TASTE OF TSO
Austin restaurant startup uses online platform to deliver a new view of Chinese takeout.
When considering all the tastes and flavors of different ethnic cuisines, Chinese delivery food does not always top the list of authentic culinary experiences.
But Austin-based Tso Chinese Delivery says it is on a mission to change the reputation of the cuisine, and several influential local investors have already bought in.
The company, which opened its first store in August 2017, has two locations in Austin.
Tso Chinese Delivery’s business model is built around an online platform — developed by one of the company’s founders — that tracks orders and collects data to streamline delivery routes.
The company takes orders through its website, and only does delivery or carryout. The company also does not accept tips and does not add delivery fees, according to its website.
Min Choe, its CEO, said the company recently closed a $2.3 million seed funding round with participation from former Whole Foods co-CEO Walter Robb, as well as Brett Hurt, co-founder of Bazaarvoice, an Austin-based digital marketer.
The funding will allow the company to add three locations, including a south Austin site that is on track to open this year, Choe said.
“We have the good fortune of being a profitable startup from the beginning, so we’re not using capital to extend our runway,” Choe said. “Instead, this is specifically growth capital, so we’re going to use the capital to open more stores and reinvest into the software.”
Robb said Choe’s previous
experience as a restaurateur instilled values that carried over to his current startup.
“There is no guarantee in business, but they’re careful, frugal with their money and thoughtful,” he said. “They’re not going around with big egos and checkbooks; they’re doing this very, very responsibly.”
Hurt said he was sold by the company’s no delivery fee and tipping policy, but was also impressed with the company’s tech-focused strategy.
“I almost never meet a restaurant entrepreneur that is thinking about scaling as quickly and is doing so with technology being at the core of their business, as opposed to technology as an afterthought,” Hurt said.
Choe said he got the idea for the company during his 15 years operating Chinese Americanstyle restaurants in Austin.
“It occurred to me that the Chinese food industry is something that is highly sustainable and scalable, especially when the food is good,” Choe said. “But there are so many aspects of the restaurant industry that are cost-prohibitive, like rent and labor.”
Choe said he and his wife, Jenna, met the other co-founders of the company, Angell and Eunice Tsang, while running one of their previous restaurant businesses.
Angell Tsang had worked at several startups in Austin, including Bazaarvoice, and created the software for Tso Chinese Delivery’s online platform. Eunice Tsang, who has a background in nursing, is the company’s chief marketing officer.
“Min always has a new idea brewing and he is a true entrepreneur at heart,” Eunice Tsang said. “So when he started talking about this concept, Angell and I fell in love with the idea.”
Angell Tsang said his previous work developing software with startups helped him create an online platform that can easily be modified and added onto as the company adds new stores.
“We had to build everything from scratch, and we had to basically create an e-commerce front end where customers shop online, and convert the results of that sale into a kitchen back end,” Tsang said.
Tsang said Tso Chinese Delivery’s platform can interpret online sales into actionable data for improving delivery logistics. The platform, for example, can anticipate when a large number of orders might come in so that the team can plan ahead.
Tsang said data collected through the platform helps stores decide when orders should be started in the kitchen as well as what delivery routes should be taken by drivers.
“Before even cooking the food, we can plan the service out from a delivery standpoint,” Tsang said.
And unlike many other delivery services, Choe said Tso Chinese Delivery does not take tips or charge delivery fees.
Though his drivers do not make tips, Choe said the company believes in paying drivers a fair wage that depends less on tips from deliveries.
“None of our employees start below $12 an hour, and that’s from the kitchen, the packers all the way to the delivery drivers,” Choe said. “This year, we’re moving up to $13 an hour as the minimum pay. And we’re paying for the cars, the fuel and the insurance.”
Because the company only takes delivery and takeout orders, Choe said, it can open more locations without having to worry about parking lot and size requirements that dine-in restaurants deal with.
“We are a concept that is built on low rent,” Choe said. “That is one of the attractive investor profiles for us.”
Another challenge for the business is getting people to respect a cuisine that can often be disregarded as unhealthy or unauthentic, Choe said.
“The culture of Chinese American food being this guilty meal shouldn’t be true,” Choe said.
Some historians tie to roots of Chinese American cuisine to the mid-1800s, when Chinese immigrants came to the West Coast as part of the California Gold Rush.
Though often prescribed specifically to Chinese culture, Chinese American cuisine is something that can be embraced by many other Americans of Asian descent, said Eunice Tsang, who is Korean American.
“In a sense it’s something that we all enjoyed together and there is something cool about that,” she said. “It’s very recognizable and approachable, and that’s what we find charming about the cuisine.”