Ashwath Rajan and Paul McDonald have what appears to be a clever startup idea. At a glance, the concept is a mashup of the video-rental Red Box vending machines, Best Buy airport kiosks, other airport food vending concepts and the Amazon’s Instant Pickup service we recently noted. Those and a throw-back cigarette machine.
Rajan and McDonald also have Silicon Valley financial backing and are both former Google employees. Nothing about their idea suggests the business model they’ve developed hinges on competing with Latin American family businesses. But the founders named their company Bodega, a Spanish word that New Yorkers and others use to describe neighborhood small convenience stores. The founders, again with no need to but obviously in love with the name they had decided on, also described the startup’s mission in a way that made them sound like they are out to replace one of the most beloved institutions in major cities across the U.S.: the family-owned corner market.
Both miscues set back any notion that being a former Googler makes you understand how the web works as during the past 72 hours, the two founders’ startup idea has been described as “the startup everyone hates” on websites ranging from CityLab.com to Digg.com to Vanity Fair.
It started on Wednesday (9.13.17) when Rajan (left) and McDonald unveiled Bodega by providing a FastCompany.com writer an exclusive story. Expecting the response well-funded former Googlers typically receive when their startups are revealed, the two were surprised (shocked? dumfounded?) to discover the internet responded with a massive shove of push-back about the concept’s name, Bodega.
Even more damaging to the startup was their use of certain language which came off sounding like their goal is to crush mom-and-pop corner markets. (This is something they later-in-the day vigorously denied. However, readers of SmallBusiness.com know that it is not a good excuse when you blame others for such miscommunication, according to Osmo Wiio.)
A branding and naming trainwreck
In a nutshell, here’s what’s behind the outrage towards a simple idea.
Bodega is a term used in the Latin American community for the type of corner store the company is trying to disrupt (or seemed to be until they vigorously denied they are). When asked by the Fast Company reporter if the founders were concerned the name may be culturally insensitive, co-founder Paul McDonald’s response sounded as if he was surprised by the question:
“I’m not particularly concerned about it….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.”
To anyone who has been involved with any market research (other than the kind that involves talking with your friends), such a claim about the preferences of those surveyed sends up a red flag. In the history of scientific opinion research, has any tested product name ever received a 97% approval response? Especially, if the word being tested is a cross-cultural term?
Within a few hours of the Bodega announcement on Wednesday, what seemed like 3% of the entire internet began a Bodega backlash. Here’s an example:
The Association for Neighborhood and Housing Development in New York addressed the matter in a statement.
“The awful irony of naming the company ‘Bodega’ after the very brick and mortar institutions they aim to displace…is offensive, utterly misguided, and frankly disrespectful to New Yorkers,”
Then some big names started weighing in on the topic, like the creator and star of Alexander, Lin-Manuel Miranda:
*read the bodega thing a day late*
*reads the ENTIRE WORLD STANDING UP FOR BODEGAS*
Sigh. I love y’all, thanks. pic.twitter.com/thcG2WLFaP
— Lin-Manuel Miranda (@Lin_Manuel) September 14, 2017
And then there’s this biting essay by Scott Simon heard nationally on NPR:
Don’t mess with the beloved bodega
Not only did the name outrage some in the Latin American community, especially in New York City where the name “bodega” is synonymous with a beloved, family-owned corner market, but the concept, itself, was labeled as another assault on urban small businesses.
If this came as a surprise to the founders, they don’t read the New York Times (or SmallBusiness.com, for that matter) where we have covered the challenge family-owned corner markets in New York are facing. They are becoming an endangered species due to skyrocketing rent. (One of the startup’s claims is that they don’t have to pay rent.)
While McDonald later used the Bodega blog to deny their concept’s threat to small businesses, co-founder McDonald (no relation to Ronald) didn’t help his argument earlier when he 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.”
While that may sound to most people to be another way of saying, “our competitors are bodegas,” it didn’t to McDonald:
Quote via Bodega blog:
“Challenging the urban corner store is not and has never been our goal. Corner stores have been fixtures of their neighborhoods for generations…. We want to bring commerce to places where commerce currently doesn’t exist. Rather than take away jobs, we hope Bodega will help create them. We see a future where anyone can own and operate a Bodega — delivering relevant items and a great retail experience to places no corner store would ever open.”Bottomline
Competition is a good thing. Startups are a good thing. Being a former Googler can be a good thing. But remember what tu abuela taught you when she told you the old adage noted earlier: You only get one chance to make a first good impression.
As for the market research that showed 97% of the people surveyed loved the name Bodega, McDonald admitted in his blog post that “… it’s clear that we may not have been asking the right questions of the right people.”
It takes only a glance to recognize that Bodega’s vending kiosks are no bodegas. (They’re more like the tiny house of retailing) And frankly, except for the culturally misdirected name and the unnecessary implication that the startup has something to do with competing with Latin American small business owners, the idea seems clever.
But please, don’t call it a bodega.