I recently interviewed Aman Narang, the founder of the restaurant payment and management app, Toast.
Aman grew up in Nepal and India, moved to the United States as a teenager, earned a computer science degree from MIT, and spent five years at a Boston tech startup before deciding to build something of his own. The first thing he tried to build was a phone app that let restaurant diners pay their bill without waiting for a server.
It failed.
But that failure led him to discover a much bigger problem, which led to Toast, which today powers more than one in five restaurants in America and generates over two billion dollars in annual revenue.
Here are five lessons that stayed with me. And don’t forget to listen to the interview!
Toast didn’t start as a restaurant operating system. It started as a payment app.
It didn’t work.
But while Aman and his co-founders were out talking to restaurant owners trying to figure out why it wasn’t working, they kept hearing the same complaint about something else entirely: the clunky, expensive, outdated software that ran the whole restaurant.
The payment app was never the business. It was the conversation that revealed the business.
Most failed first ideas contain the seed of a much better second one, if you stay curious long enough to find it.
When Aman pitched restaurant owners on the payment app, he couldn’t get their attention. They were too busy, too skeptical, too focused on keeping their kitchens running.
But when he shifted the conversation to their point-of-sale system, the same owners would spend an hour with him. They had plenty of time to complain about the thing that was really bothering them.
The signal isn’t who says yes to your idea. It’s who loses track of time talking to you about a problem.
That’s the product.
Toast needed to connect to the existing software running restaurants in order to work. Nobody would return their calls. The big legacy players had no incentive to help a small startup they’d never heard of.
So Aman and his engineers just built everything from scratch: ordering workflows, kitchen management, employee scheduling, inventory, payroll integrations, online ordering, loyalty programs, gift cards.
What started as a necessity became the entire competitive advantage. Because they owned the whole stack, nothing was held hostage to someone else’s system.
The companies that tried to plug into the existing infrastructure never found a foothold.
When investors told Aman the restaurant technology space was too crowded, that too many startups had raised too much money, he walked into a few restaurants in Harvard Square that evening and looked around.
Every single one was still running on an ancient on-premise system. He didn’t care who else was in the market. He cared about what was actually happening inside restaurants.
The competitors who had raised more money and had more brand recognition were building for a market they imagined. Toast was building for the one that actually existed.
In March 2020, Toast’s revenue dropped more than ninety percent in weeks. Restaurants closed. The company had to lay off more than half its workforce. Everything they had built over seven years was suddenly at risk.
Aman’s response was to do exactly what had gotten them there in the first place: call customers and ask what they needed right now.
The answer was tools for pickup, delivery, contactless ordering, QR code menus.
Toast built those features fast, survived, and came out of the pandemic stronger than it went in. The instinct to go back to basics when everything falls apart sounds obvious.
Very few companies actually do it.
Aman describes Toast as a business built brick by brick over thirteen years, not a hockey stick.
The app that started it didn’t work. The first restaurant they installed crashed within twenty minutes of opening. For years, institutional investors wanted nothing to do with them.
The company that nearly went under during COVID is now worth fifteen billion dollars.
None of that happened because the founders had a perfect plan. It happened because every time they hit a wall, they went back to the restaurants and asked what was wrong.
P.S. If you loved the episode, follow the show in your podcast app so you never miss one. And please SHARE this newsletter so others can learn from some of the world’s greatest entrepreneurs!
Aman Narang was sitting in a restaurant waiting for the check to come. It took ten minutes to flag down the server. Then another ten minutes for the credit card to come back.
And, like many great entrepreneur's before him, Aman had a simple thought:
There had to be a better way.
So he and his co-founders built an app that let people pay from their phones. They got 50 family restaurant owners to let them test it. But… it failed on the very first night.
In the middle of that failure, however, Aman noticed something far more interesting: restaurant owners didn’t just hate the payment process.
They hated everything about the technology running their businesses.
The clunky software. Expensive hardware. Systems trapped on servers in back offices that couldn’t talk to each other.
So Aman and his partners made a wildly ambitious bet: instead of building one app, they’d replace the entire operating system for restaurants.
It seemed like a crazy idea. Investors passed on it. Everybody said it would never work.
So… how did three engineers build one of the most dominant restaurant platforms in the country? What made them keep going? And how did they survive the one event that shut down nearly every restaurant in America overnight?
Hear the entire story behind Toast this on the latest How I Built This!
This week on the Advice Line, I’m joined by Curt Richardson, founder of OtterBox. Curt reflects on what he’d do if he were starting over, and keeps coming back to one word: focus. Resources and money help, but focus is what actually sustains a brand over 30 years.
First up, Andy: How do I scale a business when I’m the product?
Andy’s Mr. GameShow hosts live game nights for communities and senior centers. But he is ready to grow beyond what one person can do. Our advice: run an experiment before anything else… because it’ll tell him whether this business can actually be replicated.
Next, Marissa: How do I rebuild momentum after time away?
Marissa’s Gilded Coach Teas sells fairy tale-inspired tea blends, and the business was doing well before she took a year off to focus on family. Now she’s wondering how to get back to where she was. We see real opportunity to grow the business again, but the most important thing we told her had nothing to do with tactics.
Finally, Vince: Should I spread my marketing wide or go deep on one channel?
Vince’s Evrloop makes sustainable baby gear with 100% recycled materials plus a 20% buyback when you’re done with the product. Now he’s trying to figure out where to spend his marketing dollars. We gave him a clear approach to finding his channel, but the bigger insight was about which part of his product should actually be leading the story.
Curt leaves us with this: Figure out what you actually want. There are a million ways to run a business, and once you know how you want to run yours, everything gets clearer.
If you would like to be featured on an upcoming episode, call and leave a 1-minute message at 1-800-433-1298 or send a voice memo to hibt@id.wondery.com
Order in the court! Has science finally caught the world’s very first baby great white shark on camera?
In today’s Wow episode, we dig into a real ocean mystery. In 2023, a filmmaker and a biologist captured footage of a completely WHITE great white shark swimming off the coast of California.
Could that unusual color mean the shark was just born, still covered in a special nutrient-rich layer from before birth? Some scientists think so. But others aren’t so sure!
Will the jury crack the case, or is this mystery still swimming free? Tune in to find out!
In the 1980s and 90s, Curt Richardson was tinkering in his Fort Collins garage, making simple waterproof plastic boxes.
He and his wife Nancy designed them to keep small items dry while fishing or skiing, and gave them a rugged name: “Otter Boxes.”
For years, that’s exactly what they were… a niche product for people who spent time in the elements.
Then the world changed. With the launch of the BlackBerry and the iPod, people suddenly carried expensive, fragile electronics everywhere. Curt spotted the opportunity and redesigned his boxes to fit and protect these breakable devices.
Almost overnight, OtterBox transformed from an outdoor goods supplier into a tech industry staple.
The timing couldn’t have been better. As smartphones exploded, so did the need to protect them… and Otter Products grew by more than 1,000% in just five years.
What do you want more or less of?
Just send a tweet to @guyraz or a message on IG to @guy.raz or LinkedIn and put #GuyRazNewsletter at the end so I can find it.
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.