This section will describe every aspects of the BlockFood business model, describing the opportunities, how BlockFood can generate revenue in a fair way, the current state of the market, explain strategic advantages and finally shed some light on the business projections.
The current market is full of opportunities. The opportunities are the consequences of how current food ordering platforms work and how major technological break-throughs can change the way trust is managed.
Fair commission rate
While currently existing food ordering platforms claim their presence can strengthen the link between customers and restaurants by generating more orders, their current structure forces them to impose a very high commission rate of around 30% for each order. The rate of the commission is a decision taken unilaterally by those platforms and can change at any time. Once the restaurants are locked in the platform, they have no choice but to abide to the company's policy.
The same issue exists with couriers working for the platforms. Their remuneration is decided unilaterally by the platforms themselves. This particular issue has already caused anger amongst the couriers of those platforms.
BlockFood answers this issue by seeing an opportunity, bringing efficiency where all currently VC-backed companies impose a profit-based model. BlockFood's commission rate will be dynamically updated to match the actual cost of the platform (see the "Cost" section below). This update will take place in a fixed period (once a week or once a month) and will always be backed up by actual numbers. Couriers will be able to set their own price which will never be controlled by BlockFood.
Decentralization of trust
In the current state of the sharing economy market, trust is being held by the platforms themselves. This means that actors have to trust those actors for the security of their transactions. It may not be perceived as an issue, but the consequence of this invested trust is the increased power it gives to those platforms.
BlockFood's whole model relies on the decentralization of trust in the transactions made on the platform, using smart contracts on the Ethereum blockchain. Security and integrity are ensured by the blockchain itself, outside of BlockFood's control.
Acting for the common good
In the food delivery market, while most platforms will show themselves as good medium for the customers, the hidden truth is that they are only concerned with their own growth and increasing the flow of money. While customers may be happy with the service, the adjustment variable is the actual interaction with the restaurants and the couriers.
BlockFood's only interest is the common good. The goal is to provide a fair platform for all actors, from customers to restaurants. No dividend to pay, no bank to reimburse. Focus on our work and not on how to make more money.
BlockFood's business model
Being a fair organization does not mean being a free platform. The BlockFood project must bare its own cost by generating revenue. This section will describe the various expected revenue sources and the cost attached to the development and maintenance of the platform.
The main revenue source will be the dynamic commission rate set on all orders, which given current projections should not exceed 5%. This mechanism will allow the platform to become more efficient as it grows. The more users there are, the more the commission can be lowered.
Along with the dynamic commission rate, there will be other sources of revenue:
- Restaurant advertisement: restaurant will be able to advertise their products directly on the platform by paying for the service.
- External advertisement: BlockFood will allow carefully selected external companies to advertise their products or services on the platform.
- External services: BlockFood team's knowledge on blockchain and the crypto ecosystem will be used to provide meaningful services to startups or companies which want to transform themselves using the blockchain.
Creating a platform such as BlockFood generates a diversified range of cost. The project needs many different actors to be fully developed, hosted and promoted. The main costs currently identified are:
- Growth and strategy
BlockFood is the first project from the OSE foundation. Several costs described here will be shared between all OSE projects.
Access to the market
A beta test program will opened to test and refine BlockFood before a global deployment strategy. A series of elections will be organised to select the cities where BlockFood should be tested first.
Users will be put at the center of the development strategy. The BlockFood ambassador program will make users actors of the growth of BlockFood.
The food delivery market
The food delivery market has tremendously changed over the last two decades. Internet has changed the way food is ordered. This section will show a quick snapshot of the current situation and projections of this market.
According to McKinsey, "the market for food delivery stands at €83 billion", which is only "1 percent of the total food market and 4 percent of food sold through restaurants and fast-food chains". The sector has an "annual growth rate estimated at just 3.5 percent for the next five years". Meanwhile, the market is evolving from offline ordering to online ordering on portals such as BlockFood. The growth in this area is predicted to be around 25%.
The BlockFood platform will enter the market with several strategic advantages, consequences of its philosophy and technical implementation.
The BlockFood platform will give restaurants the possibility to integrate an easy-to-use ordering form directly on their website. This will help them easily set up a connection between their menus and their customers. The diversification of entry points will maximize the exposure of the BlockFood platform.
All BlockFood platform source code will be available on open source platforms. This strategy will open the platform to external contributions, giving access to new ideas and allowing developers from all around the world to contribute freely.
The BlockFood platform will be opened to third-party interfaces. Instead of creating strong boundaries between our data and the world, third-party developers will be able to create innovative applications using the BlockFood platform.
Being a fair player in this area is a true advantage in terms of image and recognition. The goal of the BlockFood project is to give users their power back.
"By the people, for the people".
The blockchain has been seen for almost a decade as a true revolution in the decentralization of trust. Some analysts see the blockchain as a revolution as big as the internet in term of impact.
We believe that being based on some of the greatest ideas implemented on the blockchain is a great advantage.
The goal of the token sale is to help create the platform, while allowing the creation of a business model that will allow actors from the sharing economy to have a fair platform. In this projection of how this model will evolve, the first years are mainly financed by the revenue from the token sale.
The numbers presented here are in €.
|Year||Estimated cost||% financed from token sale||Financed from token sale||Left to finance||Restaurants||Avg orders per day||Avg per order||Total||Dynamic commission rate|
- Estimated cost: global estimated cost for the BlockFood platform, in €.
- % financed from token sale: percentage of cost expected to be financed by the result of the token sale, in %.
- Financed from the token sale: amount of the cost financed by the result of the token sale, in €.
- Left to finance: amount of the cost that have to be financed by the platform.
- Restaurants: number of restaurants subscribed to the platform.
- Avg orders per day: average number of order per day for each restaurant.
- Avg per order: average amounts ordered by customers, in €.
- Total: total of the transaction handled by the platform.
- Dynamic commission rate: commission rate dynamically adjusted to match the cost left to be financed by the result of the platform.
The overall cost lower over time for two reasons:
- Development cost of the platform will decrease over time while resources are redirected to new projects from the OSE foundation.
- More orders means less cost per order, when taking into account the fixed cost, this leads to less overall cost.
The scenario presented here requires a financing target of around 2 825 000 € to kick start the project. Our token sale has a minimum target of 750 000 € and a maximum of 24 000 000 €. The scenario will be adapted according to the amount raised.
The sharing economy is growing and projections leave room for new actors such as BlockFood and the OSE foundation.
BlockFood will enter the market with strategic advantages and a new model that will allow strong innovation by offering a true alternative to current players.
User adoption will be built step by step by a solid strategy of user involvement and with localized promotion campaigns.