Yelp Meets Instagram: How Blockchain Will Revolutionize the Food Tech Ecosystem
Technology has turned the restaurant industry into a zero-sum game. The food & beverage industry operates on razor-thin margins, where delivery apps such as DoorDash and GrubHub take a 20% service fee on each order, leaving little profit left for restaurant owners. On top of that, there exists every other foodie app hustling to sell advertising space online.
Food is at the base of Maslow’s Hierarchy of Needs. Required for energy production in multi-cellular organisms, humans cannot exist without it. Blockchain micropayments will revolutionize the food review industry because it will satisfy every level of Maslow’s hierarchy.
Existing food review mechanisms sufficiently satisfy the bottom three layers of the pyramid. They help consumers identify safe and secure places to eat, while also giving them a sense of belonging within the community. Until now, the model has been broken, without any mechanism to satisfy the top two layers of the hierarchy. To achieve full satisfaction, a rewards mechanism must be in place, that is sufficiently perceived as valuable by most of the user base.
This concept came to fruition, while stuck in a remote part of Jerusalem with my friend Rob. We realized that nobody in Israel uses Yelp, and Instagram was terrible for discovering new local delicacies in a foreign country.
Robinson Aguado is a successful 25-year old entrepreneur from South Florida. He started out flipping electronics, eventually buying himself into the world of BurgerIM franchises with a solid footing on the corporate level.
By creating a user interface that highlights photos of food as the primary stream, barriers to usage will be reduced across language barriers. Blockchain can also turn ad dollars into rewards for content creators, eliminate opportunities for negative reviews, and revolutionize the food tech industry with micropayments.
The Existing Ecosystem
Colu: A new decentralized payment system for local communities
The State of Isreal is widely known as a startup nation. Inventions such as Waze, Mobileye, and flash drives have spawned from this young state. However, when it comes to mobile payment technologies they have been far behind the curve. It can be baffling to see that such a technologically advanced economy, has such a low adoption of payment protocols such as Apple Pay.
Colu is the local business focused startup, which came to the rescue to solve this issue. By creating an unrivaled user experience, they began to partner with local businesses to create a mobile payment system. Users load fiat to their wallet and spend money by scanning a QR code.
What I really like about them, is that they took a human-centric approach to solve a problem in their community, before implementing a true blockchain solution. Currently operating in 4 cities (Tel Aviv, Haifa, London, and Liverpool), they boast the following adoption metrics:
- Approximately 200,000 users
- Approximately 2,000 businesses which accept Colu payment
- Approximately 300,000 monthly transactions taking place
Their long term strategy is to work with municipalities to create incentive tokens for the greater good, redeemable at local businesses. For example, say a city wants people to recycle more. Citizens can earn Colu tokens for “good behavior,” which supports the greater good of the municipality.
Appics: Next generation social media powered by Steemit
The team over at Appics is making headways as a rewards-based social media network. Their goal is to merge lifestyle, passion, and user-generated income inside a single mobile application.
Their model is to give 65% of revenue to content creators, 25% to curators, and 10% to sustain the network. The split is decided proportionally to likes. Unlike Instagram, likes are weighted based on the users’ ethos. For example, likes from Beyonce Knowles has more clout than a like from Timmy Oppenheimer. Similar to Facebook and Instagram, there is no opportunity to give a bad score. Positive feedback enables paying users more of an incentive to continue paying for the service because nobody wants to pay to be trolled.
The network runs on a modified version of the Steemit blockchain. Steemit is Reddit style dApp that was one of the first to bring social networking to the blockchain community. Their tokens are inflationary to meet demand. This means that over time, more tokens are created therefore making it a long term depreciating asset. It will be interesting to see how they play out.
The Simplicity of Yelp, Blended with the Influence of Instagram
As mentioned in my previous article, blockchain is in desperate need of human-centric design.
Yelp’s success is predicated on two factors. The simplicity of the user experience, and the phenomenal training they provide to their advertising sales team. Training managers there are some of the best in the world, while their product team has mastered the ability to listen to consumers.
On the other hand, Yelp has been losing a lot of their market dominance to competitors in the space. Google has been marketing its Maps app as more of a local discovery tool, inviting users to become “Local Guides.” Similar to the approach of Yelp Elites, this boosts users into the hierarchy of self-importance at a more accessible threshold than Yelp. However, Instagram has become the biggest thorn in the side for both companies.
In the age of the influencer, no platform has achieved greater success than Instagram. Their ability to reward users for engagement through likes, followers, and communal support, has skyrocketed them into one of the most powerful social tools for marketers. An entire ecosystem has developed for paid influencers, who utilize their social clout for monetary gains. Brands are able to connect directly to their customers, through paid partnerships with influencers who can charge upwards of $30,000 per post. When done correctly, these brand partnerships can lead to significant ROIs but are out of reach for most small to medium-sized businesses.
FoodGod is likely the most well-known food influencer in the world. Many of his posts are authentic reviews of food that he enjoys, while others are massive endorsement deals for fast-growing burger franchises. The old homage goes, a picture is worth a thousand words, which is why his reach goes much further on Instagram than with any other platform. He is proof that people eat with their eyes, and while his page can be considered as a Food bible to some, users still yearn for the validation of their own inner circles for the photos that they post. The question is, what can be done to make people feel like their food posts are as valuable as his?
The Jackpot Model
As of this writing, the Powerball jackpot sits at $625 Million. The odds of winning the big prize are slim to none, but the runner up prizes of $2 to $1 million are more within reach. The aspiration of potentially taking home the big prize is enough motivation for people to stand in line for hours, just for the opportunity to buy a ticket. The same goes for websites like Fan Duel or DraftKings. Users get drawn in by the big prizes but stay after winning the more attainable smaller prizes. Even Medium implements a similar model, where top contributors are taking home thousands of dollars per post, and the rest of us take home pennies on the dollar, and still love to write.
In a blockchain based review system, content creators will earn micropayments as a proportion of ad revenue dollars spent by the local businesses they post about. For example, say Timmy posts a picture of a slice of cheese pizza from John’s Best Pizza to FoodGram. John’s Best Pizza happens to be a FoodGram advertiser spending $200 / month. Timmy sees that they are a verified advertiser through the app, which is a reason he took his business there. By posting a verified picture of his food there, Timmy earns a financial reward in proportion to the total number of other users who have posted photos there, relative to the restaurant’s ad spend. Due to the presence of micropayments, users are verified via their account information to ensure a restaurant owner doesn’t create a slew of fake accounts, to boost their own reputation. Payments would be processed in fiat at first, migrating into a blockchain based payment system as the infrastructure is developed. Based on existing post rates of traditional social media platforms, users could earn ~$20 / month, with top posters earning upwards of $10,000.
Tying It Together
The jackpot model applied to a blockchain based food review system, will bridge the gap between incentivizing reviews and maintaining authenticity. By giving users a status of self-worth and recognition though achieved earnings, they join a community which supports each other discover new restaurants that are safe and exciting to eat at. Micropayments will revolutionize the food review industry by creating a seamless user experience for brands to connect with customers. Utilizing the power of blockchain technology, the platform will give authority back to end users through a self-regulating mechanism, in which a proof of identity must be staked in order to reap the benefits.
William Seggos is the CEO of Blueglass Consulting. He specializes in helping startups develop human-centric blockchain strategies and works with luxury retail brands to drive e-commerce growth. He is also working on developing the first-ever blockchain powered sales enablement tool, Objectr.io. To get in contact, email him at email@example.com. Stay hungry 🙂
Yelp Meets Instagram: How Blockchain Will Revolutionize the Food Tech Ecosystem was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.