Jordan Boesch got the idea to build a great software product from watching his dad struggle with a combination of excel spreadsheets and sticky notes to juggle the employee schedules at the Quiznos franchises he ran in Saskatchewan.
This week’s Above the Cloud podcast features an in-depth conversation with Jordan about how he took his original product, build for his dad, and evolved it into 7Shifts, a SaaS company based in Saskatchewan (if that counts as a pun) that raised $10 million in January. Now, 7Shifts is poised to be among the leaders in the competitive restaurant management software category.
Here is some of what we covered in the podcast.
Building a Tech Company on the Prairie
Jordan incubated 7Shifts in the Bay Area but eventually moved back to Saskatchewan to grow the business. He acknowledges there are pros and cons to growing a business away from a known tech hub like the Bay Area, Austin, New York, Toronto.
One pro is that 7Shifts is a big fish in a small pond. As he puts it, “We sneeze and we’re in the newspaper” in Saskatoon. A low cost of living and high quality of life are other advantages. Two key challenges are access to “smart” capital (the kind that comes with seasoned mentorship) and access to senior talent. To address the latter challenge, the company has opened an office in Toronto and is flexible about remote work.
Making the Pivot from Horizontal to Vertical
Despite its origin as a solution for his dad’s restaurants, 7Shifts was an all things to all people employee scheduling tool in its early days as a company. The decision to go horizontal turned into a nightmare when requests began pouring in from customers asking for product tweaks that were specific to their industries.
One big reason for the pivot to a focus on restaurants was that in Jordan’s assessment, “The restaurant industry was super antiquated. It had no technology. We had a massive opportunity to have a strong impact on an industry that no one was really looking at.”
There was also an emotional element to the decision to go vertical. He realized that the product as it stood “was not something where people were like, ‘I can’t live without this product.’ And I wanted to build a product where people felt that.”
Will Restaurants be a Winner Take All Category?
We asked Jordan about a recent conversation we had with SurePath Capital CEO Mark MacLeod, where Mark asserted that restaurants could become the first winner take all category in the SMB software space, which is generally noted for its fragmentation.
Jordan agreed only up to a point. First, there are a few different slices of the restaurant market to fight over. Point of sale is the big battleground, where Jordan sees a “winner take most” showdown between Toast, Touch Bistro, and others.
7Shifts plays in the “employee lifecycle” segment, which Jordan has ambitions to dominate. He defines employee lifecycle as hiring, training, scheduling, payroll, and retention.
“Of all the challenges restaurant owners face, labor management is still the number one thing restaurants complain about,” Jordan said.
The LSA’s Tech Adoption Index backs this up. In Wave III of our small business survey research, conducted last October with more than 1,000 U.S. SMBs, 47% of respondents in the “Dining and Entertainment” vertical cited “recruiting qualified employees” as a top two concern. This was the highest of the seven verticals measured in the survey.
How 7Shifts Uses Automation, AI, and Machine Learning
7Shifts makes ample use of machine learning to optimize and automate employee scheduling, factoring in seasonality, weather trends, manager behavior, sales data, guest counts and other factors that impact demand and employee performance.
“When we tell a manager we can automate the scheduling process, they are often like, ‘Well, I don’t believe in that.'” Jordan said, “When we ask why, they say, ‘My gut instinct.”
It’s a process to convince them that automation works and frees them to focus on other tasks.
“There is this ego aspect with restaurant operators and managers,” Jordan said. “We have to ease them into how this is going to help them.”
You can listen to the full podcast here: