How Blackbird Raised $24 Million to Unleash Memberships for Restaurants
Eat-to-earn platform Blackbird is revolutionizing how we all look at restaurants
By: Zack Guzman
November 3, 2023
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If there’s anyone who knows the struggles of the restaurant industry, it’s probably Ben Leventhal.
Not only is he the co-founder of popular reservation service Resy, he’s also the co-founder of the digital media food brand Eater.
Now, Leventhal is putting a career’s worth of restaurant learnings together with a Web3 twist at Blackbird – the hot new startup looking to leverage the power of memberships for restaurants and their favorite diners.
If it sounds complicated – it’s not. Blackbird’s mobile app lets users tap phones at restaurants to start earning rewards and unlocking perks. It’s a mix of discoverability, incentives, and exclusivity bundled into a win-win-win for patrons, restaurants, and Blackbird, which also rewards users with its FLY token and NFTs. Just don't call it a Web3 company.
“We love our Web3 community, but this is a product built for people who love restaurants, whether they're Web2, Web3, or Web16, it doesn't matter,” Leventhal said on the latest episode of Coinage. “I think we tend to talk about Web3 as the steak, when actually it's just the grill, and we have to sort of understand that and that's okay – that it's technology and not consumer product.”
As a Blackbird user myself, I can confirm that the experience is extremely consumer friendly. Most people might not even know crypto is involved. And as many observers have pointed out, a New York Times feature on Blackbird after it raised $24 million from a16z didn’t even use the phrase “NFT” or “non-fungible token” once.
If you think about it, for a mainstream app looking to pair the masses with restaurants in the real world, that was likely always going to be the case. But make no mistake, Leventhal still sees Blackbird as a company leveraging Web3 tech to find a better solution to the restaurant industry’s most pressing problems.
“I think that over time, Blackbird, as part of its value add, will be an expert in unlocking the right communities for the right restaurants,” he said. “We certainly see all of these very enthusiastic and pretty tight communities in Web3, and we're really spending time thinking about ... how can we be a conduit, a connector between your community and the world of physical restaurants?”
What Blackbird’s ‘Eat-To-Earn’ Model Unlocks
Some Blackbird users often describe the app as an “eat-to-earn” rewards platform. Others prefer to classify it as a membership service best used to boast the amount of times they’ve visited their favorite spots. One user we talked to simply relished that he was able to plop down at a restaurant with friends, flash his membership pass, and score the entire table a round of free drinks.
Leventhal is tight-lipped when I ask him which restaurant might be providing the best perks. "I do love all my children the same, and they are all doing wonderful things,” he jokes.
At one stand out – Nolita’s Upside Pizza - users can pay $200 for a pizza club membership that unlocks one slice a day for a year along with preferred access to events.
At Anton’s and Nat's in NYC’s West Village, diners are unlocking perks on repeat visits to incentivize return customers, and other restaurants are already experimenting with letting users redeem Blackbird’s reward token, FLY, for items on the menu.
That – to some mom and pop restaurants who once viewed DoorDash as a friend – might trigger some fears that they could become beholden to another VC-backed tech startup. Leventhal, for his part, says Blackbird’s model is different in that it’s looking to help work in tandem with restaurants to unlock untapped value from their most fervent fans.
“We strongly believe here that in order for Blackbird to be successful, the restaurant industry has to get better at making money,” Leventhal said, adding that the average restaurant profit margin has dropped from 20% 20 years ago to just 5% today. “The good news is we are optimistic about our ability to change the tide in restaurants.”
Ironically, Leventhal points out that the ability for restaurants to find their largest source of untapped support may have been in their darkest times. Pointing back to the pandemic, when many restaurants were forced to close their doors, favorite customers scooped up gift cards and swag to help any ways they could.
“That behavior, to me, encompasses the entire reason we're so enthusiastic about the future,” he said. “Given the opportunity, customers will show up for their favorite restaurants. They will spend more, they will show up more often. … I love that as a signal for what's ahead.”
For now, Blackbird is focused on unlocking experiences for restaurants and foodies in New York City, but is already working on ramping up in other cities.
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