Can you tell me about yourself?
My name is Jason Wang. I am 31 years old and I’m currently living out my dreams traveling the world and discovering new places to visit, dabbling in photography, spending a lot of time eating at restaurants around the world. I started a few food companies in the past (Caviar acquired by Square) and also own a few restaurants. I also co-own a hospitality group called Umai with the goal being to continue funding and developing food concepts we really like. We are always looking for new and interesting opportunities. Currently we have Halal Guys in Seattle and currently a few concepts in the Bay Area and more projects in the pipeline. I’m also a founding partner at Beluga Capital where we invest in early stage technology companies.
Also the name Umai means very delicious/tasty in Japanese, people would say umai while they eat something very good.
What made you quit your corporate job to work on startups?
When I graduated from college I started in banking during the financial crisis when all the banks were collapsing. I was recruited by Merrill Lynch for corporate debt. By day one I was looking for another job. It wasn’t the right place for me but I stayed for 9 months because it’s what I studied during college. I studied a lot of finance and accounting. I then worked at Google as a Risk Operations Associate.
I really like tech and wanted to be in tech. Quitting Google and working on startups was what I wanted to do. I didn't want to work for someone else. I actually started a few tech companies in high school and did a little coding.
Which tech companies did you work on during middle and high school?
I worked on anime websites. I had the largest Cardcaptor Sakura website and a few Pokemon websites. I was making $1 on every 1,000 impressions and I was doing 30,000 impressions everyday. The ads were by DoubleClick before they got acquired by Google.
How did you come up with the idea for Caviar?
My co-founders and I were working on another company in our FIDI office and we were tired of eating the same food everyday. We got sick of it. One day we wanted Ike’s sandwiches and during the time it was in the Castro. It would take 45 minutes to get there and this was before Uber existed. Also you have to factor in that it would take an hour of waiting in line to get your sandwich and another 45 minutes on the ride back. That would be a total of 2.5 hours to get a sandwich for lunch and this happens to be the case for every restaurant outside a 3 block radius of your workplace. During this time very few places delivered food. What good restaurants actually do delivery in house? None. We just said lets try this idea for Caviar. We had our friends use our service and the first 3 restaurants we signed up was Ikes Place, HRD and Nick’s Cripsy Tacos. Caviar kind of blew up from these restaurants. All these restaurants had lines and we had put up Caviar posters to offer delivery. People were willing to pay a $10 dollar delivery fee for a $10 dollar sandwich. If you think about it, you have to factor in transportation and other costs and people valued their time more than the delivery fee.
We started pitching Caviar’s service to companies and it helped that catering wasn’t very good back then and companies budgets were big for food. We focused on a few restaurants and lunch only on weekdays. Companies would spend a few hundred to thousands of dollars and we would charge a $10 dollar delivery fee and take a % of the order cost. We initially focused on companies then branched out to everyone.
For people running startups, when do you think they should keep working on the idea or figure out when to pivot?
This is a tough question. For example Airbnb took over a year to gain traction and a lot of people told them to give up. It takes a lot of conviction because no idea will work immediately, its very rare to get an instant hit. It took 2 years to make Caviar what it is today. Munch On Me was our previous startup that transformed into Caviar. We spent 1.5 years working on Munch On Me before pivoting. We pivoted from Munch On Me because we ran out of money, all our employees quit and we weren’t making money. We made very little and sold just enough to keep up with the server costs, also rent was only $600 in the FIDI (more on this later).
We also pivoted to Caviar because we had 3 months of runway left. We all said that we would give it 3 months. If Caviar had no traction after 3 months all the founders would get a job. None of us wanted to get a job, so we all gave it 100%. All the founders hate working for other people. We hate big company culture, its not for everyone.
We got a great deal on our lease, it was a once in a lifetime opportunity. We also rented out half the space to another company which paid for our rent.
Any interesting Caviar stories you want to share?
In the early days you do things that don’t scale. We pushed that to the max limit. During the early days the non-technical co-founders would do customer support, marketing and etc. We worked all the way from breakfast all the way to late at night. We were doing everything, even deliveries since there were not enough drivers. And this was while we were managing customer supports calls at the exact same time while interfacing with restaurants and customers. There was no technology, just email on the phone, we would call the restaurant while the customer is on hold. We also had to call the drivers, there were a lot of moving parts, we needed to text the driver the address of the restaurant and it was very stressful. We would also have to run from zip car to zip car. Our technical co-founder would work on the tech stuff while we did all this.
What do you look for in co-founders?
You have to be able to get through the tough times together and hang in there. The co-founders and I were also in the same fraternity, we pledged together. You need people that never give up no matter what. In any business we got people that never quit, we continue until we succeed. You can never fail if you never give up. We all hate the quote “It’s okay to fail”. We hate to fail, if you have the mentality of being okay to fail its kind of ruins your psychology.
We tell everyone about our ideas because once you do the pressure is on. You work infinitely harder not to fail. Everyone knew we quit our jobs to work on startups. Our mentality was to do whatever it takes to succeed, any trick we had. If you hustle hard enough and build a product people want, this is the formula for success.
Again, entrepreneurship is not for everyone. Way I see it is people can stretch out hard work in 40 years or cram it in 5-10 years and succeed and you can live the rest of your life anyway you like. People stay in this daily routine and they can’t get out, but some people enjoy it.
I know food and tech is one of your biggest hobbies, what are your thoughts on food tech? Any interesting companies in this space? I know you’ve invested in some.
We love using Caviar and Square. They power our restaurants today. It’s so easy to get started, Square offers financing with a click of a button. Square processes our sales and we have analytics to look at. Since Caviar is a part of Square the food delivery is self explanatory. It improves revenue for local restaurants.
As far as investments in this space, we invested in a grocery delivery company, a souve device company, and backed other restaurants as well that were early supporters of Munch On Me and Caviar.
Do you have advice for people wanting to do a startup?
I see a lot of people dabbling in startups but don’t even bother unless you are 100% committed. Otherwise you’re on a path where you’re half assing your career and your startup. You’ll be mediocre in both your career and your startup and you can’t be mediocre in a startup. You either succeed or you don’t. You don’t want to be in between, that’s zombie land. It’s 0 or 1, 1 is success and you have to give up everything. You’ll have to leave your full time job and the customer will be the priority over other things. A lot people might not like it but that’s the reality of what it takes to become a successful startup.
You also need a really good team that can execute. You can be great yourself but you need a great team to build a company around.
I know you’re one of the partners at Beluga Capital. What do you look for when you invest in tech companies?
The team is primary, the team has to be great. I look at the past history of the type of stuff they built. I also want to see traction, we don’t invest in pre-ideas. They need to have a product that has been launched. We are pretty selective over at Beluga Capital.
What do you look for when you invest in restaurants?
It has to be food that we like to eat. Something that we can eat on a daily basis, fast casual. We’re not interested in investing in fine dining. It also has to be repeatable food. Something that could be the next stable in American cuisine.
What are some things you learned from the acquisition experience and advice for people thinking about selling their companies.
Try to give yourself as much flexibility after the acquisition. There are a lot of clauses in the legal contract, look through the details. You may not care about this during the acquisition but afterwards, a year or two in it can be very important. For example can they hold back any proceeds from the sale? If the company gets in a lawsuit, you want to limit your downside. You also want to make sure you have a few potential acquirers so you aren’t limited and you have more negotiating power. You want to be in a place where you don’t have to sell your company. If you’re in a position where its an option and may not even be the first option, you get more negotiating power.
If the company is pre-IPO, take the stock, its much better for your taxes. Make sure you have the legal paperwork done as well. The 83B and QSBS could save you millions of dollars in taxes that you otherwise may have to pay. You may not think about it in the beginning, but you should take care of it.
Also you get pitched by financial advisors once they see the potential acquisition news, so do your own research, figure out how to financially support yourself. A lot of entrepreneurs are not financially savy. It’s important to understand the financial side as well.
What are some unique differences in challenges when running a startup and restaurant since you have experience with both?
Restaurants are all operations. Tech startups are more scalable, you can write code and distribute it over the Internet. Restaurants are also way more capital intensive. You can start tech companies for $0 dollars on the computer. Restaurants require construction, hiring people, raw ingredients, etc. Restaurants is more lifestyle whereas tech companies there is no cash flow for a long time, but there is bigger potential.
Do you have a story of hardship and how you overcame that hardship?
First 3 years of my startup, everyday was a struggle. We ran out of money, people quit on us and no investor wanted to give us additional funding.
We also sold blood and ran off to do 1 hour research studies to make $100 dollars. We also applied for food stamps and I borrowed money from my parents to survive. At one point we sold all materials we didn’t need in life to help us with another month of rent and feed ourselves.
I ate this $3.99 chicken and rice plate in Chinatown for dinner everyday for over a year. I couldn’t afford something over $4 dollars for dinner. For lunch we did eat Subway though, and paid for the $5 dollar footlong special everyday.
I know you love traveling, what are some traveling tips you wish you had known when you first started traveling?
Get global entry and use a credit card and become smart with using credit card points. You could stay in 5 star hotels and fly business class flights for free. Make sure to join all the loyalty programs out there, they’re free to join and theres no reason not to join them. Everytime you fly or stay at a hotel you accumulate points.
What made you start Cityfoodsters? How did this idea come about?
I love food and photos and when you combine it, it becomes a food blog. I started with local food only in the Bay Area but we expanded to international restaurants. I blog about the best restaurants in the world. In 2012 I had a meal at Alinea with Grace and that spearheaded our fine dining, before Alinea we didn’t really eat at fine dining restaurants.
I know I bug you a lot about credit card points and how to effectively use them. It's pretty simple but there are a lot of details, what are some things you would tell someone wanting to be smarter with credit card points?
Never waste your points by booking directly on the points website. Always transfer to a hotel or airline partner. Never wait last minute for anything, book months in advance. I recommended ExpertFlyer’s subscription service. You get instant notifications when something becomes available and more.