Toast: The Restaurant Operating System

This episode is brought to you by:

Tegus. Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick.

(00:01:42) - (First question) - An overview of Toast

(00:04:16) - Toast's origins and pivot to Point-of-Sale (POS) solutions
(00:07:35) - Convincing restaurants to switch from antiquated systems to modern POS solutions

(00:09:48) - The complexity of restaurant operations requires efficient POS systems

(00:13:04) - An overview of the POS revenue model

(00:17:16) - Addressable market and limiting it intentionally with pricing 

(00:20:04) - How their tech expertise enabled them to build a hardware and software ecosystem

(00:23:23) - The Toast network effect and their potential margin profile at full scale 

(00:26:19) - Their revenue mix impacts its margin profile, with transaction revenue dominating

(00:27:37) - How they aim to dominate the restaurant industry with comprehensive services

(00:29:59) - APIs enable integration, yet in-house features may risk partner relationships

(00:33:45) - The key risks for Toast moving forward

(00:38:40) - Why expanding beyond restaurants could challenge Toast

(00:41:02) - Third-party integrations may erode Toast's point-of-sale dominance

(00:44:36) - Lessons learned from studying Toast