Ben Leventhal would moderately inform you the place to take a seat at a restaurant than what to order. “In the event you go to Balthazar, sit on desk 62,” he says, sipping his tequila. “It’s on the left facet of the room and also you’ll get the most effective views.”
During the last 20 years, the forty-something New Yorker has been instrumental to the rise of foodie tradition. First, he instructed us the place to eat, launching information web site Eater in 2005—since acquired by Vox Media. Then, he helped us to order tables, co-founding Resy in 2014, which catalyzed “reservation tradition,” by funneling the provision of greater than 16,000 eating places into one app. As we speak, he’s immersed in his newest restaurant tech enterprise: Blackbird Labs, a shared loyalty program for eateries, the place diners obtain factors within the type of crypto tokens.
For Leventhal, the brand new enterprise is about greater than discovering a brand new strategy to mix expertise and delicacies. At a time when many small eating places face existential threats to their enterprise mannequin, he hopes Blackbird can present them with a brand new stage of financial savvy—and in doing so, hold alive the form of venues he describes as his “blissful place.”
Eating out takes off, but eating places are in decline
On a somber August afternoon in Manhattan, Leventhal is aware of simply the place to flee the showers darkening the town: NoHo’s darkish and stylish Temple Bar the place menus and faces are learn by candlelight, regardless of the hour or season. With mahogany partitions, a checkerboard flooring, and pay cellphone, the 90s decor pays homage to the last decade when the restaurant first gained notoriety—an period when the artwork world would flock inside to drink martinis out of its signature, outsized glasses.
We’re at Temple Bar since it’s considered one of Blackbird’s early patrons, but additionally as a result of it displays his fascination with the spectacle of eating. “It’s really probably not in regards to the meals,” he admits, earlier than gesturing to Andy Warhol’s disco ball within the nook, speculating on the story behind it. “Seeing eating places do what they do effectively—I get actually excited,” he says.
However whilst iconic spots like Temple Bar keep their mystique, Leventhal additionally is aware of a tough fact: revenue margins of eating places have been in regular decline. Meals prices hold climbing, labor shortages persist post-pandemic, and lease has soared.
Regardless of this, the variety of new restaurant listings on Yelp hit an all-time excessive final 12 months. And in June, New York legislators even handed a invoice banning reservation markets, the place Resy bookings had been promoting for as much as $1,000. “They’re extra standard now—that’s what’s interested by it,” he says.
Given all this, Leventhal believes the eating places he loves have a combating probability if they’ll work out how to make more cash from prospects strolling by their door—particularly the common ones.
Eat-to-earn crypto tokens
In tech and crypto jargon, Blackbird is a decentralized eat-to-earn app. In sensible phrases, which means customers who frequent eating places that use Blackbird earn what the app calls “$FLY factors.” One other approach to consider it’s as an old-school loyalty rewards program constructed on new-fangled blockchain expertise.
Transactions involving FLY are stamped onto a spin-off blockchain (a “Layer 2” in crypto communicate) known as Base that was constructed by crypto big Coinbase with the aim of decreasing the stiff transaction prices that may come from utilizing the first Ethereum blockchain.
Diners care no extra in regards to the nature of Blackbird’s blockchain than they do in regards to the wires transmitting their Visa funds. However most will care in regards to the perks they’ll obtain from accumulating FLY factors similar to complimentary dishes, welcome drinks and last-minute tables.
Vance Spencer, co-founder of enterprise capital agency Framework Ventures, instructed Fortune that he makes use of the app on a regular basis, as his favourite breakfast spot simply so occurred to be on the community. The perks? He’s not paid for espresso in six months. As of July, customers have additionally been capable of pay the test in-app with FLY, by way of the funds community, Blackbird Pay.
Blackbird builds upon what Leventhal has learnt about eating tradition all through his profession. That’s, in cities like NYC, exclusivity is on the market. For instance, a buyer is extra inclined to e-book a desk if they’ll see it’s the final one, or a spot on the waitlist opens up on the remaining hour. Noticing this, Resy commodified the reservation itself: it “turns into the primary occasion,” the corporate wrote in a latest weblog publish.
Within the case of Temple Bar, the historic venue’s embrace of blockchain is undetectable to the bare eye. However, there’s one merchandise, devoid of 90s attraction, that provides it away: The so-called “check-in” level. Blackbirders scan what seems to be a steel hockey puck upon arrival, and to open a brand new test. The blockchain data the place they ate, how they ordered, and what they spent, to estimate their lifetime worth. Companies, which pay $89 month to make use of Blackbird, can then spot when it’s value providing a free drink or the most effective desk. “In the event you do this repeatedly, then you definitely’re on the trail to financial viability,” Leventhal says.
The trail to adoption
Blackbird’s thesis is compelling, particularly when laid out by the charismatic and hyper-rational Leventhal. However on the frontlines of the eating places it’s designed to avoid wasting, the service is a piece in progress. Moments earlier than his arrival at Temple Bar, his publicist asks the server for “the puck”—solely to obtain a glance of bemusement in response.
“If I see the Blackbird system at a restaurant, I attempt to strike up a dialog in regards to the app with the hosts or maître d’,” one consumer instructed Fortune, on the situation of anonymity on account of working in crypto. “However they normally have little to say about it.”
Even when restaurant workers seem perplexed or detached to the app, it seems to be getting traction amongst a extra crucial constituency: diners. In accordance with a Blackbird spokesperson, adoption has elevated 10-fold through the year-or-so it’s been stay and its roster now consists of about 0.6% of the town’s eating places.
Nonetheless, if Blackbird goes to induce prospects to make use of it, a sure threshold of companies should be a part of, so as to incentivize downloads. “I haven’t actually benefited but as an off-the-cuff consumer,” the client added.
When requested in regards to the adoption curve, Leventhal acknowledged there’s a threshold to spark virality. Whereas he didn’t disclose the place that tipping level could lie, it’s “decrease than individuals suppose,” he insists. “Within the meantime, belief us to curate nice eating places.”
The duty of persuading eating places and customers to enroll will doubtless be smoother provided that Leventhal seems clear-eyed in regards to the attraction of crypto—or lack of it—for the common diner. He acknowledges that blockchain is unlikely to be a promoting level for the fits in Le Bernardin, or the It Women at Clandestinos.
“That may not be a promote that works,” he says. And for the end-user, the crypto aspect isn’t noticeable. “Crypto individuals are simply obsessive about placing the phrase ‘crypto’ earlier than issues,” he says.
Conserving worth within the trade
Leventhal by no means got down to change into a crypto founder. Earlier than Blackbird, he was merely a “curious observer” of the trade. Slightly, through the early days of the pandemic, in a dialog with enterprise capitalist Fred Wilson, companion of Union Sq. Ventures, he articulated a nebulous thought about making a common forex between eating places. Crypto was solely talked about later, because the expertise that made essentially the most sense to carry it to life. Certainly, the blockchain element is what allows eating places to share buyer information and commerce a single forex.
Ostensibly, Blackbird is a loyalty program, however at its core is Leventhal’s imaginative and prescient for a shared, rising pool of capital—FLY’s market cap—that’s stored throughout the hospitality trade. Theoretically, this implies a consumer can earn FLY by consuming at one restaurant, however then deploying it one other, the place they by no means spend a dime.
“Eating places ought to favor that prospects spend their cash on different eating places, moderately than on inns or a firstclass airplane ticket. That approach, it’s protecting worth within the trade,” he says. Certainly, FLY can’t but be traded between customers, on exchanges, or used for off-app purchases, nor has Blackbird introduced plans to take action.
Within the bruising enterprise of hospitality, Leventhal is daring eating places to like thy neighbor. If he pulls it off, date nights and birthday dinners could quickly be settled with FLY.