Dinner Lab

What did it do?

Dinner Lab was a food start-up that staged pop-up dinners prepared by up-and-coming chefs in unusual venues for users who paid a membership fee. The company later also began catering corporate events.

Why did it shut down?

Starting out in New Orleans in 2011, Dinner Lab raised USD 2 million in crowdfunding from its members and more than USD 5 million in venture capital, according to Entrepreneur; according to TechCrunch, total investment reached around USD 9.1 million, including a USD 7 million Series A in August 2015. The company spread to 31 cities and by autumn 2015 was holding 25 to 30 events a week. To keep growing it dropped its membership wall, moved into corporate catering and tripled its event targets. But managing a scalable events workforce, coordinating the supply chain and running an operation that relied on contract staff across dozens of cities did not produce a profitable structure. In April 2016 the company ceased operations, saying it had been unable to build a business profitable enough to support its ambitions.

The story

Dinner Lab was born in a basement in New Orleans in 2011 out of a simple problem: it was hard to find a good meal late at night in the city. Led by Brian Bordainick, the start-up decided to fill the gap with pop-up dinners prepared by up-and-coming chefs in unexpected venues. To take part you had to become a member; membership cost between USD 125 and USD 175 depending on the city, and each dinner between USD 55 and USD 95.

The concept quickly caught on. The company raised USD 2 million in crowdfunding from its members and then turned to venture capital. With a USD 7 million Series A in August 2015, its total funding reached around USD 9.1 million. Dinner Lab spread to 31 cities and by autumn 2015 was holding 25 to 30 events a week. It also catered singer Solange Knowles's wedding in New Orleans.

As growth targets rose, the model began to strain. The company dropped the membership requirement, began catering corporate events and tripled its event targets. But according to TechCrunch, managing a scalable events workforce, coordinating the supply chain and running an operation that relied on contract workers across dozens of cities took their toll on the company.

On 14 April 2016, in a message to its members, Dinner Lab announced that it was ceasing operations, saying the team had poured all its energy into building a product members would want to use regularly but had failed to build a business profitable enough to support its ambitions. Dinner Lab's story shows that taking an experience-led service to many cities means recreating the operational burden in every new city.

Lessons for founders

• In a model where every event needs its own venue, chef and crew, adding cities multiplies costs too; prove profit per event in your existing cities before moving into a new one.
• Dropping the membership wall to grow can dilute a community's distinctive value; test the effect of such decisions on recurring revenue at a small scale.
• In dispersed operations run with contract staff, scaling without standardising quality and the supply chain erodes both the brand experience and the margin.

Sources

1. Dinner Lab shuts down after failing to find a sustainable business model (TechCrunch, 2016-04-14)
2. Food Tech Startup Dinner Lab Shuts Down (Entrepreneur, 2016-04-15)

This section is compiled from public sources (Wikidata, news archives and company announcements). Figures are given as they appear in those sources; unknown fields are left blank. If you spot a mistake in an entry, you can send us a correction.

Is something in this entry wrong? Request a correction → Method