At the end of this month, Stevan Premutico will step away from Dimmi, the online restaurant booking platform he founded in early 2009. Under his leadership, Dimmi has withstood “well-funded” international competitors and wooed TripAdvisor, which acquired it for a reported $25m two years ago.
In conversation with Dynamic Business, the departing CEO reflected on his journey with the market-leading start-up that began life as an idea scrawled on a napkin.
DB: Why did you feel it was time to depart Dimmi?
Premutico: Honestly, I feel like I have done what I set out to do, which is make the restaurant industry better. I am so, so proud of what the team has achieved and where Dimmi is at that I feel comfortable handing over my baby [to current GM Jared Chapman] and moving on . The team I leave behind is one of the best in any small business in Australia.
DB: Can you paint a picture of the success you’ve had?
Premutico: You can look at success in a number of ways. Firstly, there’s the tangible stuff… we have partnered with 50% of all restaurants in Australia, including marquee brands such as Rockpool, Urban Purveyor Group and Merivale. Further, Dimmi accounts for 20% of all reservations generated in Australia and we have seated 40 million dinners – in fact, we’re now seating 1 million a month. We’ve been able to help our restaurant partners make money and win new customers. Consequently, we are the clear #1 player in our space.
The thing that I’m most proud of – and that I believe defines Dimmi’s success – is that we made it through the start-up years. For me, the company’s story is one of grit, resilience and true determination to make an industry better. We shouldn’t have made it through. On the one hand, the industry was old-school and reluctant to change. On the other, big international competitors threw everything they had at us…but we made it. We made it because of a small team of 50 who truly believed in what we were doing: making the industry, including the lives of our restaurateurs, better.
DB: Was it difficult launching Dimmi during the GFC?
Premutico: It made it almost impossible to raise funds but in hindsight it probably made it easier to change the industry. Restaurants were struggling and I knew they needed to change, to innovate, to embrace technology to survive.
DB: Was it ‘business as usual’ following the TripAdvisor buy-out?
Premutico: TripAdvisor, to their credit, have been a remarkable partner and have allowed Dimmi to be what it always was. By acquiring Dimmi, they gave the company the capital and support it needed to continue growing.
DB: What were the key challenges at the company’s helm?
Premutico: Wow, there were so, so many. To be honest, I am surprised we made it through the early days – it was pretty rough at times. As with any start-up, there were moments over the years where we almost didn’t make it. Five key challenges come to mind:
- Restaurants thought we were nuts: It was difficult gaining momentum during the first couple of years because they were reluctant to change. Not only did they want to retain the personal touch of taking reservations by phone, they were still deeply attached to their pen and paper diaries. Further, nobody had CRM strategies for their database, many didn’t have websites (let alone mobile websites) and social media was a foreign concept. We knew that when we got them to the other side, the digital world, it would be significantly better for them and the industry but it was a tough slog – one by one, meeting after meeting. We literally had to drag them kicking and screaming.
- Running out of money: We had a big vision but revenue was super thin in the early days so we had to find creative ways to get through. There were two pretty scary moments when we almost ran out of money. The first was when my seed investor, a family friend, had to revise his contribution from $300,000 down to $200,000…the problem was that much of the additional $100,000 had already been committed, so we needed to find another investor quickly! The second moment came about three years in. We were over-optimistic about some of our revenue lines and I took my eye off our cash position. We went from tight – supertight – to not being able to pay our bills and our people. It’s tough because as soon as an investor knows you’re desperate for cash, they will try to squeeze you. Luckily, we found another investor just in time.
- Recruiting the best people: I always believed that the only hope we had of making Dimmi work was by attracting great people to make it happen. Unfortunately, great people typically come with big fat salary expectations, which we couldn’t meet early on, so we had to find other ways to attract them. Our approach was to focus on what we could offer employees what very few other companies could; namely, the ability to work for a company where you could truly make a difference and have an impact on the world.
- Retaining the start-up culture: While this has become harder and harder as Dimmi has grown, I’ve remained very focused on ensuring a) we never got complacent, b) we continued to innovate rapidly, and c) our customer service and restaurant support were best-in-industry.
- Remaining sane: Without a doubt, this was the biggest challenge during the start-up years! When you’re passionate about business, sometimes there’s just not enough time or resources available to realise your ambitions. Fortunately, I found yoga – it’s my personal savior. It’s an opportunity to do nothing for an hour. In such a crazy world, that time is sacred to me.
DB: What made you stick to your guns despite overseas threats?
Premutico: We’ve had four well-funded international players try to win our market. When the first one struck, in the early days, one of my team members broke down in tears, saying “we are small, they are big, they will crush us.” While you freak out at the time, the funny thing is that in hindsight you realise the big competitors just make you stronger, much more determined and more focused. When OpenTable arrived in 2015, it was with a big bang. They had lots of money and had carried out a huge acquisition of a local incumbent. Two years later, we have won the battle. We were two very different companies. We truly wanted to help make the industry better. It was never about the money for us. Restaurants were in our hearts, they were part of our DNA.
DB: What has been the secret to Dimmi’s longevity in the market?
Premutico: I would say it’s the things that have set us apart from our competitors including an understanding that ‘small and fast’ beats ‘big and slow’ plus the following:
- We had a first-mover advantage – Owing to our head start, we had the market largely stiched-up. Over that period, we had formed long-term (and mostly exclusive) partnerships with key consumer channels and had built a brand that was the ‘go-to’ place for consumer search and discovery.
- We spent years building meaningful relationships with restaurants – consequently, when someone else came along and offered them a cheaper option, it just wasn’t enough to break the bond we’d established.
- We assembled a team of people who really cared – we truly believed that a restaurant would be better off with Dimmi than with anyone else, so we battled hard to ensure we never lost an account.
- A commitment to being innovative – in a competitive world you can never stop, never get complacent. The introduction of Dimmi Payments, was super important for the industry. Enabling restaurants to take partial/full deposits or even full payment up-front has been key in eliminating no-shows. I also love our Yield Management product, which is designed to help drive more bookings in off-peak times. It’s crazy that the industry still charges the same prices on a Saturday night as they do for a Wednesday lunch.
DB: Is the restaurant booking industry still ripe for disruption?
Premutico: Every industry always is. I truly believe that technology will continue to turn this great industry on its head. In Australia, we have some of the best restaurants and chefs in the world but there are some big challenges we as an industry need to overcome – these included the highest labour rates in the world, ridiculously high rent costs and crazy new 457 visas rules that make our lives that much harder. The industry doesn’t just need answers, it needs solutions too and I think technology can play a big role. I feel Dimmi is best positioned to lead that disruption.
DB: You’ve said you’d like to launch another start-up…any ideas?
Premutico: I have a bunch of ideas but I am in no rush. My first move, post-Dimmi, is a three-month sabbatical so that I can breathe a little…after that, we’ll see. All I can say is it’s a great time to be in tech.