In 2008, Dan Leahy and Ben McKean were living and working on Wall Street. After college, the buddies took analyst positions at Brown Brothers Harriman and Merrill Lynch, respectively, and moved into an apartment together less than 100 yards from their offices. But in September 2009, they left all that behind. They quit their jobs and Leahy moved into a windowless basement apartment in the Lower East Side while McKean traded the luxury pad downtown for his brother’s couch. They cashed out their savings to start Savored.com.
Savored offers members online reservations and 30 percent discounts at upscale restaurants. Members register with the site for free and pay a $10 fee per reservation. In just the last six months, they’ve grown their member network by 228 percent, and their staff has grown from six to 45 full-time employees. Savored’s membership growth can be directly attributed to word of mouth among the frequent diners. “Dining is inherently social. Very few people dine out alone; our average party size is more than three people. People hear about the discount from their friends and sign up the next day,” Leahy said. “People love food, people love high-end restaurants. It’s a talking point, it’s something that really brings people together, and leveraging that, leveraging that friendship, has been the biggest driver of our growth.”
Until last month, the site was called VillageVines. Leahy and Ben McKean decided to rebrand their company as Savored and launch a new website in response to the growth they’ve experienced over the last few years. They now serve a total of ten cities around the country. To reflect the sophisticated, upscale restaurants they work with, they felt the name ‘Savored’ was a better fit than VillageVines—a name they came up with when the majority of their restaurants were located in New York’s West Village.
Sensing the Opportunity
While working in the financial industry, both Leahy and McKean handled accounts in the technology sector, and they watched large, national brands utilizing technology to revolutionize their companies. However, they didn’t see the same opportunities for local businesses to market themselves online.
While still working their day jobs, Leahy and McKean would use their lunch breaks and spare time to speak with small businesses owners. They talked to a wide range of consumer service businesses and they found that owners knew they needed to market their brand better online, but didn’t know how.
Though they talked to several business owners in several industries, they decided to focus their attention on the places here, they spent the most money: restaurants. Leahy and McKean saw an opportunity to help restaurants fill tables during off-peak times. In the restaurant business, the most popular places can be slammed during peak dining hours, like 8 pm, and practically empty during less popular dining times, like 5:30 pm. Vacant tables at any time of day means missed revenue opportunities for the owners.
“In the restaurant industry, there are times where there is slack demand, which really hurts business,” Leahy said. “If you have a table that isn’t filled, then you’re going to get nothing out of it. There are tons of people who would dine out [during non-peak hours] if it was a little bit more affordable.” By “a little bit,” Leahy means 30 percent, and with this discount in mind, Leahy and McKean sought to give people an incentive to go to quality restaurants at times when the restaurant would otherwise be below capacity.
Not Just another Groupon
Savored is different from other discount sites like Groupon, Restaurants.com, and LivingSocial because Leahy and McKean are very specific about their target market and its needs. Today, they reject up to 70 percent of restaurants who want to partner with Savored because they do not meet its criteria. The company has business development teams in every city who immerse themselves into the dining scene to discover qualified places.
To keep the entire experience as upscale as possible, Savored users make their reservation and when their check comes, the discount is already discreetly applied, “When you go into a fine dining establishment, you don’t want to have a printed coupon, it doesn’t fit into the high-end dining experience,” Leahy said.
A Team That Makes Mistakes
Leahy accredits Wall Street with preparing him and McKean for many things, but building and managing a team wasn’t one of them. In banking, the majority of hiring is seasonal and very structured, and with a budding company, finding great new talent is an ongoing process.
Lindsay Tigar is the Editorial Assistant at The New York Enterprise Report. She can be reached at email@example.com.