Dishonest waiters have been ripping off restaurant goers for years using a technique known as credit card “skimming.” Now, a Kirkland startup company by the name of Viableware is looking to wipe out credit card theft at the local steak house or noodle joint with a technology known as Rail.
The software and hardware company, which just closed a $956,000 angel round, essentially allows restaurant patrons to “self swipe” their credit cards at the table. The patent-pending technology also is designed to collect information from restaurant customers, kind of the digital equivalent of the comment card.
“At the touch of a finger, bills or bar tabs can be split, tips can be auto-calculated, and receipts can be emailed to customers rather than printed out,” the company notes in promotional materials. The system also allows restaurant patrons to split bills nine different ways, freeing up the waiter to conduct other tasks as the customers figure out the bill.
Viableware was founded by startup veterans Joe Snell — who previously worked at Spry, Union-Street and Pantheon — and Andy Pope — whose startup stints include MarketOrder, Point.com and Varolii. The president of the company is Steve Stoddard, the former CEO of Restaurants Unlimited who was responsible for driving $250 million in annual revenue at the restaurant company.
Pope came up with the idea of creating a “self-swiper” at the restaurant table to root out credit card fraud, and the product has since “evolved into something much bigger,” explains Snell. Potential applications could include basic surveys and a text alert system to notify managers if certain reviews fall below standards, essentially prompting the manager to make sure everyone’s meal was OK.
A restaurant with 60 tables, would likely need 18 to 20 Rail devices in operation by the wait staff. About the size of traditional credit card book, Snell says that the system includes a base station that connects to the wireless Rail devices.
A restaurant with 60 tables would pay a $3,000 installation fee, plus $345 per month for the service. Additional applications — such as real-time surveys and manager alerts — could be added for additional monthly fees.
“We are kind of a razor blade company. I am not really making any money off the devices. It is up to us to make these great applications that restaurants want to pay for,” says Snell.
It takes about a half day to install the system, with Viableware working with traditional point-of-sale vendors to handle the customer interactions.
Viableware employs 12 people, with the bulk of the hardware device being built by two large teams at R&D shop Synapse. Snell says that they are taking great pains to get the design right, noting that it is meant to be smaller than a tablet computer and simple to use.
“A 17-year-old guy on his first date at Red Robin needs to use this, but so does my 81-year-old mom in Olympia,” says Snell. “Because we touch so many different types of people, this thing has to be built in a very, very user-friendly and intuitive manner, or it becomes a burden at the table, which no one wants.”
Credit card swiping is a growing problem in restaurants, with a small handheld $300 device able to covertly collect customers’ account info quickly. (Nefarious waiters also can take a low-tech approach and simply write down the credit card numbers on a piece of paper).
Snell, for the most part, has worked in the software business for most of his career. So, he’s having a good time combining the hardware and software elements at Viableware.
And, unlike some of his past software companies, the 51-year-old entrepreneur says there’s a well defined need among restaurants.
“People are almost writing me checks for something that doesn’t exist yet,” said Snell, adding that he hopes to have the full-fledged system for sale by next Spring.
Plenty of competition exists, including pay-at-the-table offerings from Verifone and kiosk-based systems from E La Carte and TableTop Media, which is rolling out its Ziosk system at Chili’s restaurants.
Viableware is targeting higher-end fine dining restaurants that still want their customers to interact with servers.
iPads, the Microsoft Surface and other touchscreen computers are making deeper inroads into the restaurant business, but Snell thinks they will have a “tiny chunk of the market” because they aren’t industrial strength to withstand soda drink spills or spaghetti stains.
“One thing, I know, we are going to have competitors,” says Snell. “And the more successful we are, the more we are going to have and the more formidable they are going to be.”