The past two years have been something of a roller coaster for Hazlnut, a Jacksonville-based tech company that specializes in online and mobile ordering solutions companies for mid-sized restaurants, primarily those with around five to 50 locations.
In particular, it does white label solutions — making products for restaurants that brand them as their own — for restaurants that have good enough branding to benefit from online ordering solutions but aren’t so big that they can hire their own development team.
With online ordering having changed from something restaurants depended on to survive, earlier in the pandemic, to something that restaurants now consider for other reasons — to conserve manpower amid the industry's labor shortage, among them — the Business Journal sat down with founder and CEO Dick Sikes to learn more about how Hazlnut is adapting.
Back when Hazlnut started under the name Gonogo, you were doing something pretty different — selling an app that customers would download to fill out surveys about their experience at the business they’d just patronized, thus providing rating data to small businesses. Why did you transition to online ordering for restaurants?
The main people we were pitching the rating app to were restaurants. Typically, when you see on a receipt a request to fill out a survey, it’s going to be fast food or fast-casual restaurants, so we thought that was our target market. So, we were going out and pitching it to them — this was 2015 through 2017 — and really what was important to them, at the time, was online ordering. And at first, we just thought that was outside of what we do, so we didn’t really want to entertain that. Then we realized if we want to serve this market — local restaurants, small to medium-sized — that this was a service that was in demand.
What lesson did you take from that experience?
It shouldn’t feel like you’re trying to fit a square peg into a round hole. For us, we were trying to sell the wrong product to the market, and we should have realized, based on the reactions we were getting, that we weren’t hitting the mark for what our prospective customers needed or were looking for.
The reactions we were getting from sales conversations once we pivoted told us, OK, we’re going in the right direction; they’re much more receptive to taking our call, they’re willing to sign, they really liked the demos. Then the hard work begins of, how do we amplify this and reach more people, create a sales funnel, all of that.
How is Hazlnut’s business model adapting to that transition from operating in a pandemic to a labor shortage?
During the pandemic, especially the first six months, it was all hands on deck, halt all new development, research and development, any new projects we were working on. We halted everything to focus on our core product, which was online ordering and mobile apps, to get customers onboarded. They needed a solution within days or even hours, in some cases, because they couldn’t open their dining rooms.
Now that the conditions of the pandemic have changed, and now one of the biggest headwinds the industry is facing is the labor shortage, our focus has turned back more toward new products and R&D, coming out with these new products to help address the labor shortage.
How is Hazlnut innovating for the labor shortage in hospitality?
One thing we’ve really identified as a pain point for restaurants was phone orders. Not all phone orders have migrated to digital platforms. When we look at the restaurants on our platform, it’s about 20% to 25% of orders are online, and still about 40% of orders are phone-based, with the remaining being in-store.
With the labor shortage, it’s been really hard for restaurants to staff up appropriately, and now when you factor in a long line, you have limited staff and the phone’s ringing off the hook. It’s a really tough scenario. So we came out with a new product in March called Order Interception, which redirects callers to an online ordering page.
In late summer of this year, we’re rolling out HazlVoice, which is a completely automated phone chat bot to take the order. It’s voice ordering — you’re chatting with the bot as if it’s a person to take your order.
