Crisistunity: Turning the devastation of Covid into opportunity
- Linda Pouliot
- May 6, 2021
As a startup in food services, Covid-19 wreaked havoc and initially threatened our very survival. When the pandemic first hit, Dishcraft was in its infancy as a company. We were proving out a new business model to the world, Dishwashing as a Service, and focused primarily on corporate clients. When Covid shutdowns were announced, overnight one hundred percent of our customers paused service. We were in the middle of a fundraise, and the combination of our revenue going to zero plus the uncertainty of the market caused investors to question our ability to survive. They were reluctant to fund us, and we had only months of runway in the bank. More than one investor suggested we completely pivot our business model, suggesting ideas including cleaning straws or surgical instruments, neither of which we had experience with or technology to deploy. At moments it felt as if many had lost faith in Dishcraft.
Faced with trying times I told the team “Let’s kick Covid’s butt.”
I believe the success of a startup is due to a combination of factors: team (as our board member Marc Randolph states, “make sure the right people are in the right seats and make sure they have the right inputs and right information to make good decisions”), product-market fit, perseverance, and luck. I knew we had an awesome team, a great product, and a healthy amount of grit, but we were experiencing some unbelievably bad luck. I was determined to see Dishcraft through the pandemic and turn a disaster to our advantage.
Making the hard decisions
We decided to take several actions.
On the funding front, despite some investors pulling out at the last minute, we closed a round of financing. It was a portion of what we had hoped to raise and at a lower valuation than pre-pandemic offers, but we accepted this situation and optimized to build value for the long term, knowing that what is more important than valuation is keeping the lights on and moving forward.
Despite the ability to raise funds, we still needed to do a layoff to preserve capital to extend our runway as long as possible. Pre-Covid, we were already a very lean staff. Think of hardware startups like a baseball team, where if you remove a single player the whole team simply can’t function. At this point in time, we were no longer cutting fat, we were cutting out bone, and there was a chance we cut too deeply. I was definitely concerned we may also lose the best of our employees in this transition as public corporations with deep pockets were tempting employees through their stability and deep pockets. However, I trusted that by being transparent about the situation, our team would understand and stick with it. It is strange to admit this but the way the layoffs were handled and the response from existing and exiting employees is one of Dishcraft’s proudest moments. Remaining and departing employees shared with me that they were grateful for the opportunity they had to be part of our team. Since Covid, I am happy to say we have been able to rehire some of our former colleagues, and our employee surveys show a consistent 96% happiness factor throughout the year.
We invest in culture. It is hard being virtual the majority of the time with a team that has become as close knit as ours, so we added some fun things to liven things up. Consistent with our values to support our local community, we reallocated our lunch budget towards ordering meals from local restaurants. We host virtual happy hours and share photos of food we’ve cooked at home on a Slack channel. A 2021 favorite initiative is a virtual race across the country; we each log our exercise miles into a spreadsheet to see how long it will take us to get from SF to NY as a team. We are halfway across the US in only 3 months and will celebrate with a NY themed picnic in the park when we achieve our destination!
We never want to be as vulnerable again to market conditions, so we used this period to expand into other verticals. Pre-Covid, the majority of our customers were corporate cafeterias. We decided to explore healthcare, hospitality, meal delivery, restaurants and education.
We are proud of the results of our first steps into these verticals. The labor shortage the industry has faced has only continued to increase as people have left food services for other industries; hotels need a new model for recovery.
We added reusable containers to our product line. These are better for the environment, easier for chefs to plate the food, and provide a better dining experience for the guests than single-use foodware. We piloted these with Serve it Safe in partnership with Tootsies in Palo Alto and UPSTREAM, an environmental non-profit organization. The results all around are heartening, as diners, employees, and owners are applauding this as the wave of the future.
Doubling down on our Technology
Dishcraft’s goal is to provide the safest, cleanest wares possible. Prior to the pandemic, we created a pre-rinse robot that washes and inspects ceramic wares before the sanitization process. Since the pandemic began, we also have developed a touchless silverware dispenser currently being tested, and an inspection robot which adds 20 additional inspections to each ware at various angles. This robot also places the wares into carts for service. This means Dishcraft is the first to offer contactless handling of wares, so that no human hands touch the plate prior to the chef plating the food.
In addition, we added a variety of protocols including ATP and allergen testing to meet and exceed health code standards.
Dishcraft is my fourth startup. What I have learned over the years is that what makes a difference is who you have on your team and how the group handles the bad times when everything feels like it is going south. I am proud of our Dishcraft family, of my cofounder and CTO Paul Birkmeyer who exemplified a steady and motivating presence, of how we all have come together and stayed true to our vision. I am excited about what we have created and the impact we will have upon the future of dishwashing.