Interview: Sam O'Brien on Virtual Kitchens & Smash Brothers Sliders
Photography by Smash Brothers Sliders.
Sam O’Brien lives to model, tweak & experiment. Leaving a relatively settled and happy corporate job, Sam is currently working with his two brothers to prove a Colombus-based virtual kitchen business called Smash Brothers Sliders. As with anyone that is looking to test a new business model - not to mention one based in a food truck - there were many questions that needed answers.
To help think through the many operation decisions, Sam echoed a growing trend known as building in public with his refreshingly transparent project Virtual Kitchen Operator. Over 50 days and 50 posts, Sam’s writing reads with willing transparency as he hunts down solutions, all the while building valuable dialogue about how the virtual space operates.
We caught up with Sam to talk about Smash Brothers Sliders, Virtual Kitchen Operator, and the untapped potential of virtual kitchens…
Words by George Maguire
Tell us a bit about you, who you are & what you do?
Hi, I’m Sam. I have worked in what I'll call corporate America for the last six or seven years across management consulting and product roles. It was great but I wasn't in love with what I was doing. I knew there was something more - that I could own and do myself. I had been talking with my brother (Andrew) who's been working in kitchens for the past 15 years and has been running his own business for the last five or six years.
We thought there could be an opportunity for us to work together on launching a new business. It all revolved around the off-premise, takeaway and delivery food spaces. I was excited about that. I lived in Chicago at the time, where everyone was ordering from UberEATS and DoorDash. I saw the potential for food, just not necessarily in a restaurant setting. I bring like the business creativity and technology side, and he brings all things food; culinary, food safety and nutrition; all that kind of stuff.
Ok great, what about the inspiration behind your 50 posts in 50 days with Virtual Kitchen Operator?
The inspiration came from Twitter, where I had seen success with people just sharing what they were doing transparently. It’s a different approach from the old school way of doing things where you keep everything really close to the chest and keep your secret sauce to yourself.
When you just share what you're doing and talk through why you're making certain decisions it lets people see authenticity in what you're doing. It just gives a little bit of proof that you can, you know, go out and try something. Even if something fails, you talk through what worked and what didn’t.
I thought the better game to play when building a business is just to be open and honest. To share. This leads to meeting people and building relationships. Also, I was newer to the food space and I wanted to build a network.
Ultimately, I decided that it could be cool to write a post per day about what we're working on, right up until our launch day. The launch day of our first off-premise brand was December 2nd of 2021. They were probably like seven to 10-minute reads, on average, I think some of them get a little bit longer.
Why do you want to help other people learn and launch something in this field?
I think it just feels like a good thing to do. I like putting energy back into the world and hope that my writing might help someone else that doesn't have the experience. Maybe they can benefit from my Excel skills or modelling. I couldn't find any of this kind of content myself and I definitely wished it was there. It felt like there was a gap that I could fill by just putting it out there. There is a lot to bite off with all of this new off-premise food concept in a wild-west landscape of virtual, digital brands, ghost kitchens and that.
Could you discuss the pros and cons of starting up in Columbus, Ohio?
Well, a great reason was that it is where we were from. It was a place that we knew really well. A lot of bigger food companies look at Columbus as a test site. Wendy's International is founded here. And that's a huge brand, right? It's 10 minutes down the road.
A lot of companies have a presence here. White Castle is here. Chipotle has a 5,000 person office here. It’s a hotspot for testing and trying new food concepts. It's got a mix of demographics to where it's not just the same type of person. There are all sorts of ethnicities and age groups and a big university but also downtown is the corporate side of things. There are also quite a few suburbs that all have different characteristics to them.
And what did you learn from the Smash Brothers Sliders pop-up truck?
So we launched the pop up on December 2nd with the burger brand Smash Brothers Sliders. My brother (the chef) owned a couple of food trucks so said, why don't we just start selling it out of the truck for a few months, and see what happens? We had a whole bunch of unknowns that we needed to solve before we wanted to push all our chips behind it.
We needed to know things like 'how easy is it to influence the split of your first-party orders versus third party orders? Because that's really hard to do. And if you're at 80% third party orders, you're gonna struggle in this business. We needed a grasp on how to drive people to your native channels? How hard is it to grow social media presence? How much work goes into going from 0 to 1 to take your brand to life?
So what we set out to do with this pop up was answer all of those unknowns. It wasn't necessarily designed to bank a tonne of profit. We've purposely been spending in different ways, trying different marketing and ingredients. Spending a little more to see what works and what generates demand for customers in a way that makes customers. We want customers to order from us again, and we want you to have a great experience, and we want to get five-star reviews everywhere.
I would say that not everything's been perfect. You can't plan everything from the theoretical world to the real-world - things just go wrong. What we set out to do was prove demand and prove that we could do this and figure out all those unknowns. In March 2022, it will wind down intentionally so we can start building out the next steps.
I'd like to briefly dive into the logistics of a food truck. Where were the difficulties?
Oh my gosh, everything! I was so naive six months ago, which is funny as my brother knew all this stuff. He tried to tell me I was like, I don't think it'll be that bad! Some aspects were perfect. We have full control of it, we can reach out to people and find a place for us to park that's in a target demographic of where we want to hit in a certain radius. It’s just been very hard operationally as it’s extremely complex to drive and manage your business out of a truck. Anyone doing this, kudos to them! There's zero margins for error.
For example, last night we were driving from our commissary, which is 35 minutes away from where we're actually parking - we do that drive each day. So there's an hour in lost labour for three or four people. That's four hours’ lost labour! So right away, that's a huge hit on your P&L. It's actually a lot more than with loading up. If your dinner service is from five to nine, that shift is actually like two to 12! From two o'clock you start doing checklists and loading up and making sure you have all your stuff. Then at 3 pm you're making sure it's secure before driving to your spot from 3:15 pm to 3:50 pm.
Then you're unloading everything, you're firing up the propane, you're plugging it in. It's just all this stuff you do every single day, that you just don't do in a brick and mortar spot. It's not just walk in, turn on your stuff, you're ready to cook.
That said, we were willing to take those challenges. We were willing to bite this off for three months and do it because we needed to prove that we could make this work operating a truck behind a bar in the winter where no one could see us! Could we drive attraction and demand in a digital space and get people to our storefront? Yes, we could. And that was what we set out to do. We also needed to figure out all these little data points and analytic points that we needed to know before we grow our business.
Ultimately, if you have a truck then I think it's worth testing something in it. If you don't have one, I wouldn't say it's the best route to go buy one and fix it all up and learn how it all works. It's definitely a love-hate. Now that the food truck pop up is over I'll absolutely stand by the fact that it was the best decision we could have made.
Tell me about your packaging? It seems that you didn’t want to go down the usual route?
Yeah, absolutely. What we noticed was that during the pandemic, most restaurants just took their menu and they threw it online. They took their dishes that were designed to be eaten in-store and just put them in styrofoam or plastic and sent them out via third-party apps. It was the only way they could bring in revenue when there were no dining rooms. This isn’t true for 100% of restaurants, but it is true for a lot of them.
The whole experience is generally just underwhelming and we were seeing it firsthand. Food would come to us cold, soggy, uninspiring. There was nothing memorable about the experience of ordering your dinner, it was just like, oh, I'm hungry, and I'm lazy so I’ll eat this! We wanted to attack every angle of our business from a viewpoint of ‘let's plan everything with the decision that we're never gonna have a dining room’. Let's deliver a better takeout delivery experience.
A huge piece of this is the packaging with which we wanted to do two main things. Firstly, we wanted to find packaging that would aesthetically look really cool, memorable and presentable. We needed people to be excited to open it, share it, and talk to people about it.
Functionally, we wanted the packaging to actually be useful for our product, not just like a gimmick or something you throw away. We ultimately designed the packaging around the cuisine. We sell Smashburger sliders that are two and three-quarters inches wide so our corrugated box height and width is three inches, three inches, and then it's 12 inches long. We can then stack up a couple of sliders in there, fill it with tots, put in ketchup, and it's all self-contained. The box also tells our story and has little creative things and spins about it.
We don't have to wrap every single burger in foil, which is great, because if they're wrapped in foil, you can't see the beautiful melted cheese and onions when you open up the box! It keeps it pretty warm and holds really tight so things don't fly around or fall apart. We have a bigger box that's almost like a pizza box or a doughnut box. The feeling that I wanted to recreate was Sundays where my dad would bring home doughnuts and you'd open up the box and you'd have a choice of all these cool doughnuts. That's a cool feeling! Why can't you do that with burgers?
Nice. Were you involved in the design decisions?
Yeah. When I worked at BCG, I got to do a lot of the design and aesthetic work there so I'm super pumped that with this brand I get to design and build what I have in my brain. Now it's on a box, and it's in someone's living room! It's a lot of fun. I had a background in design so we didn't have to hire someone which was nice in terms of cost as well.
What's it like working with your brothers?
It's a lot of fun. We've been cautioned so many times with ‘oh, be careful getting into business with family’ but it's just easy working with them. We're very honest and transparent with each other. We know what we're getting into. I'm sure it's case by case with different families, but for us, it's been great. We each have vastly different skill sets! Our youngest brother DJ, actually built the food truck that we're selling our food out of right now with this pop-up. It was an old FedEx truck that he rebuilt. The project has been a way for us to all come together. I am lucky to say that as I don't think many people have that experience.
Will your future brands be US-based food?
Well, our long-term vision would be to get very good at running the playbook of how do you create an awesome takeout and delivery experience? Once you can do that, we can then think about other cuisine types where we can expand on what we’ve learned. You can't just throw anything in there. You can't just spin up another concept that someone else has already done and just hope it's gonna work. There's a lot of intention and thought involved. Over time, we would love to be able to launch different brands with different cuisines but I can't say what those will be yet because we’re very far away from that. We're still just proving our first brand.
One of the key questions to ask would be are we excited about it? We would love to have built multiple concepts, all focused around the idea of making takeout and delivering food better.
What do you think is often missing from takeout experiences? Where do you see the big opportunities?
Not a lot of things are completely forgotten about but there are a lot of things that are not maximised. The big thing that jumped out to me is that the food quality has to be really good. What I'm seeing with a lot of virtual brands here in the US is that people order once and the quality is awful. They're never going to order it again! It's just, you know, a celebrity's name attached to a chicken brand that's being sold out the back of an Applebee's or something. I'm making this up but there's just nothing compelling about it. It's not enjoyable. Quality is massive and with that comes the packaging. It then comes to the menu design, the way that you pick and choose ingredients, and why you've chosen them.
Another thing that I think is often overlooked is hospitality. Something you see a lot of with virtual brands is that obviously everything's online so there’s very little human interaction. Everything's just through your phone, and then it’s dropped off, and that’s that… It’s a really tricky game to play with, having no consumer touchpoints at all.
What we've leaned into is that we can be off-premise and still drive people to our door through pickup. A lot of people are ordering our food. They find us on these apps, they find us on social media, they find us online. They place an order for pickup, they drive out, grab their bag. We always make a point to talk to our customers.
We focus on little delights. We have a secret dessert item that we stick in every single box that nobody knows about. We don’t market it but it's handed to everyone. The moment they take it home, they open it up, it looks incredible! Trying to come up with ways to still be hospitable when you're not a server or a waiter is a hard thing to do and I don't think many companies are doing it well.
Another area that I'll bring up is just the general technology experience. A lot of restaurants just throw their PDF menu online. It's crazy that people still do this in 2022! Or they add their profile to DoorDash and UberEATS with no pictures of their food; there's just nothing compelling about it.
By taking every single step to make the digital experience as good as it possibly can be, you can really set yourself apart from other people. We hired a professional photographer to take real pictures of our food that look awesome. And that's how it's actually served! Not like the gimmicky stuff that you see on TV commercials, right?
Everything has pictures, the website and experience that we designed have the ability to pre-order and throttle different orders when we're too busy. We make it super easy for customers to put in their information and click order - and then let them know that it'll be ready at this time. Boom, they get a text message!
It's all designed so that it's as frictionless as possible for a customer to place a delivery or takeout order. There are some companies starting to do well with this but there are just so many that aren't - especially the Mom and Pop restaurants that are struggling the most. All of these details has led to a lot of positive excitement and support from people that we've we've been able to call our customers.
How have you gone about taking in feedback from your customers?
Yeah, really good question. I would say, the best thing that we've been able to do so far is via this software called Ovation. By receiving orders directly to our website, we get more data retention and we don’t need to give away a 30% commission. What Ovation does is 30 minutes after a customer's got their food, it sends them a text and says, like, Hey, how did we do? Do you have any feedback, or if there was anything that wasn't great about your meal, let us know!
Every once in a while there would be someone that says like, ‘it honestly wasn't great.’ Like, you know, ‘the tater tots completely fell apart. They just weren't good.’ They're able to interact with us directly via SMS, and I follow up right back with them. So we're able to get real-time feedback. I can talk to the guys that are in the kitchen and say hey, this just happened, let's focus more on this.
This has been a really powerful software that is well worth the investment. If customers have an issue, they'll let us know. And we can fix it as fast as we can. And we can also say like, so sorry, that happened. Like here's, you know, 10 bucks off your next order. We hope we can correct it again next time. So it helps us find all the little things that we're screwing up.
We can ask customers about things like the ordering process. Some people were like, it was kind of clunky? Or like, oh, no, it was super easy. And that kind of depends on how familiar they are with smartphones and whatnot. During the pop-up, I'm working in the front window and after people have had their meal there I'll ask how the meal was. Was it easy enough for you to order? Is there anything that we could do differently next time? They're like, “No, I'm so excited.”
How have you approached social media?
It’s really hard! Kudos to anyone who is figuring out growing a brand and making it work. I do think we're doing a pretty good job. The biggest social media channel for us to drive business is Instagram. We do daily posts and create stories because a lot of people watch stories that get a lot of impressions. Reels are huge and end up getting way more impressions and views than some of our posts do.
I thought TikTok was gonna be the winner for us but we're seeing a lot more traction on Instagram. One thing that I wanted to intentionally do is put content out everywhere and see where people are watching it the most. We've done a lot of purely organic posts so it's all free. Our marketing dollars are very low. I think the best approach for us is organic, cool content that's free and relevant. There absolutely could be ROI with paid ads, but it's a lot of money and we don't have endless pockets.
Social media done well can enhance authentic connections, how have you integrated the human touch that is lost without a dining space?
One thing we do is these text-based Instagram posts where we developed a little template for anytime that we had something authentic, or like a story to share or something to tell our customers other than just, you know, here's a sweet looking burger. Anytime it was a piece of our story, we would put it in these carousels which enable us to communicate what's going on in real-time.
Another cool thing we did recently was on World Cancer Day. Cancer is something that's been impactful to our family. My grandpa and my uncle are both taken by cancer in the last few years and my brother has been working with a charitable organisation for 10 years. We wanted to do something and raise money for it so we wrote one of these text-based Instagram posts saying, Here's what we're going to do and you can support in this and this way. We want to raise money. We ended up raising $2,300 in one weekend!
We've tried to balance the really cool food posts with, Hey, here's us as a business, here's what we're doing, we want to tell you about us. And thank you for following along. That type of content has actually gotten the most engagement interaction out of any of our posts. And if you did that daily, people will be like, I'm not that interested. But if you do it every once in a while and just share a little bit, people seem to engage with it.
We also do a drip-style email newsletter campaign for anyone that subscribes or orders from us via opts into emails. We like to drip certain things about the origins of Smash Brothers, what we're up to, oh, we're doing like this new cool thing. You know, here's why we're doing that.
We just try and tell our story to people, because it seems like people care. And they get more invested in the brand and want to follow us along and support us.
Nice. Talk to us about the sustainable elements of ghost kitchens?
I think a couple of things jump out. If you're a business person, your natural inclination is like, Oh, just eliminate waste or repurpose this or do that, but it gets really hard. If you warm something up, then you have to cool it back down. There are temperature zones that you have to monitor.
A couple of things that help with food waste for us is the fact that everything is tech-driven. We're in what I'll say are pilot phases working on building out some tools where you can literally track all your ingredients and stock to all of your menus, and then across DoorDash, across UberEATS, across your own website, as things come in, you can basically see how much you have left.
I know this is just like classic stock and inventory tracking. But literally, everything is tied to a digital transaction and an online order. It’s run right through the POS. You can then get a really good pulse on how much stock you're going through and try and re-forecast better for the next week.
Additionally, when there is waste, you can get kind of creative about how you can repurpose that. If you have a whole bunch of leftover buns, maybe you turn those buns you dice them up and you turn them into a bread pudding and you sell that for five bucks.
With virtual kitchens, you could point to the fact that the barrier of entry is much lower. What do you think this is going to do to the quality of food over time?
I think it's almost a misleading narrative to say that the barrier to entry is much lower. If you already own a restaurant and want to create your own virtual brand, you already have the space, you have the kitchen equipment, you've got employees. Sure that's a pretty low barrier to entry. You can work on some digital assets, spin them up or licence in a brand.
I think if you go the route of having a cool idea for a brand and you only have let's say $50,000, you don't have a million to go build your own restaurant, right or like $250,000 to do a custom build-out in a 10-year lease or something. So your option is then cloud kitchens or something like that where it's 200 square feet of space that you're renting each month and you're selling effectively 100% through delivery channels.
Through those delivery channels, you're giving away 30% commission on every single sale. I definitely started out thinking we would be a lot more delivery focused and lean into that and be purely digital. Where our model has moved through this pop up is that it's effectively shifting more towards a more of a traditional restaurant just with no dining room, a tiny little front-of-house, no servers and no way to order at the store.
Driving for pickup is a behaviour that happens at Chipotle, it happens at Starbucks, they place their order online, they go pick it up. The margin is much better for the operator, you can do more with your data, you can retarget customers, you can have that hospitable touchpoint with customers that you don't get in a cloud kitchen, right?
If you want to spin up a brand and go month to month lease in a cloud kitchen, you can. But that's a really hard game to play because it's going to take a long time to start profiting unless your food costs are next to nothing. And you're able to sell a tonne of orders with minimal labour. And all those things are kind of a pipe dream. If anyone's out there doing it successfully, kudos to them. Because we looked at that. And we're like, we just don't see a way that this really works.
You could, in theory, get started and maybe make a brand and licence it out. But like what's going to be compelling about it, because your only options at that point are going to be to drive down food costs, or drive down labour costs, and then you lose food quality or packaging costs, then you lose food quality, you lose packaging quality, and you don't have staff that cares about the order going out the door. So if that's your only option, when you're in a ghost kitchen that had a low barrier to entry, that's a hard sell. Or if you don't own a restaurant like that's, it's hard to do that.
To do it the right way probably still takes a bit of capital, it's just different thinking of instead of having 60% of the space be dining room space, let's make 100% of the space kitchen space and try and make the experience for takeout delivery as best as possible.
And that's more toward where we're shifting to. It's more of a hybrid between restaurants now and where restaurants I think are going in the next 10 years.
Where do you want to take virtual kitchens in the next 5-10 years?
Firstly, I assume that we will pivot 45 times! What we think could be a cool experience is running a couple of brands, maybe 3 or 4 that we put our full love and attention behind. We will craft them, test them, and build them out to prove that they're desirable brands. They will then operate from the same spot.
That just makes better use of the full day. This burger brand makes a lot of sense in the evening but I don't know that it makes a tonne of sense at lunchtime. People aren't usually eating this super-indulgent meal, or sharing a 10 pack of sliders with their friends on a Tuesday at lunch, right. But maybe another brand makes sense there. Perhaps we're only getting like 60% of utilisation from our staff for this burger brand. And the other 40% We could do a completely opposite brand - something different but cooked out of the same space and we can control the way that the digital presence looks - as different brands - just cooked out of the same spot.
As long as we can really focus on high-quality food and make sure that it's really good. If you can build a couple of brands that are intentionally designed to work together and maximise your equipment, your team's strengths, the food that you've ordered, and then deliver them to a customer in a really cool way with something unique and memorable about it. I think there's room for a couple of brands that are cooked out of the same spot. It's almost like a virtual foodhall. That excites us!
I imagine many of those virtual food halls in one city and then doing that in different cities. Maybe there are three brands that are the same everywhere but one is something localised to that city? I think you get a little bit more flexibility and freedom, when you can create the digital world however you want to without investing in all these physical things like decor or build-out. For now. It's we’re focused on Smash Brothers Sliders and on making sure that this is something that we can uphold with just takeout business. It needs to be sustainable and it does seem like it's going in the right direction, but you just never know.
Nice. Is there anything you want to share with our readers?
What we've done feels like step one for us. We have no idea where the future is going but we think it's digital. We're excited about digitally-led stuff and online-lead stuff. And we're excited to just try and do different things there. So we hope this is phase one of many years of many phased approaches with lots of concepts and brands. If anyone's interested in following along on the business side of that journey, I'm going to keep writing about it at virtualkitchenoperator.com.
If anyone has questions about starting their own virtual brand or offline focus brand I am happy to talk with anyone about it. I'm a pretty transparent person and like sharing what we're doing - I think that we're on to something cool.
