CDA's hub of a high-tech dream : North Idaho Business Journal

By MIKE PATRICK
NIBJ writer

SHAWN GUST/NIBJ
Rob Berger, president of HubWorks Interactive, left, and Aaron Gabriel, vice president of the Coeur d?Alene technology company.

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The spacious offices occupying the third floor of McEuen Terrace look like the owners couldn?t make up their minds if this would be a place to work or play.
Or maybe merging the two was the whole idea.
A putter leans against a wall with an electronic golf hole a potential two-putt away. In the heart of the main office, a ping-pong table and silver Foosball game are framed by attractive furniture. You can see a couple of guitars from that central vantage point; big screen TVs and a Polk sound system are off at the moment, but you can imagine the HubWorks team huddled around to watch The Big Game or blasting tunes when the mood strikes.
Against a wall adorned with inspirational quotes is an un-Heismanlike trophy, honoring company President Rob Berger as the two-time defending fantasy football champ of the HubWorks world.
Everything about the place smacks of success, of laboring in the lap of luxury. But the truth is, this high tech rocket is yet to take off. Started in 2009 by three Coeur d?Alene guys who knew each other from their days at Lake City High School, HubWorks has developed an iPad-delivered customer order product for restaurants and bars that is being piloted in the Minneapolis area and in Hollywood, Calif.
?We?ve put a lot of blood, sweat and tears into this,? said the 29-year-old Berger, son of Nighthawk Radiology founder Paul Berger. ?There was a time we lacked a little confidence, I?ll admit. But now it?s not a matter of if it?s going to happen anymore. It?s when.?
Behind Berger in the glass-enclosed HubWorks conference room is a whiteboard with the names of nine restaurant chains. The HubWorks braintrust, primarily Berger and his fellow co-founders, Aaron Gabriel and Sam Winter, project annual revenue from their product will range from $1.2 million to $10 million or more ? per chain. That?s based on roughly $1,000 per establishment per month. In the case of Buffalo Wild Wings, which has been piloting the product at two of its Minneapolis-area restaurants for about four months, a successful test run could lead to HubWorks-powered iPads in many of its 800-plus locations.
But the multiplier could be even greater.
?This is a conservative industry that?s often stuck in their ways,? Berger said. If you can un-stick just one chain, he said, its competitors are likely quick to follow suit.
Ever since they played baseball together at LCHS ? Gabriel was a pitcher and Berger, the catcher ? they stayed in touch even though college took them in different directions. A bad customer experience as an undergrad in Boston started an idea for a new product germinating in Berger?s brain.
?In Boston you?ll go to a sports bar and you can?t get a drink,? he explained of packed places where wait staff was stretched way too thin. ?Later on I thought, ?This is a broken system and there?s a chance for us to change it.??
The pitcher/catcher combo joined up with Winter ? ?at Lake City he was our geeky friend? ? and they dove into researching the feasibility of a product that would not only speed up customers? orders, but enrich the customers? overall experience.
?We?ve all seen the kiosks that have been around since the 1990s, but our idea was different,? said Gabriel. Unfortunately, it wasn?t unique. The young men learned that one other company was doing something very similar.
?I called my dad and said, ?Somebody?s already doing this,?? said Berger. But rather than suggest his son aim in a different direction, the elder Berger encouraged him to pursue it, pointing out that what their research showed was proof of market demand.

SHAWN GUST/NIBJ
HubWorks has a hefty appetite for restaurant and bar business and a tablet-based product that has several chains drooling.

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With Rob putting up seed money and Paul Berger stepping in as one of three primary angel investors ? another is Bill Allen, former CEO of Outback Steakhouse ? HubWorks had enough capital to build a solid foundation. The Coeur d?Alene-based staff is 20 people, a dozen of them designers and developers who are constantly honing the product while the others are geared to sales and service.
With orders going directly to someone at the bar or in the kitchen, fears of servers being replaced are unfounded, Berger said. In fact, tips at the pilot sites have gone up since the devices were employed, he said. The reason: Servers have more time to actually help their guests, rather than constantly running back and forth on fools? errands.
?it?s a shift in job description, with the focus on high-quality service,? Berger said.
More importantly, overall sales receipts have increased significantly: 10 to 20 percent, Berger said. Gabriel and Berger say sales have gone up because customers don?t have to wait for a server to come to their table to order another beer, for instance; they order whenever they?re ready. Further, the device prompts customers to add bacon to a burger for another buck, or order some other add-on that directly boosts the business?s bottom line.
While they?re young ? the oldest employees at HubWorks are 41 and 39, respectively ? the team at HubWorks is old enough to think beyond their own success. They?re hoping to be part of something great on the Coeur d?Alene economic front. Gabriel and Berger spoke enthusiastically about how Bozeman, Mont., has become a powerful incubator for innovative tech start-ups.
?Some people with a little bit of money in Bozeman said, ?Let?s make some jobs,?? Gabriel said of start-up investors there. ?Hopefully, that?s what happens here: We create a hub.?

HubWorks for happy customers

Here?s how it works:
The server comes to the customers? table where a HubWorks iPad is anchored or passed around. The server shows how the device is used, if the customers are unfamiliar with it, and builds rapport while answering questions.
In addition to offering everything on the menu from drinks and appetizers to main courses, the HubWorks iPad integrates other elements from the restaurant, including memorabilia and music. At each step of the ordering process, the customer sees pictures and descriptions of the menu items and their prices. When done ordering, not only is the total including taxes listed, but an adjustable bar allows the customer to add the tip, which defaults to 20 percent if no other number is selected. If paying by credit card the customer can check out without delay. A final page encourages the customers to rate their experience, and a low rating prompts managers instantly so they can talk to dissatisfied customers before they leave.
But one of the most intriguing features from HubWorks is that while customers are waiting for their food and drinks, the iPad offers Facebook and other social media, video games, access to stock quotes and news from CNN and sports from ESPN. After enjoying their drinks or meals, customers can reach a local taxi service from their HubWorks device.
?It?s a captive environment for the restaurant,? said HubWorks President Rob Berger.
And yes, Berger says the company is likely to use the devices at some point for other lucrative revenue streams, like data mining from customers? email addresses to using the iPads for advertising.

Source: http://nibusinessjournal.com/2012/07/cdas-hub-of-a-high-tech-dream/

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