The Exchanges

Q And how did you decide how much was the right amount to raise? Did you do it on run rate or burn rate?

A Our burn rate is presently about 25 K a month. It will rise to about 35,000. Um, and, and this is where my business partner is, is exceptionally good. Murray McNichol, um, as I said, he's come from KPMG background. He, he is very much a systems man. He has a very, very robust, um, forecast model, and we literally built The, the forecast from the bottom up. Interestingly, when I was on the other side of the fence, seeing presentations, we saw the traditional hockey stick curve, and we were quite conservative, and have been quite conservative in our forecast, because we've put forward forecasts we, we believe we can, we can achieve. So we looked at the customer, we built it from the point of view of customer acquisition, and how many per month, and what's achievable, and what we need to do in order to achieve these customers.

AI assessment note: “we literally built The, the forecast from the bottom up.”

Q And then the best piece of advice ever given to you?

A Best piece of advice. Wow. Uh, you know, I mentioned earlier about BD, and when we, we hit a bad time, uh, four years into the business, we had a serious bad debt, and it was like a big hole opened up in the floor, and we wondered whether we're going to survive. I had the good fortune to be organizing a conference, um, a motivational conference, actually, with Sir John Harvey Jones as one of the headline speakers. Uh, and Sir John Um, spared me 20 minutes, sat in the car, the bonnet of the car, and I said, so John, in my situation, what would you do? He said, it's, it's really straightforward, Willie. Go back to first principles. Find really good people, and when you've found them, provide them with a frightening level of responsibility, and secondly, reward them with unscheduled remuneration when they least expect it. And that's exactly what we did. We, we kind of grew our own talent And the people that we employed way back then are now actually shareholders and running the business now. Uh, and they took on that frightening level of responsibility, and I dare say they got the odd bottle of wine delivered to their home when they were least expecting it.

AI assessment note: “Find really good people, and when you've found them, provide them with a frightening level of responsibility”

Q And you're, you mentioned that you're raising a further round, uh, and you're raising the round on Syndicate Room. Uh, and it's where we get to talk to, to founders and the operators mid fundraising. So first, why did you choose crowdfunding over alternative routes like another angel round or a VC, uh, funding round?

A It's interesting. Tom from Syndicate Room contacted me and Jock Milliken from Equity Gap at the time of our first round, and we were almost fully subscribed, and said, look, give it a go. And we were very impressed with his pitch to us. We were very impressed with the fact that here was a business-to-business crowdfunding platform Um, and I think the other thing that impressed us was the fact it worked in conjunction with Angels. Um, it was a bit of an unknown context for us. Uh, up till now, most of the, the funding forays have been through contacts and networks and, um, introductions. So I, I'm, I'm waiting with bated breath and certainly got plenty of irons in the fire.

AI assessment note: “we were very impressed with the fact that here was a business-to-business crowdfunding platform”

Q And how big would you say this market opportunity is then for you? Well, it seems quite niche, but, but when you actually consider the corporate environment, it might be much larger than, than I initially thought.

A Yeah. Yeah. No, the market opportunity is huge. Um, I mean, the drop, the drop off catering food market globally is thirty three billion pounds, uh, in terms of revenue potential for spoon fed, um, That's two hundred million, ah, annual revenue potential if you, if you work it out on the average value of orders and the number of orders placed. Um, America is a huge market, um, and, um, it's eight times the size of the UK. Uh, when we set out on our journey initially, we, we thought, well, we'll go for the smaller independent UK caterer. But what's really surprising Well, not surprising, actually, but what's really interesting is the fact that since we started on the journey very quickly, some of the bigger chains have latched onto the value of being sure that the right food gets the right people at the right time at enhanced margin, to be a bit cliche, but, ah, and we're in advanced diligence stage with two major retailers, one in the U.K., Uh, part of a big food services group, and another in America, which, um, they're, they're testing it in New York, but they have a number of branches throughout the world. So, I'm, you know, the, the, the potential for spoon-fed right now is, is, is significant. Um, there's no getting away from the fact, it doesn't come easy, you've got to work hard at it, and bigger companies take longer time to make decisions. But, There's been a move more…

AI assessment note: “drop off catering food market globally is thirty three billion pounds”

Q to the BXB market. One of the hardest elements, uh, we always hear about SaaS businesses is getting those first customers, getting that initial traction. But Spoonfed seems to have done this with relative ease with Le Pain Quartidien, a very famous and popular, uh, food, uh, company in the UK, and then the Really Delicious. So how did you go about attracting these very prominent customers at early stages?

A Well, I mean, in the very early stages, um, you know, really delicious was, was our old catering company that, that we sold. Um, so it was natural that they wanted to, uh, take, take our system to continue to run the business. Um, but actually they were, they were very cooperative as were a number of others at the sort of beta test stage who, who we gave it, we gave it to them to play with, to, to, to, you know, we had a bug list that, You know, I mean, for me, coming from a marketing background, it was at times quite, quite hard going. Um, uh, but, you know, we worked our way through, and we, we ironed it all out with their help, and then when we had the, the system absolutely fit for purpose, we started talking. I suppose the, the analogy I often used, and it was the same in my BD days, is we, we have a rifle strategy. We're in a niche market, so it's very much a targeted approach. Understanding who your customers are, what you're wanting from them, um, and then go get them, um, as opposed to the shotgun approach where you throw everything at the wall and hope something sticks. Um, so it was very targeted. Having said that, uh, what is interesting is Le Pan Quotidion actually found us through, through the internet, um, and inbound marketing, and I guess looking to the future, that's where we want to be. We want to get found, um, Uh, rather than, I mean, the whole sales proces…

AI assessment note: “really delicious was, was our old catering company... Le Pan Quotidion actually found us”

Q And you're, you mentioned that you're raising a further round, uh, and you're raising the round on Syndicate Room. Uh, and it's where we get to talk to, to founders and the operators mid fundraising. So first, why did you choose crowdfunding over alternative routes like another angel round or a VC, uh, funding round?

A It's interesting. Tom from Syndicate Room contacted me and Jock Milliken from Equity Gap at the time of our first round, and we were almost fully subscribed, and said, look, give it a go. And we were very impressed with his pitch to us. We were very impressed with the fact that here was a business-to-business crowdfunding platform Um, and I think the other thing that impressed us was the fact it worked in conjunction with Angels. Um, it was a bit of an unknown context for us. Uh, up till now, most of the, the funding forays have been through contacts and networks and, um, introductions. So I, I'm, I'm waiting with bated breath and certainly got plenty of irons in the fire.

AI assessment note: “We were very impressed with the fact that here was a business-to-business crowdfunding platform”

Q And then the best piece of advice ever given to you?

A Best piece of advice. Wow. Uh, you know, I mentioned earlier about BD, and when we, we hit a bad time, uh, four years into the business, we had a serious bad debt, and it was like a big hole opened up in the floor, and we wondered whether we're going to survive. I had the good fortune to be organizing a conference, um, a motivational conference, actually, with Sir John Harvey Jones as one of the headline speakers. Uh, and Sir John Um, spared me 20 minutes, sat in the car, the bonnet of the car, and I said, so John, in my situation, what would you do? He said, it's, it's really straightforward, Willie. Go back to first principles. Find really good people, and when you've found them, provide them with a frightening level of responsibility, and secondly, reward them with unscheduled remuneration when they least expect it. And that's exactly what we did. We, we kind of grew our own talent And the people that we employed way back then are now actually shareholders and running the business now. Uh, and they took on that frightening level of responsibility, and I dare say they got the odd bottle of wine delivered to their home when they were least expecting it.

AI assessment note: “Go back to first principles. Find really good people, and when you've found them”

Q And I'd love to delve into the funding side of Spoonfed a little now. So you've raised seed funding. Uh, so first, how was that experience for you?

A Well, a very interesting, a bit of history. I, I, as I mentioned earlier on, spent some of my time, um, as a business angel with Equity Gap. Um, which is, is predominantly focused on the startup community. Um, and I'd seen lots of guys coming in to present business plans and invested in a few myself, actually. Um, um, and, and I, I realized that there was nothing wrong with going to the market to, to fund the business. We had bootstrapped, spoonfed ourselves, probably to the tune Murray and I, and a couple of sweat equity partners, um, Uh, good creative on the creative side and X-Forto II on the development side, uh, to the tune of about 400,000 pounds. Uh, and when we had a product that was fit for purpose and ready to rock and roll, we, we went to the market and said, you know, here's something, we've got some sales traction, we've got some customers, we know it works, and here's our business plan. Uh, so we, we went for seed funding, well, first round funding, actually, of 250,000. Um, And then, um, we developed the business further, and as you know, we're on another round at the moment, um, to really crank it up and, and, um, hopefully achieve enough funding to drive it to profitability.

AI assessment note: “when we had a product that was fit for purpose and ready to rock and roll”

Q And how big would you say this market opportunity is then for you? Well, it seems quite niche, but, but when you actually consider the corporate environment, it might be much larger than, than I initially thought.

A Yeah. Yeah. No, the market opportunity is huge. Um, I mean, the drop, the drop off catering food market globally is thirty three billion pounds, uh, in terms of revenue potential for spoon fed, um, That's two hundred million, ah, annual revenue potential if you, if you work it out on the average value of orders and the number of orders placed. Um, America is a huge market, um, and, um, it's eight times the size of the UK. Uh, when we set out on our journey initially, we, we thought, well, we'll go for the smaller independent UK caterer. But what's really surprising Well, not surprising, actually, but what's really interesting is the fact that since we started on the journey very quickly, some of the bigger chains have latched onto the value of being sure that the right food gets the right people at the right time at enhanced margin, to be a bit cliche, but, ah, and we're in advanced diligence stage with two major retailers, one in the U.K., Uh, part of a big food services group, and another in America, which, um, they're, they're testing it in New York, but they have a number of branches throughout the world. So, I'm, you know, the, the, the potential for spoon-fed right now is, is, is significant. Um, there's no getting away from the fact, it doesn't come easy, you've got to work hard at it, and bigger companies take longer time to make decisions. But, There's been a move more…

AI assessment note: “the drop off catering food market globally is thirty three billion pounds”

Q And what do you think then the main benefits are of a system-based business over a people-based business?

A Well, the main benefit is there's a system and process in place to, to enhance efficiencies. Um, when we first got involved in a catering drop-off business, and I should specify that Spoonfed is specifically for caterers delivering food to offices. Um, and as you can imagine, people ordering The secretary or PA or receptionist ordering food for a business meeting in the office is, is absolutely dependent on you getting it right and doesn't want to be embarrassed with the food arriving wrong. So one of the great benefits of Spoonfed in this regard is it, it allows caterers, customers to know with confidence that what they order is what they will get, and it'll be on time. Uh, it cuts out mistakes because of all its integrated processes and back office functionality. And, and provides an efficiency level that a lot of these businesses who use these types of, who, who deliver food to offices don't have. It's paper-based. Uh, I've often said our, our biggest competitor is actually paper and spreadsheets. But, uh, you know, there are, there are more technology companies on the market than there ever have been. But interestingly, in our space, which is business to business, there, there is surprisingly few competitors doing what we are doing.

AI assessment note: “Well, the main benefit is there's a system and process in place to, to enhance efficiencies.”

Q And then finally, the next five years for you and for Spoonfed, what's in store for us? Wow.

A Um, well, I think for sure we're in for an exciting journey. Um, it's, it's been a great journey so far. Um, obviously we're, we're keen to drive, uh, Sales significantly upwards, uh, and to achieve, um, uh, an EBITDA around just slightly south of a million would be acceptable, but much further north would be great. Um, uh, but the most important thing for me is to provide a good return to, to the shareholders, um, to, to add value to our customers, um, because after all, if you don't add value to your customers, you, you've got no proposition, um, Um, and we believe that Spoonfed's doing that, so let's now, uh, up the ante in terms of marketing with proper funding. We, we can grow the business to, to achieve a return for all stakeholders.

AI assessment note: “achieve an EBITDA around just slightly south of a million would be acceptable”

Q to the BXB market. One of the hardest elements, uh, we always hear about SaaS businesses is getting those first customers, getting that initial traction. But Spoonfed seems to have done this with relative ease with Le Pain Quartidien, a very famous and popular, uh, food, uh, company in the UK, and then the Really Delicious. So how did you go about attracting these very prominent customers at early stages?

A Well, I mean, in the very early stages, um, you know, really delicious was, was our old catering company that, that we sold. Um, so it was natural that they wanted to, uh, take, take our system to continue to run the business. Um, but actually they were, they were very cooperative as were a number of others at the sort of beta test stage who, who we gave it, we gave it to them to play with, to, to, to, you know, we had a bug list that, You know, I mean, for me, coming from a marketing background, it was at times quite, quite hard going. Um, uh, but, you know, we worked our way through, and we, we ironed it all out with their help, and then when we had the, the system absolutely fit for purpose, we started talking. I suppose the, the analogy I often used, and it was the same in my BD days, is we, we have a rifle strategy. We're in a niche market, so it's very much a targeted approach. Understanding who your customers are, what you're wanting from them, um, and then go get them, um, as opposed to the shotgun approach where you throw everything at the wall and hope something sticks. Um, so it was very targeted. Having said that, uh, what is interesting is Le Pan Quotidion actually found us through, through the internet, um, and inbound marketing, and I guess looking to the future, that's where we want to be. We want to get found, um, Uh, rather than, I mean, the whole sales proces…

AI assessment note: “Le Pan Quotidion actually found us through, through the internet, um, and inbound marketing”

Q And how did you understand your customers then and their wants and needs in their businesses? Did you kind of survey them a lot? Did you go and speak to them?

A Yeah, you know, that's a good, a very interesting question. Um, what, what, what, what has become very clear to us very quickly, um, even when we're, we're cold calling prospects, um, is our knowledge of the industry. We've, we've developed, um, Software based on customer needs, from needs that we identified when you ran, when we ran our own catering business. Um, and that's in stark contrast to others out there who have been developer-led and very focused on, well, this is a good piece of kit, someone's going to like it, as opposed to our approach was, here are the problems that are affecting your industry, and here we're delivering the solutions in a SaaS offering. Um, and that has really stood us in, in great stead. Um, not quite sure if I've answered the question, but.

AI assessment note: “needs that we identified when you ran, when we ran our own catering business”

Q And I'd love to delve into the funding side of Spoonfed a little now. So you've raised seed funding. Uh, so first, how was that experience for you?

A Well, a very interesting, a bit of history. I, I, as I mentioned earlier on, spent some of my time, um, as a business angel with Equity Gap. Um, which is, is predominantly focused on the startup community. Um, and I'd seen lots of guys coming in to present business plans and invested in a few myself, actually. Um, um, and, and I, I realized that there was nothing wrong with going to the market to, to fund the business. We had bootstrapped, spoonfed ourselves, probably to the tune Murray and I, and a couple of sweat equity partners, um, Uh, good creative on the creative side and X-Forto II on the development side, uh, to the tune of about 400,000 pounds. Uh, and when we had a product that was fit for purpose and ready to rock and roll, we, we went to the market and said, you know, here's something, we've got some sales traction, we've got some customers, we know it works, and here's our business plan. Uh, so we, we went for seed funding, well, first round funding, actually, of 250,000. Um, And then, um, we developed the business further, and as you know, we're on another round at the moment, um, to really crank it up and, and, um, hopefully achieve enough funding to drive it to profitability.

AI assessment note: “we went for seed funding, well, first round funding, actually, of 250,000.”

Q And what do you think then the main benefits are of a system-based business over a people-based business?

A Well, the main benefit is there's a system and process in place to, to enhance efficiencies. Um, when we first got involved in a catering drop-off business, and I should specify that Spoonfed is specifically for caterers delivering food to offices. Um, and as you can imagine, people ordering The secretary or PA or receptionist ordering food for a business meeting in the office is, is absolutely dependent on you getting it right and doesn't want to be embarrassed with the food arriving wrong. So one of the great benefits of Spoonfed in this regard is it, it allows caterers, customers to know with confidence that what they order is what they will get, and it'll be on time. Uh, it cuts out mistakes because of all its integrated processes and back office functionality. And, and provides an efficiency level that a lot of these businesses who use these types of, who, who deliver food to offices don't have. It's paper-based. Uh, I've often said our, our biggest competitor is actually paper and spreadsheets. But, uh, you know, there are, there are more technology companies on the market than there ever have been. But interestingly, in our space, which is business to business, there, there is surprisingly few competitors doing what we are doing.

AI assessment note: “the main benefit is there's a system and process in place to, to enhance efficiencies.”

Q And Spoonfed, obviously, in the food and catering sector, a sector that's, uh, incredibly, uh, popular at the moment, particularly in the US, um, there's a lot of, you know, Instacarts and food tech companies rising. Why do you think there's this sudden interest in the food market?

A Well, I think, I think it's, it's a broader, um, Um, acceptance of technology, um, you know, I, I, I found myself, uh, talking to someone, I was at a function last night, and we were talking about the, the advent of technology, and how, you know, we went away on interrail trips, you know, several years ago, uh, and our parents never heard from us for, for, for weeks or so, and everyone assumed you were fine, but now with mobile technology, it's completely revolutionized how we do things. What's interesting with, with our market is there is a huge explosion of B to C food technology offerings. I'm thinking of seamless. I'm thinking of Grubhub, Deliveroo, Just Eat in the UK, um, big, big, um, technology platforms making it easier for consumers to order their pizza and have it delivered to the home. But there's very few companies working in the niche space we are in, which is providing a Not only that online ordering platform that you get with the B to C side, but from a business to business point of view, we've got a complete system, um, which you can plug into your business, and it'll run it for you, and make it more efficient. So that's quite, quite exciting, and that in some ways is our opportunity, um, is to exploit the back office functionality that we have compared to some of the bigger B to C offerings that are out there.

AI assessment note: “it's a broader, um, acceptance of technology”

Q Yeah, no, absolutely. But then how important do you think it is for founders to have operating experience in the industry that they're innovating in? As you said, you knew the problem, presented the solution because you had worked in that industry. So do you think it is pivotal for founders to, to have that operations experience?

A I think it's a real bonus. There's no doubt about it. Um, It, it, it helps. Two examples, um, you know, we, we've, we, my own experience when speaking to some of the, certainly some of the big chains, and even, even a small business, I can, I can identify with that. I can say, look, we ran a small business like yours. I bet you don't have this problem, that problem, this problem, that problem, and they say, yeah, we do actually. You've obviously been in the industry. That helps. Um, The other thing that's quite interesting, we've just employed one of our, our UK sales executives come from a firm called Social Byte, which is a customer, um, and, uh, doing very well in Scotland, and they came to us when they were, and this is in the public domain, so I'm not giving away any confidences, it's been reported in the papers, um, they, they came to us when they were doing about 7000 pounds of corporate catering revenue through five stores, uh, four stores in central belt of Scotland, um, Um, it's a social enterprise business aimed at creating, uh, jobs for homeless people, so that helps, but, um, they, they've grown the business with our, our software platform from 7000 to, to 70,000, um, pounds a month in terms of turnover.

AI assessment note: “I think it's a real bonus. There's no doubt about it.”

Q Yeah, no, absolutely. But then how important do you think it is for founders to have operating experience in the industry that they're innovating in? As you said, you knew the problem, presented the solution because you had worked in that industry. So do you think it is pivotal for founders to, to have that operations experience?

A I think it's a real bonus. There's no doubt about it. Um, It, it, it helps. Two examples, um, you know, we, we've, we, my own experience when speaking to some of the, certainly some of the big chains, and even, even a small business, I can, I can identify with that. I can say, look, we ran a small business like yours. I bet you don't have this problem, that problem, this problem, that problem, and they say, yeah, we do actually. You've obviously been in the industry. That helps. Um, The other thing that's quite interesting, we've just employed one of our, our UK sales executives come from a firm called Social Byte, which is a customer, um, and, uh, doing very well in Scotland, and they came to us when they were, and this is in the public domain, so I'm not giving away any confidences, it's been reported in the papers, um, they, they came to us when they were doing about 7000 pounds of corporate catering revenue through five stores, uh, four stores in central belt of Scotland, um, Um, it's a social enterprise business aimed at creating, uh, jobs for homeless people, so that helps, but, um, they, they've grown the business with our, our software platform from 7000 to, to 70,000, um, pounds a month in terms of turnover.

AI assessment note: “I think it's a real bonus. There's no doubt about it.”

Q And how did you understand your customers then and their wants and needs in their businesses? Did you kind of survey them a lot? Did you go and speak to them?

A Yeah, you know, that's a good, a very interesting question. Um, what, what, what, what has become very clear to us very quickly, um, even when we're, we're cold calling prospects, um, is our knowledge of the industry. We've, we've developed, um, Software based on customer needs, from needs that we identified when you ran, when we ran our own catering business. Um, and that's in stark contrast to others out there who have been developer-led and very focused on, well, this is a good piece of kit, someone's going to like it, as opposed to our approach was, here are the problems that are affecting your industry, and here we're delivering the solutions in a SaaS offering. Um, and that has really stood us in, in great stead. Um, not quite sure if I've answered the question, but.

AI assessment note: “needs that we identified when we ran our own catering business”

Q And Spoonfed, obviously, in the food and catering sector, a sector that's, uh, incredibly, uh, popular at the moment, particularly in the US, um, there's a lot of, you know, Instacarts and food tech companies rising. Why do you think there's this sudden interest in the food market?

A Well, I think, I think it's, it's a broader, um, Um, acceptance of technology, um, you know, I, I, I found myself, uh, talking to someone, I was at a function last night, and we were talking about the, the advent of technology, and how, you know, we went away on interrail trips, you know, several years ago, uh, and our parents never heard from us for, for, for weeks or so, and everyone assumed you were fine, but now with mobile technology, it's completely revolutionized how we do things. What's interesting with, with our market is there is a huge explosion of B to C food technology offerings. I'm thinking of seamless. I'm thinking of Grubhub, Deliveroo, Just Eat in the UK, um, big, big, um, technology platforms making it easier for consumers to order their pizza and have it delivered to the home. But there's very few companies working in the niche space we are in, which is providing a Not only that online ordering platform that you get with the B to C side, but from a business to business point of view, we've got a complete system, um, which you can plug into your business, and it'll run it for you, and make it more efficient. So that's quite, quite exciting, and that in some ways is our opportunity, um, is to exploit the back office functionality that we have compared to some of the bigger B to C offerings that are out there.

AI assessment note: “I think it's a broader acceptance of technology”