Case-study: sharing home-cooked dinners
What we learned this past year from building a home-dining experience platform.
This past year, my team and I set out to build one more plate which started as a restaurant discovery platform and then pivoted to a home-dining experience.
Though I discovered pretty early that the idea is not worth pursuing, there are some important lessons that I learned and want to share here.
Table of contents!
Some background
More than restaurants
When building one more plate the initial goal was to create a restaurant recommendations platform. Early in that process we realized that food experiences would bring a bigger value add for users than finding a good restaurants and this would become the main differentiator for us.
We wanted to offer something that was new, unique and exciting.
With that in mind, we thought of positioning the platform as way for tourists to discover new cultures through food. The best way to do that was for them to try out home-cooked meals from locals.
Our initial focus was on tourists, so this type of activity was perfect for someone new to a city to discover local culture through its food, meet locals, and maybe, make some new friends.
This type of experience is not new, there are businesses like eatwith.com that focus on something similar, so the concept was somewhat validated as a business.
Moving past tourists
The first question that popped up was: why focus only on tourists? There was no reason why it should be limited to that group and why locals wouldn't enjoy home-cooked meals with others as well.
Yes, the positioning and messaging would need to be different, but the addressable market would be considerably bigger. We really wanted to make this work so we decided to also include locals and shifted our full focus in this direction.
There were already startups (some of them very early) focusing on this very concept and with most of them launching in 2022/2023 it was clear that the idea was becoming more and more popular.
Be it because of the pandemic or the general fatigue with online spaces, people are starting to look for more ways to interact in real life.
We have Closer and Dinner with Friends in NYC, & the table (in multiple cities) and a lot of independent hosts that focus on variations of this idea.
There was definitely interest but as we drilled down more on the concept to see if it makes sense to focus on building a platform for it.
The concept
The main idea of the concept is a person hosting a dinner party with a meal they prepared at home.
There are some variations of this concept where the host can enforce some rules, for example, being women only, the guests not knowing each other, invite only a limited group, but the main idea is a dinner party in someone’s home with home-cooked food.
The concept of hosting a dinner party is as old as time, but opening that up to acquaintances and strangers brings opportunities and some challenges. This is what I would like to cover here.
Why it would work
There are a few reasons why I think this makes for a lovely concept — it not only offers a cozier atmosphere than a restaurant, but also an amazing opportunity for genuine human connection.
These are the main reasons why someone would want to take part in these dinners: meet new people, discover new dishes or just as an alternative experience to eating out.
Who would participate
These reasons also relate to the main groups of people that would be interested in this experience:
- tourists: discover new dishes, meet new people
- people that recently moved to a new city: meet new people
- people that just want to meet new people in real life
- long-time locals of a city: alternative experience to eating out
In our interviews we saw great interest for the concept from people in all groups. But, when applying a stricter "the mom test" type of interview, people’s underlying need wasn't always so clear.
The two groups that showed strong demand in every survey were tourists and people that recently moved to a new city.
A new way of socializing
Another strong belief we had is that people who want to meet new people would be the largest group that would take part in these dinners regularly.
Our thinking was that the main reasons why someone would be included in the "meet new people" category would be:
- extend their friendship circle
- professional networking
- light connections that could expand into dating
On top of that, taking into account the overall trend of people moving more and more into digital spaces, home dining would have been a welcomed third space.
Our street interviews found that most people are happy or neutral with their current friend group, but open to creating new connections (most responding between 0 and 2).
Challenges
As good as the idea sounds, there are some challenges to making it work. These are the biggest ones we found:
Regulations
Not being registered as a restaurant is the main limitation of the concept.
The rules differ from country to country but overall there is no simple, straight-forward way to turn an apartment into a restaurant.
A workaround that I saw was positioning the participation fee as for the social experience and not the food, which would come as something extra. So, from a legal point of view, the food wouldn’t be the focal point of the gathering.
This would have been a hard sell because food safety laws are not really in the “bad laws category” that we want to challenge. This is how Uber/Lyft got away initially with running their services: they decided that legal monopolies (transport only by taxi) are not fair and “bad laws“. They proposed the new method of transportation by ride-sharing and the law had to catch-up and make it legal.
Safety
By far, the biggest concern raised by people interested in the concept was safety.
Because you are meeting with people you don't know and eating at a stranger's house there were questions about physical and food safety.
This is where the platform plays an important role by vetting the hosts and participants.
Making the participant list invite-only (the host manually accepts guests, only someone who already participated in a dinner can invite others, etc) addresses some of the trust and safety concerns. Hosts eating their own home-cooked dinners addresses most of the food safety ones.
One way that & the table circumvents this risk is by offering women-only dinners. Our interviews showed this to be a great idea and makes woman much more likely to participate.
Low repeatability number
Even if we added all the categories together (new people to a city, people that want to socialize, etc) the number of times users would take part in this activity wasn't very large.
All of these groups would only take part in this type of experience a couple of times. After making new friends, there isn’t a real need to continue participating. Same problem as with dating apps.
As for tourists, the platform is useful only when traveling, and even in those cases maybe once or twice. This is the same problem that businesses like AirBnb has, but the big difference being that the margins are much smaller here. Accommodation is one of the biggest incurred expenses while traveling.
Low margins for the host and the platform
Compared to other travel businesses, the margins for this would be much smaller.
Because a dinner is an order of magnitude cheaper than a flight or hotel booking, the platform also takes a smaller cut. This means that the difference needs to be made in volume. And this was also the main reason why we moved away from focusing only on tourists.
For the hosts, the low margins become more apparent if their time (for preparing and serving the dinner) is also baked in the cost.
This is one of the reasons why restaurants are such hard businesses: the margins are really small. For them, the biggest costs are: the food, staff and rent.
With hosts, rent is not an added cost and this helps bring up margins a bit. But because the number of participants is much smaller, the end result is worse off than a restaurant.
Low number of events per host
As a host, you are limited in the number of dinners you can organize.
At most, that can be once per day and hosting every single day might raise questions from neighbors, so you are again limited to a small number of days per week. Hosting regularly would also bring the host closer to the line of being a business than a one-off experience provider.
That means a host would be able to organize a max of 2-3 dinners per week, which translates to around 15 people per week (if we think of 5 guests per dinner). As a platform, that would translate to around 100 €/month/host IF the occupancy is close to 100%.
Alternatives
Either by focusing on the food or on the people joining, there are attempts to bring variations of this experience to market.
These are one of the bigger ones:
Selling home-made dishes
There are a couple of startups in the US and UK that are allowing home-chefs to sell their home-cooked meals.
The UK is a bit more permissive from a regulatory stand-point, but most states in the US ban the idea of "home restaurant kitchens". So a cook would need to use an accredited kitchen, making it no different than ghost kitchens (delivery-only kitchens). These have become popular with the rise of Uber eats, Bolt, etc.
The ex-co-founder of Uber, Travis Kalanick tried to build a whole business in the ghost kitchens space, but it didn't go too well.
In the UK, there are startups like HomeCooks that recently raised financing by pitching the idea of allowing home cooks to sell their food. One of the reasons that would work in the UK is because the legislation is permissive.
Going premium
An option to make home dining viable is to offer a more premium experience at a higher price.
This can mean more courses, higher quality food or having a "celebrity chef". All of these are great options, but they also don't scale very well.
For example, Romania has Amuse Bouche that organizes high end culinary experiences (some not in a restaurant setting) with known chefs.
The focus on premium food/experiences allows them to ask for a premium price.
Focusing on the networking part
This option allows the business to position itself as a way to meet new people so the food is not the main attraction.
There is supper club in London that brings 6 people that don't know each other at a restaurant table and Closer NY that is similar, but their groups are larger (around 10-20 people).
Both of these platforms have launched in the past 12 months which demonstrates that in-person friend-making in gaining popularity.
Casual lunches
Another option would be to make the reason for the get-together more casual: having lunch.
Even if it’s a dinner at someone’s apartment, it might still be seen as an experience for which you need to put your whole evening aside. Making it a more casual, short (1 hour max for lunch) experience might be more attractive for people to participate.
With the switch to WFH, people now have the option to either cook lunch or order in. Going out is not really accessible if you’re not leaving in a densely populated area. But going to someone’s house for a quick lunch and coming back ticks all the boxes: good home-made food, change of scenery, interacting with other people, etc.
Even though it has the same challenges as the dinner concept (regulation, safety, etc) it can be more accessible from a price point of view because lunch can be a simpler meal to offer than a full dinner experience.
Conclusions
Be it the pandemic or the over-reliance on apps for meeting new people or dating, people are moving more in the direction of real life experiences and interacting with living, breathing humans.
This is encouraging for many reasons and I hope it continues.
As for the in home-dining concept, I am still a fan. Even though we couldn’t find a way to make it viable I hope someone will and it becomes a sustainable business.