Disruption: How a YouTuber with 50M Subscribers Opened a 300 Branch Chain Restaurant on the FIRST DAY

This is the story of how a YouTuber with 50M subscribers disrupted the traditional fast food chain with a nationwide rollout via a mobile app on the first day. It’s also a story about how traditional businesses can find ways to partner with the new economy, lest they lose their relevance and fade out.

Let’s put these numbers into perspective, it took In-N-Out over 60 years to reach 342 locations and even McDonald’s which is one of the fastest growing fast food chains took 5 years to reach 228 locations. 

For McDonald’s and In-N-Out it also took them some years to standardise quality and service standards, yet here we are in 2021 and a YouTuber who is all of 22 years old, managed to grow to 300 branches in less than 30 days.

The Modern Day Celebrity on YouTube

MrBeast aka Jimmy Donaldson is a YouTuber who started in 2011 with some gaming video content which did not get much views. However after one viral video later (recording himself counting to 100,000), which garnered millions of views in a few days, he managed to become one of Youtube’s most popular content creators. Now with a subscriber count of 50.7 million subscribers and 9.3 billion views for his videos (as of January 2021), on a sad note Zencode’s video subscribers is only 5. 

The Unlikely Partnership - Cloud Streaming Meets Cloud Kitchens

Now you might imagine that there is no correlation between a YouTuber and a Food & Beverage business. 

But imagine his videos as a marketing and distribution network for which there is a captive audience of over 50 million people. In perspective, McDonald’s serves 68 million customers every day from 37,855 locations (facts from 2018). 

Yet realistically you can’t start a restaurant without any expertise or experience to build a kitchen, staff and location. And here is where it gets interesting. Using a cloud kitchen provider (who incidentally also helps with the concept, technology and delivery integration) MrBeast was able to both tap on the experience and leverage the existing infrastructure to start and scale up. 

What are Cloud Kitchens aka Dark Kitchens you might be asking? They are essentially commercially fitted kitchens located in central locations, but crucially not in the prime retail space area, but an offsite industrial building or upstairs office space. They provide a budding entrepreneur all the commercial grade equipment to prepare their food for delivery apps within the prime location area without the associated capital costs and high rental a prime walking location requires.

The company running this service for MrBeast is called Virtual Dining Concepts which goes beyond what Cloud Kitchens typically provide and adds conceptualisation, development of the mobile app, staffing and training for food operations for those staff and delivery integration. They specifically target celebrities and high performing YouTubers to come up with relevant kitchen concepts, including the likes of Mariah Carey and Rapper Tyga. 

The Leverage (The Gradual Pivot)

But Virtual Dining Concepts actually leveraged the owner’s traditional business footprint to maximise the outcome. Building upon the key ingredients that make up a restaurant, namely the kitchen, prime location and the kitchen staff. The owners understood that they could use that wide production and distribution network to partner with food delivery apps which were starting to take off in 2018. 

And what this comes down to is the shift that Industry 4.0 has brought, the advent of the App Store all those years ago means that the “footfall” in the virtual world “shopfront” now exceeds or matches those in the physical world. The number of users utilising mobile apps like Foodpanda, Deliveroo, etc. (much like some mobile apps that Zencode has developed) help make starting a pure delivery only business viable for a budding entrepreneur. However with content creators like MrBeast that means that they can do even more with their own distribution mechanism, marketing and captive audience, but scaled up much quicker leveraging the resources of Cloud Kitchens.

The Missing Piece - Connection to Customers on the Mobile

The other key vital ingredient in this whole business is the mobile app, which crucially allows customers to find a location close to them for delivery or pick up, order their meals and make the payment online. But more than the function it connects the customer to the essence of the brand, it’s the key touchpoint of what they are buying into and the key part of their purchasing decision. 

With a clean and simple UX, that is well suited for both Android and iOS, it leads the consumer straight to purchasing decisions. The key order of the day is, keep the choices simple, don’t discombobulate the customer. A good UX (along with a good product) is the key to high conversion to cart and checkout. 

But with new concepts popping up and improving, it won’t take long before the need to revitalise and enhance that online experience will happen as other celebrity YouTubers start to see opportunities as well (we see this often at Zencode with our clients and believe small changes are more inexpensive and improvement engagement than large changes that are done less frequently). So there is a continual need to upgrade the touchpoint and add new experiences that enhance the customer experience. 

In the end the goal of every successful app is to become an ecosystem of services to improve the daily usage time and customer wallet spend.

Conclusion

Much like the 1st industrial revolution of old, the next one will move quickly and ferociously. And those that adapt, adjust and embrace to the possibility of new business models leveraging on existing knowledge or infrastructure will not just survive, but thrive. 

And ending with a quote from Ray Dalio (Billionaire Founder of Bridgewater Associates)

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