The Startup Scene that’s Really Cooking–Food Trucks!

Posted on 16. Jul, 2012 by in blog, Coworking, Foodie, Local News, SOMA, Startups

What’s more basic than eating?  Maybe that’s why the growing legions of little rolling restaurants have something fundamental to teach us.

One of the hottest spots for startups isn’t just in the incubators of Silicon Valley.  It’s also on the streets nearby. Literally. As in where the Goodyears meet the macadam.  And for the price of lunch, it can provide you with a glimpse into some of the market’s most important new technologies, market trends, and business models as they blend, bake, and stew into commerce as it’s coming to be.

I’m referring to food trucks.  There’s an exploding number of the serving up meals in San Francisco–and in Chicago, Austin, and other metros, too.  Unlike the “roach coaches” that classically cater doughnuts and coffee at construction sites or the push carts dishing up dogs, these are new concept, rolling restaurants going by names such as Le Truc, Eire Trea, and JapaCurry.

Study Results. I’m calling your attention to this phenomenon not just because I’m a foodie. Instead, it’s because I got a jump on the preliminary results from study by a husband-and-wife market research team exploring the phenomenon as part of their ongoing work into the swiftly changing nature of the small business economy, such as the rise of independent workers and what I’ve previously identified as the “cell-sized enterprise.”

They’re Steve King and Carolyn B. Ockels, who are partners at Emergent Research, which has been providing forecasts for companies such as Intuit, SAP, and American Express.  As they started to describe their early food truck findings, it became clear there were broad and important parallels to be noted for other startups — and even established companies, big and small.

Because the food truck phenomenon is so new the evidence surrounding it is largely anecdotal.  But even at that, it’s clear something’s cooking. Steve and Carolyn found the City of San Francisco has now licensed about 250 food trucks–compared to just 20 four years ago. While the number represents a fraction of the city’s thousands of brick-and-mortar restaurants, it doesn’t mean it’s insignificant.  Remember: This is the kind of trend-spotting that can lead you to first-mover advantage that’s won the day in so many markets and for so many companies.

Based on their reckoning, the food trucks represent directions that, when passed through my prism, mean three important things to you.  And they are:

  • Be mobile, local, social. To me the local-social-mobile chant resonates of the blah-de-blah I keep hearing mostly from consultants, analysts, and especially smartphone application developers looking for even more reasons to tangle us in connections we don’t need or want. Checking in on FourSquare makes me want to gag myself with a spoon.  But when it comes to food trucks, then these imperatives look more like concrete business practices to be broadly applied to real commerce.  Food trucks go to their customers. They’ve gotten savvy at reaching them virally where they live, work, and, of course, eat.  More than anything, Steve and Carolyn note, the increasing public appetite for locally grown, prepared, and provided food attests to the changing nature and growing importance of neighborhoods and community.  That people are seeking more real–as opposed to virtual–connections to each other holds major implications about the way any business operates anywhere.
  • Growing importance of prototyping. This is another post-recession practice gaining momentum.  Many food truck owners want to open their own traditional restaurants, Carolyn and Steve point out.  Because capital is so scarce–and expensive–they’re using their trucks to hedge their bets.  In many cases, they’re relying on their trucks to “test concepts, neighborhoods and recipes” before they commit themselves to their grander a real brick-and-mortar eatery, says Steve King. In the same way, many of the startups I’ve encountered, and an increasing number of established companies, are dispensing with the brash “go-big-or-go-home” way of doing business. Even when it involves a technology platform or an application rollout, more and more companies are validating their efforts in small baby steps.
  • Emphasis on opex.  Some of you will recognize this as one of the factors driving businesses to the cloud. What applies to data centers also works for restaurants too: Rather than expending capital on server farms or storefront space, which take longer to write off, food trucks also represent the more flexible financial advantages and the faster tax deductions that come with tilting money away from fixed expenses to variable costs. The shift reflects a broad reality of the post-recession economy.

As I think of it, maybe food trucks are coming to represent more of the way companies, of all sizes, need to operate in today’s complex and fast-changing marketplaces, and even when it comes to IT: You need to be able to move fast and flexibly through twists, turns, and bottlenecks to meet your customers where and when they want you to satisfy their most basic needs in ever more palatable ways.

Patrick Houston is the co-founder of MediaArchitechs. He is a former SVP for a new media startup, a GM at Yahoo, and editor-in-chief at CNET.com. He can be reached at patrick.houston@mediaarchitechs.com.

 

 

 

 

 

 

 

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