From Sushi Conveyor Belts to Back-of-House Automation: The MarginEdge Story

In this blog post, we'll explore the fascinating journey of Bo Davis, the visionary behind MarginEdge, a platform revolutionizing back-of-house operations for restaurants. Bo's path is far from typical, starting with conveyor belt sushi restaurants and leading to the creation of a powerful tool for restaurant efficiency. We'll delve into his diverse background, the challenges he identified in the restaurant industry, and how MarginEdge evolved to meet those needs. This article expands on the conversation in our recent podcast episode, How Revolving Sushi Led To Automated BOH Operations | Season 8, Vol. 19, offering a deeper dive into the story behind MarginEdge.

Bo Davis: A Diverse Background

Bo Davis's career trajectory is anything but linear, and it's this very diversity of experience that makes his story so compelling. He didn't start in the tech world or with a burning passion for accounting software. Instead, his journey began with a seemingly unrelated venture: conveyor belt sushi restaurants.

Before diving into the restaurant industry, Bo's experiences were even more varied. He served in the US Peace Corps in Macedonia, an experience that undoubtedly broadened his perspective and instilled a problem-solving mindset. This commitment to service and his exposure to different cultures likely influenced his entrepreneurial spirit later in life.

Following his time in the Peace Corps, Bo pursued an MS in Finance from the prestigious London Business School. This provided him with a strong understanding of financial principles and business strategy, laying the groundwork for his future ventures. He then founded Prometheus, an educational software company, which he successfully sold to Blackboard in 2002. This early success in the tech world demonstrated his ability to identify market needs and create innovative solutions, skills that would prove invaluable in his later endeavors with MarginEdge.

The combination of international experience, financial acumen, and software development expertise created a unique foundation for Bo's entry into the restaurant industry. It wasn't just a random career change; it was the culmination of diverse experiences that equipped him with the tools to see the industry with a fresh perspective and identify opportunities for innovation.

The leap into the restaurant world came with the creation of Wasabi, a group of conveyor belt sushi restaurants located in Washington D.C. and Boston. This venture wasn't just about serving delicious sushi; it was about understanding the intricacies of running a restaurant, from managing inventory and costs to dealing with suppliers and tracking profitability. It was within the day-to-day challenges of Wasabi that the seeds for MarginEdge were sown.

The Genesis of MarginEdge: Solving Restaurant Challenges

Running Wasabi provided Bo with firsthand experience of the pain points and inefficiencies that plague the restaurant industry, particularly in the back-of-house. He witnessed the tedious manual processes, the struggles with inaccurate data, and the constant juggling act required to keep costs under control. It was clear that technology could play a much more significant role in streamlining these operations.

One of the biggest challenges Bo observed was the manual entry of invoices. Restaurants receive countless invoices from various suppliers, and manually entering this data into accounting systems is a time-consuming and error-prone process. This not only wasted valuable time but also led to inaccuracies that could impact profitability. He knew there had to be a better way to capture and process this information.

Another key issue was the lack of real-time visibility into food costs. Restaurants need to closely monitor their cost of goods sold (COGS) to ensure profitability, but traditional methods of tracking inventory and costs were often outdated and unreliable. Bo recognized the need for a system that could provide up-to-date information on food costs, allowing restaurants to make informed decisions about pricing and purchasing.

Furthermore, integrating point-of-sale (POS) data with accounting systems was often a cumbersome process. Reconciling sales data with inventory and costs required manual effort and was prone to errors. Bo envisioned a system that could seamlessly integrate POS data with accounting, providing a comprehensive view of the restaurant's financial performance.

It was these challenges that ultimately led to the creation of MarginEdge. Bo's vision was to build a platform that would automate back-of-house operations, eliminate manual data entry, and provide restaurants with real-time insights into their financial performance. He saw an opportunity to leverage technology to solve these persistent problems and help restaurants operate more efficiently and profitably.

The name "MarginEdge" itself reflects the company's mission: to give restaurants an edge in managing their margins. By providing better data, automation, and insights, MarginEdge empowers restaurants to optimize their operations and improve their bottom line. It's about providing the tools and information needed to make informed decisions and stay ahead of the competition.

Series C Funding and MarginEdge's Focus

MarginEdge's commitment to solving restaurant challenges has resonated with investors, leading to significant funding rounds. In December 2022, the company secured $45 million in a Series C funding round, a testament to the growing demand for its platform and the potential for future growth. This influx of capital has allowed MarginEdge to further invest in its technology, expand its team, and reach a wider audience of restaurants.

Bo Davis has made it clear that MarginEdge isn't planning to pivot away from its core mission. The focus remains firmly on helping restaurant operators streamline their back-of-house operations and improve their financial performance. The new capital is being used to "dig in" and deepen MarginEdge's commitment to the restaurant industry, rather than pursuing new and unrelated ventures.

This unwavering focus is a key differentiator for MarginEdge. In a crowded market of restaurant technology solutions, MarginEdge stands out for its specialized expertise and its dedication to solving the specific challenges faced by restaurant operators. The company's deep understanding of the industry, combined with its innovative technology, has made it a trusted partner for restaurants of all sizes.

The Series C funding is being used to enhance MarginEdge's existing product offerings, improve its customer support, and expand its sales and marketing efforts. The company is committed to providing restaurants with the tools and resources they need to succeed in a competitive and ever-changing industry.

MarginEdge's commitment to its core mission is also reflected in its company culture. The company is built on a foundation of customer service, innovation, and a passion for helping restaurants thrive. This culture permeates every aspect of the business, from product development to customer support, ensuring that MarginEdge remains focused on delivering value to its customers.

Team Growth and Product Development

MarginEdge's success is also driven by its talented and dedicated team. Bo Davis emphasizes the importance of building a strong team with a shared vision and a commitment to excellence. The company has been strategically growing its team to support its expanding product offerings and its growing customer base.

One of the key areas of growth has been in product development. MarginEdge initially built its core product with a small team of five developers. As the company has grown, it has significantly expanded its development team to 45 people, allowing it to accelerate product development and introduce new features and functionalities.

This investment in product development has enabled MarginEdge to continuously improve its platform and stay ahead of the curve. The company is constantly listening to its customers and incorporating their feedback into its product roadmap. This customer-centric approach ensures that MarginEdge remains relevant and valuable to its users.

In addition to product development, MarginEdge has also been growing its sales team. The sales team has expanded from a handful of people to approximately 50, allowing the company to reach a wider audience of restaurants and expand its market share. This expansion is critical to MarginEdge's continued growth and success.

MarginEdge's team is not just about numbers; it's about talent and expertise. The company has assembled a team of experienced professionals with a deep understanding of the restaurant industry and a passion for technology. This combination of industry knowledge and technical expertise allows MarginEdge to develop innovative solutions that address the specific needs of restaurant operators.

MarginEdge also places a strong emphasis on training and development. The company invests in its employees to ensure that they have the skills and knowledge they need to succeed. This commitment to employee development fosters a culture of learning and innovation, which is essential for a company that is constantly pushing the boundaries of what's possible.

Expanding the Market: Targeting Accounting Firms

While MarginEdge's primary focus has always been on selling directly to restaurants, the company has recently recognized a significant opportunity in targeting accounting firms that work with restaurants. This strategic shift has the potential to significantly expand MarginEdge's market reach and impact.

Bo Davis explains that accounting firms were already using MarginEdge, often without the company's direct knowledge. These firms found the software incredibly helpful because it streamlined the process of capturing invoices, getting them into accounting systems, and integrating them with point-of-sale data. This allowed them to focus on higher-value tasks, such as cash flow management and strategic planning.

The realization that accounting firms were effectively using MarginEdge as a key component of their service offerings led the company to intentionally target this market. By partnering with accounting firms, MarginEdge can reach a wider audience of restaurants and provide them with access to its platform through a trusted advisor.

This approach also benefits accounting firms by allowing them to offer more efficient and valuable services to their restaurant clients. By using MarginEdge, accounting firms can automate many of the tedious and time-consuming tasks associated with restaurant accounting, freeing up their time to focus on more strategic advice.

MarginEdge's accounting integration is designed to seamlessly integrate with popular accounting software packages, such as QuickBooks and Xero. This makes it easy for accounting firms to incorporate MarginEdge into their existing workflows and provide a seamless experience for their clients.

Targeting accounting firms is a smart strategic move for MarginEdge. It allows the company to leverage the existing relationships and expertise of accounting firms to reach a wider audience of restaurants and provide them with access to its powerful platform. This strategy is likely to drive significant growth for MarginEdge in the years to come.

Conclusion: Streamlining Restaurant Operations

Bo Davis's journey from conveyor belt sushi restaurants to the creation of MarginEdge is a testament to the power of diverse experiences and a problem-solving mindset. By identifying the challenges facing restaurant operators and leveraging technology to solve those problems, MarginEdge has become a leader in back-of-house automation. The company's unwavering focus on its core mission, its commitment to product development, and its strategic expansion into the accounting firm market position it for continued success in the years to come.

MarginEdge is more than just a software platform; it's a partner for restaurants, providing them with the tools and insights they need to thrive in a competitive industry. By automating back-of-house operations and providing real-time visibility into financial performance, MarginEdge empowers restaurants to optimize their operations, improve their bottom line, and focus on what they do best: serving great food and providing exceptional customer experiences. Listen to our full conversation with Bo Davis on How Revolving Sushi Led To Automated BOH Operations | Season 8, Vol. 19.