Steve, Aman and Jon were at dinner when they realized the restaurant industry needed a serious tech upgrade. The three MIT grads had met at enterprise software company Endeca, and had been thinking of starting their own company in the mobile commerce space.
From the willingness to listen and the ability to innovate in the face of failure, a Boston unicorn is born.
The first product they made was a customer-focused mobile payment app, developed in Aman’s basement and launched at a local Boston pub. It flopped.
But that didn’t stop them. They realized that the app was just adding to the restaurant operators’ woes on an already-busy Friday night; servers certainly didn’t need one more thing to juggle. The trio probed further, and discovered that what was really broken was restaurants’ central operating system: the POS. So they shifted gears.
This pivot was critical. Restaurateurs previously reluctant to discuss the mobile payment app would now talk hours about how much they hated their existing POS: they were difficult to operate, poorly serviced, and expensive to fix. Here, indeed, was a big problem worth solving.
Using their background in enterprise software, the team hired restaurant experts and relied heavily on early customer feedback to iteratively build a platform to manage all operations. The platform prioritized mobility, ease of data access and updates, and a better consumer experience.
The company virtually exploded overnight. Two years from being founded, Toast had signed over 1,000 merchants across the United States and grown to over 120 employees, requiring a space upgrade from 7,000 sq ft in Cambridge to 40,000 sq ft at the Hatch Fenway co-working space. In early 2015, Toast brought on Chris Comparato (Acquia, Endeca) as CEO.
Shortly after, they met F-Prime Capital which participated in their first round of institutional round funding, raising $30M; within three years, Toast raised $115mn in Series D funding, and its official unicorn status at a valuation of $1.4bn.
As the company continues to grow, it remains obsessed about customer feedback and hyper-focused about the entire restaurant experience, both cornerstones of its success.