Komal Ahmad pitches her social enterprise startup Copia to Zanoon Nissar from Google.
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Episode transcript
You’re listening to The Pitch, a podcast where we take you behind closed doors and into the world of startups. I’m your host, Josh Muccio.
Today, we have a problem. Those who have, waste, while those in need, starve. Often you’ll find a homeless hungry person begging for food and right across the street there’s a restaurant throwing away enough food to feed a hundred people. This is a problem that many nonprofits are trying to solve. But perhaps a better solution can be found using technology. Today’s founder, Komal Ahmad, is trying to do just that.
Komal Ahmad: We say we want to solve the world’s dumbest problem. Because in a world with so much innovation and technology and abundance, issues like hunger shouldn’t exist.
And with cities like Seattle and San Francisco introducing fines for disposing of food waste incorrectly…
Komal: Businesses will be required to use our services or face massive penalties.
And this is just the beginning of a trend that’s happening worldwide. But will Komal’s start-up, Copia, provide enough value to justify its high prices? Especially since their nonprofit competitors offer food pick-up and delivery free of charge?
Zanoon Nissar: Why wouldn’t I pick FoodRunners where I can do it for free?
That’s Zanoon Nissar, our guest investor on today’s show, and as Google’s manager of social responsibility, a potential customer for Copia. Here’s my co-host, Sheel Mohnot.
Sheel Mohnot: All right, Komal, you’re on the spot. Tell us about Copia.
Komal: Copia is a for-profit company. We enable businesses to turn their excess food into profit. Every day, commercial businesses waste over two hundred million pounds of perfectly edible food. And this has been happening for decades. But two things recently changed.
First, laws have been passed from San Francisco to France, and just a few weeks ago in Italy, that are banning food waste and imposing massive fines on businesses that throw away their food. Fortunately, for US businesses that donate their food, they are now eligible to receive over 16 billion dollars in enhanced tax deductions. But hardly anyone takes advantage of it, because donating food is unbelievably hard.
This is where Copia comes in. Copia is a tech-enabled logistics company. Businesses request pick-ups of their excess food through our platform, our algorithm matches that food to the nearest nonprofit that’s in need, and a driver will come pick it up and drop it off. And then we compile all the tax documentation necessary to enable you to receive the largest write-off at zero liability. And the way we generate money is a combination of pick-up fees, and a 30% rev-share of our customers’ tax savings.
Sheel: Cool. That’s super interesting. Tell us how you got into this business.
Komal: A few years ago I was walking down the street, down Telegraph Avenue in Berkeley, and I encountered a homeless man begging for food. And something about him compelled me to stop and invite him to join me for lunch.
And during lunch he sat across from me just scarfing down his food. He was really hungry; it wasn’t a ploy or anything. And in between bites, he shared his story. He said, “my name is John. I just came back from my second tour in Iraq. I’ve been waiting weeks for my VA benefits to kick in. And because they haven’t, I haven’t eaten in three days.” And that really hit home for me.
Because I’m sitting across from a veteran, someone who had given the most selfless sacrifice on the battlefield of Iraq, only to come home to face another battle which was hunger and homelessness. And then adding insult to injury, Berkeley’s dining hall was throwing away thousands of pounds of food every single day. So it was this very stark reality of those who have and waste, and those who are in need and starve. And those two people are literally right across the street from another.
Sheel: Tell us who are your other clients? I imagine there’s a bunch of tech companies?
Komal: Sure. There’s a bunch of tech companies that over-feed their employees. Zanoon, we could really use Google actually on our platform. I know for a fact that they feed their employees.
Zanoon: I don’t know that we get free food. I don’t know if that really exists at Google.
Komal: So tech companies, hospitals, 49ers, just a variety of different businesses. So our goal this year is to create a playbook out of the Bay area, and to understand how does this model work in Silicon Valley versus San Francisco. And then what can we learn. And then we want to take it across the country and then across the world.
Sheel: Zanoon, what does Google do with its food waste? Do you know?
Zanoon: We actually, Komal probably knows this, we’ve worked with several companies. What we do in San Francisco is very different than what we might be doing in the South Bay. There’s different partners. I know we’ve worked with FoodRunners before, which is another company that does similar to what Komal is doing.
Komal: Except they do it for free with volunteers. And so that’s the model that we’re changing. So we are technically competing with what is traditionally a nonprofit model. But why a vast majority of FoodRunner’s clients will come to us, even though they have to pay to essentially give away their food, it’s not that you’re paying to donate your food. You’re paying to get all of the different benefits that we offer.
We are a professional anti-food waste management company. We have ServSafe certified drivers. None of our drivers are volunteers. They’re all reliable. They’re all efficient. You also get data and analytics.
So we give companies back the exact impact reports on a monthly basis that show them how many people they have fed, where did this food go, what organizations were served, along with photos and testimonials of the people that they fed. So that when they donate their food it doesn’t just go into a black box, but that they can actually get that back. Whether it’s through their corporate social responsibility, their PR department, or also through employee engagement. Because employees want to know that their company is also giving back.
Sheel: Let’s just use a fictional company and tell me how it actually works. How much they pay you, how much food gets delivered, all that sort of stuff. Take me through an example.
Komal: Sure. So we have an on-demand catering company that we work with here in San Francisco. Every day at 3:30 we have recurring pick-ups for them. They pay us $25 a pick-up, plus I believe 35 cents per pound of food. So every pick-up we weigh that food and then we deliver it to the nonprofits.
So let’s say they gave us a thousand pounds instead of 300. Well, one nonprofit most likely won’t be able to take that thousand pounds of food. So our algorithm will then kick in and say “these are the three organizations”. So Cityteam Ministries, St Vincent de Paul and Larkin Street Youth can take a certain amount of that. And then as a full-circle we then add it to their dashboard.
All of our customers also have a visual dashboard that shows them on an ongoing basis what their savings are and that’s what we’re building in, and also how many people are they feeding, what was their methane offset.
Sheel: What are the rules around how long can food be out? How does that work?
Komal: All of the food that we move, is moved within the hour. A lot of our donations are on a recurring basis. So for instance, Stanford Hospital doesn’t necessarily know how much food they’re going to have left over, but they know that they’ll at least have 300 pounds. So every day at 8:30pm we will pick up at least 300 pounds of food. So in those cases, it’s immediate. We have a driver on stand-by who will come pick it up. In cases where it’s like Uber for food recovery, then within an hour we move it. It’s up to four hours where you can leave food out and have it donated. But usually the sooner we know the faster we come.
Sheel: And where does food go? Like, who do you donate to?
Komal: We have hundreds of different nonprofits. So it could be after school programs for underprivileged youth, women’s domestic abuse shelters, veterans’ agencies, homeless shelters. Places like Glide Memorial, St Vincent de Paul, Larkin Street Youth and a variety of other organizations that are in need. And we’re not redistributing corn dogs. We’re redistributing $300 cheeses and pulled pork sandwiches. Which are not necessarily my jam, but they are jam for hundreds of thousands that are actually in need here in the Bay area.
Zanoon: Are you actually getting information back from the nonprofits to understand the quantities that they need, the types of food that they need versus just, here’s a delivery for you! How are you matching between…
Komal: Exactly. So this is what makes this problem so interesting and difficult to solve. All of these nonprofits create, essentially, a dating profile. They’re telling us when are they often, what kind of food do they need, what’s their client, what is their refrigeration capacity, what is their freezer capacity. And all of this information is then given into our algorithm and can be updated on a regular basis, within seconds.
Zanoon: So you’re only pushing to the nonprofits that want it at a certain time? Have you got it to that stage yet? Where it’s on-demand, we need this, and then you’re matching the demand versus driven more on the tech companies and…
Komal: And fulfilling their needs?
Zanoon: Right. Which side do you see yourself, at least currently, optimizing for?
Komal: Well, we’re optimizing for our paying companies. Obviously, because we are a business. Fortunately, when Copia wins, nobody loses. So we are still feeding thousands. We have fed over 700,000 people which is the entire population of Luxembourg.
Sheel: So this is, as you said, a logistics business. You’re currently active in the Bay area?
Komal: We’re in 40 cities.
Sheel: You’re in 40 cities? Wow. How do you do the pick-up and everything in all these cities?
Komal: We have 1099 contractors that are ServSafe certified. So we have a network of 200 drivers who could come pick up that food.
Sheel: Got it. And you pay them basically per pick-up?
Komal: You know, I think that that would be smart and I think in the future we will definitely do that, but right now they’re getting paid per hour.
Sheel: So that’s a challenge, because a lot of the time these guys are idle?
Komal: Right. And so if you even think about companies like Zesty, where their on-peak hours are lunchtime. Those aren’t our on-peak hours. Our on-peak are right after there. So we’re also optimizing other services hours, where that post-lunch slump, we’re utilizing those drivers, too.
Sheel: That’s cool. But it’s still challenging, because all of our pick-ups are going to be at the same times every day, for the most part.
Komal: Sure. Challenging, but not impossible.
Sheel: You said you have a million dollars in bookings. Are you profitable off those bookings?
Komal: We’re gross margin profitable.
Sheel: Got it. Okay. Help me come around on the logistics.
Komal: Sure. So there’s drivers for our recurring pick-ups. They already have a schedule in advance.
Sheel: Recurring makes sense. And you can route-optimize all that stuff.
Komal: So on-demand is very much how Sidecar used to do it as this mass notification, and the driver could accept the pick-up. So that’s the way it works. And that’s how we reduce idle time.
Sheel: Got it.
Zanoon: But these drivers, do they have other jobs as well?
Komal: They do. At this point, they’re not solely Copia drivers.
Sheel: Have you thought about getting rid of on-demand?
Komal: Yeah, we have, but at the same time that’s a really great customer acquisition strategy.
Zanoon: How are you thinking about the consumers themselves and helping the companies you’re working with to encourage their employees to reduce the amount of waste that they’re starting to have in the first place?
Komal: So these are the impact reports I’m talking about, that we give them on a monthly basis. Their employees can actually see how much food they did donate. I think it’s also important to remind people to keep their eyes smaller than their stomachs. Which is, I think, a common trend that happens. We just end up wanting more.
And there’s a lot of really unique ways you can do this. You can eliminate trays, which is what Cal Dining did. So that people aren’t just trying to fill their trays with food. And I think there’s also beyond that, 97% of the reason why businesses don’t already give their food away is one, fear of liability, and two, transportation constraints. so these were the two things that we addressed so that people weren’t afraid of giving away their food.
Zanoon: What are the biggest reasons that companies won’t work with you? Because it sounds like wow, someone will… Obviously you’ve got to pay for it, but everything else is taken care of and apparently it’s good for my social responsibility. What is the biggest reason that people say, “no, I don’t want to work with you”?
Komal: So people don’t say, “no”, they don’t want to work with us. I think where the delay happens is always when it goes to legal. God bless legal departments. I think it’s just really making sure that all of the I’s are dotted and the T’s are crossed, and that’s what makes our sales process at times longer.
Zanoon: What specifically about the legal process?
Komal: To make sure that all of the liability is waived off. Their team wants to review the indemnity agreement, they want to review our commercial liability insurance. They want to review all of the different procedures in place. All of them pass through, it just takes a while.
Zanoon: And you are only working with major companies right now? What is the plan for, like, if I had a huge birthday party and I have maybe not tons of extra food, but…
Komal: We’re not doing it necessarily like, if you ordered way too much dinner last night and you have a bunch of pad thai in your fridge. But if you hosted a Super Bowl party at your place, that’s a little bit different. We’ve recovered food from events, as well. Events are great. My next goal is to definitely do the inauguration.
Sheel: Nice.
Komal: Because that’s the only thing I can think that is bigger than the Super Bowl and only happens once every four years. And to recover all those events. And I think unfortunately DC is one of the worst examples of both wealth and poverty.
Sheel: Totally.
Zanoon: What other markets do you see available, or what kind of technologies do you think will be scaling your business?
Komal: We’ve received over 50,000 requests over the last month for global expansion. So from senior government officials in Germany and Austria who say, “we want to utilize your platform, we’ll pay to utilize your platform, to help redistribute food and other resources to the Syrian migrants”. So when I was a college student at Berkeley I could never have thought of that example, but that’s just one use case.
And our goal, right now we are mastering the redistribution of the most perishable resource there is, which is food. And once we get that, once we figure that out, we will be the most effective and efficient platform for the redistribution of resources, period. So whether it’s medicine, medical supplies, books, clothing – food is just the beginning. And it’s a great beginning. And like I said, we are going to solve the world’s dumbest problem. So that is what the future holds for us.
When we come back, the founder leaves the room. Here’s Sheel and Zanoon.
Sheel: What do you think?
Zanoon: I like it. I think the business is, you know, she is thinking through all the right angles. She’s thinking about things that are really important to tech companies right now, which is their carbon footprint and their sustainability. Anything from, I know at Google we’re looking at how do we cut printer costs, how do we reduce the number of printers in the offices, to how do we figure out better solutions for food.
Food is a huge part of our culture. And people really appreciate it. I think as conscious employees we have to also be thinking about the footprint associated with the food that we have. I think it’s a very timely and very Bay area-specific issue. Not Bay area specific-issue, but it really fits our culture.
Sheel: The thing is, there are catering companies everywhere, and there are events everywhere. But I think it probably works better here because you can do it on a schedule. But actually, you know what, there are hospital cafes everywhere that have waste at a particular time, like she said. Maybe we’re thinking about it from a Bay area lens, but the problem probably applies everywhere.
Zanoon: I think the event space is one for her to look at. It sounds like the Super Bowl and the inauguration are big opportunities. I would just encourage her to do more of that. If she can’t close these big, big contracts with tech companies, it might take longer, it might require more legal barriers. I think she’s starting to do that. And I think exploring more of that, just large scale events, it could be a good business for her.
Sheel: Do you think Google would pay to have people take away their stuff when it sounds like you’re using FoodRunners now, which is free? How do you think…
Zanoon: I think I would want to see… I’m actually really curious to see what this logistics platform looks like.
Sheel: Me too.
Zanoon: The dashboard. Actually seeing, how can I as a customer visualize the savings, the tax credits, the social impact associated with all of this. So I think that metric is going to be so key. And for me I think I wanted to really see, why wouldn’t I pick FoodRunners where I can do it for free?
So I would really want to see the value-add of this dashboard and know that it’s going to be helping me with the story that I tell to the world about my social impact. And also legitimate tax savings. They’ve actually made it easier, versus I could have done it myself. What is Copia providing that is specifically helping me get my tax savings in a more easy way than I could have done it myself.
Sheel: I also don’t understand, the logistics seems too hard to me. How does it actually match up with a nonprofit? I used to volunteer every week at a soup kitchen and we would cook food and the food would be ready for the people coming. What about this random 300 pounds of food that just arrives? What happens to that food? I’d probably want to understand the logistics-side of things and also follow the trail. Be on the truck. See where it’s going.
Zanoon: Yes. She said that she was getting information from the nonprofits on their needs. That’s a very interesting part. It sounds like she’s still optimizing to the tech companies and to her customers. They’re the paying ones, right? So I’d be curious to understand how closely is she really understanding the nonprofit side, how closely is she really following their demand?
Sheel: And how much is it actually reducing food waste? Because is it going to the nonprofits and getting wasted there?
Zanoon: That’s a good question. I hope not.
Sheel: I hope not.
Zanoon: At least hopefully at the homeless shelters and whatnot, there hopefully is more of this constant need for food, versus just one time of day or something.
Sheel: It makes sense. Anyway, I like the overall problem that she’s trying to solve. I think it can be solved in a for-profit way. I have hesitations on the logistic stuff, like I was talking about.
Zanoon: I wonder if she can talk more to the companies that understand logistics so well. I wonder if she’s talking to Lyft, talking to Uber, looking for synergies, looking for ways that they or their platform could power some of the stuff that she’s doing.
Sheel: The reason that Lyft and Uber work so well in on-demand as compared to every other on-demand company most of which are not doing well, is that people always need pick-ups and drop-offs all the time. Versus any food business. Nearly all the on-demand ones are struggling. SpoonRocket shut down, Sprig is struggling, they just shut down other markets. Good Eggs struggled. All these companies are struggling.
The challenge is their pick-ups and drop-offs are only at certain times of the day and idle drivers cost a lot of money. But it sounds like she’s charging a lot, actually. Three hundred pounds of food would cost $125. Which is good for the business. So I really do hope that it is reducing food waste and people are eating this food.
Zanoon: It just makes me really think through, what else could we be doing as responsible employers to avoid this problem in the first place.
Sheel: Yeah, like get rid of waste from the beginning.
Zanoon: And consumer campaigns. I was just reading about Italy, which she mentioned, they’re just investing so much more now, they decided to invest much more in consumer advocacy programs around waste. And also giving tax credits to the companies. But I do think that, as consumers, are we really thinking about that? And what kind of role do we play in all of this? So that people like Copia can go out of business one day!
Sheel: If it’s the world’s dumbest problem.
Zanoon: Can we offer credits to consumers? Hey, Sheel, you ate your plate of food! Here, I’m going to give you $5 for that. I’m joking, but it makes me think, how do we incentivize consumers to be more responsible? And more aware. Maybe a lot of us aren’t even aware of all the things that are happening in the kitchens behind the scenes and how much food is wasted. But what if we did?
Sheel: I was just thinking about businesses. You have to be profitable to want the tax credit. So a lot of businesses out here, it wouldn’t even work for.
Zanoon: That’s true. It’s a cost that would be a luxury for some.
Sheel: Yeah. For sure.
That’s all for today’s show. Thanks for listening.
You can find me on Twitter, Facebook and Instagram @joshmuccio and Sheel is @pitdesi or follow the show handle @thepitchfm. To join our weekly newsletter and get behind-the-scenes stuff that we don’t share on the podcast, go to thepitch.fm and subscribe by email.
We’ll be back with a new episode next Wednesday. I’ll see you then.