Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic (Part 5)

Sramana Mitra: What happened in 2020 when the pandemic hit?

Shaunak Amin: At that time, we had two hubs. We had plans to open up five more. Then in March, nobody was in office. That business went to zero overnight. It was unfortunate. I remember it was the second week of March. We said we are going to take a pause. We all went home. We were thinking we’ll come back in a few weeks. By the second week, we realized that this is going to be longer.

We said, “Let’s use this time to start another business.” Stadium has restaurant dishes as well as snacks and beverages that we’d just introduced in 2018. We wanted to do more, but we didn’t know exactly what we wanted to do. We talked to many people.

The first week we were working on a few other ideas for Stadium thinking it’s going to be back. After that first week, I realized it’s going to be longer. We talked to our customers and said, “We want to know how you’re handling this remote situation.” We did 10 to 15 calls a day with every customer. We also set up calls with brands. What we realized is they were looking for ways to connect with everybody who was now suddenly remote.

When we’re talking to brands, they were being shut out of whole foods and all the other retailers. It was unfortunate for all these emerging brands because they had no distribution. Our strength is being able to piece multiple pieces. When it comes to taste, everybody is different. That was our strength and what makes Stadium Stadium. Can we apply that strength to something related to snacks and beverages?

We decided to launch this concept where an organizer could create invites for hundreds of people in less than a minute, send out a link, everybody goes to the menu, and build their own snack. We launched that. On day one, we got a few orders. The first week was great because people were looking for a product like that. 

Sramana Mitra: What kind of numbers are you seeing?

Shaunak Amin: This was just last year. We did our first order on the last day of April. In three weeks, we went from an idea to product launch to first order. By December 2020, we were doing close to $20 million annual revenue. We’ve doubled since then.

Sramana Mitra: With no external financing? 

Shaunak Amin: We ended up taking financing earlier this year. Last December, there was no financing.

Sramana Mitra: How much did you take?

Shaunak Amin: We took in $15 million in March of this year.

Sramana Mitra: Is this a separate company?

Shaunak Amin: It’s a separate brand, but it’s all under the same parent company. 

Sramana Mitra: This business that you had of the kind of delivery that you were doing to offices, did that not make sense to do in other zip codes where it’s much more residential.

Shaunak Amin: That’s true. We did consider that. For our model, businesses are paying. There’s less price sensitivity. When individuals are paying for their own meals, they are very price sensitive. Also our average order value was roughly $400 to $500. There was probably a way to do it for residential buildings, but we weren’t 100% convinced that individuals would be comfortable paying those kinds of prices. It’s very tempting to go the B2C route but it requires a different way of thinking and economics. 

Sramana Mitra: Is there anything else you want to share?

Shaunak Amin: People sometimes think about an idea a lot and make it all about the idea. Listening to people and giving your idea direction is a better approach. 

Sramana Mitra: Unquestionably. We emphasize hugely on validation. The way you were describing your techniques of validation is very helpful. 

Shaunak Amin: We are launching new verticals all the time. We are launching a service where you could ship restaurant food. We are very systematic about how to validate and launch. 

Sramana Mitra: Wonderful story. Thank you for your time.

This segment is part 5 in the series : Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic
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