One of the most exciting aspects of Blackbird is that it is an application that can change consumer behavior on a daily basis.
By Paul Veradittakit, Partner at Pantera Capital
Translated by 0xjs@Golden Finance
Introduction
Blackbird may be one of the most unique applications in the consumer blockchain space. In an era where many leading projects in this field are focused on building new infrastructure and developer tools, Blackbird stands out as a consumer-oriented application and has the potential to bring cryptocurrency into the daily lives of mainstream users.
In this article, we will explore how Blackbird seeks to turn the adoption of cryptocurrency, the "holy grail," into reality. To do this, we will first discuss how Ben Leventhal's experience and unique insights into the restaurant industry inspired Blackbird to become a product. Next, we will explain how Blackbird works for end users and restaurant owners, and finally discuss how this represents a new paradigm for customer loyalty in the restaurant and other industries.
Recreating the Restaurant Experience
When we think of dining out with friends and family at a restaurant, the typical image that comes to mind is the "traditional" restaurant experience - sitting face to face in an independently owned community restaurant and enjoying the service.
But with the closure of stores due to COVID-19 restrictions, the surge in food delivery platforms, and rising prices, mom-and-pop independent restaurants have been pushed to the brink. In 2023, the number of closed restaurants exceeded the number of new openings by about 4,500, and the sales growth of fast food restaurants was twice that of dine-in restaurants. Today, the trillion-dollar food and beverage economy is increasingly shifting towards a focus on takeout, chains, and fast food. In many ways, traditional dine-in restaurants are struggling in an economic environment that no longer suits them. Blackbird hopes to address this issue and bring back the magic of the restaurant experience.
Founded by Ben Leventhal, co-founder of Resy, Blackbird has a unique understanding of the challenges faced by many independent restaurants. Over the past 20 years, he has been a serial entrepreneur in the restaurant technology field. In 2005, Ben founded the restaurant exploration blog Eater, transforming restaurant guides from outdated paper books to updated digital blogs, and later sold it to Vox Media in 2013. In 2014, Ben founded the restaurant reservation platform Resy, a mobile-first reservation platform that has become synonymous with restaurant reservations. In 2019, he sold Resy to American Express and worked there for several years, before founding Blackbird in 2023.
In many ways, Ben represents the founder suited for restaurant technology, and his products have grown and matured like our modern internet. If Eater was Ben's answer to Web 1.0 restaurants, and Resy was his answer to Web 2.0 restaurants, then Blackbird is Ben's vision for Web 3.0 restaurant technology.
At each stage, Ben has strengthened the digital relationship between restaurants and customers. In Web 1.0, Eater connected customers globally by providing a restaurant discovery platform. In Web 2.0, Resy not only allowed customers to discover restaurants, but also enabled them to make reservations and manage them, all in a mobile-first manner. In Web 3.0, Blackbird has built the final missing piece, allowing customers to establish deeper connections with restaurants through a programmable digital loyalty system, bringing value to independent restaurant operators and making the restaurant experience magical again.
How Blackbird Works
So, what exactly is Blackbird? How does it work? For everyday consumers, it is a very intuitive and simple application. You can download Blackbird from the App Store, create an account on the platform, and link your credit card.
When you visit a restaurant, you can open the Blackbird application, tap the hockey puck labeled with Blackbird on your phone to check in and earn FLY loyalty points. When you check in, Blackbird will inform you of all the special offers and discounts available at the store, such as free drinks, merchandise, or surprise gifts exclusive to Blackbird.
For example, some restaurants offer surprise gifts to returning customers, such as a free drink on the second visit, a dessert on the fifth visit, and an additional omakase set on the tenth visit. Other restaurants regularly hold "Blackbird special events," such as providing free coffee to Blackbird members every two weeks. Some restaurants participate in Blackbird's pass programs, such as the Blackbird's Breakfast Club pass and the Bar Blackbird Summer Pass, both of which offer great value to end consumers.
For example, the Blackbird's Breakfast Club pass costs $85, allowing cardholders to enjoy free coffee every morning for a whole year at 15 stores in New York. Similarly, the Blackbird Summer Pass costs $50, allowing customers to enjoy a free drink during happy hour at dozens of bars in the city every day. Recently, Blackbird also launched the Blackbird Burger League pass, a $250 pass that allows cardholders to enjoy a free burger once a week at 9 different burger restaurants and vote for the "Burger League Champion" in New York.
Blackbird Burger League Pass
This diverse range of special offers, benefits, and experiences demonstrates Ben Leventhal's unique approach to building products and consumer experiences. Blackbird creates a novel experience for everyday consumers, while allowing restaurants to freely choose what to include in Blackbird's offers, as restaurant owners are the ones who understand their business the best.
When you sip on free coffee, chat with the barista, and see customers in line downloading the app on the spot, you can't help but realize that Blackbird has made the restaurant experience magical again. Blackbird achieves this magic by hiding the complexity of encryption from ordinary users and eliminating the nightmare of data tracking for Blackbird restaurant owners.
On the backend, restaurant owners pay a monthly subscription fee of $89 to use Blackbird to collect customer data and track customer loyalty through a complex mechanism. Blackbird tracks four parts of customer data to form a comprehensive "customer profile":
- Personal Identifiable Information (PII), stored in the Blackbird Labs database to protect privacy
- Check-in history at restaurants based on on-chain transaction data
- Customer value score calculated by Blackbird
- FLY points balance
These four components work together to enable restaurants to better understand who their customers are, so that the restaurants can provide tailored experiences to reward and incentivize their most loyal customers. Additionally, Blackbird also uses FLY points to incentivize users to engage in behaviors that are beneficial to the restaurants. For example, while data sharing is an optional feature of the Blackbird application, users receive FLY rewards if they choose to share PII with the restaurant. Additionally, if users use a debit card instead of a credit card for their purchases, they also receive FLY rewards, allowing restaurant owners to save on credit card fees.
Blackbird leverages the existing technology stack of restaurants, such as the tablet client used by many restaurants to coordinate reservations and check-in customers. For example, Blackbird has directly integrated SMS concierge services into the Blackbird application, allowing restaurants to interact with customers in real-time, make reservations, and customize bookings based on special requests. Therefore, Blackbird provides restaurants with a low-cost, comprehensive toolkit that enables them to easily track and manage customer data, ultimately leading to a better customer experience.
Moving Towards an On-Chain Loyalty Framework
The current FLY issuance
One of the most exciting aspects of Blackbird is that it is an application that can change consumer behavior on a daily basis. Through restaurant discovery, passes, and points, Blackbird allows users to discover restaurants they didn't know about, let alone dine at. For example, in a neighborhood like Chinatown, the allure of FLY loyalty points could steer customers towards certain restaurants, much like how airlines reward miles incentivize customers to book with specific vendors.
But of course, collecting points is just one aspect of the loyalty equation; the real question of loyalty programs lies in how these points are used.
This is where Blackbird Pay, recently launched by Blackbird, comes into play. Blackbird envisions a future where it doesn't just offer free drinks and desserts as perks, but where consumers can use their FLY points to pay for their entire meal, with 1 FLY being equivalent to 1 cent. In other words, FLY is not just a loyalty program - it has become a blueprint for a new encrypted payment system.
Blackbird Pay UI
In July 2024, Blackbird released the functionality to purchase FLY points with USDC, meaning that for any restaurant accepting Blackbird Pay, users can now use their cryptocurrency balance by transferring USDC to the Blackbird application for payment. The payment aspect of the application may explain why Blackbird was initially built on a cryptocurrency track.
Indeed, if Blackbird were just a data collection application with digital membership cards and restaurant loyalty points, it might not necessarily need to be built on-chain. But Ben Leventhal's vision for Blackbird goes far beyond this simple premise. The ultimate goal of Blackbird seems to be much broader, with FLY points being just a part of a new encrypted payment network, which can lower costs and increase revenue for restaurants.
In this network, Blackbird charges a processing fee of 2%, 50% lower than traditional payment processors, which can charge up to 4%. The lower processing fee attracts more restaurants to join the Blackbird network, and restaurants can use perks, rewards, and points to attract consumers. Once more consumers build brand loyalty to Blackbird restaurants, they will start bringing in more FLY for the restaurants, in turn attracting more restaurants to adopt. As the Blackbird ecosystem matures, it has the potential to become a mature encrypted payment network, serving millions of mainstream consumers daily, much like American Express does today.
In a recent Flypaper update, Blackbird also hinted at a novel long-term vision, "Flynet," which is a third-layer chain based on Base, specifically designed to serve as a loyalty tool for the FLY payment network. In the proposed Flynet blockchain, Blackbird hopes to build an open-source ecosystem of applications, such as projects that facilitate consumer restaurant discovery, data visualization, and other third-party tools. As a consumer application, Blackbird could serve as a distribution gateway for all these loyalty tools built by the community, and Flynet could be the way for Blackbird to ultimately build a low-cost open-source loyalty program that rivals expensive solutions built internally by restaurant groups.
Indeed, the hidden power of building membership cards as ERC-721 NFTs and putting FLY on-chain lies in the programmability it unlocks for these assets, allowing the practical use cases of restaurant loyalty to have infinite combinability with the broader on-chain world.
Furthermore, while Ben Leventhal may be the perfect founder to apply this loyalty blueprint to the restaurant industry, Blackbird's core insights into the meaning of loyalty in web3 also apply to a range of other industries. Loyalty programs are a pillar of many service-intensive, retail-oriented industries, such as hotels, cosmetics, fashion, and tourism.
Many vertical industries face the same problem as restaurants, where small independent vendors cannot afford complex loyalty tools and cannot compete with large corporate groups. Blackbird's loyalty framework, through its intuitive "click check-in" feature, could actually provide the needed tool solution for all these vertical industry independent operators - a public, open-source, community-driven customer loyalty approach that enhances the consumer experience.
Perhaps this is the novel on-chain loyalty blueprint that Blackbird offers for web3, and ultimately, it could bring cryptocurrency into the mainstream.
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