Google veterans Paul McDonald and Ashwath Rajan want to make even bodegas obsolete with a new start-up they decided to call “Bodega.” They have even created a cat-shaped logo inspired by social media’s love of bodega cats. Essentially, their plan is to replace the stores with fancy vending machines. After the launch received a negative reaction on social media, McDonald published a Q&A, insisting that they don’t think their business model will put real bodegas out of business.
The duo announced the launch of the project in a Fast Company interview and it was quickly ridiculed on Twitter. “Bodega” became a national trend, with thousands of Twitter users complaining about the idea of taking away one more iconic part of New York. “If you replace my bodega with a f**king box i will launch you into the sun,” one person wrote.
“Despite our best intentions and our admiration for traditional bodegas, we clearly hit a nerve this morning. And we apologize to anyone we’ve offended,” McDonald wrote. “Rather than disrespect to traditional corner stores — or worse yet, a threat — we intended only admiration. We commit to reviewing the feedback and understanding the reactions from today. Our goal is to build a longterm, durable, thoughtful business and we want to make sure our name — among other decisions we make — reflects those values. We’re here to learn and improve and hopefully bring a useful, new retail experience to places where commerce currently doesn’t exist.”
Here’s what you need to know about their idea and the founders behind it.
1. They Want to Replace the Bodega With a Five-Foot-Wide Box Unlocked By an App
In the Fast Company interview, McDonald and Rajan explained that they want to install five-foot-wide pantry boxes filled with the stuff you would usually buy at a bodega. The box would be unlocked with an app and a camera will notice what you picked up. Your credit card will then be charged based on what you picked up. If this becomes a reality, you could restock your fridge without needing to even physically hand your money to someone.
“The vision here is much bigger than the box itself,” McDonald told Fast Company. “Eventually, centralized shopping locations won’t be necessary, because there will be 100,000 Bodegas spread out, with one always 100 feet away from you.”
The duo launched a website, Bodega.ai, although there is no further information about the project. They do have their cat logo, which can also be seen on a shirt worn by McDonald’s son in an Instagram video.
In a blog post, McDonald insisted that he doesn’t want to put real bodegas out of business.
“Corner stores in places like NYC are a model for this — they’re on nearly every block and serve their local neighborhoods 24/7. We’re trying to use technology to bring some of that same ease and convenience to everyone by putting tiny stores right where people live and work,” he wrote.
2. They’ve Already Secured $2.5 Million Funding From Investors & Tested the Idea in the Bay Area
McDonald and Rajan started getting funding for the project last year. They told Fast Company that Josh Kopelman at First Round Capital, Kirsten Green at Forerunner Ventures, and Hunter Walk at Homebrew have all invested in the project. Senior Facebook, Twitter, Google and Dropbox executives are also backing their idea.
TechCrunch reports that McDonald, who has never lived in New York, and Rajan have raised $2.5 million already.
“Retailers are contouring their business around this fact that users want convenience,” McDonald told TechCrunch. “There’s really only been two options: you can go to the store, or you can order something online. What we’re trying to do is introduce a third option, a new way of buying things. Shrink the store, bring the best parts in a smaller form factor and bring it to where you are.”
They already launched Bodega in the Bay Area, with 30 locations at apartment lobbies, dorms, offices and gyms. They want to use data to figure out what the 100 most-needed items are to figure out what each box should have. Once you buy an item, they get information that the box needs to be re-stocked and they send a person out to do that.
“Each community tends to have relatively homogenous tastes, given that they live or work in the same place,” McDonald told the magazine. “By studying their buying behavior, we’re hoping to eventually figure out how the needs of people in one apartment building differ from those in another. We could customize the items in one dorm versus the next.”
By the end of 2018, McDonald hopes to have 1,000 locations.
3. McDonald Claims He’s ‘Not Particularly Concerned’ About Offending the Hispanic Community By Calling the Venture ‘Bodega’
Fast Company asked McDonald if he thought using “Bodega” as the name of the venture might be seen as culturally insensitive.
“I’m not particularly concerned about it,” he told the site. “We did surveys in the Latin American community to understand if they felt the name was a misappropriation of that term or had negative connotations, and 97% said ‘no’. It’s a simple name and I think it works.”
Frank Garcia, the chairman of the New York State Coalition of Hispanic Chamber of Commerce, who represents bodega owners in New York, told Fast Company that he would try to block McDonald from allowing them to install boxes in the city.
“I would ask my members not to allow these machines in any of their properties in New York State,” Garcia told the site. “And we would ask our Hispanic community not to use the service because they are not really bodegas. Real bodegas are all about human relationships within a community, having someone you know greet you and make the sandwich you like.”
A recent Bodega Association of the United States, Inc. survey found that there are 16,500 bodegas in New York City and 85 percent are owned by Latinos.
4. McDonald Co-Created Google Consumer Surveys & Worked at Google for 13 Years
McDonald worked at Google for 13 years, starting in 2003, after graduating from the University of California, San Diego, notes his LinkedIn page. He was also an adviser on Scoop Technologies and a Board Member of COMPAS Technology.
While at Google, McDonald specialized in consumer products and analytics. In 2012, McDonald and Brett Slatkin created Google Consumer Surveys, which helps businesses conduct market research.
“We hit upon this idea that instead of paying for content with your money, you could pay with your time for answering a one- or two-question market research survey; or at the time we had another idea, you could do what we called the human computation task, like labeling an image or categorizing a product,” McDonald explained to Forbes in 2013. “So we did this test in 2010 with the Huffington Post and we saw that people were happy to answer the market research questions and they weren’t so pleased with doing the human computation tasks.”
Notably, in that interview, McDonald said Google was trying to make products to help all businesses, including a “Mom and Pop shop on the corner.”
“Really we’re just trying to build a product where businesses of all sizes can use data to make data-driven decisions for their companies, whether that’s a Mom and Pop shop on the corner or a big company, everyone can use this service,” he told Forbes. “I think once you understand the power of that data and how to use it, you can build better products.”
McDonald was also produce lead on GMail and product manager for Google Ads Optimization. He also worked on Google Checkout and AdWords.
5. Rajan Also Worked at Google & Is a Graduate of Columbia University
In 2012, Rajan earned a B.S. in Biomedical/Medical Engineering from the University of Southern California. In 2013, he earned his Masters of Science in Computer Science from Columbia University in New York.
Rajan also worked at MightyHive, Summit Securities Group and Waterfall Mobile.