Small Business: Using technology to solve hospitality's biggest problem - HospoConnect

Left to right: Mike Higham, Ramesh Naran and Sanjay Dayal. Photo / Supplied

Ramesh Naran, chief executive and co-founder of HospoConnect discusses how he is using technology and a mobile application to solve problems in the hospitality sector, and raising $500,000 in capital to fund development plans.

What does your business do?

HospoConnect is a digital platform for hospitality and food service industry. The objective of it and what we are trying to achieve is help restaurants, cafes and bars and their wholesale suppliers to save time, reduce costs and develop new business relationships. The current version of the app has been running for just over two years, prior to that we had a limited testing version. We did all of our research and planning for the business is 2016 and in 2017 we ran the first version of the app and then in2018 we launched what's in the market.

Just over 300 hospitality outlet and 30 wholesale suppliers are using the platform. We charge suppliers based on the volume of orders that they get through the app each month, we don't charge the hospitality venue. So far, we've invested just over $200,000 into the business.

What was the motivation for starting it?

The motivation came about from a conversation with my co-founder Sanjay who was running Cuba Fruit Mart which is a family fruit and vegetable wholesale business at the time. He was frustrated about not being able to effectively communicate seasonal produce changes to all his chefs and he was frustrated with the amount of time it took to collect orders each day so that, combined with my background in digital technology, we came up with an idea just for his business, but from there we talked to a whole load of chefs and they opened the doors to some of their other suppliers - meat, seafood and the alike - who told us about their daily problems and it grew from there.

Now, the motivation as we've got to know suppliers really well is to help them fix their problems. Believe it or not, a lot of suppliers still use fax and voice mail and text messages to communicate and place orders. There's a huge opportunity to improve efficiency as these are really busy people.

What other functions does HospoConnect app operate?

The main parts that users can do on the app is chefs can place their wholesale orders, orders with multiple suppliers in one place. There is also a product communications feature so chefs can easily find out if products are in season or if they are about to run out or if there are specials; information that affects their menu and planning. The third feature called Discover, which we made some enhancements to during lockdown, is helping local suppliers, growers and producers get the opportunity to put their business in front of chefs.

How big is your team?

There's three co-founders; Sanjay Dayal and Mike Higham and myself, and then we have an external technology partner that we use for technology development, support and maintenance.

Sanjay and I grew up together as kids, our grandfathers were born in the same village in India, so our families go back a long way and Mike and I worked together in the corporate world, I was one of his clients for a design company he was working for.

What's your background, what did you do prior to HospoConnect?

I had 20-odd years in the corporate world, predominantly working in financial services as a product manager in the digital space, so that gave me the skills to talk to customers and identify their problems, validate them and come up with digital solutions. Prior to that, I grew up in my parents fruit and vegetable business and I studied agriculture economics at Massey University so that gave me that food background, so I'm combining the two.

How has Covid-19 influenced or affected the business?

During lockdown with all of the restaurants and cafes shutting down it meant that there was no activity on the app so that impacted our cashflow. But as an early-stage start up, it gave us the opportunity to reprioritise a few things and that's when we launched the Discover feature to help do our part for the support local movement. It's going to be a tough time for the hospitality industry over the next 12 to 18 months, minimum, so we really want to look at the features we've got and help focus in on efficiency and reducing costs for suppliers using technology.

What are your long term plans?

We have plans for HospoConnect to go global so it can be used overseas. In the immediate term we know there is some product features that we still need to build before we can take it global and expand it further. We also want to get more suppliers on board so chefs can easily connect with those businesses.

To be able to accelerate our plans to global, we will do a capital raise to raise money from investors so that we can go faster satisfying needs of those current users. In the first round we are looking to raise about half a million dollars, to see us through medium terms plans and raise further after that. The capital would be used to build out missing product features and also for further sales and marketing activity.

What markets are you hoping to launch this in?

We're looking at Australia as a first port of call, but we're also quite interested in looking into Asia and the Middle East because there we haven't seen any technology solutions that match what we do, we've had some discussions with chefs over there.

What advice do you give others thinking about starting their own business?

For a technology business, in the early days, spend most of your time speaking with your target market, really get to the heart of what their problems are, and once you have validated that, find some really good people who you get on with to share the passion and build a great solution.