Dear Disruptor,
There's always money in the [robot du jour]: An open letter to the restaurant disruptors of the future
Dear Disruptor,
Do you have the next great idea for revolutionizing restaurants with the sort of automation that will reduce labor costs, allowing for reinvestment in quality ingredients, all while improving margins? Will this change the way that people eat, forever? Have I got a story for you!
A decade ago, a gaming executive named Alex Garden patented an idea for delivering food as it was being cooked. By reducing the time cooked food was in transit, Garden rationalized, it could optimize food delivery for a diner while optimizing prepared food production for a restaurant or other food business. Adding robotic prep cooks to the equation could further streamline this operation, creating an autonomous operation. This patent would become Zume Pizza, which would henceforth be known as Silicon Valley’s overfunded robot pizza company after investment giant Softbank poured close to half a billion dollars into the venture. I’ve been steeped in this startup failure story for months, spending hours reporting and writing it out for inclusion in the winter print edition of Fast Company magazine. (It appears online here.)
You see, disruptor, the point of writing the magazine piece after Zume’s quiet, official demise in June — when it was liquidated in an assignment for the benefit of creditors, an alternative to bankruptcy — is not schadenfreude. There are many valuable lessons in this story that can and should be applied to future efforts to revolutionize the restaurant industry. Much of it has to do with the challenge of building and running a food business.
In fact: “Running a restaurant is not rocket science,” Benson Tsai, the cofounder and CEO of a robotic pizza startup in Los Angeles told me for the piece. “It’s much, much, much harder.”
Tsai would know. That’s because before he launched vans outfitted with pizza-making robots, he helped launch rockets as an engineer at Elon Musk’s SpaceX.
Disruptor, you may be glad I mentioned Musk at this point, given his penchant for breaking and remaking entire industries, like electric cars, while ignoring the work and experience of those who have gone before him. Indeed, I read Walter Isaacson’s epic biography of Musk as well; I finished it last night, and pulled some observations that apply here.
Specifically: de-automation. In Musk’s Austin Tesla Gigafactory, constructed to pump out electric vehicles at Musk-ian speed, a massively automated assembly line wasn’t working as efficiently as Musk demanded. “We began sawing robots out of the production line and throwing them into the parking lot,” an employee explains. They made a hole in the building to remove the equipment and then replaced bots with human employees. Production moved faster.
“Humans are underrated,” Musk tweeted about the ordeal.
Zume Pizza’s robots, too, were decommissioned a few years into the experiment. Instead of creating an automated dream team of pizzaiolos, they created an operational headache for employees while leadership chased down dreams of reinventing the food system with pizza as its prototype.
Disruptor, I am not anti-progress, anti-technology, or even anti-robot. I am observant and allow space for nuance. This is critical in the restaurant business, where the same hypergrowth and speed that inspired a generation of technologists to move fast and break things doesn’t always apply, and I urge you to consider this as you innovate.
On Monday, we learned of yet another robotic restaurant concept, this one out of Pittsburgh, Pennsylvania, helmed by the former head of self-driving cars at Uber. A company called Lab37 created a large robot capable of producing an undetermined amount of bowls using certain ingredients. The bot is big — 9 feet by 20 feet — and Lab37 is positioning it for use in different types of restaurants.
It is similar to efforts we’ve already seen from Sweetgreen (which has one bowl-making robot deployed outside of Chicago and a second on the way in Southern California) and Chipotle (which is testing a bowl-making bot in its test kitchen, far outside any of its store kitchens.) Both chains have the interest, expertise, and grand plans of deploying this automation on a grand scale to change restaurants. Neither has the scale yet; it’ll be years before any kind of nationwide deployment truly shakes up the burrito- or salad-slinging businesses.
Scale eluded Zume, too, despite its leader and investors’ grandest visions. While it operated as a pizza concept, it promised growth outside of the Bay Area, which didn’t happen. Its pizza-making robots and, later, its kitchens on wheels deployed to bake on their way to customers’ homes could scale, in theory, but never made it out.
The other important detail about Lab37, of course, is that it’s operating as a subsidiary of City Storage Systems, the parent company of CloudKitchens, Uber founder Travis Kalanick’s ghost kitchen operation. Disruptor, you are surely familiar with Kalanick’s motives and tactics while building Uber; asking for forgiveness instead of permission and upending an entire industry of service workers for profit. In challenging operating conditions, this sort of optimization is attractive. As Lab37 shares in a blog post:
The restaurant business is very difficult. The National Restaurant Association estimates a 20% success rate for all restaurants. About 60% of restaurants fail in their first year of operation, and 80% fail within 5 years of opening.
Tech-fueled endeavors aren’t immune to these numbers; one analysis of CloudKitchens restaurant tenants calculated a 65 percent turnover rate in their first year of operation. Could they have succeeded if for some robots? Let’s just say it doesn’t matter how fast you cook dinner if no one’s buying it.
Yes, there is value in thinking about the future. As I wrote the Zume feature, I was impressed by the scope of the company’s ambition. So were the hundreds of people that worked at the company — at least judging by the handfuls of ex-employees I consulted in my reporting. But its systems were overwrought. As one source told me, “It’s like you asked someone for the time and they made you a watch.”
That’s fine if you want to be in the watch business; it’s another thing entirely when you’re making someone’s lunch.
Disruptor, I’ll invoke Elon Musk one more time in a point worth remembering. According to his biography, as Musk pushed Tesla engineers to build a Model S sedan that could drive itself, well before the same engineers believed this innovation was prudent, they struggled to impart the real-life safety repercussions of a risky deployment in the name of creating something particularly epic. Or, as one engineer says of Musk, a dedicated, focused, bright workaholic with a grand vision, “He just wasn’t aware enough of the challenges.”
Cordially,
Kristen
