Chef Nightly CEO’s Recipe For Building Boston Consumer Tech Startups
Successfully growing a consumer tech company can be a tall order, given the volume of users it usually requires to achieve relevance.
But Boston serial entrepreneur Michael Sheeley thinks he might have the recipe down, even if his latest venture—Chef Nightly, an app made by parent company Every Labs—is trying to carve out a place in one of today’s most crowded sectors: food-delivery apps.
Working in Sheeley’s favor is the fact that the curated meal service is the fourth consumer tech startup he has co-founded.
FitnessKeeper, the parent company of mobile app Runkeeper, raised $11.5 million in venture capital during Sheeley’s three years with the company, on its way to attracting more than 45 million users. Mobee acquired another one of his consumer tech companies, Kickscout, within 18 months of its launch. Sheeley says he gave up too early on the third—Estorrs, a college social network he founded in 2000 while studying computer science at the University of Connecticut. “I let the naysayers get the best of me,” he laments. “Probably the lesson of my career. Facebook and MySpace launched a few years later.”
It’s still early for one-year-old Chef Nightly, but the company is already expanding, fresh off a test run in Boston that began in the spring. Its efforts got a boost with today’s announcement of $1.5 million in seed funding.
The round was led by Accomplice (the former tech investing arm of Atlas Venture), with participation by Fullstack Ventures, Kayak and Blade co-founder Paul English, DraftKings co-founder and CEO Jason Robins, and Bridge Boys.
The money is fueling an expansion to New York that will make Chef Nightly’s service available in most neighborhoods from Midtown Manhattan to Battery Park. Chef Nightly has also grown to seven employees, Sheeley says. Its other co-founders include Adam Stroud, FitnessKeeper’s former lead Android developer; designer Nick Samia, who worked with Sheeley at Kickscout; and Sheeley’s brother, Bret, whose career includes a stint as senior software engineer of GSN.com in Waltham, MA.
The Chef Nightly app uses artificial-intelligence techniques to suggest personalized meals that are made at local restaurants (selected by the Chef Nightly team) and delivered to customers’ doorsteps. With the first order, the app suggests the most popular types of cuisines in the user’s neighborhood and the most popular food items based on those cuisines. As users order more frequently, the app learns what customers like and matches them with dishes it thinks they’ll want.
The company tweaked the app based on feedback during the Boston pilot. Those changes included showing more information about the food to users, such as ingredients, nutritional information, and a description of each dish’s flavor profile (spicy, sweet, savory, etc.). “People liked the idea that food was the first thing that they saw” in the app, Sheeley says. “They wanted to know more about that food.”
Initially, each meal cost $12, including delivery and tip. Chef Nightly no longer has a set uniform price, with some dishes costing more and others less than $12, Sheeley says. The company found that customers didn’t mind paying extra for higher-quality items, and the price flexibility allows Chef Nightly to offer a wider variety of meals, including some that wouldn’t have fit under the $12 cap. (The company makes money by taking an undisclosed cut of each order.)
“The pricing was put in there to be something to simplify [purchases] for our users, but we didn’t get the sense that it was simplifying things, so we unhinged it,” he says.
Here are a few other highlights from Xconomy’s conversation with Sheeley:
—On standing out in a crowded sector: Chef Nightly is focusing on “doing a lot of the work that other solutions make customers do on their own,” Sheeley says.
Sheeley calls it a “food-first model.” “We spend the time and we research what restaurants and what kitchens in each location that we’re expanding into are actually the good ones,” he says. From there, Chef Nightly picks some of the dishes on the menu that the restaurant is best at preparing and adds them to its database, while also describing their characteristics.
“If your good friend knew a great sandwich at a great place, they would really be able to help you,” Sheeley says. “That’s what this app does.”
—On methods for attracting users: One strategy Chef Nightly has employed is a referral program. If a user enjoys a meal, he or she can share it with friends and give them a promotional code for an offer to buy one meal and get one free, Sheeley says.
There are no limits to how many times a user can dole out the coupons, but more sharing won’t earn the user discounts, he adds. “If you’re getting something in return for giving a friend a promotion, then we think there’s a little mis-incentive. We want to make sure people are sharing [the app] because they really like this product, not because they get a discount” on food.
“All this is designed to find out whether or not we’re making people happy and they’re liking this so much that they’re promoting this product,” he continues. “That’s really the essence of a great product, is listening to people.”
—On building consumer tech companies in Boston: Although Boston has generally had more success in churning out enterprise software startups, Sheeley doesn’t buy the narrative that it’s harder to nurture a consumer tech company here than, say, Silicon Valley.
“I hear that ‘Boston versus the Valley’ type of thing all the time,” he says. “There’s been big companies that have been built in Boston that are consumer, and big enterprise companies that have been built in the Valley. It’s more about following your passion and finding a team of people that have similar passions—and finding an idea that everyone gets really excited about.”