No one has been spared the effects of the epidemic, but the foodservice business has been hammered especially hard by it. It is estimated that more than 90,000 restaurants and bars have closed, causing thousands of workers to lose their jobs in an already precarious industry. Those who managed to keep their employment had to deal with the onerous demands of customer service amid a pandemic.
Because of the shifting nature of the foodservice sector, food service veterans are starting their enterprises, whether it’s delivering takeout meals in their neighborhood or distributing cans of kombucha across the nation. For example, “people tell them that they create fantastic cakes,” Castiron founder and CEO Mark Josephson noted. “People also tell them that their sourdough is better than everyone else’s,” he added. “Their spicy sauce is outstanding,” he said. In addition, they have aspirations of selling and starting a business, but they end up spending 75% of their time doing things that are not their strengths. He’s referring to anything that doesn’t involve cooking, such as creating a website, keeping track of funds, and doing other administrative duties.
He took this opportunity to create Castiron, an e-commerce solution for independent chefs. Castiron reported today that it had raised $6 million in initial investment from investors Bowery Capital, Foundry Group, and High Alpha. Josephson is a three-time CEO in the technology business — he previously led outside. In, which was sold to AOL and then served as CEO of Bit.ly for seven years — but Castiron is the first firm he has started.
As of October, Castiron gives its customers (whom it refers to as “food artists”) fully configurable e-commerce websites that include dynamic inventory management, order fulfillment facilities, newsletter and marketing tools, and other features and functionality. Until the food artisan earns money, Castiron does not make any money; at that point, the platform takes a 10 percent cut, plus the standard 2.9 percent + $0.30 payment processing fee.
“After having done five, six, or seven previous businesses, it was crucial to me that with this one, we were completely connected with our clients,” says the founder of the firm. “As a result, I only care about being successful if our consumers are also successful,” he said. Our clients are risk-averse, so we must provide them with a no-risk product to trial.
Castiron is only available in the United States, where rules governing home food companies (sometimes known as “cottage food laws”) differ from one state to the next. However, due to the rising incidence of unemployment since the outbreak of the epidemic, several jurisdictions have made it simpler to operate independent food companies lawfully. Currently, Josephson thinks around 40% of Castiron’s users are involved in local delivery enterprises, 40% are engaged in product pickup businesses, and 20% are interested in shipping businesses. “Several hundred” people have signed up for Castiron. The seed round will support a recruiting drive to expand the firm.
As Josephson pointed out, “this drive of entrepreneurs who are developing little enterprises is going to be a significant part of our economy moving ahead.” It’s the first time I’ve seen something like this in my years working in media, digital media, and software marketing. And, to be honest, I’m expecting boxes of chocolate chip cookies, roasted coffee beans, biscotti, sourdough, and spicy sauce to arrive at my door this week. The thought occurs to me, “What exactly is the problem with that?” “Can you think of anything better?”