DRINKS ON KOZLOWSKI: How Wharton Entrepreneurs are Disrupting the Bar Experience

Meet one of the WBPC Semi-finalists! See the full list here.

Mark Kozlowski, Evan Glickman, Tyler Neal and Kiran Pookote have created a mobile app currently called Ignite that focuses on removing inefficiencies in nightclubs by allowing customers to order drinks from their phones. In addition, it will incentivize customers to bring their friends to a particular nightclub by generating discounts based on the drink price and the number of friends. Here’s what Mark Kozlowski had to say about the idea:

 

Can you quantify the impact of this app on the bar and its customers?

MK: The biggest impacts of the app to patrons are increased speed of service, control over their bar experience, and the institutionalization of large-party discounts that are normally handled through negotiations with bars.  We are projecting a 50% increase in bartender efficiency, which will translate to customers getting their orders much faster.  As it relates to the bar experience, Ignite provides users with much more information and purchasing power in what was previously a very powerless environment.  If you want a drink immediately, you can pay for VIP service or simply order the FastLane item.  If you choose to wait, you’ll know roughly how long it will take and you can stay with your friends instead of hovering by the counter.  And lastly, Ignite will credit users’ accounts based on the size of their party.  The bigger the party, the bigger the discount.  We think that with a good amount of people, this will be in the $10-$15 range — so pretty sizable.

For bars, the value-proposition comes down to volume and cost savings.  How many more drinks would you order at your favorite downtown bar if you knew you could get them instantly?  Even more importantly, how much of a factor would this speed be in your bar choice?  The crowd-sourcing discount isn’t really that much different from a cost perspective for bars – they do group-discounts all the time.  Automating group discounts through the app just makes the process easier for all parties involved.

Another thing that maybe not everyone realizes is that bartender theft is a major issue for bars and nightclubs.  In Philadelphia, the industry standard is that 17% of revenue at bars is ‘lost’ due to bartender’s over-pouring drinks or straight-up gifting them to encourage higher tips.  Since tipping is pre-set (much like Uber) and Ignite controls all portions of the transaction, the opportunity and incentive for this type of theft is removed.  Bartenders are thus better off taking Ignite orders because of the increased volume they can serve, in some cases doubling their income/tips.

 

How will you respond to restaurant apps who may start to sell their services to nightclubs?

MK: This isn’t a major concern for us.  Restaurants and nightclubs are very different environments with different needs and infrastructures.  What will work at restaurants (also a pretty open field right now) will almost certainly not work at nightclubs.  There are very different customer/owner needs for the different establishments.

 

What are the biggest risks you anticipate?

MK: We have some legal risk – every locality has their own unique liquor laws, but we’ve researched some of the harsher states like MA and NY and we are pretty confident that our service falls squarely within the law.  Even so, we are likely open to some litigation when something goes wrong, which is pretty scary but manageable.  There are also a lot of other players in this space.  We think we are highly differentiated but at the end of the day there are a lot of factors to balance between user, bartender and bar owner experiences and someone else may get the formula right first.  We are counting on the overall industry growth to shield us from most of the competitive forces but we won’t know until we are out there en force.  Receiving the Wharton community’s full support come go-live will be a key dependency of Ignite’s success.  We are confident that the value Ignite creates for each stakeholder (bar owner, patron, and tender) will be enough to make it a must-have within the bar experience.


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