Revolutionizing the Restaurant Business with Blockchain, with Ben Leventhal, CEO of Blackbird

[upbeat music] All right.

Welcome to another show of 51 Insights, today with Ben Leventhal. Ben, welcome to the show. Hey, Marc. Ben, it's an honor and awesome to have you here today. Ben, you're the founder of Blackbird.

Blackbird is, in my opinion, one of the most innovative applications of blockchain in the consumer space that we've seen to date. So I'm excited t- to talk with you about this today.

If you could just give our listeners a little bit of background. You've been in the restaurant business for many, many years. Who are you? How did you come about to found Blackbird, and what is it that you do?

I've been in the restaurant business tangentially for more than 20 years, always as a fan and avid observer of the industry.

Somehow, luckily, I've never worked in a restaurant, probably don't have what it takes to do that. But I've been in and around restaurants for most of my career.

First started talking about restaurants and thinking about them when we launched Eater, which was in two, the early, the early aughts, 2005, and subsequent to that, I've worked on several things, but most recently, I suppose notably, I built, um, Resy, which we sold to American Express in 2019, having founded that in 2014.

And so, you know, I've just really been fascinated with restaurants. All of their idiosyncrasies and, um, challenges to me add up to lots of opportunity and, uh, lots of interesting things to think about.

You know, it's a trillion-dollar industry in the US alone, and the average restaurant is making a couple million dollars a year, not more.

So when you sort of think about how many restaurants it takes to get to a trillion, it's a lot of restaurants, and a lot of them are subscale.

So, you know, thinking about what the future of the restaurant industry should look like and how we can give restaurants more tools to be in better control of their destiny is something that I'm very interested in continuing to do, and all of that gets you to Blackbird.

Yeah, and then I remember Resy, and I think most of the people who listen here remember Resy. It's been a huge app, uh, in the US, and probably most of, of our listener use that as well. What was it that you saw

in the restaurant business that you think was wrong or has an opportunity, had an opportunity to be improved that led you to found Blackbird?

Well, the thing about Resy, and actually the thing about Blackbird too, is that I find that generally speaking, technology evolves slower than restaurants themselves do, which is really peculiar.

You would expect technology to be out in front, but what happens is you get these larger players that settle into the industry that sort of dig in their, dig in their heels and, and sort of wrap their tentacles around the restaurants that they work with, and then they slow down, and there's, there's examples of this kind of throughout the history of technology and restaurants if you go all the way back to the credit cards.

What happened with Resy is that OpenTable had gotten lazy and gotten complacent and had deprioritized innovation and customer service and, frankly, fairness and collaboration with the industry, and that was the-- ultimately, that was the sort of macro wedge that, that Resy found for its path to market.

And I think something similar is happening today, but instead of reservations, I think what we're seeing is this is happening around loyalty and payments.

I think that the way payments are priced for restaurants and the functionality alongside payments that restaurants have at their disposal is unacceptable.

And, and so really that's what we are, that what, that's what we have observed, and that's what we are trying to fix.

So, you know, Blackbird is about loyalty and payments and is really about changing the way restaurants think about that as a piece of technology, giving them much better pricing, much more collaborative pricing, giving them much more ready access to data that comes with payments and, of course, that come, that allows them to unlock loyalty.

Um, and in the long run, and this is where the blockchain comes into it, we hope to build this with them.

We hope that Flynet, which we've just put on-- which we've just launched as mainnet a couple of weeks ago, we hope that Flynet ultimately becomes a partnership with the industry where we can look back in a couple of years and say, "Restaurants own this with us.

They really truly own the rails that we are processing most of the transactions on." So, you know, it's am-- it's exciting and it's ambitious, but you know, we're on our way. Yeah.

And before we jump into Blackbird and, and the technology and blockchain, I would just like to make it very clear and break it down for our listeners, what are those current pain points that you observed when you talk about solutions like OpenTable?

I mean, we all know that we, if you go to Google, we search for a restaurant, we, we click on reservation, it links us to a third-party page.

And, and from the user's perspective, it all looks quite simple and easy to do and, but what, what's, what's wrong there? What's going on in the background, and where do you see those challenges for restaurants?

Well, I think it, in the end, you know, restaurants should be able to customize their technology stack, should be able to put pieces together, should be able to select from a, a bunch of components, put them together, and have a cohesive technology stack that helps them run their business.

The problem with restaurants as a playing field is there isn't that much money to go around. Restaurants are making four percent on a good day, and so there's only sort of so much you can charge them.

You know, this is not like a very high-margin industry where y- you know, a SaaS player comes in and can charge high prices and nobody blinks an eye. These are really low-margin business.

As I already said, some of them are subscale. Um, they're not making any money, and so there's not that much money to go around.

And so what happens is companies that are servicing reservations or servicing data and analytics or servicing POS, everyone is sort of grabbing at the same things. Everyone is grabbing at consumer data.

Everyone is grabbing at processing. And in terms of the reservation side, everyone wants to be the source of truth for reservations.

And I think what we have gotten to on the basis of all that is a technology stack that is in fact working against restaurants for innovation. POS today as a gateway for innovation, it's so crucial to the restaurant.

It's really the brain of the restaurant. Unfortunately, it is what it is. It's the brain of the restaurant, and the POS space is massively lacking in innovation.

Gatekeeping innovation, companies like Toast, Square, Micros, Aloha, these companies are literally standing in the way of innovation today because they have their own priorities. I'm a capitalist.

I believe in everyone doing what they need to do to maximize shareholder value, and so that's what these companies are doing, and so, you know, there's no hard feelings.

But it's not necessarily to the benefit of restaurants, and it's created this technology stack where we think about everyone promises, uh, an integrated technology stack.

Everyone kinda sorta has APIs that can connect to each other, but it's very, very hard to actually make those, those connections work.

And around things like consumer data and payments and reservation source of truth, there really are walls up. And so that's a, that's a struggle for a restaurant.

A restaurant can pick a system and sort of hitch their wagon, so to speak, to a Toast or a Resy and hope for s- the best case scenario in terms of innovation, hope for the connectivity.

But I think the players who are actually truly playing for innovation and who are actually pushing forward right now are few and far between. Mm-hmm.

So, you know, we'll see how it goes from here, but that's what restaurants are facing. So you thought about all these issues, and it was probably some time around 2021. Blackbird was founded 2022.

And you saw this technology called blockchain, and you basically designed the core of Blackbird around blockchain.

Can you tell us a little bit about why do you think that technology was so important for that product that you built today? Well, I would say that Blackbird has evolved to the place that it is.

I think I'm an, a very iterative thinker to begin with, so I often sort of dive in knowing kinda sorta where I wanna land with it all.

And so what, what was the sort of the genesis of Blackbird was a series of conversations I had with people that I trust and I think are the smartest in their field, and I layered that with some observations around the restaurants, which I just shared with you.

And it sorta turned out that, well, there was something very promising in blockchain, and what we were seeing in terms of blockchain, and this is a couple years ago, and as you know, things are moving extremely fast, so the capabilities and the state of the art in blockchain today versus even three years ago is, is night and day.

But even three years ago, you could see that the concept of owning, owning something like a, like a network, the nature of, you know, database ownership, the nature of how databases are, are gonna work in the future, uh, and what that, what that unlocks from governance and ownership and, and really just capability standpoint was really interesting.

So these are... You know, the early projects were things like NFTs and a couple of examples of blockchains that g- got some traction, some of which have, have sort of gone by the wayside.

To me, these things were really kinda interesting as, as clay to start to form something around.

And so we had a sort of general idea that we would wanna, we wanted to point all of this new tech, all this cutting-edge tech at the restaurant industry.

Um, and given my background, I think we sort of felt like we had a, a path to do that.

And then over the first six, six to 12 months, you know, we really sorta dug in and clarified some of our own ideas about h- how, how it should all work.

And you've read our Fly paper, and you've seen how we've iterated on it. You know, we started with a token.

We moved to two, a two-token model, and then we sort of evolved that even further in terms of how that's, that network and, was gonna work and how it was gonna inter- how the two things were gonna interact and sort of, you know, in, in many ways, the over the, the o- the o- the Venn diagram of, of loyalty and payments and Blackbird being that intersection in the middle.

And, and I, you know, candidly, it's come together for us as we've gone. Um, and I think at this point we feel very good about the strategy and the plan.

But I would be exaggerating to say it was crystal clear in high def, you know, on day one. Yeah. A- a- I mean, at, at 51 Insights, we've tracked a lot of those use cases. We looked at over 200 consumer brands.

We're hyper-focused on how Web3 actually creates those consumer-facing solutions and, and what is really usable and what is really scalable.

And in my opinion, from what I've seen in the market, Blackbird is still one of the best examples of blockchain applied in the real world at scale.

Um, and that's, again, uh, why it's so exciting to talk with you about today. So let's take a step back again.

If you were standing in an elevator with a restaurant manager or owner, how would that two-minute pitch of you sound like?

Well, the pitch is really, we'd like to overhaul the way you think about payments, unlock consumer data for you, give you better tools to acquire and retain customers, and we need your help to build this in the long run.

And, you know, our pitch continues to evolve, but that's really what it is in the end. You know, we're building a new payments network- Mm... and we're building it specifically for restaurants. If they don't wanna...

We need their help in building it. We can't build it unless they want to. So that's the pitch. And so far it's gone pretty well. We're almost at 1,000 restaurants. I'm sure we'll continue to evolve it. Yeah. You, you...

1,000 restaurants in New York, right? Yeah, just we're not quite at 1,000, but we're, we've got that pretty, in pretty close sight. New York, San Francisco, and Charleston. Yeah.

And if you break that down now, like we, we spoke about the challenges restaurants face. We spoke about blockchain. How does this now come together in the Blackbird solution?

How do we have to think about this a little bit more technically? Well, you have a couple of component parts.

You have Flynet, which is the, which is a transaction network, and we move Fly from point A to point B on that, on that blockchain. It's an L3. It sits on base, obviously EVM.

And anytime Fly moves anywhere in our system, that's happening on Flynet. So a couple of things alongside that. One is every consumer user, and for that matter every restaurant, has a wallet on Blackbird.

Uh, we use Privy for that service. And by the way, a good example of something three or four years ago wouldn't be possible but is today.

We use Privy for that service, so when you sign up for Blackbird, we're provisioning a wallet for you in the background.

What we put in there is your check-ins, your affiliations with restaurants, and separately, in a separate wallet- We put your Fly, your spending, your, your points.

Um, and we, we, we bifurcate those two things for a couple of reasons that are probably obvious, but primarily because we don't want you to, based on your spending, dox yourself.

Um, and we don't want you to necessarily have to hardwire your Fly balance and your restaurant profile. The things are closely related, but we don't think about them as the same.

So a consumer signs up, gets their NFT wallet, starts to earn Fly, gets their Fly wallet, um, and, and uses those two things to interact with restaurants.

As I said, it's all happening on-chain, and I guess the last piece is on Fly Net, F2 is the gas token for that network. Now, obviously, it's our network.

All of the transactions are ours today, so the nature of F2 will evolve.

And what we'd like to see happen with F2 is it evolves into not only a gas token, but also a governance mechanism for that network, so that over time, restaurants and other participants can drive outcomes and, and ultimately determine what happens with, with Fly Net.

And how was the feedback of the restaurants that signed up so far, those early tests you ran one or two years ago? How did they perceive that?

Yeah, I mean, they, some, some have perceived it, um, a- as, as a huge win for them. Others have thought it, frankly, to be a bit of a nuisance to have to embrace new technology. That's the nature of these things.

The first 20, 30 restaurants are kinda hit or miss, and that's what makes them as partners so valuable.

A restaurant that signs up that early, um, you know, I have to give a restaurant like Gertie in Brooklyn credit, um, it was our, was our first Blackbird customer. That's a rocky road.

Frank- you know, thankfully we're well past that now, um, and have figured out what works and what doesn't work and, and how to really, um, consistently, day in and day out, deliver value to restaurants.

Things are different today, but y- you know, you, it's, it's a s- it's a startup from zero, so you, you expect the first couple to be a little bit rocky.

But I would say the best case scenario partners for us saw an increase in business, saved, saved some money on transactions, and overall felt, you know, in control, feel in control more of their own destiny by the virtue of the way Fly moves around.

In the worst case, you know, it's not that bad, but we didn't have, you know, on day zero, we didn't have enough users to fill every seat in every restaurant.

So some restaurants were sorta sitting there twiddling their thumbs a little bit. But, you know, we're figuring out the marketplace parity question and, um, and feeling pretty good about where we are now.

And you just mentioned a couple of KPIs. Do you have numbers that you can share with us where you saw an average increase of some kind of KPI you look at together with the restaurants?

We look at, look at a bunch of stuff. You can see check-ins. You can see check-ins, and you can see, uh, to some extent, transaction volume on-chain.

Check-ins on a good day are around four thousand now, averaging about three thousand. Um, daily volume in terms of TPV is, um, increasing almost on a daily basis.

That's maybe a, a tiny bit overstating it, but growing fast. You know, we did about half a million dollars in transaction volume in, um, in 2024, and we're well above that already for 2025.

Um, growing really at a good clip now. Okay, so let's play that through again. A user downloads your app, Blackbird app. They create a wallet. It's all very seamless. Yep. They go to their favorite restaurants.

Ideally, th- those restaurants are signed up with Blackbird as well. Yeah. They eat, and then what happens? How does that user experience look like?

Uh, well, they've-- If they're at a Blackbird Pay restaurant, which soon they will all be Blackbird Pay restaurants- Mm-hmm... all the restaurants in the world.

Um, if you're at a Blackbird Pay restaurant, you've checked in at the start of the meal when you arrived.

Um, what, what that does in the background is it, it creates a digital handshake between you, the customer, and the restaurant. We make your spending wallet available to the restaurant.

They have a piece of, they have a piece of technology themselves, a, a device that we call a terminal, Blackbird Terminal.

And your name, essentially, with your wallet, with access to your wallet, pops up on that terminal. And so when you're done eating, you get up and leave. You've preset your tip.

You've, you've selected method of payment, and when you're done, you get up and leave. Um, uh, it's c- I think it's pretty magical.

You know, that whole waiting for the check thing that in the US is, is such a mysteriously long-standing problem is solved. You get up when you're done, and you leave, and that's that.

So, you know, pretty straightforward, pretty seamless. And then you p- you pay with Fly. Yeah, you pay with-- Your transaction is in Fly no matter what.

Whether that is Fly that you have accumulated and you're spending out of your points bank, or it's loading in real time, either way, Fly is being transferred from you to the restaurant. Okay, so right.

It, I mean, that's, that's super cool. So the, the value proposition for the user is you don't actually have to care about separate reservation apps. It's, it's all in one app.

You just reserve, you c- come there, everything is stored in one place. You pay, you don't have to wait for the bill, and that's that. And, and by the way, you also get rewards for eating at those restaurants.

All right, so let's take a step b- s- step back again. I, I think that's pretty clear now how that solution works.

And when I came across Blackbird for the first time, I thought, "Wow, this is the first model that truly creates that economy, two-sided marketplace of users and, and companies and puts a token in between together with a blockchain."

If you think about your model, have you thought about applying this to other industries, and do you think it's applic- applicable to other industries? I think it applies in many s- places.

I mean, for us, you know, from here, it's all about execution, and so we're laser-focused on restaurants today.

So I think in the next 12, 18 months, you're not gonna see us expand beyond restaurants, although maybe a- after that we will. But I do think it applies in lots of cases where you have...

You know, I mean, the, for us, it's about essentially a large industry, you know, built on SMBs and a very engaged repeat customer base. And I think there's lots of examples of, of where that exists.

And, and when you think back on your journey over the last two years, what were your biggest challenges that you had to overcome? I mean, it's a startup, so there's challenges every day.

But I think Always when you're building something for restaurants, it's getting restaurants to trust that it's worth their time, that it's worth them adjusting operations, that it's worth them learning something new.

I think whenever you're building something, you can't underestimate how hard that is to sell something brand new into an established industry.

This is a two-sided marketplace, so that has its own set of very, very substantial challenges. Um, you know, I think beyond that, it's the challenges we face just building a business from scratch.

You know, focusing on building a good team and building one fast, focusing on good capital allocation, knowing it's a scarce resource.

But at the end of the day, it's a two-sided marketplace, so our challenge is around building a two-sided marketplace from scratch, maintaining relative parity as we go, understanding which side of the marketplace is gonna be hard at any given time, and then understanding, you know, how to deliver magic to both sides.

And I, I think one question that we need to answer and always need to look at with blockchain-based solution is why do you need a blockchain in the first place?

If you think about Blackbird, why did it need a blockchain, and could you solve it differently as well? Yeah. So Marc, I think this is the mistake that blockchain companies make.

I think the premise of your question is, the structure of your question is flawed. I think it's a mistake to ask why do you need blockchain. I think blockchain is infrastructure.

I think the question that you should be asking is, is there a, do you have a commercially viable idea, and can blockchain make it better, make, allow you to go faster, give you more scale, give you more resources?

Those are the reasons to use blockchain. You don't...

If a lot of the, a lot of the sort of companies that sort of, in my view, seem to struggle with product market fit and seem to struggle with finding users are sort of starting with the blockchain and working backwards to a consumer use case.

I think that's a disaster of a plan. You need a consumer use case to start. You need to know who your customers are. You need to know who you're building for.

So in the case of Blackbird, the observation around the restaurant industry came first. You know, technology is, is lagging, pricing is off, excuse me, all the things I said at the start.

And then we say, "Okay, well, if we're gonna build this, how do we build it the best way we c- possibly can?" And that's where the blockchain came in. So could we do this without being on chain?

I think now that we're into some of the payment stuff, now that we have this pa- now that we're really talking about payments at scale, of course, you can.

I mean, Visa, in terms of how this works, I'm more or less describing the early days of Visa, so obviously it can be done.

But I think blockchain allows us to move a lot faster with a lot more scale and security, and in these very, very established industry with legacy players that are not gonna give up any ground very easily, I think blockchain does become a superpower for us.

And you just launched your own Layer3, you just mentioned before. Why did you launch your own blockchain? Because we wanted ultimately to control all the elements of it.

We ultimately wanted this to be purely a partnership with the restaurant industry, and frankly, really nobody else. And we felt that that was, that having our own L3 was the path to that.

Creating F2, saying specifically what it's gonna do in the long run, really being very deliberate about how that's gonna work, we felt like that, the answer to that was an L3.

As I said, I think this industry is gonna continue to evolve and evolve fast, and, um, time will tell if that's a good call or not.

But that's the way we're thinking about it, and I think we're, we're confident sitting here today that that's the right answer.

And, uh, before we jump into a, a quick lightning round, my last question, if you talk to other executives, leaders in brands, consumer brands, thinking about loyalty and how blockchain applications might fit into that, and they heard about NFTs, they, they did some early experiments, those didn't really work.

What would you advise them to do? What would be your tip for them? My tip is the same as any, as when anyone asks me how to, you know, what's your advice for starting a business.

You have to appreciate how high the bar is on everything. You have to appreciate how hard it is to put anything new into the world and expect it to work, whether that's blockchain or anything else.

So you gotta understand what your superpowers are. You gotta understand how you're gonna deliver magic. You of course need to understand in, in detail the playing field that you're on.

But really, you gotta set the bar incredibly high. You gotta be sober and honest with yourself about where your product is relative to that bar, and then you gotta execute unconditionally.

Like, you gotta be un- you gotta be unrelentling, unrelenting. And if you do that, then you got a shot, but it's still not, it's still not a layup. Yeah. Ben, that was a, a great ending note.

Before we end, a quick lightning round, short questions, very short answers. Sure. The first one, your chef's choice. If you could onboard any one chef in the world to Blackbird, who would it be? I want all the chefs.

I want all the chefs.

In, in New York, uh, you know, w- I've been playing around with AI, and so I plugged my recent restaurant history into Claude not too long ago, and it turned out that, um, Jody Williams and Rita Sodi were, were 30% of all the me- that E.

Sodi and Via Carota in New York were 30% of all the meals that I've eaten in the last two years. So I need those guys on the platform so I can spend my Fly at E. Sodi and, uh, Via Carota.

But, you know, I want all the magical restaurants all over the world, and, um, and we'll get them. Yeah. I'm flying to New York today for, uh, DOS in New York. I'm for sure gonna download the Blackbird app.

Which restaurant would you recommend me to go and try Blackbird in? You know, where are you staying? In the southern part of Manhattan. Listen, you can't go wrong. All the Blackbird restaurants are great.

If you're looking for a great breakfast, I would say Raf's on Elizabeth Street is awesome, and I think that's where, that's where you might see me for breakfast. Anton's in the West Village is great for dinner.

They've just recently started using Blackbird Pay. You know, we've got all kinds of great restaurants, lots and lots in between.

The, the Dinex restaurants, which is Sir Daniel Boulud's restaurants, are coming on, um, I think in the next week or two. Barbudo in the West Village. It's a long list of awesome restaurants. You can't go wrong. Awesome.

And then final order, if Blackbird had to launch in a completely different industry, which one would it be? A different industry? I don't think I'm gonna answer. I don't wanna tip off any, uh, future strategy.

We have some ideas there. Cool. All right. I'm gonna keep that one to myself. Yeah. Ben, thanks so much for coming on the show. It is a pleasure to talk to you. It's great to see what you're building with Blackbird.

I wish you all the best for the future, and I'm eager to try it out. Thank you, Marc. And for all the listeners, thanks for tuning in. Please like, subscribe, repost, retweet. This helps us keep the show going.

And yeah, have a good day. All right. [outro music]