Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic (Part 3)

Sramana Mitra: How did you pick amongst those ideas?

Shaunak Amin: It’s not so much about the idea. The idea is going to give me the starting point. I wasn’t married to one idea or the other. We created three or four landing pages with different messaging. One was around healthy food coming to your door every day. The other was ordering from different restaurants and coming to you at the same time. The third one was very quick delivery.

I would go to residential buildings. On my way down, I would drop flyers underneath everybody’s door. Then I would come back and see who visits the website. The one where you order from different restaurants resonated the most. It’s an open-ended problem. All restaurants in New York, anytime- it becomes mathematically impossible. Then you start imposing constraints. That’s how I came up with a constraint-optimized solution.

We made that our idea and we called it Stadium. It was delivery from different restaurants at the same time. We registered the business in 2014. We launched the landing page and started collecting interest. I talked about imposing constraints, but this was a hub-and-spoke model where we’re going to have a central hub where everything comes together and gets packaged. We’d use equipment to protect the food’s quality.

Now the question became, “What location?” Manhattan is quite big. That could be a decision that makes or breaks the business. I went back to flyers and Facebook ads. We drove people to the landing page and asked for their zip code. I was thinking of doing it in Tribeca, a residential area in Manhattan. When we got these signups, they were all in Flatiron, which is right in the middle of Manhattan. It’s very fascinating. I had built this whole concept around Tribeca. So we looked for a hub in Flatiron. It was one of the best decisions we ever made. We found a hub in Flatiron. We did our first delivery in June 2014. 

Sramana Mitra: Do you have any idea what it was about Flatiron that was driving this?

Shaunak Amin: People didn’t want this concept for dinner. They wanted this for work. When you’re ordering lunch in an office, you have 15 to 20 people. The chances that everybody wants the same thing is close to zero. Many startups were in that area. Tribeca was residential. 

Sramana Mitra: You then built the whole thing in Flatiron and worked out a delivery model. What about restaurants?

Shaunak Amin: Initially for the first six months, we had to sign up restaurants even before we launched. They were initially skeptical. We were explaining the business for something that was not live yet. The first few months were difficult. I had a co-founder, Stephanie, who did an excellent job. Many restaurants signed up. Even before we launched, we had 80 or 90 restaurants.

Sramana Mitra: What was the business model that you came up with?

Shaunak Amin: When we launched the website, it was supposed to be subscription-based. Very quickly, we realized that nobody is going to pay the subscription fee. We removed it very quickly. 30% was then our rate.

This segment is part 3 in the series : Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic
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