What is Excellence in Action?
The Tidemark community features people who are practitioners of excellence in their domain. Excellence in Action spotlights world-class talent discussing the superpowers, strategies, and tactics that drive category leadership.
Who: Tidemark Fellow Chris Comparato
What: CEO of Toast
Where: Cambridge, MA
Why: When the pandemic caused restaurant revenues to go into free fall during the early months of 2020, Toast partnered with its customers and employees to combine business with impact, enabling them all to thrive.
By every measure, the last year has been dizzying. While the beginning of the pandemic now seems far away, it wasn’t too long ago when runs on toilet paper and hand sanitizer, bare grocery store shelves, and frightening daily headlines were the norm. Restaurants were on the front lines of this burgeoning global crisis, as people stopped eating out and restaurant volumes rapidly dropped 70-90%. The pandemic made the restaurant business personal in many ways. This is the story of how Chris Comparato, CEO of Toast, an end-to-end platform for restaurants, embraced its community to create a Better Together business strategy and survive an unprecedented year.
Better Together represents the idea that every additional product Toast offers works in harmony with Toast’s core point-of-sale system of record. Each product saves a restaurant time, makes them more money, or enables better decisions because of integrated workflows, a richer data set, and a better customer experience. All while lowering the total cost of ownership. It also speaks to Toast’s stakeholder philosophy, where the company succeeds by helping its restaurant owners thrive, serve customers better, and create happier employees through lower employee turnover, better employee experience, and higher tips and wages.
“The restaurant industry is one of the most diverse and hardworking industries in the world. In many ways, it’s been underserved by technology and financial services in regards to modernizing into a digital economy,” said Chris Comparato, CEO of Toast. “Better Together reflects our mission to empower this industry to delight their guests, do what they love, and thrive. We bring Better Together to life in three ways. First, as a product strategy, we harmonize our solutions to eliminate the barriers restaurants face in running a more efficient workflow. Second, we consider all stakeholders; there tends to be a flywheel between happier restaurant guests, leading to happier employees and better-run restaurants. And third, we believe that as restaurants grow and thrive, we grow and thrive. By listening to the needs of our customers and understanding their stakeholders, we can help improve the ecosystem for all.”
Managing well through a crisis
When the Covid hit the fan, Toast responded in a uniquely Toast way. They did it Better Together. Led by CEO Chris Comparato, Co-Founder and Co-Presidents Aman Narang and Steve Fredette, Toast’s leaders are passionate advocates for stakeholder capitalism. It’s easy to espouse feel-good ideas in good times, but to stand by your principles during times of strife shows true conviction.
Toast management team’s reaction to the pandemic is truly a playbook on successfully managing a business through any downturn or crisis. With Chris at the helm, the team took these fundamental steps every leader should in the face of adversity:
Take the threat seriously
In the early days of 2020, it was hard to know if Covid-19 was another SARs for U.S. companies -- a scary-sounding contagion that had great risks but ultimately minimal impact on commercial activity. Plus, Toast, like lots of tech companies, had a banner year in 2019. It can be harder to recognize threats when everything is going so well. When you’re rolling, you don’t want to stop. But Toast followed the data carefully. As the full scope of Covid-19 emerged, they took it seriously and were better prepared to act decisively.
“At first, I was more focused on business continuity, our global supply chain, and whether we’d have the materials, the devices, and the people that we’d need to be successful. It quickly evolved from there as the impacts on restaurants became clear. That’s when we kicked into high gear on potential scenarios and how we would react to what we were dealing with,” Chris said.
Make the hard decisions early so that you can look forward, not back
When it was clear Covid represented a massive risk to the business, Chris and the team did a tough thing; they reduced the size of the company by 50%. Professionally this was tough because it required scuttling promising projects and doing more with less. Personally, it was devastating. Toast had always been a tightly knit organization. Toast’s deep reduction in force meant asking incredible, valued colleagues and friends to leave in the face of a pandemic.
There’s no good way to make these types of changes. But Chris led through this difficult time with grace, humility, and transparency. By deploying salary reductions for the executive team, instituting furlough programs, freezing hirings and bonuses, he minimized the total number of employees impacted, which allowed Toast to bring back talent as the market recovered. Toast demonstrated respect and care for all impacted employees, offering generous severance and health coverage, as well as outplacement services. Toast also quickly moved to support the restaurant community by waiving its software fees and helping to drive awareness of restaurateurs' plight among government stakeholders.
Pause and re-evaluate your priorities
Recognize your car’s in the shop, but so is everyone else's. There’s a saying in the startup industry that it’s hard to change out the engine while your car is driving 100% down the highway. The smart companies in the pandemic took a pause, re-evaluated their priorities, and focused on longer strategic projects for when the market returns.
For Toast, this meant accelerating its e-commerce capabilities and self-service onboarding. E-commerce is the significant long-term opportunity for all vertical Saas companies, and Toast has a huge opportunity here to help restaurants redefine their customer experience. Additionally, self-service is essential to manage remote engagement and the speed of implementation, and customer delight.
The idea behind these approaches was that if done right, Toast would be well-positioned to go on the offense faster than the competition when the market returned.
Embrace your community
When states issued shelter-at-home orders, Toast quickly launched Rally for Restaurants. This online platform helped restaurant owners and employees understand what was happening at a market-by-market level, shared resources to assist owners in accessing vital private and government capital resources, and showed they were in this together.
Toast stepped it up even further by taking a leadership role in advocating for the restaurant industry by writing letters to Congress, actively lobbying to help secure this funding for the restaurant industry, and partnering with groups like the Independent Restaurant Coalition to support restaurateurs and their employees. Toast backed its action by donating capital to fund restaurant recovery efforts. More recently, Toast partnered with the U.S. Small Business Administration to support its customers with a simplified application process to access restaurant revitalization funds.
During the tumult of the pandemic and shifting operational requirements, Toast’s suite of products and services proved vital. The e-commerce tools allowed Toast restaurants to diversify quickly into curbside pick up and delivery, order and pay at the table allowed restaurants to serve customers in a no-contact manner that was safer for customers and servers.
“When I reflect on how we navigated this time, it was truly by being better together,” added Chris. “Our team rallied to find ways to help the restaurant community push forward, including sharing knowledge, supporting Rally for Restaurants, and releasing new products critical to enabling digital transactions and contactless ordering. We also ramped up our industry advocacy to help increase restaurants’ access to stimulus funds and collaborated with other restaurant technology partners to help our customer base. By working as a team to support each other, our customers, and the community, we helped each other move through the uncertainty toward recovery.”
Go on the offense
With a stronger-than-ever team laser-focused on emerging priorities and the continued support of an engaged community, Toast was ready to move as states began to open up. When the market reached stability, Toast not only survived but thrived. The source of the Company’s strength was the effectiveness of Toast’s approach to its stakeholders with its Better Together strategy.
From Dave’s desk:
I got to know Toast in 2016 (thanks, Steve Papa) and invested in 2019 while I was at TCV. I currently serve on their board of directors. It’s been an amazing business story, but the team’s Better Together is what stands out to me. Whereas sometimes corporate mission is dismissed as employee or shareholder marketing, Better Together is core to Toast’s DNA. It’s not a byproduct. I fundamentally believe Better Together is why Toast is a superlative, resilient, and lasting business. Seeing Toast in action in the depths of the pandemic was one of the core inspirations for Tidemark. As I build Tidemark, I”m grateful to the mentorship of Chris Comparato, Aman Narang, Tim Barash, Nick Deleonardis, and Matt Baumgartner as Fellows of Tidemark.