Mobile ordering and contactless ordering have changed the food and beverage
industry in a short period of time. But on-premise efficiency within the food
and beverage industry still leaves much to be desired. However, that could be
changing thanks to tech startup CHEQ, which is changing the way food and drinks
are ordered in stadiums and restaurants, making those businesses more efficient
while helping consumers enjoy themselves more.
CHEQ founder and CEO Tom Lapham recently joined startup coach Roland Siebelink
on the Midstage Startup Momentum Podcast to talk about how the on-premise
experience is becoming more efficient for operators and more focused on
consumers. They also discussed CHEQ’s early traction and quick rise to being one
of the most promising startups in the world.
- How starting a renewable energy company in China helped to inspire CHEQ.
- How CHEQ effectively addressed the cold-start problem.
- Why CHEQ went after high-profile enterprise clients and how they did so effectively.
- Why taking the land-and-expand approach was the best option for CHEQ.
- The need for startups to pull back on their ambitions during the early days.
- The difference between iterating a product and iterating the go-to-market.
Roland Siebelink:Hello, and welcome to the Midstage Startup Momentum
Podcast. My name is Roland Siebelink and I'm a coach for fast-growing
startups all around the world, one of which is in our studio today. I'm so
honored to have with us our long-term friend and client, Tom Lapham, the CEO
and founder of CHEQ. Hello, Tom. How are you today?
Tom Lapham:Roland, it's great to be here and thank you for having me.
Roland Siebelink:Of course. This has been long in the planning. I'm so glad
we could finally make it happen because you folks at CHEQ have been very, very
busy and I can't wait to tell the world more about it. First, Tom, the typical
question every founder gets is the elevator pitch. What does CHEQ do, who do you
serve, and what difference are you making in the world?
Tom Lapham:Sure, Roland. And thank you for helping me kick it off there.
CHEQ is a marketplace for on-premise transactions. We allow people to use the
mobile device that they've got with them all the time to purchase food and
beverages anywhere they go. Whether they're at a restaurant and not wanting to
wait for a server who never comes to their table, or they're at a sports stadium
and not wanting to wait in line for 20 minutes for an overpriced beer and a
hotdog, we allow those experiences to become friction-free with mobile payments
and let our users get back to the real experience that they're trying to have,
which is enjoying a meal with their families at a restaurant or enjoying a game
at a stadium or otherwise having a social experience where the technology
enhances it and melts into the background, so they can really have the fun that
they're looking to have.
Roland Siebelink:Okay. If I'm putting on my hat of hearing about this for
the first time, what I hear is that it's like online ordering but for the real
world. In a situation where orders are available, just use your phone instead of
calling a waiter or standing in line, and then your order will be delivered
seamlessly without friction, so you can keep focusing on your company and
whatever you're doing.
Tom Lapham:That's exactly right. The thing that we are doing is bringing
this mobile technology to the real world, to the on-premise experience. Unlike
ordering something from Amazon, from your computer or ordering something on
DoorDash from your home, we are allowing that experience to take place when
you're out at a venue, so that the technology can support you in those
situations in addition to when you're at home, and frankly, you don't have such
a sense of urgency. There's not a great sense of urgency when you're sitting in
front of your computer buying something on Amazon. But there could be if you're
sitting inside of a restaurant and maybe you've gotta get somewhere and you
can't get someone to come help on the timeframe that you wanted. We believe that
there's actually more of a need for this in the on-premise environment than
Roland Siebelink:Okay. Very cool. Tom, of course, especially during the
pandemic, we've seen many restaurants and other venues already roll out what
they would call contactless ordering, also a QR code, a smartphone, things like
that. What makes CHEQ different from those solutions that have turned standard
in the last two, three years.
Tom Lapham:For sure. Two years ago, or almost two years ago, when we
started the company, this was still a pretty novel idea in the United States to
do contactless ordering from your table. But the big difference between us and
others is that the contactless solutions that you've probably seen before, which
is a QR code on a table, is very passive. From the restaurant's perspective, by
the time somebody gets to the table at your establishment, you've already got
them as a customer. They're unlikely to get up and walk unless there's something
really, really wrong. The value proposition for contactless ordering in that
situation is they're increasing efficiency of the customers that you already
have. But we turn that on its head and help restaurants and other F&B venues
People can look at the CHEQ app for discovery and see all the restaurants nearby
and maybe decide that they want to go to your restaurant, where they might not
have known it was an option before. We're able to help drive demand through our
marketplace. And then the other key differentiator is that once people are
inside the venue, because we are also a very social peer-to-peer app, we allow
people to communicate with the rest of their friends. And one of the main use
cases for CHEQ is people who are out in a social setting - maybe out for drinks
on a Friday - posting on the CHEQ app or on other social media, "Hey, I'm at
such and such a place," and actually allowing them to get drinks or food and
beverages sent from their friends who are outside the venue.
Roland Siebelink:Now that's a differentiator. I'm sure that all ears are
perking of the listeners of this podcast right now. How can I get free drinks
sent to me right when I'm at my favorite bar?
Tom Lapham:Exactly. Obviously, it's a great thing for the restaurant
operator because you're getting more traffic and then you're getting more sales
from the traffic that you do have because not only are they ordering on behalf
of themselves, they're getting orders from their friends. From an operator's
perspective, it's wonderful. But from the user's perspective, what we found is
people are using this technology in all sorts of creative ways.
We'll have groups of friends who will go out and they'll have a CHEQ's night out
on the town. They may may go to either three or four establishments, and at each
one they'll post on social media: "Hey, I'm at this place." And they'll get a
bunch of drinks sent to them by their friends, and some of them even turn into a
competition. Who got the most drinks sent to them? We've had people who in a
period of a half hour have gotten as many as 18 drinks sent to them.
Roland Siebelink:Oh, that's awesome. I love that idea of a CHEQ's night out
or CHEQ on the town as I think you called it. This is really a sign when an app
is taking off and people are starting to find their own users that you may not
have anticipated in full detail.
Very cool. And I wanna talk about the triple-sided marketplace that I think you
seem to be describing. But first let's talk a little bit about the history of
CHEQ. Many people start tech startups right out of college or because they were
enamored with certain technology. Your history has been a little bit different,
right, Tom? Can we talk a little bit about your entrepreneurial history and then
also how did you come to found this tech company and what are the differences
between previous entrepreneurial experience and the tech sector as you're seeing
Tom Lapham:Absolutely. You're right that I have always been an entrepreneur
at heart and I've started a couple of businesses in the past. The most recent
two I started and brought to an exit through trade sales. I had a renewable
energy company that I started in the Pacific Northwest, which is where I'm from.
And I built that up to a nationwide footprint starting in 2008. In 2014, sold
that to Shell, so it's part of Shell New Energy now. And then stayed on for a
bit running North American operations of that business unit for them but
realized pretty quickly that I much preferred being an entrepreneur than being a
mid-level manager in a big conglomerate.
In 2015, I got the bug and decided to do it again, this time in a different
geography and moved with my family in 2015 to Beijing and started another
renewable energy company in China.
In my time in China and having spent several years there really was part of the
inspiration for CHEQ because I came back to the US after being completely
immersed in life in Asia and realized that while I'd been gone, that everything
in the mobile payments and digital payment space had moved by leaps and bounds
in China but felt it had stayed rather the same in the US.
Being at a restaurant and having to wait maybe 15, 20 minutes for a table and
another five or 10 minutes for a server and the server coming over and saying,
"Hey, can I get you started with some drinks," and having to tell them "No, we
need to put the whole order in right now; my kids are gonna melt down." They'll
be put out: "Hey, you're ruining my flow. I just wanted to stop by your table
and get your drink order." And I was thinking to myself, "Well, shouldn't you be
fitting into my flow? I'm the customer here." The whole experience felt broken
And I knew there was a better way from my time in Asia. And that's what got me
obsessed with trying to solve this problem of having a good on-premise
experience and having the ability to share that with friends.
Roland Siebelink:For those of us that have not been in China recently, how
does this stuff work in China? What's so different? I sometimes hear people
being incredulous that China might be ahead of the Western world in some of
their apps and mobile phone technology. How did you experience that when living
Tom Lapham:Just to give you a sense of it - a few stories that always stuck
with me. I can remember the first time after we opened an office in Shanghai in
this skyscraper in the middle of the city, coming down from our office on the
48th floor to the city streets, and there was a man on the side of the road
asking for money. He didn't have a can, he had a QR code. That's the extent to
which it's a cashless society.
It truly is a mobile-first society in China today. And as an end user, I would
say in most ways that makes your life better because you can communicate with
your friends quickly and easily. You can send money peer-to-peer quickly and
easily. You can order things in restaurants or any place that you might wanna
buy something all with your phone and. Frankly, the last 12 months I was living
there, I didn't even carry my wallet. I just had my phone.
Roland Siebelink:Going back to the CHEQ marketplace, you called it a
marketplace right in the beginning because you serve both venues and then
patrons or consumers. But now you were talking about this use case where friends
can send each other drinks. In a sense, you are even serving three audiences,
those that are at the venue, those that want to send them something, and then
the venues themselves. That must be a real difficult, cold-start problem to get
through. Where do we even get started? How has CHEQ been dealing with that?
Tom Lapham:Well, I think you described the problem accurately because it's
one of those technologies that once it gets going, it works very well. But it's
a bit of a catch 22 because you need to have venues in order to gather users.
You need to have users in order to entice venues. And how do you get it started?
For us, our go-to-market strategy was we wanted to go after very high-profile
enterprise clients to get started so that they would increase our brand
awareness. Then the other restaurant or F&B clients would be willing to give us
a chance because somebody who they knew and respected was using us. And then
guests who came into those venues would see our technology, would like it, and
would start using it. And then we could get the whole flywheel spinning.
What happened for us - and I think this was a combination of being in the right
place at the right time and having some really fantastic people on our team like
our chief revenue officer, who had great industry connections - much earlier
than we had originally thought possible, about six months into our journey, we
were able to sign a professional sports team. And that was the Miami Marlins in
Florida. We signed last year at the all-star break, so the relationship with
them is approaching a year. And that was really the transformative moment for
us, where we got to plant a flag at the top of the hill and gather great market
recognition through being in a stadium that has tens of thousands of people
coming through every night. And that was the break for us that helped us get
that flywheel spinning.
Roland Siebelink:That's a high risk, high-profile strategy to get into the
market. Has that been something that you've been able to replicate?
Tom Lapham:Luckily for us, the enterprise of the large professional sports
teams all know each other and talk with each other. And late last year, the
Miami Dolphins, the football team, and the senior management went to a Marlins
game and saw our technology in action and thought that it looked pretty
attractive and reached out to us. We've been in conversations with them these
past few months and actually recently announced a deal to become their mobile
payments partner. We were able to get a second one. We've got our first MLB
team. We've got our first NHL team. And although the information's not yet
public, within the next month, we're going to be announcing three more
professional sports deals, all in key markets for us.
We've definitely found that our land-and-expand approach, where we get a
professional sports team and then light up the network around them, is working.
And I think by the end of the year, we'll have eight to 10 professional teams
who use us exclusively as their mobile payments and social payments partner.
Roland Siebelink:Tom, the world has changed a lot - first with the pandemic
as we discussed, and now also less credibility of the tech sector - I do wanna
ask everyone who comes on the podcast, how are you dealing with this new normal?
What has changed for CHEQ? How are you making changes? How are you putting
accents differently in the way you lead your business?
Tom Lapham:It's really forced us to double down on and focus on this
land-and-expand approach, where we utilize our high-profile clients to get more
clients and utilize them to get users with the ultimate goal of growing with
reducing our CAC. If we've got restaurants who see us in a stadium and those
restaurants reach out to us, now we don't need to have a big sales team. We just
need to have a success team and an onboarding team. And that materially reduces
our customer acquisition cost. And then if we're utilizing our restaurant
partners to get all of the people who come through the restaurant transacting
with us to become our users, that further reduces the customer acquisition cost
for users. Using that stadium play is our superpower to grow without having to
raise those huge sums of money that VC-backed companies did in the recent past.
Roland Siebelink:And what would be your advice for founders that are a year
or two, three behind you, that are just hitting some degree of
product-market-fit, some are just starting to think about their go-to market,
where would you tell them to look?
Tom Lapham:If you're just starting out, the temptation will be to try to
build a perfect solution, and to work on it for a long, long time before you
bring it to the market because you want it to be good enough. And remembering
that advice that if you're not embarrassed by the first version of the product
that you put out, then you waited too long. That can be a hard one to
internalize as a founder, but I think it's absolutely true. You have to get MVP
out and start getting feedback. I think that's crucial.
And then the second one, which has also been challenging for us and we continue
to wrestle with it, is to pair back. Even though it sounds counterintuitive,
pair back your ambitions of serving lots of different market segments and focus
on one segment that you can really delight and turn into super fans. And once
you've got that segment of super fans who love you, it's much easier to expand
to the next adjacent market segment rather than trying to go after everything at
once and getting a very thin layer of acceptance, but not a very sticky user
Roland Siebelink:Even if you wanna think big long-term, you still have to
start small with a small segment of people who will really love you before you
can expand from that.
Tom Lapham:It's exactly right. And there's so many examples of it. You
could take Amazon starting with books and then eventually getting to where they
are, which is almost doing everything. But if they tried to do that from the
very beginning, they surely would've failed. Our version of that had been to
think of restaurants and then to move to more places. But we realized even that
was too broad, that we needed to have a very, very specific segment. And it
turned out just because of our own good fortune that the first segment we got
was stadiums, a product that delights them, which means that we had to forgo
features that would've delighted different segments. For example, the formal
dining segment wanted a whole different list of features than stadiums.
Roland Siebelink:Slightly different atmosphere, right?
Tom Lapham:Yes. For us, what's the immediate adjacent after stadium? It's
something more like QSR or counter service type restaurants because they have a
similar experience. Once we've got a product that delights stadiums, we can move
to a product that delights counter service. But if we had tried to build
something universal that every single F&B establishment would've loved out of
the box, we never would've been able to do it because the task would've been too
big to get started on.
Roland Siebelink:A question I often ask, are you really iterating on a
product or on a go-to market?
Tom Lapham:Yeah. I love that. I love that question because it's something
that we ask ourselves as a leadership team quite often. Just to take the earlier
example of our product, which works well for stadiums and also works well for
counter-service restaurants. While the feature set is similar, the go-to market
is completely different. On the one hand, we need a small group of very well
connected professional enterprise sales people, and on the other, we need a
large team of people who are smiling and dialing and knocking on doors. Building
up those go-to-market strategies is very different, even if the feature sets are
To answer your question, we've chosen to start with the former because we can
have a smaller team and we can get larger contracts going with stadiums. While
the feature set isn't terribly different, the go-to market is very different.
We've had to spend a lot of time thinking through and iterating on the go to
Roland Siebelink:We had a quote in the book that Doug and I wrote a few
years ago, Scaling Silicon Valley Style, the quote was: "Technology may scale,
go-to market doesn't." How do you respond to that?
Tom Lapham:Well, I think in most cases, it's true. In fact, I think a very
easy trap to fall into is to only look at your product through the lens of the
market features and not through the go-to-market approach. And they're equally
important. You can't have one without the other.
Roland Siebelink:It's also a trap that I see a lot of tech founders fall
into where they think they're building a product company, but really what they
need to iterate on most is the go-to market and learning about that and building
a sales machine, essentially.
You and I have been working together for a while, but you have also worked with
different coaches in your previous companies. And I'd love to hear a little bit
about your experience with coaching, signing up a coach as an entrepreneur, what
to look for. What value does it give but also when you would recommend people
not to get a coach?
Tom Lapham:I'm a huge believer in bringing in outside coaches to help with
growth, particularly early on. Maybe not in the very, very initial stages when
you're doing ideation and you don't yet have a product; that might be a little
bit too early. Maybe when you're a publicly traded company, you've gotten past
it. But I think there's a long period of scaling up in the middle where having a
coach can be really beneficial. I used a scaling up coach for my business in
Asia. I credit them with helping us really put a lot of the processes in place
that allowed us to scale up effectively.
Roland Siebelink:Awesome. Okay. Well, thank you for that, I really
appreciate that. Tom, going back to CHEQ, what, if anything, can listeners to
this podcast help you with? What are you looking for? For what should they reach
out? Where can they find more information? What should they download?
Tom Lapham:Absolutely. For people who live in the Pacific Northwest and who
live in South Florida, they can download our app and use it at restaurants and
stadiums. We are soon to be adding more geographies to that. And for people who
live outside those areas, if you happen to have any friends who live there, you
could still use our app. If your friends are out having a night on the town, you
could send them something special, just as a fun way to interact. The app is
just called CHEQ, C H E Q. And if you look for it on the Android or iOS store, I
think you'll find it right away.
And our website is CHEQplease - C H E Q please.com. You can even send a drink
through the website. And you can look there to see all the new stadiums that
sign up once they come online. And if it's a stadium in your geography, you can
expect that there'll be lots of restaurants and bars and fun venues around the
stadium being lit up sooner rather than later.
Roland Siebelink:Awesome. Okay. If you have a friend visiting, I believe
you said the Marlins and the Dolphins. And there's a few more stadiums coming
down the pipe. Then make sure to remember to send them a drink or a snack
through the CHEQ app. And from there, anyone looking to invest in this amazing
model or look perhaps for a job at CHEQ, you can always ping me as well, and I
can introduce you directly to Tom.
With that, Tom, thank you so much for the amazing explanations, all your
experience that you're pouring into this podcast, and for your time and your
energy. I really appreciate it.
Tom Lapham:Thank you for hosting, Roland. It's been a pleasure doing the
podcast with you. And more importantly, working with you as a coach and really
excited to see how far we can get together going forward.
Roland Siebelink:Up toward unicorn status soon, huh? See you soon, Tom.
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.