Consumer

We invested in 0x, a project designed to create a protocol for decentralized exchanges, because we believe financial disintermediation is the largest benefit from blockchain tech. If you can disintermediate centralized entities that seek unnecessary rents by replacing them with protocols operating at marginal cost, everything becomes more efficient. There’s no real good reason to pay a centralized exchange 0.25% every time you do a trade, and there’s definitely no reason to store your funds with them and hope that they don’t get hacked.

As blockchain tech scales more and more, people will start tokenizing more assets that users will be able to trade on it. As the definition of a financial asset broadens, people will need trading venues to trade them on. Instead of manually setting up a new market each time, with 0x people can programmatically create markets between pairs of various tokens.

Our cost basis was about a penny, so we're up 200x.

There hasn’t been a true zero to one improvement in the food industry since McDonalds in the 1950s.

There are two major cost centers that plague all QSRs: real estate and, and labor. It currently costs most QSRs $1-2 million to open a new location. Labor is invariably around 30% of their budget, with incredibly high turnover and high amounts of training thus required. Clearly the answer is automation, which would cut down labor costs and allow for a much smaller real-estate footprint, which in turn opens up a whole new set of prime locations to target. I’d expect to see, at some point, an automated equivalent of McDonalds, or Starbucks, and in the long term would expect small machines where you can request your favorite Bobby Flay or Gordon Ramsay meal cooked up for you on the spot.

Despite the obviousness of the solution, as well as the amazing teams and significant capital that’s been injected into the space, to our knowledge, nobody has really been able to get to the point where they have one unit up and running in the wild that truly proves out their unit economics. We believe that there are two main reasons for this. First, and most importantly, the majority of these companies are trying to use custom hardware, which is super expensive, takes a long time to develop and iterate on, and is incredibly difficult to scale, to the point where they can’t do so in a way where it economically makes sense to cut out human labor. Second, once this hurdle is closed, we’ve found that these technology-focused companies do not have a good grasp on retail — where’s the optimal location, branding, way to survey customers, etc.

Then we met Greg Becker. Greg understands retail: his father founded the incredibly successful QSR chain, Roti, which is chaired by his mentor, Mats Lederhausen, the former chairman of Chipotle who took them public. At Roti, he did everything from making buckets of hummus to going to every board meeting, where he participated in strategic planning at every level of the business.

During his time at Roti, Greg came across all the problems mentioned above, and came up with a novel approach. He realized that the price of off-the-shelf hardware, specifically robot arms, was dropping dramatically, to the point where he could write software to combine these parts into a full-functional automated restaurant with unprecedented unit economics. Greg and his team have a unit up and running at their lab in Berkeley, and plan to ship one into the wild in 2018