Starting From 0 To Build A $35K/Month HR Platform For Restaurants
Hello! Who are you and what business did you start?
Hi there, I’m Luca Lotterio from Italy, born in Rome, a psychologist that worked in restaurants around Europe and I’m currently in Turin developing Restworld, a matching HR platform vertical in the restaurant industry.
The startup, with 3 years of activity and 1 and a half of Covid (!) has now more than 800 customers and a community of more than 72,000 subscribers that use Restworld to find a job in beautiful destinations in Italy.
We’ve been working on algorithms, funnels, and matching algorithms for months bringing revenues from 0 to half a million in 2023, and now we’re almost ready to start scaling the company.
What's your backstory and how did you come up with the idea?
Well, when I was in high school I understood that to be independent I had to find a way to earn money. So I started making leafleting door to door, then I invite some colleagues to do the same and pay them to split my flyers taking a percentage of the volumes.
With the money earned, I bought a moped and I started working in pizzerias as a delivery driver (when you still had a paper map under your saddle, no GMaps, no smartphones). I was a dancer too, so I started teaching dance and in the meanwhile, I created my first structure in an MLM, which I left 2 years after high school selecting MLM as “shit”.
When I started the university studying psychology and human resources, my new focus was to be able to spend the University in different places, that’s why I studied in 4 different cities and 3 countries (Tenerife in Spain, with summer 365, was the best deal for sure!). I paid for all these changes by working in restaurants, as a runner, kitchen porter, sous chef, chef de rang, and even store manager.
When it comes to doing my thesis for graduation, I started mixing HR and restaurants and came out with an idea in mind: to create a platform to match people and companies, such as Tinder but not for having sex, but for working.
There is when I started talking with my colleague Davide Lombardi, the actual co-founder, and we decided to walk through 102 restaurants around Turin and ask the owners which challenges they were affording with staff. We did the same with workers.
Then we started a program (something like a little master's) with 2 universities to validate our idea, we attend dozens of challenges and hackathons, found 2 other co-founders (with an engineering background), and run the company. 2 weeks before the lockdown in Italy, perfect timing =D
Imagine, 1 year and a half, almost no revenue, a lot of costs, and no income for us as founders. Where do we take our money, we invest all we had. And the reputation with our parents and friends. It was an all-in.
Take us through the process of building the first version of your product.
At the very beginning, our process was clear and simple for us, in 3 steps:
- Ask the restaurants who they’re looking for
- Post a job advertisement on job boards
- Collect and select applicants.
Easy peasy, it was completely done with google docs, Gmail, Typeform, and a couple of simple automation such as auto-reply and a sheet filler to have people organized.
When it comes to the 5th, and 6th customers, we started by adding complexity, questions, and requirements from the restaurants, different availabilities from the applicants, and the job boards stopped our organic traffic.
We understood that the restaurants were not ready to do everything by themselves, so we left on a table the possibility of a SaaS and we focused on a RaaS model (recruiting as a service, with real humans that help customers to find staff).
Our original idea of a matching platform became more, and more, and more, and more (do I already say more?) complex. Three front-end platforms, hundreds of tables, 70 variables for workers, and the same for restaurants. Different steps of the hiring process and something like 92 transactional emails based on events. Just in 2 developers!
Behind complexity, we studied our market, make research, and became the “experts” in Italy in this field. It seems like a perfect execution, but believe me, we spent hundreds of working hours testing, validating, and creating useless features, add-ons, business models, etc. to find the right ones.
And, differently from most of the startups, you can see it (the tests) on our fundraising story: firstly 12k€, then 30k€, then 100k€, 200k€ and now 300k€. We didn’t go step by step, we divide single steps into other steps and go through every single micro-step (I can’t add a laughing emoticon).
Describe the process of launching the business.
As you are already familiar with, we like to do things repeatedly.
That’s why we had a financial plan version for every fundraising we did, and a different website every 4 months at the beginning. But we are more mature now, the website is always the same, financial plan we have 3 different versions and we update them.
But what is interesting is the customer base, and I hope it should be inspiring for everyone that is starting a business now:
- From 0 to 1 customer we convinced 1 of the 102 restaurants to become our customer.
- From 1 to 5, we spent almost 3 months scraping emails, knocking on doors, and sending flyers.
- From 5 to 30, we spent hours as a call center (useless a call center in 2023 if it is not 2.0 cold emails, please read the book “Predictable Revenue”)
- From 30 to 100, we were bombed by customers after the pandemic ended and the HR crisis in the restaurants happen. The brand was on.
Today we collect 2 to 5 customers per day mostly with ads, with a single funnel ad > typeform > calendly > sales call > onboarding.
There are a lot of opportunities between 10 no’s and just 1 yes!
Remember, we spent 3 months for the same number at the beginning of Restworld. The difference today is not the advertising (useful but not the only channel), but the trust in the brand and the online reputation of Restworld, based on newspaper articles, reviews, and people that talk in a positive way about us.
Since launch, what has worked to attract and retain customers?
First, we decided to do things that don’t scale. So we decided to walk-in restaurants, to talk to people and meet applicants 1-1. Then, collecting feedback, and understanding patterns and clusters, we started to automatize acquisition channels, onboarding channels, and retention methods.
We tried to find at the beginning the customers that love our product and use them to find other customers through a genuine referral method (without paying them, just giving them the perception that they were useful for their colleagues!).
What did we understand that worked when scaling? Don’t go anymore directly to the restaurants! But we started like that, but at that time we were not scaling. Remember, do things that don’t scale at the beginning, then move them through a scaling process.
Strategies are not a “forever” concept. Strategies in a startup must be adapted as a “for this step” approach, meaning that every time you do a step forward, you need to rethink your strategies and understand if they’re still good for the next step of your startup journey.
Instead, from a worker side (applicants and candidates) we used the job boards as our first acquisition channel. This has been through until today when we’re starting to include a more omnichannel strategy to acquire new workers (users) to reduce CPA.
How are you doing today and what does the future look like?
Well, we’re still not profitable in terms of the entire business. Our service is, but we believe that we’re on a mission to build something x100 bigger than today (at least) so we’re investing more than our revenues (as most startups do!).
Gross margins in our kind of business are not the typical more than 90% compared to the classic SaaS but, in the meanwhile, we have an LTV/CAC ratio that is more than x20. We find customers with an easy-peasy funnel on Meta. Our customer acquisition is our disruptor, depending on the momentum of the Horeca industry. We’re already working on retention and focusing on LTV!
We’re not the super-amazing startup that makes x10 YoY but we found that to grow x3 every year and focus on maintaining this growth is the right approach to success without losing pieces and hairs in the head (or at least no more than what is already happening!). X3 is still a super growth if you compare it to 5-7 years of life if you start at 150k€ per year.
Through starting the business, have you learned anything particularly helpful or advantageous?
A few important things are habits. The habit of meetings such as the team meeting twice a month, and the board meeting once a quarter. The communications such as the daily standup with Geekbot for every team to get involved with each other, the monthly update for the shareholders, and the quarterly update for “everyone in the field of Restworld”.
This helps us maintain updates, engagement, and interest not just for our customers but for everyone involved with the company.
What platform/tools do you use for your business?
As co-founder and CEO, I’ll be not able to do my job without strict scheduling software. So the combo Google Calendar and Calendly is a must-have.
To manage the team a good mix of Slack, Polly, and Geekbot is my “in love” automation system to get everyone in the loop and understand feelings about each other.
Typeform is a “for every situation” must-have tool. And for investors, I use investory.io.
What have been the most influential books, podcasts, or other resources?
For sure from 0 to 1 (I thought about this 0-1 logic before reading the book and I had a confirmation of it). To scale there’s nothing cooler than Exponential Organizations and to approach business psychologically, you have to read Misbehaving.
If you’re approaching sales, Predictable Revenue is a must-have.
If you’re approaching the community, The Business of Belonging is a must-have.
In Italy we have Made It Podcast, interviewing founders from around Italy telling their stories and challenges.
Advice for other entrepreneurs who want to get started or are just starting out?
Find co-founders to work with ASAP. If you don’t have them, solo-entrepreneurship is good but working with people is what gives you lifeblood.
Do things that are not scalable, approach business angels for your first steps and find a way to easily apply to accelerators, competitions, etc. serially. There are a lot of opportunities between 10 no’s and just 1 yes!
Are you looking to hire for certain positions right now?
We’re hiring our #1 person in the marketing field in Italy. This is the JP.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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