The Restaurant Technology Guys Podcast brought to you by Custom Business Solutions
The Restaurant Technology Guys Podcast brought to you by Custom Business Solutions
Revolutionizing Restaurant Finances with Starfish AI: Insights from Jordan Silverman
Revolutionizing Restaurant Finances with Starfish AI: Insights from Jordan Silverman
In this episode of the Restaurant Technology Guys podcast, host Jeremy sits down with Jordan Silverman, co-founder and CEO of Starfish, a company dedicated to helping small businesses understand and manage their finances using AI. Jordan shares his journey, from early entrepreneurial endeavors to his passion for assisting small businesses in democratizing access to data and tools. The conversation delves into how Starfish leverages AI to analyze P&L data, identify cost-saving opportunities, and provide actionable insights to improve profitability. They discuss the challenges of the restaurant industry, the importance of understanding financial metrics, and the future potential of AI in streamlining back-of-house operations. Tune in to get inspired by Jordan's mission to enhance the financial health of small businesses in the hospitality sector.
00:00 Introduction and Guest Welcome
00:23 Jordan Silverman: Background and Passion
01:32 Challenges of Entrepreneurship
01:54 Helping Small Businesses with AI
03:15 The Importance of Financial Understanding
04:22 Sponsor Message
04:59 Starfish: The Solution for Cost Management
07:05 The Value of Actionable Data
11:56 Real-World Impact of Starfish
17:03 The True Cost of Small Business Ownership
18:10 Leveraging AI for Business Efficiency
19:07 AI in Action: Practical Applications
21:47 Challenges and Solutions in the Restaurant Industry
24:03 Normalizing Data Across Different Restaurant Models
33:05 The Future of AI in Restaurant Management
35:27 Conclusion and Final Thoughts
This is the Restaurant Technology Guys podcast. Helping you run your restaurant better.
Jeremy:Welcome back to the Restaurant Technology Guys podcast. I thank everyone out there for joining us. As I say each and every time, I don't take your time for granted. So thank you guys for hanging out. Today I am joined by somebody that we met on the internet. And not, it's not like weird that we met on the internet. But, Jordan, why don't you tell everybody a little bit about who you are. And then, we can talk a little bit about what you get to do. And how we, how we encountered each other. Cause I'm excited for them to learn about, what you've been up to lately.
Jordan Silverman:Sounds great. so first off, Jeremy, thank you for having me. big fan of the podcast. That's how we originally connected. Literally just me saying. I'm a fan. Thank you. so I'm really excited to be here. Jordan Silverman, co founder and CEO of Starfish. what Starfish does is we help small businesses who are struggling to understand their finances. We use AI to help them decrease their costs and increase profits.
Jeremy:Love it. we're only a minute in and, if we didn't talk about AI within the first minute, we would be, we would be having problems in the year 2024. And obviously I'm teasing about it, but, but I'm excited to dig into, quite frankly, the passion for why Jordan, because you and I, again, we got a chance to meet online. and, for those that don't know how these things go, oftentimes we'll get on the, before I hit the record button and we'll spend five or 10 minutes getting, a little bit more insight. Jordan, I just spent 25 minutes talking about baseball and talking about life and kids and all of that kind of stuff. But, but when you talk about your passion, tell me a little bit about it because it was inspiring one, as I've started to watch your journey and where it's gone. And then when you and I did a prep call last week, I was like blown away. I was like, dude, you, the world needs to hear your story. So talk to me a little bit about where it's coming from and what's up with, with why. You chose to, to start to engage with us. Cause it's not easy. Entrepreneurship is not easy. Starting a tech company is not easy and it's a lot of work. and for, a co founder to, to jump into that, there had to have been a big why.
Jordan Silverman:First thing I'm going to say is somehow I always forget every time I jump in how hard it is. I'm sure you feel the same way, right? Where it's like you lose track when you're building of how hard the first step of the journey is. So I've been working with small businesses for the last 15 years. I have owned small businesses. I have been an entrepreneur. I have worked with small businesses as clients and partners and customers. And what really drives me at the end of every day is. How can I help small businesses, restaurants, hospitality, brands, retail, et cetera, democratize access to data and software and tools. So I first encountered this when I was in college, I went to university of Michigan. We have a thriving small business ecosystem in Ann Arbor, and that's where I started my first business. And one, they were incredibly supportive of me and my first business and my first journey, but. It's where I really started to realize these people are so passionate about what they're building. They're so passionate about what they're doing, but sometimes they are building passions, not businesses. And I think that's where the light bulb really went off for me was I was working with these people and they had such deep understanding of their customers and why people come and how to make customers happy. But then when it came to the finances and the behind the scenes. They didn't want to deal with that. They wanted to outsource that. They wanted to find a partner to deal with that at the end of the day, every single business is in business for the same reason to make money. Yes. To make customers happy. Yes. To be hospitable, but to do those things, you need to make money.
Jeremy:I love that. And I love the passion. I, any long time listeners. I know I was able to share a little bit of the story with you the other day. I was just at a trade show earlier this week talking to somebody. They're like, why do you do this podcast thing? And really for me, it's that same passion. I've watched people put their blood, sweat, and tears into these businesses, and then they make a poor decision about. their partnership on the financial side or the wrong technology decision or the wrong location decision or any number of things. And I've watched over my 30, 30 year career, I've watched brands that are amazing people that are amazing, that lose it all because of a poor decision that they've made or the lack of understanding that there are tools out there that can help them do these things, which is what I love about what you're doing is you're trying to, like you said, democratize. To these tools to be able to really help people solve these business challenges. And now a word from one of our sponsors. Every restaurant operator understands the chaos of a Restaurant kitchen during the meal rush restaurant technologies, oil, total oil management solutions, and end to end automated oil management system that delivers filters, monitors, and recycles your cooking oil, taking the dirtiest jobs out of your kitchen and letting your employees focus on more important tasks. Control the kitchen chaos with restaurant technologies and make your kitchen safer. No upfront costs to learn more, check out rti inc. com or call 888 796 4997.
Jordan Silverman:And. Starfish is culminating for me from two main experiences. So the first experience is when I was running my business, we had really good early success. We went to go raise like a pre seed round, raised a pre seed round. I was 21, had no idea what I was doing. And I ended up spending like third of my pre seed money just on the lawyers to raise the pre seed Now, nobody told me I was overspending. I had a bookkeeper. He just did the books. He didn't tell me anything, right? He was just entering invoices into QuickBooks. That's the first thing is like I was overspending on significantly unnecessary things that I should not have been. And if I had someone or a tool or something to help me figure that out, that would have potentially saved the business. And then the second thing is I spent seven years helping build a company market man, which is a restaurant inventory software. I was employee seven. When I left after seven years, we got acquired. We were 120 people, amazing journey. We worked with thousands of restaurants and other hospitality brands. And we saw the same thing over and over again, where they have a really good understanding of their revenue. They have a really good understanding of the cash in the bank. But what's happening in between and how do I improve that in between and starfish is the culmination of those two experiences of how do we help people understand where their money is going, where the money should be going, and then how to actually make more money. And I don't mean more top line revenue. more cash in their pocket.
Jeremy:Yeah. Yeah. More profit at the end of the day, because at the end of the day, profit is that engine. I tell people all the time on our team, profit is the engine that helps, or is the fuel that drives the engine of the business to continue to grow, to continue to give you opportunities to expand your career and do those kinds of things. I love, and again, I'm glad you were able to share where those two things came from, because again, selfishly, I got a chance, Jordan, to hear it from your mouth and the passion. and how, excited you are to talk about solving this problem is amazing. talk to me a little bit about what is the tech then? So you're building tech, you're on the restaurant technology guys, you're passionate about helping small businesses succeed, you've got this understanding of how they spend money poorly, or they don't have their costs in alignment with where their revenue numbers are, what is it? The starfish actually does.
Jordan Silverman:About a year ago, Suresh, my co founder, he's technical, I'm the go to market guy. Suresh and I basically said, let's go start this business. we had worked together where he was chief tech, he was CTO, I was CCO. We're like, let's build something. I had this very basic idea of restaurants need help understanding their costs. That was it. Really basic idea. How can we help restaurants, bookkeepers, finance partners better understand costs? So the first thing we did is we're like, let's go build a reporting hub for restaurants. They have all of this data, POS, inventory, labor, all this data. Let's combine it into something really simple. I was just coming out of a company where we used Power BI, lived on Power BI. Power BI is really hard.
Jeremy:Yes.
Jordan Silverman:The average restaurant is not coding in DAX, learning Power BI. The first idea that we had for Starfish was, let's build this reporting dashboard for restaurants. We realized pretty quickly that restaurants don't want a reporting dashboard. They don't need more reporting. So what we're doing today at Starfish, and really what our focus is how do we take your data, specifically integrating into the accounting systems, QuickBooks, Xero, Restaurant 365, pulling out your finances, your P& L, line by line, all of the transactions, running AI on top of that, and then spitting out action items. Thanks. And the goal is that instead of you going line by line, manually analyzing your P& L, we are doing that for you and giving you step by step action items to show you and tell you how to lower your costs. And increase your profits. So we are integrating into the accounting system, giving you nice reporting and dashboarding. But really what our customers love the most is every single week, they get an email from starfish with here are two, three, four, five ways that you can go lower your costs and increase your profits and make more money. This week,
Jeremy:I love that. And again, we've had quite a few people on the show and again, you're a listener as well So you've heard a lot of people talk about revenue generation. How do we market to our customers? How do we get them to come in more often? How do but very few people? Really look at this other side of the business, which is what are you spending on these items? I love that you guys went after the financials because a lot of people look at vanity metrics I've talked with plenty of restaurant operators I'm sure you did back at your previous role and even now You Oh, no, my food cost is 22%. Help me understand what that means. What is 22 percent food cost? You're chuckling. For those that are on video, they're watching you. Why is that such a, such an interesting thing? Because it happens every single day. And ultimately, at the end of the day, this is this lack of understanding and or arrogance is part of where the problem comes from and why actionable data steps are really critical.
Jordan Silverman:I have to think. So when I was at market man, I had an amazing boss CEO, Noam, and I'll never forget. So my first week on the job, Noam sat me down. We had a big whiteboard in the office and he was like, I want to explain to you why market man, why inventory management is important. And he basically built a funnel. And at the top was the revenue. And all he did was write a hundred dollars at the top, 5 at the bottom. And he said, here's where they lose their And I think most people say, Oh, my prime costs. 50 percent that's food and labor, right? So my cost of goods is 25%. My labor is 25%. I've got a 50 percent margin. That's great. You got 45 percent of something else. Most likely that might be rent. That might be utilities. That might be corporate overhead. That might be cleaning supplies, paper. All of these different categories are eating at it. And the prime costs. We look extensively at prime costs and help you. And about 50 percent of our tasks are towards those prime costs. 50 percent of the action items you get are around. How do you improve labor? How do you improve food? How do you improve beverage liquor? But then there's another 50 percent there. Utilities,
Jeremy:And people think, oh, I've got my favorite, my favorites. no. I've got great pricing. I've been with so and so for X amount of time. And again, you're chuckling. And for those that are watching on video, it's awesome because we've all had these conversations. We've actually probably said them as restaurant operators in the past. no. I can't save any money on that. I just renegotiated my contract and part of why it's so critical to looking at these things. And without a tool like starfish, you've got to look at line by line, invoice by invoice, vendor by vendor day in and day out, and it's exhausting. So why do you chuckle about those things? Because this is the world we live in.
Jordan Silverman:percent the world we live in. So we have one of our customers, and I just want to like starfish is for all different sizes, right? So this customer, they've got two locations, not one, not 50, two locations, not a huge customer. And just like you said, Jeremy, they were their uniform supplier. They were getting the same rate every single week for uniforms. Guess what? The Uniform Supplier tried to jack up the rate on them without them noticing. 20 per week. It went from 100 to 120 per week. This went on for six months without the customer knowing. Customer signs up for Starfish pretty quickly. We give them an action item. Did you know that your two locations are spending different amounts on cleaning supplies? This is the date that it happened. This is the location it increased. Go reach out to your uniform supplier to understand why the cost went up.
Jeremy:yeah, and that's
Jordan Silverman:They would have never, they would have never found the 20 increases.
Jeremy:Yeah,
Jordan Silverman:But they got a 2, 000 check in the mail because they, uniform supplier said, you're right. We're sorry. that was our mistake. So that's why I'm laughing because I agree with you. We get, when I was very early on at starfish, we had a customer sign up and he said, Jordan, to be honest, I don't totally understand why I need starfish. Can't I do this manually? And I said, you 100 percent can. Are you? And he said, no, I'm not. And I said, that's why you need starfish, right? Because of course you can go line by line in the PNL, look at every single week over week, period over period, compare your different locations. You can do all that manually. Why spend four or five hours a week doing that manually? If we can, no offense, do it automatically and better, and you can spend 15 minutes instead of four or five hours.
Jeremy:Yeah. and then it's that phone call. So you're back to your point of actionable data. You're going to have somebody sit and listen until you Jordan go 20 bucks, dude, whatever, like that's, that's a meal nowadays. 20 is not that big of a deal. Why is 20 such a big deal? You talk about it being 2, 000, but 20 Every, every customer that I've ever worked with has somewhere close to a hundred different vendors and hundreds of invoices every single month. So why is, they're gonna be like, Oh, whatever this guy's talking about trying to save me 20 bucks. Why is this such a big deal? Help me understand why having a tool that automates these things really moves the needle and can be one, two, three percentage points to your profit margins at the end of the day.
Jordan Silverman:20 a week here, 200 a month there, 500 a month later. That's what we're trying to do is those small wins. Very early on, I had a restaurant CFO tell me the profit Is in the pennies. You can focus on bringing revenue as much as you want. You can focus on cutting your labor and negotiating prime costs and working with Cisco and us foods, and you can do all of that, and we are going to help you do that, but you need to look in the nooks and crannies, that's, what's going to make or break your business. Yes. You need certain revenue. No, you cannot operate selling a hamburger at an 80 percent cost. You can't, right? You need to have some basics in place, but we're going to help you optimize on those basics and then every single penny matters for a small business because a dollar saved is a dollar profit. So remember that 2, 000 check is not your normal 2, 000 in sales that you're seeing a hundred bucks of. It's 2, 000 in your bank account of profit.
Jeremy:that was where I was going to go. I had a lesson, a few months ago in my mastermind group that I go to about that. And, if, if an average restaurant makes 8 percent profit, if I increase sales by a hundred dollars, I get$8 out of it. If I save$8 in cost, I get all$8 of that month over month, year over year without having to increase the top line. And people don't comprehend that dollar save, that dollar not spent as we just got done talking about buying a very expensive plane flight to go see my kid play baseball right before that. But that's a different conversation from my own personal p and l. But, but in general, I think that's something that people don't comprehend and they don't, they're hospitable. Like you said, they like being out in front. They like talking to customers. They like being out creating menu items, creating an experience, creating an environment. They didn't get into the hospitality business to be sitting in the office and looking through invoices and looking through PNLs and digging through all of these details. And when they're small businesses, they don't have the opportunity to afford somebody to do that for them. And quite frankly, their time should be better spent either at home with their family and kids or helping grow the business by making customers happy out front and using tools like what you guys have to help with that.
Jordan Silverman:So well said. I think one of the really interesting things is small business owners don't value their time enough. Most small business owners look at themselves as free labor. They say, Oh, someone called out. I can fill in. I cause 0 for the business. In reality, a small business owner is the most expensive form of labor because your time is everything. And that could be, as you said, spending time with your family, spending time with your friends, or it can be spent on time acquiring new customers. Building new recipes, networking and figuring out how to grow the business, go to look at a second location, the hard part, and you and I live this every day, when you are a business owner, there is an exponential number of things that you can and should be doing. It is all about what are you prioritizing for today? Tomorrow in this week and most small business owners aren't looking past next week. They're looking at it one Freaking week at a time. So take back your time Let software help you automate the back of house manual processes that you are spending far too much time on
Jeremy:Yep. Jordan, you've thrown out ai and again, there's a lot of misnomers about ai and I, and I say it because again, there's very few shows that show that people come on that don't talk about AI that are in the tech space because it's critical. And we've had AI for hun, like 40 years. So it's not like AI is this new thing, but because open AI has really made it kind of table stakes, a lot of people think. Oh, AI is brand new. The truth is it isn't so define for me how you guys are using AI to automate some of these processes and do pattern matching recognition of things that, I understand it. I'm going to talk a little bit technical on that, but there are things that a computer can do 7, 000 times better than a human can do because of AI and the ability for it to match patterns amongst different brands and even amongst your own invoices. What a part of AI are you guys using? Is it this chat bot that I ask it questions, or is it just sitting on top? Help our listeners understand a little bit more about what you guys are doing on that front.
Jordan Silverman:we've thought a lot about this because Where you see most people going with a AI is installing a chat GPT style widget, like you're saying, Jeremy in a data set, we don't think that's the correct thing for our customers now for McDonald's and Chipotle. That probably is the right thing because they know what questions to ask and they can dive deep into their data deeper than we would want to. But for the average small business owner, I don't think the chat is the right way to do it because they don't know what questions to ask and don't want to spend the time thinking about it. If you own 1, restaurants, 10 locations, retail, whatever it is, but let's just focus on restaurants for this podcast. If you own 5 restaurants. Don't focus on spending time saying like, how do I lower my food costs? And then next week, how do I lower my beverage costs? And the following week, how do I improve my labor scheduling? Like you shouldn't have to ask those questions. We can tell you that. as you said, the main thing with AI is it's been around, machine learning and AI has been around for a long time. What we are doing is ingesting your data from your P& L, line by line, transaction by transaction. We are then running, again, to get a little technical, Python code and machine learning on top of it to learn from the trends. All could have been done 5 or 10 years ago. Where we are excited about AI is how do you take those trends, that machine learning and put it into simple bite sized pieces for managers and ops teams and finance people, because most restaurants are operating the same way with the P and L. They have weekly, bi weekly or monthly P and L meetings. They get an Excel from either their external bookkeeper or their controller, depending on how big they are. Sometimes they look at it. Sometimes they don't look at it, but it's an Excel spreadsheet that you're expecting,
Jeremy:don't know what to do with it. If food cost is up, they have no idea where to look. If labor cost are up, they have no, and those are prime cost. But then you talk about some of these other things that are eating away at their profit margins. whether that's, your dishwasher supplies have gone up. Your lighting bill went up. Your plumbing bill went up. Maybe you've got a leaky toilet and your water bill went up because you had a leaky toilet. And you need to go now look at it because you had a 15 percent increase in your water bill. In your water bill, what does that look like? Whereas you may not have noticed it because your sidework people had checked off that the toilets had been checked, but they didn't notice that there was a leaky toilet. And I, and again, I'm saying these things because all of our restaurants that are listening out there have these problems. Every single one of them from the Chipotles and McDonald's of the world that are, enormous to the smallest of the small, all of them have problems because they've got staff. They've got problems with what's going on and having the data to be able to make actionable decisions. Is critical to cut to the chase because their time is valuable. And ultimately at the end of the day, if they serve, solve it properly, they're going to, they're going to save that money or make that money for themselves and for the business.
Jordan Silverman:And that's really where we're trying to use AI the most is. How do we take what is like a complicated, hard to read, but you're probably not reading P and L statement and just say here's what you need to actually do with it. Here's what actions you need to actually take. So what we're so excited about for AI is taking numbers and data and. Moving that from numbers and data to simple step by step tasks.
Jeremy:and most operators, when they say we've got a problem in this area, they know how to solve it. But getting them to a place where they can look at that. I know we've got a mutual friend, that's been on the show before, Matt Wampler. He's doing something similar on the production side. they have these matr matrixes, but it's Oh, I can do all this manually. But at the end of the day, how right is it? How wrong is it? How quickly did you fix it? How quickly did you not fix it? And applying a data model on top of that, It really allows you to do that same thing. You need to make X amount of bread. You need to prep X amount of ribs. You need to prep X amount of brisket today in order to hit your numbers. You're taking it the opposite way and saying, where are those, opportunities for us to continue to enhance the profitability of the restaurant and really the efficiency, the cash efficiency of that restaurant at the end of the day, because you're investing your time, money, and energy into that restaurant. And if you're not making any money, it doesn't serve anybody. Growing your business can mean big time logistical questions like, how am I going to keep up with all these local deliveries? Let UberDirect offer you a helping hand. With UberDirect, you can take orders on your website, via app, or by phone. Then drivers who are part of the Uber courier network will pick them up from your store and deliver them to your customer's doorsteps. Sounds simple, right? Delivery just got better with UberDirect. Check out uberdirect. com to learn more.
Jordan Silverman:Matt and I share the same vision for AI, which is how can we use AI to better manage the back of house? We're taking different routes of getting there, but we have the same goal of more profitable restaurants. That's the goal. More profit for the restaurants.
Jeremy:Love that. flip it around, Jordan, because, different restaurants operate differently. Fine dining operates differently than a fast casual operates differently than a fast food restaurant. Profit margins look different. Labor numbers look different. How are you guys normalizing any of that? Because it's critical to understand, operations. you get a big steakhouse, 25 percent is probably low on the food cost because they've got high dollar proteins that they can't charge 80 for a steak to get that same, profit margin. They got to charge what the market will bear at 50 or whatever. So their margins might be a little bit different in certain areas. They've got to make it up in volume. They've got to make it up in, different ways. Whereas a fast food place needs to check every penny because their margins are, on whole dollars. Are less, but percentages are higher. Talk to me a little bit about how you guys think about normalizing those things across different brands and service models.
Jordan Silverman:Yeah. I learned this the hard way. So when I first, when I was at Market Man, I'll never forget this. One of my first customers was a very nice steak restaurant right by me in Florida. And he's running a 45 percent food cost. And I said to him, I just said your food cost is too high. The majority of our restaurants are running at between 25 and 30%. You can't run at 45%. I was trying to be helpful. And he was just like, And he was very nice, but he said, Jordan, you're wrong. And he educated me. And I thank him for that because what you're saying Jeremy is absolutely correct. A pizza place running at a 25 percent margin is bad. They guy running at 15%, 20%, but a steak restaurant running at 40% is pretty normal. so what we're doing is two things, and as you said, we talked a lot, we talked a lot about baseball before this, and I'll use a baseball analogy in baseball and in sports, the idea is that once you've done something, you can do it again. So what we're trying to help our restaurants understand is if they run a month where they have a 35 percent food cost and every other month is at 40 41%, they can consistently run a 35 percent food cost because they've done it before. So the first thing is that once you've done something once, how can you replicate that over and over again? If you're doing 100, 000 a month on average in sales, but one month you do 150, 000, You can do 150, 000 every month if you're replicating what you do. So first thing is using the customer's own data, right? Then the second thing, which is the harder part, which is, we've done it pretty well so far, but we have a ways to go to get even better at it, is how do you slice and dice the data across different customer segments? we're trying to do that based on A, type of restaurant, and then B, location of restaurant. Because different, city versus non
Jeremy:Yeah,
Jordan Silverman:country versus different,
Jeremy:Yeah, you're at, in Miami Beach, it's going to be a different margins than you are, you're in a super high touristy area in New York City. It's different. It's just going to be different. And, educate our listeners, because there's still, again, this big anomaly or this big misunderstanding about AI and machine learning. Educate our listeners as to, the more data you get, the, Better the models are built and the more actionable data you can get out of it. The less data you have, the more guesses you're taking. And I'm saying that guess is they're going to be directionally correct. They might not be exactly correct, but as you start to add more and more data to it, you're able to discern even more from that data and you just keep adding data on top of that and if it's modeled properly and educated properly, it's going to continue to net you better results and get tighter and tighter on its predictive engine.
Jordan Silverman:of Starfish are these action items, and these action items are what get emailed to you on a weekly basis. When we first started 12 months ago, about 20 25 percent of our action items, our customers marked as noise. So one out of every four or five of these action items our customers are marking as noise. We're down to under 5 percent now. And that's just me giving an example of in 12 months, our data set has grown significantly action items have improved significantly because the data is improving. So now all of a sudden we have significantly more data, not only that we can benchmark how you're performing versus others, but also just. Learning what tasks do customers like, what actions are they actually taking? What's leading to them saving money. And by learning on those things from an algorithm standpoint, you can really start to spit out very detailed instructions that say right now, the way that action ends work is it's. Problem, solution, data points, dollar impact. Trying to formulate it, so here's your problem, here's how, here are the potential solutions, here's the data to back it up, here's the potential dollar impact. And we're just seeing those solution steps become better and stronger at knowing what you should do based on us training.
Jeremy:yeah, no. And again, I think that's oftentimes the misnomer that people have. And I often tell the story and again, you'd listen to the show from time to time, like the whole idea that, Google knows who you are and what you do because of your login, Facebook knows who you are and what you do because of that. My wife handed me her phone cause she was not feeling well this morning. My daughter needed to get picked up. I picked up her iPhone, which is the least customizable device in the world almost, and I'm like, this feels weird. What's happening. And I think we're all used to, to that, that data about who we are and how we like to operate that system. in these environments, the more data you give it, the more it understands what you're doing. And I guess I would love Jordan for you to help me understand what happens when you get restaurants that don't do the work. Cause that's part of the challenge. They're too lazy. I know what I should be doing to lose 20 pounds. We all do, and I don't do it. And so help me understand for those listeners that are out there that are like, yeah, you can tell me all day that my labor cost is too high, but Susie's my cousin and I can't cut Susie because that's a problem for me at the Thanksgiving dinner table or whatever it might be, whatever that problem might be, they're not willing to see the impact and do that.
Jordan Silverman:Yeah. first thing I'm going to say is I think what's interesting is with all technology. Our customers are people that want to improve, right? Because They're not going to pay for a software if they don't want to get better. So I had a, I literally had someone tell me no last week from a Starfish standpoint, because he doesn't want to automate the P& L analysis. He wants to continue doing it manually. And he understands that we can save him money and time, but he wants to continue doing it. And I said, that's no problem. please go ahead. You know what I mean? So first thing I'll say is the majority of the customers signing up want to improve. It goes back to what we were saying earlier, where I would just remind those people that their job is to run a business, and their job is to make money, profit, for that business. If you don't want to cut Susie in your example, that is totally okay, but then you need to use Starfish to find other ways to make that money up somewhere else.
Jeremy:that. I love that. And again, I think, one of the things I often say on these shows is if you're not doing it, the guy to your right and the guy to your left are doing it. And when they do it, they're going to be making more profit. And ultimately they're going to be able to grow beyond that single store or that second store or they're going to be so profitable that they're potentially going to put you out of business. Cause if you're not thinking about these things, your neighbors to your right and to your left are thinking about it.
Jordan Silverman:I'm not breaking ground here, but like this is a really hard time for restaurants because third parties are killing the restaurants. 25, 30 percent of revenue go into these people, right? So that's the first problem. Second problem is costs going up across the board. Consumers. Getting tired of increasing how much they pay you though, so you restaurants have hit a ceiling in terms of how much they can charge, but the costs are creeping up and the margins are getting cut out from under them by the third party delivery systems. So in order to not only just thrive, but seriously survive restaurants, you do pro actively look for ways to cut costs. And improve margins. The simplest way to cut costs is to cut your team. That's not what I'm saying. The simplest way to become more profitable is to cut a person, but that's going to have huge long term ramifications. And maybe that is the right answer, but there's a lot of different ways to make that profit back. And that's what we're trying to help you do.
Jeremy:Yeah, I think there's, that's a fantastic, place to start to wrap up Jordan. Cause I agree with you. part of where this thing comes from and part of why you're doing what you're doing is you're passionate about seeing these small businesses succeed. And that if they can, if they're not likely, they're not doing it now, that guy that you said that said, no, I want to be able to do this. Maybe he's the exception because he loves being in the numbers and is in the business. Cause he doesn't really care about being out in the front of the house and doing all of the hospitality things. But. 9 out of 10 restaurants really got into the business to be able to serve people and be out there, not to be analyzing a profit and loss statement or a, a labor matrix or whatever those kind of things are. And one last question I do like to ask though, where's it going? Where is it going? Because, it's a very interesting time, I agree with you wholeheartedly, costs have gone up, consumers are struggling to pay, they're reducing their, you look at all of the public traded companies, traffic is down, There's got to be a solution, there's got to be a solution and we've got to figure it out. But where is it going five years from now? you guys started this thing a little over 12 months ago, five years from now. Is it going to be all completely automated, from a financial reporting perspective? I'm not even gonna have to make a decision. It's just gonna cut Suzy on my own without me having to know it or where do you think that's going?
Jordan Silverman:Yeah. I think the good news for the industry is. Consumers love eating out. I'm included like everyone loves a good restaurant experience. Everyone hates a bad one, but there's nothing better than a good restaurant experience. So the good news in the industry is I do think sales and like NRA data shows is like, sales are going to keep going up. It's just about how do you a capture that sales? Then how do you make sure those sales are the most profitable? The way that we see starfish really fitting in is. You have all of this different data siloed. We are starting with the P& L, because anyone that's been in the industry long enough knows, labor data, pretty accurate. POS data, pretty accurate. Inventory data, somewhat accurate. But your P& L is the most accurate. we chose the P& L to start because A, it's the most accurate, and B, we want to train our system on the most accurate data. But our big vision is bringing in inventory data, bringing in labor data, because what we really want to do is be able to say your food costs were too high this week. Here's the item that caused it.
Jeremy:That's
Jordan Silverman:Your labor was too high. Here's the shift, and the person, and the reason, and what you can do. So right now, we can tell you when your food costs go up, we can tell you when costs increase, when you're missing transactions, but the big vision of where we want to be in the next couple of years is stitching all of your data together, being able to say, This is where your costs are too high and pinpoint exactly what's causing it. Now, I'm still a firm believer you make the decision. I'm not gonna go from Cisco to US Foods for you, and I'm not gonna cut that cost. You make the decision. I'm gonna guide you to that water though.
Jeremy:I love that. And I think that's a fantastic place to, to, and at least my questioning, cause I've peppered you for the last 35 minutes with, with questions and I appreciate, I appreciate it, Jordan. I love hearing the story. How do people get in touch? How do people learn more about, where they can, find you learn more about starfish, how it can help their business, help people get connected.
Jordan Silverman:So if you want to learn more about the business, just go to the website. It's USE starfish.com. Use starfish.com if you wanna connect with me, you wanna demo, you wanna walk through. I'm very active on LinkedIn. Reach out to me on LinkedIn, Jordan Silverman. You'll find me, just connect, say you heard about me on, the podcast and I'll happily set up a call always available, always open.
Jeremy:Jordan, I, I love when entrepreneurs scratch their own itch, something that they see as a problem and really dig in and say, you know what? We got to solve this. I'm actually listening to Noah Kagan's book this morning on my run and he talks about the same thing. It's those entrepreneurs that had a problem and he started AppSumo because he had a problem finding software for what he needed to do. And I love that you're doing that same thing as part of my favorite part about these shows is that I get a chance to talk to people that are solving real world problems and really making a difference in the restaurant industry. So thank you for doing that.
Jordan Silverman:Thanks for having me really enjoyed it. Had a blast.
Jeremy:Awesome. And, to our listeners, guys, as I said at the onset, I don't take your time for granted. So thank you guys for hanging out. If you haven't already subscribed, please do so on your favorite, platform and, make it a great day.
Thanks for listening to the Restaurant Technology Guys podcast. Visit www. RestaurantTechnologyGuys. com for tips, industry insights, and more to help you run your restaurant better.
