The author is a friend and was the original marketing director for the hosting company LiquidWeb. He' a superb marketer and I suspect this article grew out of his frustrations dealing with this problem.
I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
Exactly, but I'm not sure about the class action lawsuit part. The contract probably forbids it and since it's B2B I bet those types of provisions stick.
The most frustrating part is that these types of situations are tough to avoid and we're starting to see them everywhere. Ex: DoorDash has a huge marketing budget / money to burn when starting up, so the early adopters see great returns because someone else is paying for a bunch of advertising for them. They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it. Then they abuse their market position and do stuff like this.
You see it everywhere; Google, Amazon, Microsoft, app stores, adhesive terms of service, etc.. It's happening in the software development industry right now and no one's paying attention. Tons of services like SaaS Git, Saas CI, SaaS dev environments (Codespaces), templated SaaS deployment targets, etc.. The early adopters are seeing gains in efficiency, so they're out there advocating the use of all these subsidized services, but no one is considering what's going to happen in 5 years when the ownable workflow is neglected and the SaaS workflow is the only practical option.
There is a huge difference between SaaS and marketplaces. The latter is very prone to creating monopolies or oligopolies, but the former not so much.
About the developer tools you mentioned, take for an example the CI service. It is relatively easy to switch to a new one. I have used Codeship and Circle CI in the past but have switched to Google Cloud Build since it ia cheaper for my use case with Docker containers.
That was an insightful comment, pointing out a pattern.
- [A SaaS startup or established platform] has a huge marketing budget / money to burn when starting up.
- Early adopters see great returns because someone else is paying for a bunch of advertising for them.
- They tell their friends and slowly the system grows to a critical mass where you're losing out if you're not on it.
- Then they abuse their market position and do stuff like this.
To put a name to this trend, to call them "subsidized services", makes it clear to recognize how much of business/software/web ecosystem is getting consumed by the strategy.
>I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
It's honestly gotten pretty bad. I almost can't find most independent restaurants' web presences anymore because Yelp, Caviar, Google's page, Doordash, et. al. all outcompete them on SEO for their own brands. And that's AFTER the paid ads those same sites manage to take out.
Most of the time, I end up using restaurant menus listed on UberEats or Doordash instead of their own websites before I call them for a delivery because it's just impossible to find their websites. It's especially bad with things like Chinese or Thai restaurants since so many of their names are variations on a handful of motifs. So you might be looking for the Peking Garden across the street, but you're just as likely to get Peking Gardens in cities all over the country, none of which are affiliated with each other. But the Yelp or Doordash hit is always the one right by you.
It's unfair. I want restauranteurs to be good at restauranting. The line between their success or failure shouldn't rely on their ability to outsmart expert SEO hustlers. It basically winds up being a shakedown that adds no value to the customer or the restaurant.
> "Most of the time, I end up using restaurant menus listed on UberEats or Doordash instead of their own websites before I call them for a delivery because it's just impossible to find their websites."
The trick is to look them up on Google Maps using their address/location and usually their website is directly attached to their map entry.
> It's unfair. I want restauranteurs to be good at restauranting.
Restaurants have to pay an arm and leg (often around 1/3 of revenue) for prime real-estate; or pay higher wage in more prosperous places.... is it fair?
In the end, restauranteurs who are good at this business will thrive and those who are not good at it will falter. Google/Yelp/DoorDash just provides additional dimensions for restaurants to compete in. And as always, when new technologies emerge, there are winners and losers.
In this wave of change to restaurant industry, the winners are actually smaller restaurants at cheap locations who are previously invisible to most potential customers but now are on equal footing with restaurants at prime locations in terms of exposure. And in the long term, it'll shift restaurants' expense breakdown, and those who pay too much rent will struggle because they don't have the budget to pay for online exposures.
It doesn't mean the restaurants paying less rent will be more profitable, the money simply goes from landlords to tech companies. And as long as restaurant industry is a fiercely competitive market, profit margins will remain low.
>In the end, restauranteurs who are good at this business will thrive and those who are not good at it will falter.
If the differentiating factor between success or failure is SEO rather than location, quality of food, or service I have trouble seeing how that's a net benefit for anyone but Google. Maybe "fair" was the wrong term. It's encouraging maladaptive behaviors in the industry.
Why is location a net benefit for anyone but the landlords? SEO is essentially just your digital location. It makes your restaurant easy to find and navigate to, in the same way that a good location makes your restaurant easy to get to (and maybe park).
Yes, expensive walkable commerce centers will have reduced relevance, as fewer sales come from walk-in customers. Speaking as someone who took over a failing restaurant at a hippy commerce center, only to close it down after realizing the walk-in traffic is going down while rent is not.
As long as people desire such physical congregated commercial areas, they won't go away. But I'm not confident that people really want them, based on how they vote with their wallet and time.
There is a lesson here: no matter what it is that you are building marketing is going to be important. Sometimes more important than the actual product.
This is one of the reasons most of my websites have no ads on them. One of the problems is that people don't want to put their money where their mouth is.
I get feedback that I'm writing valuable and interesting independent content, but people don't promote my work by sharing it around and very few people kick money my way. When I complain about how I remain dirt poor and people on the internet expect writers to be de facto slave labor, I get told crap like "Get a real job."
Advertising is how much of the internet is funded. If you think it's a cancer, help fund things that aren't using advertising to deliver value. Vote with your checkbook, as they say.
> There is a lesson here: no matter what it is that you are building marketing is going to be important. Sometimes more important than the actual product.
Not if you're this guy [1], he went out of his way to ensure he got the worst reviews on Yelp from his clientele in order to defy the monopoly Yelp has over the Industry and its exploitative shakedowns.
The GM at my last restaurant hated having to pay and play by Yelp's reviews but since we were doing upwards of 20k+ days even during non-peak season on a consistent basis it was a marginal cost at the end of the day and 'a cost of doing business.'
Having been in-out of the Culinary Industry, jumping from tech and automotive in between, restaurants rarely have Marketing down and often relies on word-to-mouth practices.
Unless you're on something like Chef's table, or one of Bourdain's old shows, or get a Michelin star (or to a much lesser degree James Beard award) there is very little exposure outside of local magazines and who even bothers with food critics--if they're even around any more--outside of someone being a person with way too much time on their hands.
One of my colleagues/cooks went to NY on all expenses paid trip to see Blue Hill Farm, and got to be with Barber all weekend long. He said that Chef's Table was a life-line that pretty much put him on the map, because prior to that no one really paid attention outside of his local NY clientele.
One of my more loftier post-retirement goals was to see if I could make a few pilot episodes highlighting the local food scene within certain Tech hubs and eventually Digital Nomad cities all over the World and have dinner with a select few startups to see what they were about.
Having a hand in both Industries I thought I could capture things well, and I even drew up a list of cities I'd visit, starting with my own and a few in CA. COVID has put a damper on it all, but may be worth exploring now that there is a dire need to help and people seem more receptive to help out people in the Restaurant Industry as things are slowly starting to open up. Hopefully with a few EPs and a refined approach I could pitch to Netflix, Hulu, AppleTV et al... Honestly, I just want to be able to aspire to make something worth Zero Point Zero Prodcution's attention as they do brilliant cinematographic work.
At no cost, and in fact negative costs as it ended up not costing him anything for defying the Established cartel's Marketing costs, or how the owner put it: mafia's extortion.
The point being that Marketing is not always more important than the product and if you're brave enough to go against conventional wisdom it can be quite profitable as he saw a massive increase in business. But it is, albeit unconventional, Marketing in the end.
> I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
This same thing happened to the hotel industry few years back, studying that would give us a good idea of how this is going to play out. I think restaurants are just going to have to adapt to the new reality.
> I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.
On what basis? You can't just sue someone because you don't like them-you have to have some argument that they wronged you.
Trademark infringement seems like the obvious one. If your add says "Saddleback BBQ", but takes you to a simmiliar product from another provider, then that seems like a clear cut case of infringement.
The contract between grubhub and the restauraunt makes everything more complicated, as there is likely language relating to trademark use, so this might turn into more of a breach of contract suit.
Sure, but the author didn't claim that grubhub was doing that. The author claimed that the grubhub had an ad saying you could order "Saddleback bbq", which took you to an app where you could indeed order saddleback bbq (among other things). That seems to me to be a significantly different situation.
Please ask him the motivation for the floating Drift AI chat box. When I see one of those, I abandon the site. They only get in the way, add an extra layer of indirection to communication, and devalue the customer.
I have never once got a helpful response from any chatbot because they are only equipped with content already in the site anyway. Comcast is a model implementation of how utterly useless they are.
I don't think the average restaurant owner who may not be very digitally savvy realizes how these companies piggyback on top of their brand. I predict that soon there will be a large class action lawsuit with thousands of restaurants going after the delivery services for these underhanded tactics.