Recipe for Disaster
Why Kitchens Fail to Succeed
Pilotworks (formerly Foodworks), was a community of food incubators, mentors, and entrepreneurs. Awarded a $13MM round of Series A financing led by Techstars Ventures and Acre Venture Parnters in 2017, Pilotworks was positioned to become the most successful commercial kitchen in the market. Three established kitchens in Brooklyn, Providence R.I., and Portland M.E. were part of the original acquisition, and Pilotworks opened three more locations by May 2018 in Newark, Dallas, and Chicago.
In addition to kitchen space, all locations offered education, mentorship, and distribution services in addition to co-working space and demo-kitchens for cooking classes. Employees of Pilotworks assisted with the local licensing process, training for use of the equipment, connecting their members with local and national resources, and more.
- Choosing the Right Technology
- Scheduling Management
- Invoicing & Collections
- Member Management
- Staff Efficiency
- OUT OF BUSINESS
Pilotworks was positioned to be the leader in shared commercial kitchen space. With quick national expansion and lean operating teams, it was critical to be efficient. Unfortunately, we did not have the processes in place – from tour scheduling, to orientation; scheduling, to billing – and the wrong technology to support our business. We used multiple platforms both internally and externally, which complicated the user experience for our members and created unnecessary problems that we had to spend countless hours resolving. Our billing / invoicing system was so convoluted that it ultimately resulted in tens of thousands of dollars in unpaid bills. We spent more time working through operational challenges instead of focusing on our members, scaling, profitability, and growing the member community.
The management team could have easily made excuses for lack of efficiencies day to day operations. However, It became to the clear shortcomings of PilotWorks use of technology which is what made it was difficult to manage the business and create the appropriate maker (member) experience. Day-to-day operations were easily consumed by administrative tasks and spending time to try to run the operations of the business versus focusing on the critical tasks of client relationships and helping our makers (member) grow their small businesses.
Learnings: Spend time helping your makers (members) grow their business not daily administration tasks that can be managed by the right technology!
Management began to realize that the technology portion of the business was one part of the puzzle our executives had yet to invest in and nor did they understand the importance to the business to support future scalability. By the lack of understanding of the business needs, requirements and how technology plays a critical role in Kitchens, the assumption was that the management and staff could easily scale a national business. As my team was at ground level and faced these challenges, by the time the issues were identified it was too late to fix the sicking ship.
Instead of an all-in-one technology, we used several different programs technologies to run our business. We’d manually cross-check access card scans with scheduling; comb through confusing invoices with members because the scheduling platform didn’t sync properly with the billing platform and used lots of sticky notes because ultimately that was easier to keep up with.
Learnings: Don’t wait – understand how the right technology can help your Kitchen and compliment your daily efforts!
Management would spend days each month reconciling invoices and discussing fees with makers. This was never a good conversation and created frustration for both parties. The PilotWorks Staff would also spend hours each day reviewing access card scans to confirm who had been coming in and out of our 24/7 facility and comparing hand-written check-in and check-out forms to online schedules.
As a fast-growing company, we were constantly coming up with new ways to create revenue. The problem was our Billing platform could not easily generate unique charges or automate the maker to see their bills online. This caused us to turn away business and lag in getting invoices sent out within a reasonable timeframe.
When bills did go out, they were not clear and simple itemized receipts. Because we used a platform that was not built for our industry, it provided a lot of unnecessary information that only confused our members, which resulted in many one-off meetings every month in which we’d explain and break down their charges.
Learnings: Finding the right technology that allows management to automate monthly billing and/or charge for specific items and scheduling all in one place. In addition to allowing the makers (members) to be able to review their billing in real-time by logging into their account online.
As new makers joined, compliance and equipment use became an ongoing issue to support both business, state and local laws and governances. Keeping a close eye and making sure makers were properly trained on equipment use became an ongoing challenge and consumed a lot of time.
Learning: Finding avenues to save training and communication so it can be easily reviewed by makers daily would be the goal. Ideally being able to having a place online where all these resource are available to the makers on demand would have been the solution and saved time.
DONT MAKE OUR MISTAKE!
Since before the opening of our doors, we as a company reviewed the technologies readily available for the Kitchen industry which were identified as not suitable, inflexible and unscalable. We actually chose the best technology at the time why is one of the leading companies supporting Workspace rentals. As the technology had its strengths at the end, it simply was not designed to support the automation of the Kitchen scheduling, billing, compliance, and management issues all in one.
Days prior to closing which was unknown at the time, in search for a technology solution, we came across a Technology firm that understood business automation and when speaking with their leadership team they had deep knowledge of the pitfalls of Shared Kitchens Industry.
While VFH could not have been the savior for Pilotworks soon enough, it could have been a critical value-add to streamline our processes and given us – and investors – more confidence in the monetization of the entire business, not just the kitchen rental portion of the business.
“I guess for me personally, what I felt was most interesting was when I was able to see a smaller local Kitchen approximately 3000 square feet with a single owner who managed their business, operate their business more efficiently, more automated and with greater visibility along with significantly more makers (members) than a 50,000 sq. ft kitchen with Nationwide presence. It was than, I realized other companies like VFH see value in the industry enough to solve the core challenges we all face!”
October 9th 2018
*Case Study conducted by a Third Party Research Firm