bash-3.2$ ./profile

Harry Mahon

$ whoami

I’ve worked with early-stage startups and large enterprises, building from zero to one. Outside of work I make time for cooking, reading, travel, and the NBA.

$ cat experience.log

  • Startups: helped an early voice-agent company go from zero to category-leading. Worked across product and go-to-market; landed first customers. Lessons learned - fast, abundant inference, and empathetic design.
  • Enterprise: developed AI strategy, workflow adoption, and partner ecosystems.
  • Advisory: here through growth. Happy to make warm intros for win-wins. Reach out!

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About Toast

Harry Mahon ·

What is vertical software?

Many industries rely on various legacy systems in order to serve their customers and operate with their information. Vertical software is a set of solutions that streamline all operations of a business domain. Incumbents are finally facing tension from new companies looking to streamline the workflows of industries ranging from commerce to property management.

Vertical software applications allow operators to navigate all aspects of their workflow, starting with the touchpoint of customer engagement and then monitoring and using that data. These systems are a singular place of interaction and management between end-user and employees alike.

Many companies face market challenges where service providers already rely on a variety of spread out horizontal solutions to conduct business. There is also a struggle to tailor products to the individual needs of business ranges, which is an opportunity for new vertical software products to focus on and address the demands of specific business processes.

Isn’t Toast for breakfast? (Toast overview)

Toast is the most prominent vertical software company today, serving the retail needs of restaurants, cafés, and other food-oriented businesses. Toast was founded in 2011 to address the need for easier payment systems at restaurants through an emergence of mobile payments and increased service demands. Reaching an IPO in 2021 and an almost 2.8B in revenue in 2022, it has expanded its services in the post-pandemic market. Many businesses introduced Toast to promote touchless pay as an advantage to customer’s wary of in-person dining. Also, the replacements of empty retail space are being reintroduced by techno-advanced restaurants that use Toast products to streamline the payment and inventory processes. This makes it easier for customers and businesses to fill the voids of a world that was working with pre-pandemic, non-innovative, legacy options.

  • Toast offers several customer-facing and back of house solutions to restaurants and their customers.

    • POS systems for self-ordering and the incumbent cashier experience.

    • Online order and delivery systems tailored to client needs.

    • Inventory management

    • Payment processing and payroll

    • Financial lending

    Toast is focused on individual clientele, with most of Toast’s products being used by independent retailers. Toast charges monthly costs for retailers utilizing their products. Prices for businesses using Toast are dependent on the volume of transactions within a month. Toast also earns revenue from selling their proprietary Android platforms. Toast Capital provides loans to restaurants that are stored within the platform that are paid back from additional fees charged to retailers.

    Toasts earns 82% of its revenue through its platform and financial services, with the rest coming from the devices installed in businesses allowing them to conduct operations. After IPO in 2019, a reported $823M in revenue was recorded in 2020. An increase to $2.73B in revenue was reported during Q4 2022. The valuation of toast fell from $30B to $9B in 2022, indicative of cooling market trends post-pandemic. However, positive gains were recorded with an increase in revenue of 220.7% from 2020 to 2022.

    • Toast holds the first position with 21.9% of all food industry-specific payments systems, with several new and longstanding competitors.

      • Oracle has their own line of products serving the restaurant retail industry and longstanding partnerships with many food chains, such as Starbucks and KFC.

      • Revel is another competitor with a focus on creating lasting customer relationships through their own CRM for small to mid-size businesses.

      • Clover provides iOS systems to businesses with a focus on inventory management for boutique businesses.

Conclusion

Toast is the most prominent vertical software company today, serving the retail needs of restaurants, cafés, and other food-oriented businesses. Toast was founded to address the need for easier payment systems at restaurants through an emergence of mobile payments and increased service demands. Many businesses introduced Toast to promote touchless pay as an advantage to customer’s wary of in-person dining. Also, the replacements of empty retail space are being reintroduced by techno-advanced restaurants that use Toast products to streamline the payment and inventory processes. This makes it easier for customers and businesses to fill the voids of a world that was working with pre-pandemic, non-innovative, legacy options.

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