Ann Arbor’s Own Hopes To Get Michigan Coffee Houses Buzzing Again

8/23/10

The Burrito Joint eatery at the corner of Packard and Dewey in Ann Arbor might seem an unlikely birthplace for a tech startup. But that was where Verdi Erel Ergun, 27, the Joint’s owner and an MBA student at the University of Michigan, decided he was fed up with his cash register. And frustration, when felt by a creative entrepreneur, is often the spark of a new business idea.

Ergun’s year-old startup, which goes by the name of Own, is developing a Web-based cash register system that makes it easy for restaurateurs to customize the interface that their employees see when they’re entering customers’ orders or ringing up the bill. The system not only lets managers create buttons on the fly to fit a changing menu, but also gives them real-time remote access to all their stores’ sales data, and integrates customer loyalty programs with social media.

There were three components to the problem as he saw it from the Burrito Joint. Let’s say he wanted to create a new burrito item on his menu. First, he had to draw a box on the screen of his register. That’s the burrito. Then, he had to create a code for the burrito, like XY3426, and then he had to create a box and a code for every single ingredient in that burrito. “So, before you know it, you’re not dealing with real items anymore. You’re dealing with codes,” Ergun says.

Then, as the owner, if Ergun wanted to get a real-time update on sales, he would have to call up his manager, interrupting his work, to get the figures.

And at the end of a 10-hour day, Ergun would go home and update the Burrito Joint’s Facebook page and find time to send e-mails out to customers, in a separate process that was completely disjointed from sales.

“It’s just a huge pain, you know?” Ergun says the process not only wastes restaurant owners’ time, but prevents innovation by discouraging change and creativity with menu items. Today’s point-of-sale systems also make it difficult for owners to track sales, and make social-media marketing an extra burden and afterthought when it should be front-and-center in attracting and retaining customers, Ergun argues.

Verdi Erel ErgunOwn’s solution is to replace a restaurant’s cash register with a Web-based system—with Ajax to make it “feel” like software—that is easy to use and accessible. He’s aiming his product at Michigan-based coffee shops and microchains. So, let’s replace his burrito with, say, the gingerbread latte that a coffee shop might want to add for the holidays. Just click “add new item” and search. As you start typing, icons will pop up with suggestions, kind of like Google. It’s “smart,” too, and knows ingredients and suggested prices. So, using Own is not a burdensome coding project, but rather more of an affirmation process, checking things off as the system presents it to you.

Ergun says he chose coffee shops as his first customers because most of them already have well-established loyalty programs, and Own offers a way to get loyal customers into a database and reach out to them on social media. When a customer gets a loyalty card, clerks can enter their birthdays and coffee preferences into the database. Then the store can offer customers a free cup of Joe on their birthdays, or e-mail them a receipt. Having this data then allows coffee shops to follow the customer on Twitter or Facebook rather than counting on the customer finding them online. This part might sound a little creepy, having your favorite coffee shop “follow” you, but this is where Ergun says he’s in new territory and he’s still exploring.

“If we can be innovative for coffee houses to start with on the loyalty programs—you know, really taking them to the next level—involving the loyalty cards with Facebook, involving them with Twitter, doing all that from the checkout system, then I think we’ll create a compelling solution that could work for other stores.”

“Some companies pay people just to be their evangelist online,” Ergun continues. “If you don’t have that kind of budget, you lose to Starbucks and you lose to Caribou.” Own’s system gives store owners the ability to evangelize without having to hire a full-time social media marketing coordinator.

Ergun plans a beta launch of Own in November with a couple of Michigan coffee houses, and to create some buzz around what he hopes will be Own’s early success. Own recently received $50,000 from the Michigan Microloan Fund program and has won an additional $20,000 in various grants and business plan competitions.

Ergun has come a long way from the frustration of being a burrito eatery owner trying to figure out a lousy cash register system. Even better, he used his anger to create something new and innovative that he hopes will also light a fire under local coffee shops. “People are pissed off about this industry because nobody’s doing anything,” Ergun says. “The big players are resting on their laurels and somebody needs to create some buzz.”

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