Software Executive Magazine

OCTOBER/NOVEMBER 2017

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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startups, a handful of large direct competitors, and a growing number of POS software companies dabbling in online ordering add-ons, the company sits a solid number two behind OLO in market share and revenue. To date, the company has targeted what it deems "enter- prise" restaurants—those with more than a couple hun- dred units—almost exclusively. That's a simple product of the economics of the company's development and im- plementation costs, which are directly correlated with restaurant menu complexity. Some restaurants offer a lot of modifiers and complexity, while others have very simple menus with little variation. These seemingly simple considerations have significant implications on the development of online ordering software. "We really have to make sure we scope projects appropriately," says Taylor. "We're a SaaS company, and true to that model, the service is repeatable—generally, 85 percent of the code that drives an engagement is repurposed. The 15 percent that gets customized for each brand can require some heavy lifting on our part, and that's where we need to be careful about pricing." It also needs to be careful about forecasting and book- ing revenue. It's one thing to sell and contract an online order management application, Taylor explains, but it's quite another to get it implemented and generate rev- enue. "Constantly shifting priorities in the restaurant space can result in go-live delays, which in turn make it difficult for us to make revenue projections," says Tay- lor. It's therefore incumbent on his sales and implemen- tation teams, he says, to ensure Onosys clients consider their online ordering initiative a priority and stick to their go-live schedules. With a firm foothold in enterprise-class hospitality, Onosys is turning its attention to a massive opportuni- ty downstream. The company recently launched a sec- ondary channel strategy to reach the lower tiers of the restaurant market. "We're not equipped to onboard sin- gle operators and small chains, but we offer a toolkit that allows the resellers who own those relationships with small operators to resell our application." While chan- nel sales represent only a single-digit portion of current Onosys revenue, Taylor sees the 600,000-unit indepen- dent restaurant market as a significant opportunity over the next three to five years. "Our channel model is to support the reseller, not the restaurant brands. We be- lieve that if the reseller can implement and service our solution, that market can get real for us quite quickly." If investment analysts are on their game, it's about to get really real for Taylor and Onosys. Investment firm Cowen predicts the total U.S. food delivery market will expand an incredible 79 percent by 2022, from $43 bil- lion to $76 billion. Considering that current figures peg 43 percent of all delivery orders as originating online, Taylor's tenacity is poised to pay off big. S W A R N I N G S I G N S O F W A N I N G L E A D E R S H I P Taylor says misappointed CEOs are a common mistake among startups. "I have plenty of entrepreneur friends who thought that someone else was best suited to take the company to the next level, and that's usually not the case." Neither, he says, does misalignment in the C-suite always manifest itself in overt disagreement. "You know there's a problem before verbal disagreement even arises, because by then, it should be obvious that goals are not aligned." Taylor is quick to point out that the misalignment he references isn't trivial – it's not a healthy debate over marketing strategy or a human resource policy, which are simply aspects of running a business right. In the case of Splick.it, it was a fun- damental disagreement on the company's exit vision. "When the CEO takes on a tone that alludes to giving up and cashing out, that's a pretty good indicator that something's wrong," he says. "When things get tough for entrepreneurs, they double down and work harder." That doesn't necessarily mean spending more, how- ever. Once it was established that Taylor would resume the role of CEO in June 2015, the company pulled back on its growth-mode spending spree. "We brought the business back to cash flow breakeven and then pulled our horns in a little bit and regained control," he says. That correction set the company up for quite the oppo- site of an early exit – it set the stage for Splick.it's May 2016 acquisition of competitor Onosys, the brand name the company assumes today. T H E E C O N O M I C S O F TO D A Y ' S O N O S Y S In the year-and-a-half since the acquisition, the 40-em- ployee Onosys has added more than 9,000 new sites to its portfolio. In a market flooded by small "garage band" " WE BROUGHT THE BUSINESS BACK TO CASH FLOW BREAKEVEN AND THEN PULLED OUR HORNS IN A LITTLE BIT AND REGAINED CONTROL. " Rob Taylor CEO/Founder/Chairman at Splick .it /Onosys 23 SOFTWAREEXECUTIVEMAG.COM OCTOBER/NOVEMBER 2017

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