Dinners and Dreams

SaaSEAD speaks with Santiago Tenorio, founder of Melba and Venture Partner at Rewired

Startups aren’t easy. We spoke with serial entrepreneur and venture partner at Rewired, Santiago Tenorio, about building restaurant tech before any playbook for entrepreneurship existed on the internet.

Restaurant Apps In The Early Days

Melba, an AirBnB for amateur chefs, was built to connect underutilized kitchens with unestablished chefs looking to showcase their skills. In any two sided marketplace, both sides need to be actively using the platform. In Santiago’s case, traction with amateur chefs at culinary schools – eager to use their craft – made it easy to build out one side of the market. Acquisition costs for diners on the other hand made the unit economics unsustainable.

Early traction, as exciting as it might be, can distract from the realities of your business model. Keep an eye on the CAC.

Pivot and Customer Acquisition

With only a few months of runway left, Santiago’s team transitioned their platform quickly into an experiential dining marketplace. Impressively, Santiago was able to sign up a series of Michelin star rated restaurants to participate in the platform. Getting through the door to these busy chefs is never easy. To get his first customers, Santiago personally visited restaurants, worked his way to management through the waiters, and suggested restaurants join the platform at the end of the meal.

The classic story of doing things that don’t scale for acquiring your first customers seems to apply even more in relationship-driven industries like dining.

Runway and Exit

Despite the early traction, Melba ran out of runway and began a rough 6 months without cash. During the hard times, and without reserves to pay salaries, Santiago ended up hosting his co-founder in his own apartment. Without additional capital, the startup was forced to look into an asset sale and a very tough letter to investors, many of whom were close friends.

When asked if he still believed in the platform, even as they closed down, Santiago was certain it could have succeeded. Timing can be everything. Experiences are now being integrated into popular platforms like AirBnB.

Aftermath and Advice

Turns out serial entrepreneurs aren’t un-hirable, as the relationships he’d built with restauranteurs was immediately recognized as a valuable asset and there was a quick transition into a position at Amex and later into venture at Rewired.

To those trying to tackle the space, Santiago recommends working with distributors of products like wine and spirits who have unmatched reach and connections to restauranteurs. You might not see it at first, but the brute force approach to customer acquisition is not always the best.