All Tovala meals come ready with a bar scan so the Tovala oven can download the cooking instructions and perfectly prepare each meal
Technology is an ever-evolving entity. We live in a time where a quick glance can do everything from unlock a mobile device to make a digital purchase from said device.
Now imagine the day when cooking becomes digital. A semi-prepped meal you ordered online arrives at your front door, you scan a barcode to pull its recipe from the cloud, place it inside an oven and, with the press a button, voila! You have a perfectly prepared and nutritious dish in under 30 minutes. And of course there’s an app for it, too, enabling you to control the oven from your phone and to order more deliciousness sent to your door.
Sound crazy? With Tovala, the future is here. Forget about smartphones, Tovala is the smart oven and meal delivery service brought to you by Chicago Booth MBA David Rabie along with his co-founder Bryan Wilcox.
For Rabie, baking the idea began in 2015 while attending the University of Chicago Booth School of Business. To date, this MBA startup has raised $13 million, of which $9.2 million was raised in December 2017 alone. Also in 2017, the company shipped the very first Tovala ovens to customers.
“It’s been an incredible journey, but a lot has happened since we first got started,” Rabie says. “You live multiple lives when you’re launching a company.”
FROM CHICAGO TO Y COMBINATOR AND BACK
In 2016, when we first spoke to the head of Team Tovala, Rabie and company were living in San Francisco’s Bay area doing what promising startups do: they were in California’s popular startup incubator, Y Combinator.
“YC was awesome for us,” Rabie says. “We learned the key fundamentals of building a startup and building a successful one. They’ve seen it thousands of times now and shared key lessons for what works and what doesn’t when it comes to launching a business. It was awesome for our team and company.”
Since then, Tovala has moved back to Chicago, where the company and team of 40 are now based. Why Chicago? “We have a better opportunity to build a great team in Chicago than in the Bay area largely because of the network we have here and our product is fairly unique for the midwest,” Rabie tells Poets&Quants.
THREE PILLARS OF TOVALA
“Fairly unique” is a modest description of the Tovala smart oven and meal delivery service. Driving the Tovala brand are three pillars: hardware, software, and food.
First, the hardware. Rabie describes the futuristic appliance as a smart countertop oven that’s sort of like a toaster oven, but better being that it’s an all-in-one steamer and broiler as well. The main idea, he says, is that the company is seeking to automate cooking. “As a customer, you don’t have to worry about figuring out the right way to cook things,” he says. “Just push a button and cook. Part of the magic is it uses different steps. It may start with steam, move to bake, then broil.” The magic continues as it also automates changes in temperature as needed while a meal is being prepared. Call it an oven with a brain.
Credit for the magical automation of the Tovala steam oven goes to the company’s second pillar, its software. Once a pre-ordered Tovala meal is placed inside the steam oven, users scan a barcode which then downloads meal-specific cooking, temperature, and automation instructions to the appliance. Once the recipe is brought from cloud to countertop (don’t worry, the Tovala oven is wifi-equipped) the end result is a meal prepared to perfection. With the accompanying mobile app, users can monitor and adjust their cooking from afar and purchase new food.
The third and final pillar — the pièce de résistance to it all — Tovala meals. Meal boxes arrive at the customer’s doorstep and consist of three partially cooked, single or double serving meals prepared by Tovala’s culinary production team. Menu options change every week and as of today, there are dozens of recipes and meals the company has produced.
A quick visit to Tovala’s website and you’ll see a variety of beautifully plated dishes that were prepared inside the Tovala oven. With menu items such as apricot-glazed pork chops and Szechuan chicken breast, the emphasis is on two key themes: healthy and fresh.
Tovala CEO and Chicago Booth MBA David Rabie
TURNING FOOD INTO PROFIT
Customers can buy into two meal plan options. “A Taste of Tovala” gives users six months to purchase four meal boxes while “Dinner is Solved” gives them 24 meal boxes in a year’s time. If customers don’t want to be locked into a meal plan, a la carte boxes are also an option.
Just as it was two years ago when we last spoke to David Rabie, the meal kit service industry is a crowded one. “It’s a big pie,” Rabie said during the previous Poets&Quants interview. “There’s Munchery, there’s Sprig, there’s GrubHub, there’s Blue Apron, there’s Plated. But they’re all different. We think there’s room for all of those. We also think we’re going to create a new section of the pie.”
Two years later, Rabie says it’s interesting to reflect. “The biggest thing that has changed is you’ve seen these larger meal deals start to struggle,” he says. “What we’ve seen a lot of is these service are free to try, but then customers stop using it and I don’t think that was clear to everyone two years ago. At end of the day people want convenience more than anything. Blue Apron forces people to cook three or four nights a week. You get home 8:00 at night, the last thing you want to do is cook and then clean for another 15 minutes. ”
Where Tovala comes in, he says, is convenience. Particularly for young, working parents who generally makeup Tovala’s customer persona.
“For the young parent household where both people are working, 6 to 8 p.m. on a weeknight is chaos,” Rabie says. “Those who have children who are very young, they’re eating food different than them. After feeding the children, they’re too tired or it’s too late to feed themselves so they end up doing GrubHub or something else meal-wise that they don’t feel great about. Tovala solves a real problem that a lot of them say they didn’t even know they could solve.”
Be that as it may, meal services are known to be a tough nut to crack on the profit-making front. Even in this regard, Rabie feels like Tovala has the potential to break new ground.
A pre-cooked Tovala box meal made of thai turkey meatballs
The Tovala oven on its own retails at $399 and the cost reduces when you tag on a six or 12 month meal deal. One meal box on its own, not attached to a meal plan, contains three meals each and costs $36 or $72 dollars depending on if it’s a single serving box or double.
While he wouldn’t disclose how many customers Tovala is currently serving, or revenue figures, he had this to say: “Profitability is hard in the industry because customer lifetime values are so low and because it takes a lot of money to acquire customers. Most companies are profitable on a per-meal basis. While I can’t speak to specific numbers, this is one area where we feel like we have a strong advantage over traditional meal kits.”
BIGGEST LESSON IN ENTREPRENEURSHIP: YOU’RE GOING TO GET TOLD ‘NO.’ USE IT AS FUEL
Rabie says the lessons learned during his journey as an entrepreneur have been plentiful; but the primary one being persistence. “You’re going to get told ‘no’ so many times by so many different people. That’s a running theme that never goes away. People think the idea is crazy, they say you’ll never raise money, or you’ll never be able to do it. Hearing ‘no’ is a common thing for entrepreneurs so being okay with it and using it as fuel is hyper important.”
He also credits his time in business school as another key factor to where Tovala is today. “A lot of people don’t think about business schools as launching pads for businesses. They mostly think of it as getting jobs or getting a better job. But if you have the entrepreneur focus and lens, there’s a lot of value to going into business school to launch a company. Similar to recruiting resources for jobs, business schools are filled with a lot of resources for would-be entrepreneurs. And because everyone is mostly utilizing the career services resources, you become a big fish in a small pond that can fully capitalize on the entrepreneurship opportunities that are there.”
Still, Rabie cautions MBAs not to let the abundance of resources become a distraction to their startup. “Connections can be made and doors can be opened through things like networking and meeting people, but in the early days all of this can be a huge distraction when you should just be focused on the product. Some of it is valuable, but having intense focus on your product and customer is so important when you’re first getting started.”
Thai turkey meatballs from the Tovala oven in less than 30 minutes
NEW YEAR, NEW MEALS
As Tovala’s first tweet of 2018 reads, “Last year we delivered to our Kickstarter backers, launched & announced our Series A. We’re excited to continue to deliver many more meals in 2018!” it’s an indication that Rabie and the Tovala team hope the year ahead is one of promise and continued growth.
“There will be a lot of new menu additions and a lot of new enhancements to automate your own cooking, he says. “People love the meal service, but where we really want to expand is cooking their own food, opening up the magic of the machine, and making that easy for everyone.”
Likewise, while the company often uses the tagline, “Dinner is solved,” Rabie says it’s not just dinner the company wants to solve, but also breakfast and lunch. “We plan to expand to other meals; not in next six months, but, yes, in the next 12 to 18 months. Customers are definitely asking for it.”
Beyond 2018, the Tovala mission is grand. “We see ourselves in ideally every home in the country one day,” Rabie says. “That may take different shapes than it does today, but we have a long road ahead of us.”
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