Copy of Ep. 7__ Happy Price_GoX Version_.mp3
3:30PM Oct 10, 2019
from Georgetown University, this is venture forward a series of conversations with entrepreneurs in and around Georgetown, in which we discussed the startups they've launched, the obstacles they've encountered, and the small wins that have made all the difference. Here is your host, Jacki Abbey.
Sharjah, is a student at the School of foreign service at Georgetown with a keen interest in pricing. He's written a book called the extinction of the price tag that explores the principles of dynamic pricing. He's also created an algorithm that can be used across a wide range of industries, to help companies price their product in the most optimal way when he's not in class, so Hodge can often be found in meetings with executives of wineries, restaurants, and even sports teams, talking to them about how to apply his own them to their businesses. Here is the founder of happy price. So Josh, welcome to the podcast.
Hey, Jacki, thanks for having me on. I'm really excited to have this conversation with you. You're
an undergraduate and an entrepreneur, what brought you to Georgetown,
I've always been a big fan of DC as a city, I grew up in the area and Northern Virginia. And so Georgetown was always a place that was right in my line of vision. And I'd always wanted to go here. So when I applied me Got it, and I was ecstatic.
What prompted you to start a business,
I've always been someone who likes doing things in unconventional manner. You know, there's something exciting about having a startup in college. We've all seen the movies like The Social Network. And it was kind of the glamour of that idea that interested me in starting a business.
As I understand it, you started one business, and then it evolved into another once you tell us about that process.
Sure. So actually, this story goes back a little bit. So when I was a freshman went to Georgetown, I had a random roommate named and Roger, and we bought a whiteboard on Amazon, we held it up in the room. And what we would do every day is we would write a business ID on the whiteboard, and the other person would rank it out of 10, erase it and write another business idea. And we did this for a semester, two semesters. And then finally, you know, someone wrote something kind of interesting, which was sort of a heat map of where people are going within the city, we didn't actually end up doing anything with that idea. I went away to India for the summer. And my grandfather took me to a bizarre when I was in India, in the city of tonight. And we were just walking around walking around. And I was kind of bored, my grandfather is doing some shopping. And while I was bored, I focused on this food card vendor, who was really incredibly aggressive with his customers at noon. And he was yelling at them, telling them to go away. He didn't want to sell anything to them. And all of a sudden, when we're walking back in, I was living with my grandfather at 3pm. He was being incredibly nice. He was offering discounts. And what was really interesting to me was he was just as busy at 3pm as he was at noon, even though naturally, you'd expect his demand to drop substantially. And what he was doing was very rudimentary form of dynamic pricing. And so I called my roommate, the same one who'd been writing on the whiteboard all this time. And I said, Listen, I think there's an interesting idea in terms of bringing dynamic pricing to restaurants in America. And he was excited to and so we launched a business called dinos, which was actually an app that we launched. In around Georgetown University, we signed up around 15 restaurants in the area. And when they weren't busy, they'd offer discounts on our app, to Georgetown University students. And so that got a little bit of traction. We linked up with people like Mark MacArthur from Windows, and some really, really great people. And it was a lot of fun to set that up. But it wasn't scaling very quickly. And for the effort we were putting in, we weren't getting a ton out of it. So then we pivoted
so just to understand the business. You had dinos would allow Georgetown students to buy restaurant food at lower prices when they went at off hours. That's Is that right? That's exactly right. Okay. And yet 15 businesses signed up. Yeah. In the Georgetown community. Yes. Did you focus on any particular niche of restaurants?
It was just restaurants, we want to do that. So that's exactly. So berries, Georgetown gourmet on M Street, Windows was a big one. And what was great about all of these restaurants is they were used to dealing with students. And so when we went and spoke with them, they were incredibly nice. They heard us out. And it was great to kind of connect with them to learn some of their challenges in terms of bringing people in off times and super buoy something that I didn't even think about that he kind of brought up. Robbie's the restaurant. Yeah, babies, the restaurants are Ravi is the owner manager at booties. And he said to me, you know, we don't have off hours so much as off days. And so you know, Monday, Tuesday and Wednesday, were kind of slow days for him. And then things started to pick up Thursday, Friday, Saturday, Sunday. And so that was really interesting when you said we can work with that. Yeah, exactly. That's exactly right. And so we did, you know, flat 15% discount on those three days that were kind of slow for him throughout the entire day. For other restaurants, we were a lot more targeted. So like for Windows, for example, it was Mondays were kind of slow Tuesdays were kind of slow, but from one to 3pm. We did like a 30% discount at windows at those times bunch of restaurants just like that they each had their, you know, unique problems. But there was also broader trends. Yeah, the off times were usually, you know, right after lunch before dinner, or right after the breakfast rush. And before lunch, it was kind of fitting our model to all these restaurants specific needs. How did
you make money? Or how,
how did you expect to make money. So we expected to make money by charging a cut on each transaction, there's a little bit tough because they're already offering a discount. And so that was kind of a tough model. So then we started thinking about a subscription model, that would be a little bit easier, and would be a recurring source of revenue. And so we're looking into that we actually never ended up implementing it. But that's where we would have gone with it. There'd been more traction
with the restaurants paying a monthly subscription yet to be a part of it. And lastly, how
did you market it to students? So we marketed to students in a lot of interesting kind of guerilla ways. We bought on Amazon, this massive inflatable T rex costume, because our logo was a dinosaur. And we had one of our friends get in it and walk around Red Square, walk around classes, go into an econ classroom during lecture and pass out flyers before he was kicked out. In that way, we kind of generated a lot of buzz, a lot of people start talking imagine, and a lot of people didn't even know what they're talking about. They just they're talking about the start. And then slowly that conversation evolved into Oh, they launched an app. And so we piggybacked off of that to get a lot of people to download the app. And I
suppose that work, yeah, it was really fun, hard to resist a giant dinosaur. And then you pivoted to happy price? Yes, that's correct.
Tell us about that. So happy price was something I ventured out on my own to do. Basically, the idea was with dinosaurs, we tried to create a marketplace, we're trying to connect restaurants to consumers, what we learned was, it was really hard to scale that kind of model, because you had to acquire customers, you had to acquire restaurants. And you had to make sure that you kept a balance such that no side of the marketplace kind of unraveled, right. Because if you have too few restaurants, then the customer starts to leave, you have too many customers and the restaurants feel overwhelmed, because there aren't enough restaurants. And so it was that balance was really tough. Instead, what we decided to do, what I decided to do is work on the sort of algorithm that we could transition into an API product that we could then sell to apps that already existed. And the people with the apps that we were targeting, were massive food chains, massive companies like sweet green, like Cava like Chipotle, those types of chains that already have their own apps that already have all the infrastructure in place, but don't necessarily have the dynamic pricing piece. And it would be kind of costly for them to develop that in house. And so that was the broader model. And we've tried to go and do that.
And what kind of reception Have you gotten?
So it's really interesting. We have talked, I have talked with a bunch of different chains, from very local, like district taco, which is a great chain, here in the kind of Northern Virginia DC area, to national chains, like sweet green, kind of talking about what the possibilities of implanting this sort of idea would be
sweet green, which started here at George Yes, exactly,
in a massive way, a connection. In fact, the director of entrepreneurship here at Georgetown, put me in contact with them, which was fantastic. It was a wonderful opportunity to learn more about what sort of their problems are on such a massive scale as a behemoth organization,
right. When it was just a few years ago that they were undergrads. Yeah,
yeah, it's insane. It's insane how time flies. Great.
Alright, so what are some of the obstacles you've encountered with happy price or with with diagnose,
show a diagnosed one of the main obstacles was we launched an app without necessarily doing customer discovery, we didn't know what people wanted, we just had a great idea, we thought, and we just built this app with all sorts of features like a map with, with sort of a heat map with, you know, all sorts of receipt features, sharing, splitting cause all this stuff that didn't really matter, unless you had customers and the customers care to or use those features. And so what we realized is like all of this stuff just kind of cluttered up the app and made it harder to use, people didn't really understand what was going on. So we had to work in reverse and wasted a ton of time, sort of scrapping those features that we put so much effort and energy into developing in the first place.
So instead of testing your great idea to just confirm that it was in fact, a great idea,
you just started building it. Exactly. Okay. And so the good thing about the market is, it will tell you what is a good idea and what is a bad idea, it's just hard to know which components of what you're trying to do work and don't work by working in first, were sort of able to test that. It would be nicer if we tested it beforehand,
right. But now, you know, yes, it's very common among undergraduate entrepreneurs, you were a bar tank finalist. And I saw your presentation, it was Terrific, thank you, what was the impact of shark tank on you as an entrepreneur or on your business.
So I would say bar tank specifically, and pitching more broadly forces you to really sit down and spend some time reflecting on what your thesis is, how you got there, and where you want to go. And what I mean by that is, one, you have to refine what your story is, as an entrepreneur. And that's really important, you know, it's not just important as like a marketing ploy, it's also important for you to kind of understand where you're coming from. And that helps you shape, what direction and what values you really care about, especially if you're trying to work on some sort of social impact entrepreneurship, that's really, really important. The second thing I'd say is in terms of the value you're trying to create, you need to think about what you're actually achieving in a very clear eyed way. So a ton of us have fantasies about this being really big, or that being really effective. But until you test it in the marketplace, until you think about what you would need for you to validate your hypothesis. None of that matters. Bark tank forces you to figure out what you need to validate hypotheses. And what that hypothesis is to begin with.
Boxing is one of the highest profile pitch competitions on the Georgetown campus was that your first pitch competition?
It was? Yeah, it was my first pitch competition, it was an interesting experience, because I got to spend a lot of time with entrepreneurs and residents, who would kind of advise me on how to refine the pitch, we met three or four times. And I got to see other people, you know, practicing their pitches, and how they were going about it. And was interesting means how, you know, different people go about it in different ways. Some people want to be a little bit more scripted, some people wanted to be more off the cuff. But overall, the same skills were being applied by basically everyone and those skills are refining your story, figuring out what your value is, and what your thesis is and how to validate it. And lastly, figuring out how to apply that going forward in order to scale a sustainable business.
I hear you saying that before you even got up to pitch, you had a much better understanding of your business than you did when you started preparing your pitch.
That's exactly right. I mean, it's it's it's a phenomenon that isn't just unique to pitching for entrepreneurship, right? Like, if you have to teach someone something right before a test, you understand what you're teaching them a lot better than if you don't help them out. That's why it's actually really effective to study with people who are less intelligent than you are. Those types of things will just help you think about kind of the components in a more simplistic manner. And in a way that kind of gets rid of all the clutter and noise because as an entrepreneur, a lot of that just starts to build up and build up and build up news. And you're not even sure what it is you're doing. Exactly. And that's for a couple of reasons. One is because you're in charge, so there's no one telling you what matters. So you have to figure that out. And two is entrepreneurs, as people oftentimes get really excited to go in this direction or that. And sometimes you need to realize that you only have so many hours in the day, you only have so much energy in your body, you can only focus on so many things. You know, something like Shark Tank helps you figure out well, what's actually been effective versus what am I just fantasizing about?
You mentioned the entrepreneurs in residence, which is an amazing feature of the of the entrepreneurship initiative here at Georgetown, talk about your interaction with them both before and after the pitch.
Yes, so I just want to highlight two things here. The first is the Georgetown entrepreneurship ecosystem is fantastic. So there's a club called Georgetown ventures, which you know, accepts a ton of startups and set them up with consulting and finance teams to help them figure out what they're doing. So Dinesh was actually accepted to that program. And students working with other students helped us refine that. The second thing that I want to talk about is the summer launch program, which was fantastic. That's when I first started to meet a lot of entrepreneurs and residents, you
were part of that before Shark Tank before marketing. Okay, this last summer is last summer,
so Dinesh was part of the summer launch program. And that's where I met shy and Mark, and so many interesting entrepreneurs and residents, a ton of whom were so incredibly helpful, especially Pat. And all that kind of culminated in a really special way.
And they, the entrepreneurs and residents are men and women who have launched successful businesses. Many of them have sold their businesses, were handing them off to someone else, and they have extra time to spend now with students.
That's it. Yeah, that's exactly right. So they're incredibly accomplished people. And they're also very excited by ideas by new energy. And so it's, it's fantastic to work with them just if you have any time. And if you're at all entrepreneur Lee inclined, you should, you know, if you have any kind of ideas, go and just run it by. And you'll have a fun discussion at the very least. And maybe they'll give you something really valuable in terms of how to think about it.
So you'd recommend that to anybody, Anyone? Anyone? What kind of valuable advice did they give you?
So I started to learn the lean startup process. At the summer launch program. That's something like I'd read the book, but I wasn't applying it whatsoever, which is something that happens. And they kind of forced me and held me accountable. I'm also the kind of person that I need timelines. And so the weekly time timeline, yeah, okay, to get stuff done. Perhaps Yeah, huge, huge procrastinator. So the fact that every week you're held accountable, you had to talk about, you know, sort of what you've learned, how close how much closer you were to validating your hypothesis, all of that was incredibly useful to me. And just running those small bits of evidence. Passing people was also really, really useful. And all who know more than you Yes, exactly. Yeah, a lot more, and who are really willing to help out?
That's terrific. And what about as a result of, of pitching at BARC tank, once you pitched and got that sort of platform? How did that pay off for you?
So what's great about something like Shark Tank, is when you pitch there, a bunch of people will just come up to you after and say, Hey, I know this person that you could really benefit from meeting, or, hey, this would be really interesting way to do it. And you can really use it as a platform to kind of engage with all sorts of different people. You know, this podcast, for example, you saw me pitch at BARC tank, and now I'm able to share my story, right? And you know, hopefully help a bunch of entrepreneurs are coming up at Georgetown in the future. But overall, like those sorts of things happen all the time. So an example is afterwards I got to speak with Ted and Zach via email, Leo gnosis Yes, yes, about how I can transition happy price in a more productive manner. Ted was really, really frank with me and gave me great feedback. And what he said is, you need to start treating this less like you're playing the student card, and trying to get favors from people and more like an actual business where you're delivering value to people interesting. And that was really important for me to understand, because up till that point, it was like my, my framing, whenever I asked anyone for anything was sort of, I'm a student, can you help me out? It'd be really nice. if everyone's willing to help a student Exactly. And at a certain level that stops working on Ted
told you, you are now at that level,
you are now okay. And it was really important for me to hear it. I'm really glad he said that in such a way that I could understand it. It was great that that helped me like kind of reframe my attitude in terms of how I was going out and approaching other people with more serious ideas where I actually wanted to not just get a small favor, but actually deliver value. And Ted and Zach helped me learn that what's
step for you in terms of your launch? Right now I'm back in the customer discovery phase, with happy price,
the one you skip to the one.
Exactly. It's funny, entrepreneurship is very circular. Oftentimes, it's the steps you skip, that you end up needing to repeat in order to move forward.
Entrepreneurship is circular, you know, write that down.
There are no shortcuts in entrepreneurship. And so we're in that phase right now, with the algorithm. What we're trying to do is basically figure out what type of companies could benefit from that. And whether or not industries outside of food space could also benefit from the algorithm?
Oh, yeah. And which industries are you thinking about?
So right now I'm working on a project with actually Somali a to figure out whether or not that type of algorithmic thinking about pricing could work in the wine market. He's a wine collector is a Collectors Club. And so we're doing a lot of interesting data analysis to figure that out, at the same time working on a separate project in terms of ticketing, and how possibly you can apply dynamic pricing to ticketing in a new way, using tokens. So obviously, dynamic pricing has been done ticketing,
right in the back spring sports events, exact Yeah.
So we're just thinking about doing a new way where now you can prevent scalping. And so all of these sorts of things that actually emerged organically out of shark tank, it's great to be able to figure out where your customers are, and kind of focus on where you can find traction. What Yeah, change to find trends. So that's what I'm working on right now.
And on the sports ticketing, who you talking to about that?
I you know, ran into a few ex NFL players, just as you do.
Oh, anyone does? Yes. The Redskins? Yeah,
they One of them was and so we were talking about their experience. They're actually now working on a p shop, investing player money. They were telling me about sort of the issues with ticketing in sports, and how scalping is a big problem and all these things. And so I kind of ran this idea past them. And so they said, Listen, we're really interested in this idea. Let's face using your algorithm. Exactly. And so they said, Let's explore this together. And so now we're working on sort of exploring that, which is really cool. Not a lot of people get to work with NFL stars.
Right, right. And are you a sports fan?
I'm a huge sports fan, especially soccer. But you know, I don't discriminate.
No, not when you have a chance to work with NFL players. And that's great. Let me ask you, if you had a chance to ask deadliness. This one question about your business based on where you are now. What would that question be?
I would have actually asked him something a little bit different from about my business. I'd asked him, How do you stay grounded? Once your businesses incredibly successful? Got a little bit of experience with that? He really does.
That's a good question. Ted has managed to stay grounded over the decades. In spite of his success, I wish you the same challenges. Thanks for coming in today.
Venture forward is a production of the Georgetown entrepreneurship initiative at the McDonough School of Business production team includes Jacki Abbey, Christy pills, and Ben Zimmerman. Thanks for listening. Until next time,