Blackbird
Introduction
Blackbird is perhaps one of the most unique applications in the consumer blockchain landscape. At a time when many of the leading projects in the space have been heavily focused on building new infrastructure and developer tooling, Blackbird stands out as a consumer-facing application – and one that could potentially bring crypto to the everyday lives of mainstream users.
In this article, we will explore how Blackbird seeks to bring this “holy grail” of crypto adoption to reality. To this end, we will first discuss how Ben Leventhal’s experience and unique insights into the restaurant industry have inspired Blackbird as a product. Next, we will explain how Blackbird works, both for the end-user and for restaurant owners, before finally discussing how this may represent a new paradigm for customer loyalty, both for restaurants and beyond.
Bringing Back the Restaurant Experience
When we think about dining at a restaurant with friends and family, the typical image that comes to mind is the “traditional” restaurant experience – that in-person, sit-down service at an independently-owned neighborhood restaurant.
But as COVID restrictions shuttered shops, takeout platforms soared, and prices skyrocketed, mom-and-pop independent restaurants have been pushed to the brink. In 2023, about 4,500 more restaurants closed than opened, while sales for fast-food restaurants grew at twice the rate of sit-down restaurants [1]. Today, the trillion-dollar restaurant economy is increasingly shifting towards takeout-first, chain-first, and fast-food-first [1]. In many respects, the traditional sit-down restaurant is struggling in an economy that no longer works for them. Blackbird wants to fix that, and bring back the magic of the restaurant experience.
Started by Ben Leventhal, the co-founder of Resy, Blackbird uniquely understands all the problems that many independent restaurants face. Over the last 20 years, he has been a serial entrepreneur at the forefront of the restaurant tech space. In 2005, Ben founded the restaurant discovery blog Eater, transforming restaurant guides from outdated physical books to updated digital blogs, before selling it to Vox Media in 2013. In 2014, Ben then founded the restaurant reservation platform Resy, a mobile-first reservation platform that today has become synonymous with restaurant booking. He sold Resy to American Express in 2019, and worked there for a few years before founding Blackbird in 2023.
In many ways, Ben epitomizes founder market fit for restaurant tech, and his products have grown and matured just as our modern Internet has. If Eater was Ben’s answer for restaurants for Web 1.0, and Resy was his answer for restaurants in Web 2.0, then Blackbird is Ben’s vision for restaurant tech in Web 3.0.
At each stage in Ben’s journey is the enhancement of a digital relationship between restaurants and their customers. In Web 1.0, Eater allowed customers to connect with each other more globally by providing a platform for restaurant discovery. In Web 2.0, Resy allowed customers to not only discover, but to make and manage reservations with restaurants, all in a mobile-first approach. And in Web 3.0, Blackbird builds the final missing part, allowing customers to forge a deeper bond with restaurants through a programmable digital loyalty system, bringing value back to the independent restaurant operators that make the restaurant experience magical.
How Blackbird Works
So, what exactly is Blackbird, and how does it work? For the everyday consumer, it’s an incredibly intuitive and simple app. You download Blackbird from the App store, create an account on the platform and link your credit card.
Blackbird check-in. Source: Original Content.
When you visit a restaurant, you open the Blackbird app, and tap your phone on a Blackbird-labeled puck, and get FLY loyalty points for checking in. As you check in, Blackbird will tell you of all the special perks and discounts that you can get at the shop, such as free drinks, merch, or surprise gifts that can come from a variety of Blackbird-exclusive perks.
Some restaurants, for example, give returning users surprise gifts – such as a free drink on a second visit, a dessert on the fifth, and an extra omakase course on the 10th. Others have recurring “Blackbird special events”, such as a biweekly day of free coffee for Blackbird members. Still others participate in Blackbird’s pass programs, such as Blackbird’s Breakfast Club pass, and the Bar Blackbird Summer Pass – both killer deals for the end consumer.
Blackbird’s Breakfast Club, for instance, costs $85, and allows passholders to get free coffee every morning at 15 spots in New York for a whole year. Likewise, the Bar Blackbird Summer Pass costs $50, and offers patrons a free drink every day during happy hours at more than a dozen bars across the city [5]. Recently, Blackbird also introduced the Blackbird Burger League Pass, a $250 pass that entices free burgers at 9 different burger restaurants [6], and allows holders to vote on New York’s “Burger League Champion.”
Blackbird Burger League Pass.
This diversity of special deals, perks, and experiences is a testament to Ben Leventhal’s distinctive approach to crafting both a product and a consumer experience. Blackbird creates a novel experience for the everyday consumer, while also providing restaurants with the freedom over what to include in their Blackbird deals – trusting that restaurant owners know their own business the best.
As you sip on your free coffee, strike up a conversation with the barista, and glance at the customers in-line downloading the app on-the-spot, you can’t help but realize that Blackbird makes the restaurant experience feel magical again. Blackbird brings about that magic by hiding away the complexities of crypto for the average user, and abstracting away the nightmare of data tracking for Blackbird restaurant owners.
On the backend, restaurant owners pay a monthly subscription fee of $89 to get access to Blackbird’s sophisticated mechanism of collecting guest profiles and tracking customer loyalty. Blackbird tracks four pieces of customer data to form a comprehensive “guest profile”:
Personal Identifiable Information (PII), stored on Blackbird Labs databases for privacy
History of Restaurant Check-ins, based on on-chain transaction data
Guest Value Score, calculated by Blackbird
FLY points balance
These four components work in tandem to allow restaurants to have better insight on who their customers are, so that restaurants can in turn provide a tailored experience to reward and incentivize their most loyal customers. Moreover, Blackbird also uses FLY points to incentivize users to engage in behavior beneficial to restaurants. For example, while data-sharing is an optional feature of the Blackbird app, users get a FLY bonus if they decide to share PII with restaurants. Furthermore, users get a FLY bonus if they spend using a debit card, rather than a credit card to allow restaurant owners to save on credit card fees.
Blackbird taps into restaurants’ existing tech stacks, such as the tablet clients that many restaurants use to coordinate reservations and check customers in. For example, Blackbird introduces an SMS concierge service directly in the Blackbird app, that allows restaurants to interact in real time with their customers, make bookings, and customize reservations with special requests. Thus, Blackbird provides a low-cost, comprehensive toolkit for restaurants to easily track and manage customer profiles, to ultimately allow for a better customer experience.
Towards a Framework for Onchain Loyalty
Fly Emissions to date.
One of the most exciting aspects of Blackbird is that it is an app that can change consumer behavior on a day to day basis. Through its restaurant discovery, passes, and points, Blackbird allows users to discover restaurants that they otherwise would not have even known about, let alone dined at. On a Chinatown street filled with similar restaurants for example, the lure of FLY loyalty points can potentially steer customer traffic towards certain restaurants, just as airline reward miles incentivize customers to book with a particular vendor.
But collecting points, of course, is one side of the equation for loyalty; the real question for a loyalty program is how these points can be spent.
This is where Blackbird’s recently introduced Blackbird Pay system comes into play. Instead of simply giving free drinks and desserts as perks, Blackbird envisions a future where consumers can pay for entire meals using their FLY points, with 1 FLY being one cent. In other words, FLY becomes more than just a loyalty program – it becomes the blueprint for a new payments system, built on crypto rails.
Blackbird Pay UI.
In July 2024, Blackbird released the ability to purchase FLY points via USDC, meaning that for any restaurant that accepts Blackbird Pay, users can now pay using their crypto balances by loading USDC into the Blackbird app [8]. This payments part of the app may explain why Blackbird was built on crypto rails in the first place.
Indeed, if Blackbird was simply a data collection app with digital membership cards and restaurant loyalty points, it wouldn’t necessarily need to have been built onchain. But Ben Leventhal’s vision for Blackbird goes far beyond this simple premise. Blackbird’s ultimate goal seems to be much broader, with FLY points being just one part of a flywheel for a new crypto payments network, one that both reduces cost and increases revenue for restaurants.
In this flywheel, Blackbird charges a 50% lower processing fee of 2% compared to its traditional payment processor counterparts, who can charge up to 4%. This lower processing fee attracts more restaurants to the Blackbird network, who can use perks, rewards, and points to attract consumers. Once more consumers build up brand loyalty to Blackbird restaurants, they begin to bring more FLY volume to restaurants, which in turn attracts wider restaurant adoption [3]. As the Blackbird ecosystem matures, this has the potential to become a mature crypto payments network, servicing millions of mainstream consumers on a day-to-day basis, just like American Express does today.
In its recent Flypaper update, Blackbird also hinted at a novel long-term vision of a “Flynet,” a layer 3 chain on Base dedicated to loyalty tooling in service of this FLY payments network. In the proposed Flynet blockchain, Blackbird hopes to build open-source ecosystem applications, such as projects that facilitate consumer discovery of restaurants, data visualizations, and other third-party tools. Blackbird as a consumer app could become the distribution gateway for all these community-built loyalty tools, and Flynet may be how Blackbird ultimately builds a cheap, open-source loyalty program competitive with the expensive solutions that restaurant conglomerates build in-house.
Indeed, the hidden power of building membership cards as ERC-721 NFTs and having FLY on-chain is that it unlocks these assets’ programmability, allowing infinite composability between the real-world use case of restaurant loyalty and the wider on-chain world.
Moreover, though Ben Leventhal is perhaps the perfect founder to apply this loyalty blueprint to the restaurant industry, Blackbird’s core insights on what loyalty means in web3 applies to a range of other industries too. Loyalty programs are a mainstay in many service-intensive, retail-facing industries, such as in hotels, cosmetics, fashion, and travel.
Many of these verticals face the same problem that restaurants face, where small to medium-scale independent vendors are unable to afford the sophisticated loyalty tooling to compete with larger conglomerates. Blackbird’s loyalty framework, through using an intuitive “tap-to-check-in” functionality may in fact provide the tooling solution that independent operators in all these verticals need – a public, open-source, community-driven approach to customer loyalty that enhances the consumer experience.
And perhaps this is the novel on-chain loyalty blueprint that Blackbird provides for web3, and one that can ultimately bring crypto to the mainstream.
- Paul Veradittakit
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ABOUT ME
Hi, I’m Paul Veradittakit, a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.
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