ClusterTruck Inc., an Indianapolis-based delivery-only restaurant, has decided to sell the software that has driven its success and created a new company, Empower Delivery, to do so.
Many start-up companies struggle with the decision to develop their own software in-house or outsource it. Developing software in-house can be a monumental expense for a fledgling company, but it gives firms more control and a potential future revenue source if they decide to sell it later.
To sell or not to sell – your company’s software – is no easy decision. Some companies think selling their software is akin to giving away their competitive advantage. Others prefer to focus on their core competency. One such company is Indianapolis-based Oak Street Funding, which was recently featured in BizVoice® Magazine. Founder Rick Dennen says the company had lengthy discussions about selling the high-powered financial lending software that allowed the firm to take on clients – and profit from them – that other lending institutions wouldn’t touch.
“We had hours of discussion about becoming a technology company and selling our software,” Dennen recalls. “We agreed to stay focused on the lending side of it, and that’s the path we’ve gone down. But the piece of software we have is truly incredible.”
But it’s no surprise ClusterTruck went a different direction. It’s founder, Chris Baggott, after all, is a tech guy at heart. He is one of three co-founders of ExactTarget, the marketing tech giant that was sold in 2013 to Salesforce for $2.5 billion.
ClusterTruck has always been as much about the technology that allows it to speed tasty food to the doors of hungry customers as the food itself. And Baggott is one of Indiana’s best-known market disruptors. This is a guy who even questions the need for “flipping” hamburgers in the cooking process.
Empower Delivery isn’t Baggott’s first pivot into software sales.
But he was something of an accidental disrupter. Baggot was operating a small dry cleaning operation – Sanders Cleaners – on Indianapolis’ north side and in Hamilton County, when he stumbled onto the idea for ExactTarget in 2000.
He was trying to find a way to better communicate with his customers. His initial direct email customers were other dry cleaners who heard about his innovative marketing method.
“I was going to be the data-driven dry cleaner,” Baggott explains. “The data part worked out.”
His dry cleaning business went bankrupt and closed, but by that time, Baggott – and his brother-in-law, Scott Dorsey – had started selling their software to other restaurants and retailers. ExactTarget’s disruption of the direct-mail and marketing segments was well underway.
Empower Delivery, explains Baggott, is a software company that allows delivery-centric restaurants to drive profitably and sustainably serve off-premise demand. With Empower Delivery, restaurants can offer less than 30-minute delivery times, food that is never older than seven minutes with less than 10% delivery fees.
Using the in-house-developed, proprietary software, ClusterTruck has delivered more than three million orders in multiple markets over the last six years.
“We could not have made such an elegant solution without designing the software hand-in-hand with our restaurant operations,” Baggott states. “But now it’s time to share the results of that hard work with the restaurant industry. The performance of ClusterTruck, driven by its software, was too good to keep to ourselves.”
Drawing on his experience as a software innovator, Baggott launched ClusterTruck after observing how unsustainable an incremental approach to delivery was for many restaurants. The software that has been the key to ClusterTruck’s success is available to restaurant groups who want to take control of their delivery business.
“The restaurant delivery market is starting to mature towards more purpose-built, delivery-centric kitchens,” Baggott said in a news release announcing Empower Delivery’s start. “Restaurants are realizing the opportunity to make more money while delivering a best-in-class experience and better value to their guests. For hospitality-focused restaurateurs, this is the tool that enables them to serve their fans on delivery occasions without sacrificing their brand or guest relationship.”
Empower Delivery recently closed a seed round of funding led by Allos Ventures and High Alpha Capital, both based in Indianapolis.
“We are thrilled to partner with this experienced leadership and engineering team,” says Allos lead investor David Kerr, “as they simplify and streamline the restaurant technology stack.”
