Project Title: Deylandra Home Cooking Delivery Service
Summary: Cook food from home and sell it to your neighbors. Like Uber for home cooking.
Goals: To reduce the cost of restaurant/takeout food while increasing food quality.
Description: Cooking from home and selling the food is cheaper than owning a restaurant because there's no overhead costs. No rent, utilities, expensive equipment, payroll, permits, taxes, accountants, employees, etc. This allows a home chef to offer superior quality food at a lower price point. Most restaurants require at least 500k in starting capital and over 85% of new restaurants fail. Becoming a home chef costs $0. Many people who would like to own their own restaurant but don't have the startup capital would find Deylandra as a good alternative.
Food Safety: Normally cooking food for the public from a non-commercial kitchen is forbidden. The Smartphone camera necklace is able to overcome this problem because the entire food preparation of home chefs is recorded and live streamed on Periscope. This allows for superior food safety compared to restaurants.
How Can Stellar Surpass Ripple?
Stellar needs a “killer app” like VisiCalc was to the Apple II or Silk Road was to bitcoin. A home cooking network that cannot use Visa or MasterCard because it's in a gray area of the law is the perfect universal application because everybody needs to eat and everyone wants food that is half the price of a restaurant and twice as good.
Do You Have Proof of Concept?
I launched Deylandra July 22nd. The numbers and feedback I received indicate that the network can succeed but that additional capital is needed due to the cost of customer acquisition.
Details on the Launch
I handed out 5000 fliers door to door and acquired 5 new customers. Everyone was happy with the service and wanted to reorder. I had a set menu of the following:
Monday: California Burgers
Tuesday: Mushroom Risotto
Wednesday: Japanese Steak Bowls
Thursday: Fettuccine Alfredo
Saturday: Honey Walnut Shrimp
Sunday: Pork Potstickers
1000 fliers per a new customer was considered a failure. The cost per new customer acquisition was approximately $75. To be feasible I needed to acquire one new customer per every $25 spent in marketing. When I changed the flier to “your first meal is free” the cost of customer acquisition dropped to $30.
With further retooling such as changing from a static to flexible menu, I believe I can drop the cost of customer acquisition down to $10. Each customer brings in an average of $10 in revenue and $5 in profit on a reorder. If a customer reorders 2 times the service will be breaking even. If a customer becomes a long term customer the service will be making a profit. However, that's assuming I am the only chef and that I work for free. When using other chefs the math becomes less clear. Will new chefs bare the cost of customer acquisitions by handing out fliers? Will the network bare the cost of customer acquisitions and then charge a fee to the chefs to recoup that money? How will the network raise the capital to cover these initial startup costs?
Raising the Funds to Cover Customer Acquisition Costs
Venture capital is one way. Expanding the money supply via a crypto currency is another way. If we use a crypto currency, we have to determine what is the value to the crypto ecosystem per food customer? This is unknown. However, as a benchmark we can look at Stellar's lumen giveaway. Stellar is giving away $50 in lumens to new users which implies a new user acquisition cost of $50. If Deylandra could introduce people to the Stellar ecosystem for a cost of $10 instead of $50, this could provide value to Stellar.
There is also the problem of giving people $50 in lumens which they cash out and never use Stellar again. A food network where people constantly trade in lumens for food could provide a more sustainable user base that stays around for the long term.
Attempts to Get Deylandra Users to Use a Crypto Currency
Initial attempts to get customers to use a crypto currency were a failure. People prefer to pay with cash on delivery. Learning something as complicated as a crypto currency just to order food is too much trouble for the average person. However, there is a solution that has potential.
Discounts If You Pay with Crypto Currency
Customers will be offered a 20% discount if they pay in lumens. For new customers, the cost of learning a crypto currency is too high for it to be worth the 20% discount. However, for long term customers it eventually becomes worth wild to learn a crypto currency in order to save the 20%. In order to offset the cost to chefs, cash prices will simply be increased by 10% thereby it actually costs nothing to the network or to chefs, since an increase in prices on one end compensates for the discount on the other.
Exclusive Rights to Deylandra's Ecosystem
Whichever crypto currency funds the expansion of Deylandra will get exclusive rights. If Stellar provides me funding, I will only accept lumens on the network and it will be our official currency. If Eos provides the funding, then Eos will be the official currency for the ecosystem. If Neo or Waves or Cardano provides funding, then those crypto currencies will be the official and exclusive crypto currency for the network. If we self fund via a Deylandra token, then we will only have a native token.
Retooling for a New Launch
Instead of a set menu of 7 items per 7 days of the week, I'm expanding the menu to 40 items that a customer can order anytime. This was a huge problem with my prior launch because if nobody wants Ratatouille on Friday then the day has just been wasted for both the chef and the customer.
In order to provide flexibility in giving the customer the exact menu item they crave, a customer must “set the menu” by ordering 4 servings worth for $20 a day in advance. This then “sets the menu” for that day.
For example, John wants California Burgers on Monday but Susan wants Honey Walnut Shrimp. The chef can only cook one item per day. Whichever customer “sets the menu” by reserving $20 worth of food gets to decide the menu for that day. Once the menu has been set for Honey Walnut Shrimp, other customers can still order, but they have to order Honey Walnut Shrimp if it's Monday. John can either set the menu for Tuesday if he really wants those California Burgers or he can order the Honey Walnut Shrimp. The advantage of not setting the menu is that there is no minimum order. You can order just one serving instead of four.
Besides giving the customer flexible order options, it guarantees the chef a minimum revenue of at least $20. This was a problem with my initial launch because if I only received one order for $5, it's not worth the hassle of cooking. For $20, it's not a lot, but it's still worth wild for me to cook. It guarantees me $10 in profit, it only takes an hour to cook, I get to eat myself, and I was going to have to cook anyways.
What if the Health Department Tries to Shut Down the Service?
Let's say in theory I raise 100 million from venture capital, the network starts exploding, and then the health department tries to shut it down. Is the 100 million and all of the effort in starting the network lost?
The network will be built as a decentralized app that cannot be shutdown. This means the health department would have to target individual chefs. Because it's a delivery only service, no one will know the exact location of the chefs. This will make enforcement for all practical purposes impossible. Furthermore, the enforcement doesn't exactly have teeth. As a chef the first time is a warning notice, and the second notice is a small fine of around $125. It varies from jurisdiction to jurisdiction, but the costs are infinitely less than the 500k required to start a new restaurant. The important question is not whether it violates health code, but is the food on the network safe? If it is, I think we can successfully and morally challenge the health code.
Timeline: In order to relaunch, I need to raise around $20,000 to cover customer acquisition costs. I also need to learn a few new recipes since I'm expanding the menu from 7 items to 40.
Please vote for me on the galactic talk forum if you are a member there: https://galactictalk.org