Most of the technology glitz in the restaurant and hospitality industry will likely end up as an app on your smartphone. You’ll be able to whip out your device and pay your bill, redeem a coupon, or even help your buddy leave a tip for that last round. But having all those capabilities takes some non-glitzy stuff. Somebody has to provide the tools that give the innovators the ability to innovate. That’s where Austin’s SubtleData comes in. They’re giving app makers a platform that integrates with the lifeblood of the hospitality industry’s technical environment: the point-of-sale system (POS).
“We’re taking something that is hugely difficult and expensive and essentially making it cheap and easy,” said Bryan Menell, the company’s newly appointed CEO. ”We’re betting you’ll see an explosion of innovation over the next year or so.” He says that despite more than 500,000 restaurants in the U.S., it’s an industry still looking for a killer app. A big reason for that is the complexity of aging systems, a lack of POS standards, and a general state of disconnectedness when it comes to data-driven marketing.
“Almost every restaurant chain operates in a heterogeneous POS environment,” said Menell. “We can take a large franchise model and unify reporting across all the properties. We can even help with real-time menus, where SubtleData’s customers can push price changes across all properties in the enterprise.”
POS systems aren’t the only integration hook, but it’s the one that provides scale. Most POS-driven applications are typically highly customized and done for a specific purpose within a particular system. By using Subtle’s pre-built, two-way integration framework, customers have cloud-based access to whichever POS interface is needed. In that sense, Subtle becomes the technical broker that provides access to the right web-based APIs at the right time. That’s the sort of capability that’s sparked interest from a number of high-profile startups. One of those is NY-based Dash, a company that’s building a smartphone application that allows you to easily manage your restaurant and bar tab and receive targeted loyalty perks.
“Working with SubtleData has been a pleasure for our development team,” said Jeff McGregor, CEO of Dash. “The value add was clear the first time we looked at their API documentation and was further expanded when the SubtleData technical team wrote custom API calls for our use. They easily cut our time to market in half.”
Another early customer is Washington, DC-based Me+1, who’s also targeting bars and restaurants. “We estimated that it was going to take us six months and over six figures to get our app to integrate with just one Point of Sale system.” He concluded by saying “With SubtleData we were instantly integrated with all of the major systems with no up front costs.”
With so much IP around its backend infrastructure, Menell says it was important for SubtleData to emerge with a solid foundation. Though it was built from scratch, the lessons learned from Bagdonas’s previous consumer-facing company SpeedMenu, helped Subtle understand and prepare for all sorts of complexities.
“It was kind of like building a new house with parts of an existing one. We went back and questioned where everything needed to be, where else we needed to invest,” said Menell.
The scrutiny and shifted focus seems to be paying off. In just ninety days, more than 200 companies are using the SubtleData platform, according to the company. The momentum has also carried over to the funding front, thanks in part to its association with AngelList. Menell said 40% of the funding round is closed, and the remaining amount is already over-subscribed. Apparently the feedback SubtleData received from a recent trip to AngelList’s headquarters provided some validation around the model. Principals told them there were plenty of opportunities in play within the hospitality space, but few were investing because of the required infrastructure build-out. He says there’s a chance they’ve already impacted some of those investments.
“We’re extremely fortunate to have a group of investors that are bringing key customer and developer relationships to us along with their investment” he added. “This provides us with significant momentum as we continue to expand our Point of Sale integrations and number of mobile developers.”
I also asked Bryan about what’s on the horizon. What’s really pushing the boundaries of your business? He said everything is being driven by restaurateurs wanting to know who their best customers are.
“Today, when you walk into a restaurant and hand the waiter a coupon, there’s training and new processes involved. There’s no seamless way to incorporate it,” said Menell. ”When you can integrate with a POS to provide automation, there’s no friction.”
“I think you’ll see two camps emerge in the hospitality business, the restaurants that deal with modern tools and bigdata, and those that don’t.”
I’ll drink to that.
[Disclosure: Bryan Menell is the Managing Editor of AustinStartup]