some quantitative data from rolling out the first 5-10 canteens, but the sample was too small for many of them to commit at that price point.

It’s also important to note here that smaller catering companies were in a perpetual state of fear of losing their SMB contracts to the larger catering companies, and if they lost any contracts, their revenue would take a huge hit. They were reluctant to commit to any new costs with this in mind. My clients were in a defensive mindset rather than a mindset of aggressive growth and innovation; maybe this was a function of the market, maybe of the timing; and maybe just my own failure of communicating the value proposition effectively for them to see tastePal could help them retain business.

I was too stubborn and slow in decreasing my price point or changing the model

Why? I was still of the belief that the value of the product would far outweigh the cost. Perhaps more than that, I was desperate. I was too involved in the setup and support process, and despite being a SaaS, I hadn’t streamlined processes enough. We should have focused more on product. I felt that I had to charge enough that it would at least cover some of the time cost of providing support. In hindsight, if we had invested more in product, the setup and running process would have been slicker and more automated - I could have charged less for the product; reduced the sales cycles; saved myself time from support; and increased sales; and scaled faster.

Why didn’t I invest more in product?

Bootstrapping is a sexy idea in principle. Use savings runway from previous job; run a good business with manageable sales cycles; illustrate value; gradually build MRR to cover operating costs; run a lean operation; reinvest revenue into product and support; and grow a solid business.

Why couldn’t I do that?

The team was lopsided. I was the sole founder. My brother built an incredible MVP for a discounted fee which was amazing to get us going, and then we got a brilliant part-time software engineer, but we couldn’t move fast enough without full-time software engineers to build on the rock solid foundation. Therefore all product work took a backseat / took longer than necessary.

In a well-balanced SaaS with 2 or 3 founders with complementary skills, a bootstrapping model can work. I still love the idea, in principle. However, I needed to compensate for my lack of skills by investing heavily in the right areas. I didn’t. I was stubborn with the bootstrapped approach. I fell in love with the idea of a B2B monthly retainer bootstrapped slow and steady model, but I didn’t have the right team, product, pricing, runway or sales operations to execute it.

What if I raised a seed round?

This would have been a game-changer in two ways. It would have provided runway that would have kept the desperation away, and would have helped me to charge fees in line with what the market was willing to pay and in line with the value we were providing at the time. I could have gradually increased fees as we improved product and as we increased value, without rushing the process. Secondly, I could have invested in a full-time team of software engineers to build the product in line with our go-to-market strategy.

We could have started with the smaller catering companies, built the product that solved their problems, in collaboration and constant discussion with them. We could have built a self-setup product that allowed them to set up the menus more easily, manage the orders comfortably themselves, integrate with their POS, do their reporting, all while providing our initial VP of cutting queue time with app orders. While doing this, we would have had leeway to gauge from them if they prefer the commission model or the retainer model, and used our initial customers as a reference point to determine fair price. As we improved the product, we could have moved upstream to the bigger players in the market, with a fully proven product, strong MRR, rock solid pricing model, and features commensurate with the problems they’re experiencing.

Bootstrapping can lead to a startup being too sales heavy. This was the case with tastePal. Trying to compensate for lack of product to get an ‘in’, but I’m unsure of it’s sustainability as a long term model. Bootstrapping can lead to desperation, as compensating for lack of product could lead to clients being skeptical to commit, as they identify flaws. Selling B2B is hard enough as it is even with the perfect product.

This is not a call for all early stage startups to aggressively pursue a seed round, but rather to take an honest step back, zoom out of the business as much as possible, and identify what the fatal flaws are or could be, and take an honest appraisal to see - how do we stop these challenges from killing the business before it has a chance to thrive?

Key mistakes noted here:

• Single founder, key skills gaps and insufficient people with ‘skin in the game’ playing devil’s advocate to ideas
• Unfocused go-to-market strategy - pursuing large clients with early stage product
• Approaching low-end clients with medium/higher end pricing
• Lack of SaaS setup automation and solid repeatable automated process loops
• Tried to compensate for lack of product with too much focus on sales
• Lack of sales operations and automation; all sales were too manual
• Too much reliance on sales pipeline closing, without questioning why sales cycles are taking so long and acting swiftly to change situation

This is just the beginning. In the next post in the series I’ll dig deeper into some of the elements of the above and address other operational, sales, marketing, product, awareness, engagement, adoption, SaaS, partnerships, as well as other forks in the road that I experienced.

Until next time!