After Opening Four Restaurants, He Wants to Build an Operating System for the Restaurant Industry | Founders Speak

Wang Dongfeng thinks that, more than an operating system, Wuwei is really a company that exports a methodology.

“The Sichuan pepper chicken was a little too salty, but everything else tasted great~”

“Never got my little coconut milk... not happy”

At a small shacha noodle shop in Beijing's Wangjing Commercial Center, the owner, Xiao Yu, has picked up a new habit: checking whether her regulars still come in.

She can see all of it on her iPad. “If the system shows a customer who used to come every week suddenly stops for two weeks running, something is probably wrong.” When that happens, Xiao Yu uses the system to message the customers who have dropped off, asking why they stopped coming.

At Xiao Yu's shop, you follow her WeChat official account to order, take a queue number and pay. When you finish your noodles, you reply with a 3, a 2 or a 1 to rate the food, and you get a discount coupon back.

Two large Xiaomi TVs hang above the counter. The left one shows the same menu as the WeChat ordering page; the right one calls out queue numbers. Xiao Yu lays out the screens on her iPad and they appear on the big displays, and they look rather good.

Xiao Yu told me 98% of her orders come in online. The shop sits in an office building, so to save time many customers order from their desks on her WeChat account and then come by to pick the food up.

Xiao Yu's noodle shop is not part of a chain, and she did not hire programmers to build anything. It stands on Chaowai Street near Beijing's Third Ring Road, 25 square meters with 30 seats, open only two months, deliberately small and good.

She bought the automated system. Two months ago a salesperson from the restaurant system “Wuwei” came by to pitch it, and since she had just opened, she decided to try it.

“What I care about most is the customer-management side, especially when we're developing new dishes — knowing what customers think is genuinely useful.”

The “OS” for Small Restaurants

The system Xiao Yu uses took Wang Dongfeng more than a year to build.

In March this year he released the “Wuwei OS Restaurant Management System,” which lets an owner handle ordering, checkout, customer management, inventory, automated WeChat marketing, staff performance and more. No special computer skills are needed; an iPad is enough.

In the six months since launch, more than 1,000 shops across the country have taken it up. Wang Dongfeng says he wants the system to take over everything in a shop the way an “operating system (OS)” does — you can also think of it as one more employee. By Wuwei's own count, it has lifted those shops' revenue by 20% on average.

On the iPad an owner can see how many orders the shop sold that day, how much money came in, how much stock is left, and whether anyone has complained about a particular server or cook.

Owners set the menu and the prices in the system, manage each dish's stock day by day, and run promotions — “5 yuan off orders over 30 yuan,” say. The backend data then shows which promotion customers responded to most.

Ideally, the owner just looks at the day's Wuwei numbers: even when you aren't in the shop you know what is happening, and you can trace any problem, or anything done well, back to a particular step and a particular person.

Besides customer management, Xiao Yu also watches the operating numbers the backend generates once a shop has been running for a while — customer retention, how active people are.

Founder Wang Dongfeng, though, thinks Wuwei's role is closer to that of a “store manager.” The starting point was a comprehensive system, and behind it sits a set of values and a methodology his team worked out about the restaurant business — meant to help the people who run shops make more money and worry less.

To Build a Restaurant System, He Opened Four Restaurants First

Three years ago Wang Dongfeng quit as general manager of the innovation department at YeePay and threw himself into studying restaurant systems. The decision was neither accidental nor impulsive: he came from a technical background and had seen openings in this market.

“Food, clothing, housing and transport make up an enormous industry, and eating is the most frequent of the four, but it has never produced a real giant. Even the ones that did emerge — Dianping, Meituan — haven't completely changed how the industry works. The failure rate here is very high, probably the highest of any industry. That leaves a lot of room. If you can find a way to help an industry that keeps going under make more money and worry less, that's obviously worth a great deal.”

Wang Dongfeng began turning the idea over in 2006 and 2007. Around the time the iPhone came out he had already registered the name Wuwei, having decided restaurants needed a system that would let them run gracefully.

His work then shifted to mobile development. After the iPhone, Android rose too, and more and more people were doing things on their phones. Still he waited, until WeChat took off in 2013. His reasoning:

“I don't think anyone should have to download an app just to eat. So I waited until WeChat rose, opened its platform and had official accounts. Once you could build on official accounts, I felt it could be done.”

To learn the restaurant business he opened four restaurants in Beijing, one after another, each on a different model — one with no seats, some with dine-in, one a buffet.

Technology alone, Wang Dongfeng felt, was not enough to build a system like this; it also took a deep grasp of the trade. “That's why the company's co-founders and first 30 employees have all, basically, bussed plates and waited tables in a restaurant.”

Let the Customers Run the Restaurant?

Running his own restaurants led Wang Dongfeng to aim Wuwei at small shops and ordinary restaurant workers.

Because the shops are small, the people running them often have no experience. They frequently don't know why fewer and fewer customers are turning up, and can't tell where the trouble is.

Wang Dongfeng hopes Wuwei can at least let them see where the trouble is, and so give them a chance to fix it. He has a very internet-industry way of saying this:

“Use the system to iterate the restaurant's operations, use operations to iterate the product, use the product to iterate the service. Use the service to iterate the brand.”

One essential piece of that, he believes, is getting customers to take part and leave feedback. The logic: if you don't like a shop, you have to be given a reason to tell the owner what went wrong, so he has a chance to improve the ingredients, the dishes, the service, the hygiene — any detail in the restaurant that might be going wrong.

Dianping alone, Wang Dongfeng thinks, can't produce that.

“Because most people who think your food is awful and your service is bad won't curse you out. They'll just walk. They'll simply not come back. The people who go to Dianping to praise you or attack you are very few. Our aim is to wake up the silent 90%.”

As for how to wake that silent 90%, the most direct incentive we saw in Xiao Yu's shop was a coupon in exchange for a rating.

Whether getting customers to follow a shop's WeChat account and rate every meal actually works is another matter.

Looking at the shop's backend data, I saw that this two-month-old place doesn't get many bad ratings — though even with rating cut down to replying 1, 2 or 3, only about 35% of customers rate anything on a given day.

But What Do the People Running Restaurants Actually Need?

The restaurant trade is also one with sore points everywhere.

Xiao Yu, running a restaurant for the first time, told me that only after getting into it did she feel the full weight of the business as the “king of all trades” — problems needing solutions turn up everywhere.

Delivery matters a great deal, for instance. How do you tie the order volume from the delivery platforms to the outgoing food and the stock levels in the Wuwei system?

How can the system reconcile the books accurately and automatically in a world where customers walk out without paying and hand over fake notes? That would free people from work that is dull and time-consuming and still has to be done.

None of this is something the Wuwei system can do yet.

Set against the restaurant systems in wide use, Hualala and Yunkelai, which essentially only ring up the bill, Wuwei does far more.

But Wuwei costs 12,000 yuan a year, three times the price of what's on the market, and shops must also buy their own Xiaomi TVs, receipt printers and iPads.

There is also a free fast-food system built specifically for shops doing delivery. It does only one thing, but it answers the most basic needs of a fast-food operation.

Among electronic restaurant management systems, these free or cheap products may be the more sensible choice for small shops whose annual takings are modest to begin with.

He Wants to Be the Restaurant Industry's Driver

Wang Dongfeng says he can only give the Wuwei system a 60 out of 100 right now.

“The missing 40 points are about deepening your understanding of it [the system]. Some things you understand but haven't built yet; your intelligent system has to keep iterating, and there's no end to it.”

“I think any company in this industry needs five years to get relatively mature, or near enough to perfect.” His definition of mature: Wuwei can make 50%-70% of the restaurants using it profitable.

Wang Dongfeng has always felt Wuwei is not just a system but the export of a set of values about running a restaurant.

He registered a trademark for it: Wuwei Inside, borrowed from Intel's slogan Intel Inside. In hiring, year in and year out, he describes a single image to the candidate.

Only a candidate who understands and is moved by it, Wang Dongfeng feels, might grasp what Wuwei is doing.

“Any computer with an Intel CPU has ‘Intel Inside’ written on the outside, which says my heart is driving this machine, and I'm very proud of that, because its system is excellent. Wuwei is the same. My system is excellent and it can take care of everything for you. You walk into a shop, you know it runs on Wuwei's system, so you can eat there with confidence — if anything goes wrong, it'll handle it.”

Q = QDaily

A = Wang Dongfeng

Q: I hear you'd rather your partners be married?

A: “At the time we decided that in hiring we had to find people who were married and had children, because this doesn't run on bursts of energy, it runs on endurance. It's a continuous process. Once a shop is using your system and something goes wrong, the place falls apart, and you're responsible for that. It isn't like buying a cup — software has to keep being updated, without stopping.”

Q: What has been the hardest part of building this company?

A: The team, first of all. Finding people suited to this work is very hard. They have to like the industry, because the business here is extremely complicated. They have to be sensitive enough to see, inside that complexity, what can be made precise, what can be solved with technology, and what you have to step back from and let the business handle itself. That's very hard.

Finding people who understand software and technology and are also willing to learn a complicated business is hard. If you're building a website, a community, a tool in a phone app, you can see it and touch it and it's simple — you just build it. But with restaurants you have to understand how the whole shop operates, the whole flow of information, how the whole supply chain works, its management strategy.

In the past this was all done by people from the software industry, but software people often don't understand user experience. What they make has terrible user experience, and people in this trade can't work with it. So everything being built now is local, and the cost of servicing it is high. If you want to make it internet software, it becomes SaaS, and the technical demands get very high. Things in this category are mostly built as tools; very few people build a system this heavy on business logic. Worldwide, there is essentially no one building a business SaaS system this heavy. That takes time, and the people you need have to be patient enough to solve the problems.

Q: What do you make of the internet restaurant brands that were hot a while back — Huang Taiji, Funiu Tang and so on?

A: First, I think everyone should thank Huang Taiji, because it was brave enough to experiment and try things, and that alone deserves respect.

But the essence of the restaurant business is probably still product and service — in plainer words, tasting good. Good taste beats everything. Offline costs less than online; pulling in a customer offline is cheaper than pulling one in online. Given that, counting on drawing customers online to get them into your shop is, I think, wrong. We don't believe most people can do it. So what we're really doing is turning your customers into friends, rather than having my system bring you new customers. I get your own people to bring you customers; I have no new customers to give you.

The reason Wuwei can help our clients is that our analysis is clear-eyed, we don't overrate ourselves, and we don't make a fuss over things that are vague and intangible. We pay more attention to things with long-term potential.

Cover image courtesy of Wuwei Technology / Yue Niangniang Lai Wan Mian