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Launch HN: MAC'D (YC S18) – Fast-Casual, Build-Your-own Mac and Cheese
51 points by antonybello on Aug 9, 2018 | hide | past | favorite | 40 comments
Hi HN!

We’re Chen-Chen and Antony from MAC’D, a fast-casual, build-your-own mac & cheese restaurant. Pick one of our six cheese sauces, a pasta base, add unlimited toppings like roasted broccoli and mushrooms, and top it off with anything from truffle oil to hot cheetos. We’re currently in San Francisco and Portland.

MAC’D was inspired by a mac & cheese restaurant called Homeroom, which Chen-Chen frequented while at Cal. Fast-casual has consistently been the fastest growing segment in the food and bev industry, so it made sense to apply that spin to an old-school comfort food like mac & cheese. It’s a social, nostalgic, late-night meal that’s both familiar in taste and unique in experience.

After graduating from Berkeley, Chen-Chen was a management consultant, but quickly realized that consulting wasn’t the career for him. Together with a part-time partner, he began drafting up ideas for a restaurant concept. The one that struck a chord was mac & cheese. After confirming high demand through several pop-ups in early 2017, Chen-Chen and his partner opened MAC’D’s first brick & mortar in SF’s Marina District. About 6 months in, Chen-Chen’s partner made a decision to pursue business school, and Chen-Chen ran the restaurant solo until opening up a second location. Antony was a friend of Chen-Chen’s and had been following MAC’D’s progress while a software engineer at AWS. He worked in restaurants throughout his life and after a brief stint as a chef in Milan, knew he wanted a career in the food industry. Chen-Chen had been pretty spread thin running two locations with eyes on a third, and good timing on both ends led to our partnership.

In a little over a year, we’ve successfully bootstrapped two locations in SF and have served over 75,000 meals. We’re profitable and have a validated concept in a city with among the highest costs in the US. We want to continue to grow and expand to other cities.

In Portland, we’re using low capital commissary kitchens to explore new food markets through catering and delivery. Commissaries give a low managerial overhead and remove front of house staffing / building costs. It’s a way of getting into new markets quickly and intelligently, with the goal of proving a market and getting our name out before investing in brick & mortar spaces.

We’ve identified roughly thirty cities across the US as potential locations for MAC’D. Our customers range from families looking for a predictable meal to more boisterous late night crowds. Our target markets are college towns, cities in the south and midwest, and ones with progressive food scenes, both in and outside the United States. We’re also ramping up on catering, so if you’re in SF and Portland, reach out! Our catering form is on www.getmacd.com. We’re also on instagram @getmacd.

Hi Chen-Chen and Antony,

Why did you choose to join YC with a restaurant business?

Is there a technology differentiator in your business?

I have a lot of experience in the on-demand food space and your method of using commissary kitchens is very smart and will allow you to access tens of thousands of customers without an expensive build out.

I would guess net (after paying the delivery platforms for distribution) you're saving about 10% once a kitchen is operating at a reasonable scale.

Is that a model you're looking to expand into other concepts? My understanding is the entrepreneurs going the commissary route are operating multiple "restaurants" simultaneously out of a space since there isn't any reason not to.

Great questions.

We believe that YC builds companies that are lean, scale efficiently, and build products that people want. We felt like we had a product that people wanted, and wanted a bit more guidance on how to grow.

Our technology differentiation is taking advantage of the growth of delivery platforms to scale our business via commissary kitchens.

We've talked briefly about expanding to other concepts once we've established a network of staff and kitchens, but are looking to focus on the MAC'D brand and product first. But in the world of food, who knows!

>Our technology differentiation is taking advantage of the growth of delivery platforms to scale our business via commissary kitchens.

I'm reading this as having commissaries specially for take-out/delivery apps to make use of, rather than being for dine-in space (and presumably a level of prep work), which sounds like an interesting concept. I own a food truck and have been considering how to go about having availability on delivery apps myself, definitely great food for thought. Best of luck on your endeavor!

You intend to penetrate the market outside of SF with commisary kitchens? That's interesting. How do you intend on tackling employee management/training and food distribution quality though?

Also nice site.

Have you explored offering pick-up directly from the commissary kitchens? Not sure what local regulations you'd be navigating there or provisions on your lease, but redirecting diners there with some collateral you include with every delivery order could provide you additional orders without paying the platforms for every order.

That concept may work if you're an independent offering a unique item for the area. For example, http://www.windycitypie.com (chicago pizza pequod's style) in seattle started out this way by having online-only pickup/delivery from a commissary kitchen in an industrial district south of downtown.

We're working on that with our Portland commissary right now. There are talks of installing a delivery/pick-up window to better operations. Stay tuned!

Is there anything to learn from the experience of "The Melt"? It seemed they started with a grilled cheese focus, didn't do so well, and pivoted to burgers. Now they seem to be doing well (however this is only through observation, I have no idea of their finances). It would seem Mac & Cheese would find a similar issue of being too narrow / too niche. Granted, if you don't intend to have in-person location ordering be a big piece of the business, then maybe that is irrelevant.

Location was two of their main problems.

High rents and limited food options (so they went into burgers) and the high rent locations they took in suburban malls often came with contracts which explicitly stated they couldn't sell burgers due to competition with other mall burger places.

Looks like this is very different in that they're mostly selling through Uber Eats et al and some locations. They can easily expand to selling anything they want out of these commissaries.

I’m assuming a giant bowl of pasta and cheese is incredibly unhealthy, even with some brocolli sprinkled on top.

Do you have any moral concerns with this company? We’re a massively obese nation...

Yeah honestly it sounds pretty gross. But I’m sure there are a lot of people out there that want to eat very un healthy food. I mean, look how many McDonald’s there are in the world. Personally I would never start a company whose sole mission is to feed people things that are definitely bad for them, and I’m surprised that this is the product they chose to launch with when there are SO many easy and cheap ways to get unhealthy food already. Uber eats will deliver me McDonald’s for free in under 20 mins, plus Taco Bell, jack in the box etc etc. It seems like a huge opportunity to bring that kind of convenience and cost effectiveness to healthy food. Almost everything healthy near me is 2-5x more expensive. But if someone could figure out how to make delicious healthy food at scale and deliver it to me, wow. I would be so stoked. So I hope these founders will consider thinking about more than a bottom line as they scale up. The world doesn’t need more Mac n cheese.

Does YC have any moral guidelines for the companies they fund? I was assuming there’d at least be a hand-waving “make the world a better place” or something, but I’m not seeing anything on their principles page: http://www.ycombinator.com/principles/

Would YC fund a cocaine delivery company if it was legal and profitable? A news site that fuels revenue by spreading hate? Military recruiters in poor neighborhoods as a service?

There's a quote attributed to Redd Foxx that I read years ago in, of all places, a bodybuilding magazine I subscribed to. "One of these days, all those healthy people are going to end up dying of nothing."

How about we just let people make their own informed choices? I love mac & cheese and would happily use this service if I were in their target area. I also made my family sauteed broccoli and rice for dinner last night. Although you might complain about the freshly baked peach pie and vanilla ice cream I made for dessert!

Not everything needs to be a hand-wringing concern about the future of civilization; sometimes we just need to enjoy ourselves.

This is a fair point when there are limited options available (price, availability, location, convenience). In Portland, there are tons of options that are healthier and cheaper.

Was checking out the website and thought how it would be nice to check this place out but all these tech startups are in SV. And then scrolled down and saw you guys have a location like half a mile from my house in Portland!

Definitely checking it out soon!

We used to get Homeroom catered to our company so I'm pretty familiar.

Its pretty delicious but also really heavy. I noticed that it was difficult finding something that I'd want to eat on a recurring basis, and that must have been uniform because we stopped getting catering from them after 6 months or so.

I'm curious to know if you've seen recurring business from customers or just getting new business because its a new concept and people love mac and cheese and want to try.

While there are trends in fast casual, I'd say there are also trends in healthier eating. Have you thought about how to provide healthier / lighter options to encourage more habitual ordering from existing customers?

Also another idea is food trucks as mobile storefront. A pizza truck a block away from me bought access to an unused parking lot, and while they do provide walk-ups, the majority of orders are fulfilled by delivery companies. Since they are located in a parking lot on a busy street, I will often see 4-5 Uber / Postmates / Eat24 cars lined up waiting for their quick-fire pizzas.

Your point about trends in healthier eating is a great one and something we're cognizant of. We're partnering with some awesome vegan food vendors in the next weeks to come, and we've had talks about other menu items that are complementary to Mac n Cheese, as well as having smaller portions.

Like most restaurants with new concepts, we need to draw a line between catering to everyone and sticking to our brand. Out of the above ideas, we'd want to experiment with smaller portions. But we'd like to continue getting feedback on our current concept before making these changes.

While I love Mac n cheese, and your menu sounds delicious - I'll tell you why I will most likely never eat at your place: price.

While there are plenty of people who will, and you will certainly be successful - I just have "price fatigue" where one can't seemingly even feed themselves for an affordable rate.

The cost of food is too high.

Let's assume the average cost of a meal from your place is $15 as is generally what appears to be the average cost of a meal anywhere, eating anywhere is just so expensive.

Even a "meal" from McDonald's in a really crappy location such as 24th and mission in SF is $11.

I'm sure people will always pay for the convenience, I just can't justify paying premium prices like $15 for Mac n cheese.

I have three kids.

Now imagine a family where each in the family can't be together for, say, lunch.

Each parent needs to eat, and each child needs to eat.

If all members of the family were to go out and need to buy lunch - even if it were $10 per lunch and the family had to buy 4 lunches twice a week....

So, I just think pricing for food these days, across the board, is unsustainable.

First off, kudos on launching multiple successful restaurants in a tough city like SF!

> Our technology differentiation is taking advantage of the growth

What does this actually mean? Reading between the lines, sounds like you're going for a standard cloud kitchen model. Besides nicer packaging for delivery, seems like you'll be operating a regular kitchen that does take out. Some platforms like Uber supply restaurants with analytics and data for optimize the menu, I'm curious what you guys planned on doing in-house that was tech heavy.

Don't get me wrong - having a high-growth, low-tech company is amazing - but I'm sensing that the tech-side of this business is overstated by your comment.

As we scale, things like monitoring operations and rolling out changes quickly (new recipes, modes of preparation, etc) become difficult. Expanding will help us see bigger gaps in our own processes, and that's where we believe that tech can come in and make operations more visible and smooth. At least, that's what I'm excited about :)

I wondered why Peet's Coffee (200+ locations worldwide) still uses paper checklists to ensure employees are following procedures, and it may have remained archaic because it's physical and familiar. But that's not the direction we want to go.

I only read: build you own Mac. and i'm all ready for, my screwdriver in hand :)

Please make one next to MIT - the fast casual food situation sucks now due to the construction. There's one food truck, a chipotle, and a clover and maybe a greek place within a reasonable distance from the campus.

Will the prices of your product be flat across the nation or will that be dependent on location?

Curious to see how hard it is to manage quality of food across the states.

Interesting concept, best of luck!

Definitely will be dependent on location. e.g. our Portland prices are (very) slightly cheaper than our SF prices.

A fascinating exposure to alien food.

Where does this idea of "mac and cheese" as a specialty come from? Who's going to find this stuff "nostalgic" and "familiar in taste"? Wouldn't your restaurant be equally "fast-casual" and more interesting and high quality with a traditional curated menu of good pasta recipes instead of build-your-own cheese and "anything"?

Love Mac and Cheese, was excited to hear about it a while back. Went to MAC'D in the Marina with family. Pretty good! Though heavy for us and not as much meat. Perhaps we'll get ourselves MAC'D again every now and then. Made for great day-after leftovers. Perfect for some midnight munchies. I'm also originally from Portland, maybe I'll grab some next time I visit!

How do you guys plan to strategically and operationally adjust as you expand in to markets that far removed from economics and social drivers of SF?

We can't wait to be in markets removed from the economics of SF! San Francisco has the highest costs of running a restaurant (labor, rent, food) and consequently, hurts our margins.

In other areas removed from social drivers, we'll spend less time on our viral social media presence and more on grassroots marketing and community engagement.

It's our thought that if we can make it (twice) in SF, we can make it in other areas where the unit economics are so much better.

The tradeoff is that many folks in SF who would eat at places like this are fairly inelastic (if not completely ignorant) to pricing of meals. So while your costs are high here, you have a population that can order an $X dollar bowl of mac and cheese without thinking twice. Places like that are few and far between in the US.

In these other areas, will you pay your employees a living wage?

Absolutely - we've always paid a premium for our employees, even in SF, and we will continue to do so!

I love Mac and cheese and this concept so was excited when noodles and co came to Orlando but it quickly shut down. I hope you guys have better luck and make it to the east coast!

Is it possible to "double down" where I can pay double and get double the mac n' cheese?

Do you offer an option to lobsterate my mac n' cheese?

If/when you expand into Canada, can I start the pilot franchise in Ottawa called KRAFT DINER?

You mention cities in the south. Are you going to adjust the recipe to southern taste?

I’ve dined here. It’s great!

I live near your new place on Polk. Love it. Keep it up!

Is this a joke?

Good grief.

I wanted a flying car and all I got was a pasta bar chain.

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