Thursday, October 6, 2016

Eatigo: Model Business Idea For the Future

Have you heard of eatigo?

If you haven't, I really think that you should check it out.

It's idea is simple, but ingenious.

Some restaurants are empty at certain time of the days. Or some restaurants are emptier than usual because of some situational event. With fixed overheads like rental, staff costs, utilities and also inventory of food to clear, an empty table represents revenue being losts AND fixed costs making up a larger part of the total business costs.

As a business owner, you'd want to keep your fixed costs low. For the F&B business, that actually means having a very good turnover of clients. Your service staff and cooks get paid the same hourly rate at 12 noon and at 2pm, although the workload at the 2 times can be very big. Idle time and empty tables is NOT good. If you could offer a 50% discount right now and get customers fill up your restaurant in 30 mins, would you do it?

As a consumer, you like to eat out at nice places every once in a while. As good as hawker food is, sometimes you just don't feel like entering the wild jungle during meal times and fighting for seats in the heat. However, you can't eat out all the time - that would break the bank.

Ta-da. Eatigo!

Eatigo matches empty tables with empty stomachs. That's their tagline and I think it is amazing. How it works is that restaurants with excess capacity can allow consumers to book a table. Depending on how full the restaurant is, discounts for that booking can be from 10% and all the way up to 50%!

The restaurant gets full and it is fully utilizing its resources. A restaurant that has crowds draw in more crowds. Few things in Singapore are scarier than an empty restaurant.

The consumer gets to eat out and for a great deal.

It's a win-win situation.


Personally, I've only heard of eatigo just recently, but I'm super sold on their value proposition. I actually went to try them out last night and I got 40% off! Honestly, even with 40% off, the restaurant was still half empty, but I was just surprised to even see people in the restaurant at 9.30pm. Late night dinner owls? It didn't seem like anyone else was using the app though! Between me and my friend, we got 2 mid-priced mains and shared an appetizer for the cost of a low-priced main each! Total dining cost? $15 nett, inclusive of the service charge and GST. Not bad for a very filling meal!

I really do like their business idea. Matching empty tables with empty stomachs. This is brilliant. If you think about it, their business model is exactly like Uber or Airbnb. Perhaps we can add eatigo to the list below if it takes off. "Company that feeds tons of people, has no food".

There really is something about this kind of business model that allows it to have so much success on an international level.

You are the owner of a fixed asset. (car / house / restaurant)
Your asset is not being fully utilized. (non-driving hours / no tenant / empty tables)
Your asset is ready to be further utilized.
Company comes in to convert that under-utilization into money (Uber / Airbnb / eatigo)
You have an increase in revenue.
Adopters of the company are happy paying to use your under-utilized excess.
Overall, less wastage and increased efficiency of the asset.

Fixed asset owner wins. Consumer wins. Company wins.

It's a win-win-win situation that is very hard to create and find. Which is why those that manage to do so are so successful. I've said it before and I'd say it again, the future is in the crowd and these sort of business ideas effectively makes use of the crowd to create value for all stakeholders. I am very impressed by these kind of business models because they are sustainable if managed and run correctly.

After looking at this, I realize why so many traditional business ideas fail. Instead of matching and bridging demand and supply, many businesses try to CREATE demand that wasn't there, to buy their products or services.

I'm going to re-evaluate my business ideas that I have on the drawing board and figure out which of my ideas most easily supply products/services to willing customers with an existing demand for it, rather than try to create a demand for something that people didn't even know they needed.


  1. It might not be a win win win. At such discounts, the marginal revenue may not cover the marginal variable costs. It is like the groupon problem - you attract customers but not the ones who will like to pay your full prices. These customers are anchored to your low prices now and may not convert to full paying customers.

    Just saying

    1. The math actually does work out. The average profitability of an eatigo table is around 30 percent (after commission, after food cost and after discount). This profit is incremental as the profitability and contribution of the empty table it replaces was 0 percent. We (I am a co-founder of eating, full disclosure:) guarantee a profit on every diner seated and that is one of the reasons we call ourselves the "anti-groupon".

    2. Hi Anon,

      I've done the mental math as well and it works out to me. Although the restaurant might be raking in only 50% revenues, as long as it covers the variable cost of the FOOD, it is workable.

      I know the rough rule of thumb is 1/3 food cost, so just generalizing it means that a restaurant putting out the maximum 50% discount is collecting only 50% of revenues. However, this 50% is enough to cover the 33% of variable food costs.

      Other costs like the service staff, rental and utilities are pretty much fixed and this extra 17% helps to offset those costs. This is not meant to be a money maker for restaurants, instead I suppose it is meant to reduce their fixed costs by helping them utilize their excess capacity during lull hours.

      Perhaps the main consideration as a restaurant would be if I was converting regular full-price paying customers to odd-hours, discounted paying customers. Also the discounts might dilute my branding, especially if it is premium and niche. The branding effect is a lot less worrisome for more casual restaurants.

      I've already used the app twice and clocked up discounts of 40% and 50% respectively, so I am a big fan of this and I really hope that they succeed, which would just prove that it is a win-win-win all around!

  2. Is this app in Singapore? I must try it out.
    Sounds like a good deal

    1. Hi Sweet Retirement, yes it is! I strongly recommend that you check it out!

  3. I have tried 3 times, this platform is user friendly. However the reviews and comments from the consumers in the apps is quite doubtful. As I provide some negative feedback for one of the restaurant I patronised and it's not reflected or posted in the apps to warn other consumers. Restaurant might cut cost and reduce their spread or change their food menu to cut cost. Eatigo should be more transparent and improve their apps such as allowing consumer after patronised to commented directly in their apps and not thru email from their customer service, whom I assumed screen off all nagative feedback.

    1. Hi Steven, interesting to hear about your experience with their feedback system. I've used it a couple of times, but I don't think I bothered to leave any feedback. I just happily took my 30-50% discount, ate and go, haha. I don't see or feel any reduced quantity or quality during the times I used eatigo.

  4. I am going to telling the easy way to every businessmen that how they can register their business in Singapore. By choosing the services of this you can easily register you new business in Singapore without spending the lot of time and money.


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