AI-Driven Restaurant Platforms | Alex Hult

0:00 Hey everybody, welcome back to the Particle Accelerator podcast where we talk to future thinking business leaders about how to grow their team and accelerate their business. I'm here today with Alex Holt. Alex, would you introduce yourself? >> Sure. Thanks for having me, Ben. My name is Alex Holtz. I'm the co-founder and CEO of IO, which is the world's first all-in-one restaurant platform powered with AI. Basically, restaurant in a box. Everything you need to run a restaurant, we offer it in a easy automated solution.

0:31 >> Cool. I'm excited to talk to you about that, but I'd love to ask a couple of questions to get to know you a little better. I love to seeing where guests came from. So, the way I do that is how as a person, a human being on planet Earth, did you make your first dollar? For me, it was a paper route. What was it for you? Ooh, first dollar probably hustling kids on the playground as a 10-year-old or something. My real first job was as a hockey player, like official paycheck, but I guess like smaller roles. I started working in a bank when I was 12 to learn how that worked. The restaurants with my mom, she owned a bunch of restaurants and of hotels. So, I worked both in the kitchen and in the bar from teenage years up until my 20s and then started playing hockey. I got more and more into that.

1:21 But ultimately, I would say as like 14, 15, I knew that's what I wanted to do. So, I was ranked number two in the country as an 18-year-old. I was drafted by the Sharks, played for the Swedish national team, and I was the third youngest of all time to play in the Swedish Elite League. But yeah, that's my background. Yeah. Do you think there was a toy or hobby? Obviously, having your mom in the restaurant business probably answers this question a little bit, but was there a toy or hobby that you had as a child that influences what you do career-wise today?

1:53 >> Not really, to be honest. Hockey was my big passion and hobby, and then a knee injury put an end to that. And then when that didn't work, I shifted gears and got into my mom's career. >> Yeah, that's cool. I like that following in your parents' footsteps kind of deal. I'm hoping my kids do the same to some extent. I want them to have their own path, but I'm also excited about helping them fund their future. Is there a quote from a famous person that lives in your mind rentree? I'm feeling a Gretzky quote coming, but maybe you'll break the cliche hockey player.

2:23 >> Honestly, the first one that did pop up in my head was you want to be where the puck is going to be before it gets there from Wayne Gretzky. But let me think what's another one would probably be from the Bible. You want to treat other people the way you want to be treated. Those are my two main ones that I'm both raised by and try to live by. >> Yeah, love it. Would love to dig into what you're doing. What tech trend are you seeing that's significantly impacting your industry and how are you guys responding? I know you're building software for the restaurant industry. My company has built a couple of restaurant point of sales. Highly competitive. We have toast everywhere. But I agree that even if you're a toast subscriber, you're still trying to figure out a way to manage your inventory. Restaurants are a thin margin business. You have to be on top of your data and your numbers.

3:12 How are you guys responding to that need and what makes AO different? >> I believe with the superpower of AI, building software is becoming very easy and inexpensive. So all of the platforms not just restaurants but in general are going to get much more vertical and deep because where the good deep data lives is where the AI models will be effective and show great results. I believe all of these single point solutions out there are going to die be acquired or merged.

3:49 So like you basically look at what Toast did. They saw the same thing that I saw that the restaurant industry needs a more simple system. They need more one login manage your whole business from one place kind of thing cuz the same thing have happened in many other industries right I believe that all the platforms are going to thrive because that's where you have a moat where it gets very sticky. you have payroll, you have their inventory, you have their website, you have their POS, all of a sudden it's really hard to change because it covers your whole business.

4:22 Where I think we're positioned very well and why I think we're dominating right now against people like Toast is that we built everything ourselves like Apple. We don't have integrations that we're relying on. We built everything with AI inside where things are much faster and these agentic systems can actually perform tasks A to Z. Like software a lot of times let's make things easier but with agentic systems it actually executes tasks like answers phone calls takes the reservation books them everything A to C done knows the people working knows the demand can lay a schedule done all the way. Right. So what's happening or what I predict is going to happen is you're going to have these platforms and you see it already with squares spot-on toes clover to some extent not but they're getting more and more vertical offering a wider solution because that's what they need to do to survive the competition against say toast. The problem with that approach is that you end up duct taping and frankensteining a bunch of old code to a holistic solution. The only way to really leverage AI is to put an AI layer on top like a bolt-on so you can extract the data and have some smartness. Where we're going to win is that we have the smartness inside. For these non-technical restaurant owners that don't understand how to use these tools, we just make it happen. So for them, it looks just like a normal software that they're used to except stuff just happens and it's done and their minds are blown. And then when you create that kind of value and sell a holistic solution for a third of the price that the incumbents are doing, it just becomes this explosion effect where everyone that sees it wants it. And that's what we're seeing right now.

6:21 >> Yeah. I just noticed that you posted on LinkedIn that you went to a million in ARR in 12 days and then pretty rapid growth in days, weeks. You're measuring your growth in a very tight timeline. What kinds of technology innovations are you betting on to drive your business growth? >> I think it's the platform that we've built. The whole industry wants an all-in-one solution that actually works and that hasn't been available. The only one that's close is Toast. They still don't have the marketing all the way figured out. They don't have the accounting all the way figured out. I'm sure they're working on it. But when people see our platform, we have built it all, and it actually is fully one system. It's very intuitive, easy to use, and with all the automation inside, it becomes a very powerful tool. And I think that's what it's going to drive.

7:11 Like big companies like Tesla, for example, you don't see any marketing. they just spend all their effort into their product and then people just want their product then they buy it and I think similar to that like restaurant community is very tight and small you do really well for some restaurants like our slogan as a company is we solve we don't sell so I think a lot of these tech companies have been very focused on raising private equity and venture capital and then just they're showing good growth but the restaurants are not that happy with them versus we're taking this approach of let's just make restaurants happy. Let's give them real service. Let's actually solve their problems and they're going to do all the selling for us. And that is what we're seeing right now.

7:53 >> I think in a lot of industries you see that kind of fragmentation solution where it's franken where the the restaurant owner ends up in a place where they have to leverage a lot of consulting. Your service is rolling the consulting into the solution because you've solved it. Your Apple reference makes a lot of sense. When you have a Windows enterprise, you end up having to have IT guys that can string it all together. When you experience Apple products, it just works. And so, if you're taking on this challenge of an all-in-one solution and the pieces are integrated, then they don't need a huge consulting layer on top of it to figure out how to effectively deploy the Frankenware. I think that's really interesting. But what kind of challenges are you seeing or what kind of gaps are you trying to fill as you're rolling this out to many restaurants?

8:43 >> My biggest concern right now is I already know that this product is going to go crazy. So I'm trying to figure out how do we get to 100,000 restaurants in 3 years and how to actually do that? What AI tools can we use to automate the onboarding? Make it easy for the restaurants to get onboarded from. They say, "Hey, I want this product. Here's the signature to it's actually up and running in the restaurant. How do we make that time as short as possible?

9:11 Because the shorter that time can be, the faster we can grow without having to add like crazy amount of people to do all these implementations. That whole scaling infrastructure strategy automation is what keeps me up at night. >> Yeah, we developed a restaurant point of sale system specifically targeted for franchises. Have you encountered this? The franchise problem is a little bit different. You have the parent Applebees, for example, they dictate a certain amount of menu, a certain amount of inventory, but at each individual store location, there's exceptions.

9:51 There's new menu items that maybe are unique to being in New Orleans, for example, versus LA. And so it became this very complex rule system where there was menu broadcast but there was also menu exceptions. Have you started to tackle the franchise problem? To us it was a world of different complexity to allow the franchise control but the individual location override. Just curious how far you've come around that because franchises are a different animal.

10:21 >> Yeah. So I think because of the newer tools that's available with how code are written today versus back then it's a lot easier. You have cloud software like AWS for example. There's a lot of options there. The data can flow in a much easier way than before when you had the servers. I remember the days you had these big servers with a firewall in the restaurant. You couldn't run a report without going into the physical location the way they were doing it with versions or something like that. You created a menu item on a corporate level and then they could modify it on their end, but the corporate level still control the overall. With more modern technology, it's a lot easier than that. We're going through it right now. We just signed four franchises last week that have 100 plus locations. So we need to speed up a lot of those things making sure they're happy and that we have their looking for.

11:20 >> Yeah, we have some very recent cloud experience on that exact problem. We found that there still was the need for an onremise footprint to reduce latency between order and I think franchises were also really sensitive to the fact that their internet may go down. What we developed was an onremise backup solution where as the orders were flowing from table to the kitchen there was zero possibility of interruption even if they lost internet for an hour right during dinner time. We assisted in the development of a Kubernetes cluster in the restaurant running a handful of services and then buffer the data so that everything's in the cloud reporting can be run from anywhere but there was some backup on prem that hybrid hosted solution.

12:08 >> Yeah, that makes sense. There's a lot of different ways to tackle that problem. The ISPs are pretty spotty. We've built triple redundancy to try to avoid that problem with a router switches over to a 5G SIM. If the ISP goes out, then it's pretty seamless. You don't really know until you look at your email and it says that it happened. Also, if it still goes out, you can still use the internal infrastructure in a normal way. It's a tricky problem to solve for sure. And it's very important one. Like you have a full dining room, you need to charge them. You need to find a way to get their money. And I remember back in the day when I was running restaurants, we had those knuckle busters. Do you remember those?

12:46 >> Yeah. >> Where you put the credit card and ran the thing and like you hurt your knuckles. >> The customer is demanding their table ordering. They love that. I think restaurants love it too because the demand on servers is less. So we experience that the device on table is a new thing that people are interested in. >> What devices have you seen on tables that I have been successful in working? because I haven't seen anything.

13:10 >> So, I think Applebee's is really evolving this and the bar environment where you're able to order as a family there. I don't remember the hardware exactly. I could get you that. And maybe for many restaurants, it's a novelty because the higherend restaurant isn't going to do that. They're going to want the consultative ordering that most good waiters perform. >> That higher end, it's a very small piece of the market. It's like a couple of percent.

13:36 >> Yeah. I think as we move forward, the customer is demanding things like QR code on a receipt so that they can pay from their mobile device. Table ordering in a more bar type environment is super handy. It upgrades the level of service in the restaurant because you're just ordering is going straight to the kitchen and your time on table would be less. A server could address more tables at any given time because expediting and getting the food to the customer, their order comes in as it comes in. We built the software for the ontable order device and the handheld tablet for the servers. I love the payment at the table where the server doesn't have to carry your card away.

14:16 >> Yeah, that's great. I love that, too. >> I'm curious because we've worked on a voice agent for the inventory data entry. And I think this is really cool because inventory is always such a problem if you have to have your people take the time to go key it in. So we worked on a few things where it's just hey I just got in a case of Grey Goose vodka. I just got in a case of this wine. All that data entry is happening over voice. Are you playing with voice activity? Is the agent more connecting the layers of the internal application?

14:50 Have you been playing with voice much or is that still on the road map? >> We're trying to get the human out of the loop because people are lazy and they don't get it done. If you don't have good data in, you're not going to have good data out. We have spent a lot of energy on how do we not rely on the restaurants to do anything. Are you familiar with the term EDI like electronic invoicing?

15:11 >> We do a lot of EDI ingestion. Now with AI, you can just get the purchase order, have it scraped, translated to API and enter it. some purchase order OCR style where you know any kind of paperwork any kind of digital document throw that into the system and then have that do the inventory. So if you were just in a big shipment send that into the inventory so that your inventory is updated. >> We do OCR on the invoice level because it's all connected with one system. The POS knows how much is available and depletes in real time. Once your stock is starting to get close to zero, the POS starts to come down. We have five of this left. 4 3 2 1. Ultimately, the ordering can compare up to five different vendors for price. You place the order and the loop starts all over again. The idea is to not have to do an inventory because you have the theoretical and then you have sensors and cameras that kind of audits that process so that completely get rid of having any kind of manual work done cuz that's where the system breaks typically.

16:22 >> Okay, that makes a lot of sense. That's really cool. What's your kind of plans on how to maintain your competitive edge? >> Just continuing to develop what restaurant owners need and wants. I think once you have the Apple platform, it's just a matter of continuing to develop good product and then customer gets sold on it and then they just keep evolving with you and there's not really an option to switch. If someone told me to give up my iPhone, I'll be like, I'll pull my gun out.

16:51 >> I love that that strategy for stickiness. If you're truly the one addressing any kind of need quite completely and you're walking away from Franken wear to a complete solution then certainly there's that stickiness factor as you've touched so many restaurant owners now the franchises how do you strategize your road map given all that demand you're going to have all kinds of different ideas flowing in so I ask this of every guest how do you connect your technology roadmap with your ASP aspirations. Do you have a process for that or any kind of principled approach?

17:28 >> Yeah, we're trying to stay super close to our product right now. So, we have a lot of demand coming from all kinds of places like Miami, New York, Southern California, and Vegas, but we're just doing the Bay Area right now. And that is because we want to be close to the product, actually solve these problems, and help these restaurants cuz it's not like the problems are different in any other place. So once we can say that we can solve all these problems, we have a holistic solution that works for all types of restaurants, an ice cream shop with the toppings and modifiers versus a pizza where you want half the pizza with these toppings, the other half with these and then fine dining with courses.

18:09 There's a lot of differentiation inside and a lot of POSs can't handle that. And then from there it's just continuing to listen to the customer and driving all those needs and then we're going to go scale to all the other markets. >> Yeah, makes sense. So you're controlling the interested parties, the number of voices and then the idea is you build into that demand then you can go much wider rather than having a hundred customers that all want the same feature holding it off with, hey, I got five that need that feature. I love that.

18:42 What advice would you give to somebody who's starting their journey, especially in today's market? What advice would you give to the upandcomer? Could be somebody just starting their entrepreneurial journey. >> Force yourself to learn all the latest AI tools. There has never been a technology that can 10x production the way AI can. I think all the smart people in my network say the same thing. they cannot function and do their day-to-day anymore if they don't have access to all these super AI tools cuz they can just get so much more done and be more effective and productive in a short period of time.

19:19 >> Is there a limit to AI that you're imposing in your personal life like when not to use chat GPT or is there any kind of guard rails you've put on AI in your daily discipline? >> Not really. I'm going through like learning. I'm taking classes, educating myself. I'm not a technical founder. I was a hockey player than a restaurant and now I'm trying to catch up. I feel like I picked up a lot, but it's a lot to understand and a lot of new tools. It moves very fast. If you are up to speed right now in 2 months, you're completely outdated. It's crazy.

19:54 >> Is there a lesson that you learned from failure? Something that really stuck with you, the one that got away kind of thing. I think being a professional athlete, you build this determination where it's okay to fail and it doesn't even slow you down. It almost speeds you up. Oh, I didn't succeed here. I'm going to go 10% harder tomorrow and try it this way instead. And then you just keep doing that over and over until things are starting to turn green. I think that is my superpower, this mental strength to never stop. It doesn't matter if it's 3:00 in the morning or on the weekends or whatever how big the problem seem to be. I just keep pushing. I really like Edison's like when he failed trying to create the light bulb. He just found another way that didn't work. I thought that >> pretty cool until he found one way that worked. So yeah, I think that's how I look at things.

20:51 >> Yeah, I think my primal question is am I successful? That's just a primal question. My affirmation is about winning versus learning. I don't lose, I just learn. As long as I'm putting in all the effort that I can. All I do is win. Recently, there's this really good book by Matt Foster called the seven primal questions. All of us have a predominant primal question. Some of us have a secondary. He has a really cool assessment that identifies your primal question. Then your primal question becomes your primal gift. I love making other people successful and so yeah like I'm a maximizer and so I think that goes along with what you're saying this determination of figuring out a way being hyper resourceful the core skill of most successful entrepreneurs if you put somebody in a situation where they had no cell phone no wallet no identification they're in a foreign country and they had to get home it was a matter of life and death most people it would probably take them 24 to 48 hours, but they would have to pull from their inner resourcefulness. They'd have to start asking people questions and figuring out a way. And that's the difference between an entrepreneur and an employee is the amount of resourcefulness you're willing to undertake. For me, do I need to rehearse conversations in my mind, like a hard conversation or a negotiation beforehand? What I've come to learn is I don't. I can just walk into the situation knowing who I am. I don't have to roleplay this hypothetical and try to anticipate every angle. I can just go do it. I'm finding a lot of folks don't want to rely on their inner resourcefulness. They have this desire to know what's going to happen before it happens. That tends to slow people down.

22:40 >> I relate to that big time. I've always been like that. I can just jump into any conversation, any meeting, I'm prepared and make it happen. Sometimes maybe not all the way smart like maybe you should have prepared a little bit but many times you just find a way through it. >> You got to move fast and risk it. Take the risk. People like what you've had to share today. How would you like them to connect with you?

23:02 >> I think LinkedIn is a super powerful tool to have these I can help you, you can help me. It's cool what you're doing. Thumbs up. Ask questions. That kind of relationship seems pretty effective. I would say that would be the best. >> Yeah. And who specifically are you most interested in having conversations with right now? >> Probably restaurant owners. Yeah, restaurant owners that I've been through what I've been through where you can't get the hours to be enough and there's always more work and you never get to the important stuff cuz payroll is due.

23:35 Like you have all these problems that you got to address and there is now an actual way to solve that. And that is what I'm so passionate about, being able to give back to this community that gave me so much. Having that ability now to help these restaurant owners actually get their lives back. Like we're with our actual restaurants that we turn break even businesses to an actual real business now where they're making good money and we're taking failing businesses to plug their leaks and turning it around. So, it's super rewarding.

24:04 >> Yeah. Awesome. Thank you so much for spending time with me. I know you're time constrained, so I'm going to keep it keep it aggressive here. It's been great. Thanks for being on the podcast today. >> Oh, thanks for having me, B. I appreciate it.