Jon: Hi I’m Jon Nordby and this is HXTV, the show that champions Houston’s innovators and entrepreneurs. I’m joined today by Devin Baptiste, Co-founder and CEO of GroupRaise. Devin, welcome to the show.
Devin: Good to see you Jon, thank you so much for having me.
Jon: Thanks for coming on. So tell us a little bit about GroupRaise.
Devin: I always like to talk about GroupRaise or I like to think about GroupRaise as the most delicious way to change the world but what we do under that is we help fill restaurant’s slow and undercapitalized times with an average of anywhere between 20 and 200 customers. We do that at a lower cost of acquisition than pretty much any other channel that’s available to them.
The way we achieve that is with charitable organizers; so moms, sorority girls, cancer survivors, folks like that come to our site. They book a date with one of our restaurant partners, they invite all their friends and social connections out to eat with them, have a really fun time eating and drinking and hanging out. At the end of the night the restaurant donates a percentage of the sales back to a charitable cause.
Jon: So do you then take a percentage of what that fundraiser is or do the restaurants pay? How do you make money?
Devin: The restaurants pay us, they typically pay us per event or they’ll pay us a flat rate to unlimitedly host events, so depending on what kind of deal it is. One of our first national deals was Jason’s Deli. They for example buy a large group of events in advance and as they go through those event credits then they repurchase. And then we are working with California Pizza Kitchen, we also do these kind of large enterprise deals as well as working with a lot of independent mom and pop restaurants.
Jon: Pretty unique idea, pretty unique space, but fundraisers have obviously been around for a while and restaurants trying to fill their downtimes has been around for a while, what got you to this point where you can marry these things together and what makes it unique in the marketplace.
Devin: Actually GroupRaise came out of I was in a band; I was playing keyboard and singing in this band and we were always playing at venues and restaurant owners and bar owners became my friends, they became my mentors. I was talking to one of them one day and he said he knew there were tons of organizations around him but he had no idea how to reach out. And I’m an Eagle Scout, I was in scouting, I was in tons of stuff growing up and so I was like I’m pretty sure I could find an organization that would be interested in coming in. And I remember he was looking for maybe 30 people to come and 300 people came.
And I saw a bunch of people just having a great time eating, hanging out, talking to their friends and supporting something they card about. I saw a business owner who was floored with the largest, most successful marketing engagement that he’d been able to do. And in my mind I stored it away as like huh, I bet you there’s a lot of communities that look like this where you have folks who have space who are really always looking to find groups who need that space and people who are constantly trying to find venues who are struggling. So I said hey, when I can build a team on technology there might be an opportunity to find that match. And flash forward now 150 cities later, 9,000 restaurants later more than a million people have eaten out at a GroupRaise meal and that’s growing exponentially month over month now, turns out that that’s true.
Jon: Tell us a little bit about how you’ve fundraised to this point.
Devin: We have essentially – I’ve done I want to say maybe 5 kind of fundraising experiences, about half of them were from application to funding and the other half were creating your own structured fundraising process and driving to a raise amount and I have deep opinions about both. I would say, especially in the beginning, apply, apply, apply would be my early advice to folks because all of the initial writing we did about the business was really good to share with people when they were interested, it forced us to think through issues in the business. It forced us to put something out and be prepared for that.
And the more shots on goal you take in that category you’d be surprised; getting $25,000, $40,000, $100,000, a million from applications. You can get a pretty high return on investment from applying and I also think opportunities to pitch. So some of the greatest things – that original Tech Wildcatters was from 5 minutes at the Rice Alliance. Stood onstage (04:24 ???) the Rice Alliance and that was the first experience in my life where I pitched to and there was a bunch of people in a line and I was like what’s everybody in line for. And they were in line to talk to me and it was like oh man.
Jon: It’s a good feeling right?
Devin: It was a resolved feeling because it was like what is this, and from 5 minutes. Like the amount of momentum and relationships that got built from standing on stage in front of the community for 5 minutes lasted for months.
Jon: So we got why you’re here and where you came from, tell me about the future. What’s the plan for conquest and growth?
Devin: Our vision is to get to a million people eating a day. I think a million people eating per day is meaningful for a lot of reasons. One it represents the entire of the United States going out and having a meal where they’re thinking about something community related. One of the coolest things about our meals is that actually discourse happens. I think more and more increasingly we get behind our screens, we get our phones and we have these really big topics in the world and we’re not doing that face to face, we’re doing it like driving and it’s kind of road rage. The dinner table I’ve always believed is the original social network; the original place where humans got together to share the exchange of ideas is that and so anything you can do to drive people around that is really meaningful.
So seeing an extreme amount of discourse that happens in this way, and then I’m so passionate about seeing local business be successful, just this idea of there are millions of local businesses that are where people are taking their livelihood off the table by providing like an artisanal experience or an experience to their community and having those folks be rewarded by being seen as caring about their community and driving that is really powerful.
And so in order to get to that million people eating a day we think we’ll need about 140,000 restaurants globally in order to hit that target; we’ll probably pass 10,000 in just a couple minutes here and I think we have a line eyesight to grow to that 140,000 restaurants. The way we do a lot of that growth is fueled by the data we’ve been able to get and collect and understand how to drive that. We really want to build a community that is active at that kind of scale and mainly through the application of what we’ve learned about the data in this process.
Jon: That’s an interesting point, right, is the data. With that many people coming to the site and that many restaurants that are signed up I have to imagine you’re collecting a ton of information around the behavior of how people are interacting, how they’re raising funds; talk a little bit about that and what’s the plan to monetize that data or to help it grow your business. What do you do with it?
Devin: I think what we really learned in this process was that there isn’t just one city – or I talk about these cities – but I actually think in one mile radiuses. So there are maybe 400,000 one mile radiuses that are inside of the United States and how do we have the right supply and demand match inside of these radial locations? My philosophy is that what we’ve learned is that certain words mean more to others. So for example the name of the street that you grew up on, if you were to see a word map that word is not just a word to you, it actually has emotional response right?
So if you can predict the folks who any given restaurant would like to be connected with in their community that’s one mile away that has a very different conversion, very different cost of acquisition structure than if you were just talking about your general concept. So we’ve built a lot of tools to essentially guess the set of words that any given person would likely have an emotional response to. And so you can imagine there’s a lot of applications for that kind of predictability and the first and best application is predicting which organizations restaurants would want to be connected with and which restaurants local organizations want to be mapped to.
And when we started getting to that level – so instead of talking about it ah this is just the general concept but hey, you could connect with Jason’s Deli next door on Tuesday and Wednesday of next week the conversion rate shifted up by 6X. And so you start to see these very fundamental changes and the underlying economics when you’re able to know not only what concepts should be available, but who and where you’ll likely drive response.
Jon: Even in Taiwan, Berlin, Chile, Dallas, investors all over the world, why did you come back to Houston and why stay in Houston?
Devin: So we’ve watched Houston evolve and the fact that we’ve survived long enough to be on a show that’s in Houston that’s talking about the Houston startup community, I’m really excited to see over the next like 24 months is my assessment – you guys probably have a different assessment – what will happen. I’m big into momentum so all of the cities I’ve lived in across the world I always have this analogy of thinking about an olive press. When I went to Israel I was in Nazareth actually and I saw this couple thousand year old olive press. And I never understood what extra virgin olive oil was, and it’s the first press. When you press an olive what comes off the top the very first time you get it, that’s extra virgin olive oil and there’s some interesting features about the first press. The first press is usually the fastest to come, it’s the easiest to get and it’s the most valuable.
So when I have this framework when I’m looking at geographies I’m like what press is this ecosystem? Is there an oil press in the city? Are we pre-press, are we post press? Arnd then the thing about the later press is if you’re like 6th or 7th or 8th press that takes a ton of work, you get just a little out and it’s less valuable. And so I’ll say original Houston was amazing for me because it made me like the British which is in the sense that I had to go everywhere in the world to get money. I had to go and conquest; it taught me scarcity. But I think when I look at organizations like HX and when I look at organizations that are happening now I see the olive press being built and I think the first press for Houston is coming in that 24 month time period for this part of the ecosystem. I think we’re on a later press with other industries inside of Houston and so I’m really excited to see where this is and to have the opportunity to be part of the molding of what’s coming up and to be a contributor into that community.
Jon: Devin thanks so much for sharing your story with us.
Devin: More than happy to, thanks for having me.
Jon: And that wraps up our conversation with Devin Baptiste, Co-founder and CEO of GroupRaise and this is HXTV.
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