Broken restaurant bank accounts are hit with shrapnel. There's a ton of transactions like DoorDash made a deposit through Uber Eats made a deposit. Your credit card status made deposits. You got this, you got that. And then you're looking at your bank account and you're like, did they take the right amount? Did they deposit? The right amount is all that shipping track. It feels like shrapnel margin edge is all about is minimizing that shrapnel. to restaurant influencers presented by entrepreneur i'm your host sean walchef this is a cali bbq media production we're at the 2026 national restaurant association show in chicago 55 000 restaurant professionals 2200 vendors 12 football fields this is the world cup of restaurants i'm with bo davis he is the ceo and co -founder of margin edge bo you know what and co -founder of Margin Edge. Bo, you know what? You've been on my guest list. I've wanted you to come on this show for a really long time. I respect what Margin Edge is doing in our industry. I talk to so many restaurant owners that use Margin Edge. But the biggest question I have is how did you build a software company while still running restaurants? Yeah, thank you for having me. Super excited to be here. I'm glad we got the time. I'm yeah so my background had been in technology previously I started a Yeah, so my background had been in technology previously. software company and sold it and was trying to think of what I wanted to do next and was living in London it's actually a true story it sounds like a terrible joke but it's a true story a lawyer a banker and I'm tech entrepreneur myself we're hanging out London friends trying to figure out what we wanted to do with our careers no I'm serious true story beginning of a bad that is the beginning of that joke and it kind of is a bad joke it's my life and so and so we're trying to really do the lawyer talks us into going into the restaurant business. We kept eating at this restaurant called Itzu. Did the lawyer also get involved? I'm getting there. Let me tell the story. So Itzu loved it, hired the executive chef, brought him to DC where I was from. The three of us moved to DC, opened our first restaurant at 17th and K. None of us had ever worked in a restaurant in our lives. Lawyer lasted 60 days, decided maybe that wasn't for him. He's now a professor of law, does very well for himself. The banker lasted a year, went In a year, went back to banking. I like to tell people I was clearly the least intelligent. of the three of us, because 20 years later, I'm still in the fucking restaurant business. Why are you still in the fucking restaurant business? No, I love it. I did. So for 10 years, I was an owner -operator, opened restaurants around the country, opened a dozen restaurants, all under the Wasabi brand. Loved a lot of it and learned the hard parts about it. And really, during those 10 years, built a lot of internal systems. I had a software background, so I built a bunch of internal systems to give me visits. You know, I had a software background, so I built a bunch of internal systems to give me visibility on financials. What blew our minds, as a lawyer, the banker, and myself, what blew our minds at the very beginning is how hard to know if you were making money. We had a line out the door, 17th and K. We were in the Washington Post three times for the food. The chef was very talented, but we didn't know if we were making money or not. Right. We thought we were making money, and you and I both know we weren't making as much money as we thought we were making. Right? I have a media company on top of my restaurant. We understand. There you go. So, so yeah, so we built basically some systems internally over There you go. So, yeah, so we built basically some systems. those 10 years. I actually wrote a bunch of code to build a system so that we could track our expenses. We had restaurants in California, Boston, Florida, DC, but we knew our numbers day to day and it was ugly. It was internal. It wasn't pretty. It was not margin edge, but it was the concept of needing to know your numbers every day. And so 10 years in long story, but meta meta, my future co -founder, a guy from Outback, he and I got together and decided to start Margin Edge, and the rest is a bit of history. start margin edge and the rest is a bit. What was the biggest assumption you made when you went to build the software that has been disproven? That's been disproven? Can I do the proven one first? So the one that everyone thought, like we went out and talked to people and told them what we were going to do, and the one that everyone told us was, restaurant invoices are too messy. We get too many things, there are too many SKUs, there's too many substitutes, there's too much variation, there are too many vendors, we go to the grocery store, we go all this stuff. there's no way you can synchronize all that information there's no way you can automate the synchronization of all that information and we really bullshit we can do it and so last week we did 290 000 invoices come on 290 000 invoices every single line every single skew every single tomato got mapped to the right place in tomatoes so if you've got a burger with a slice of tomato you know how much that tomato costs you don't have to tell us how many tomatoes are in a case you don't have to tell us you bought it from a different vendor you don't have to tell us it's a different skew i have ai and machine learning i you don't have to tell us it's a different skew i have ai and machine learning always have but i also have 700 humans in the loop so when that data goes in and the machine learning processes it the humans in the loop do the exception handling and we can do 290 000 invoices in a week that's incredible isn't that wild and we've got 12 000 restaurants we support looking to support them all whether you're a global restaurant powerhouse or local independent like us here at cali barbecue we all want the same thing sustainable growth and let me tell you pepsico is a partner built to do exactly that help you build a sustainable business as operators we get it we know that digital matters online ordering third -party apps digital menus online visibility it's a lot and it's incredibly hard to prioritize when you're just trying to take care of your kitchen and manage a busy team but a few small digital tweaks can have a massive impact especially when you have the right team backing you up. that's where pepsi That's where PepsiCo's Digital Lab stands apart. This is an in -house team built specifically for restaurant operators. They use proven media services and AI -backed menu optimization to drive what actually matters. More guests, smarter digital experiences, and more profitable online orders. Just look at the numbers from last year alone. And the absolute best part? These Digital Lab services are available completely free to Pepsi restaurant partners. of any size. If you're a Pepsi customer, stop waiting. Talk to your Pepsi rep today or click the link in the show notes below to learn how to unlock your growth advantage. Let's keep that momentum going. And what did you get wrong? I mean, you know, you always get speed wrong. I love speed. Tell me about speed. You thought it was going to happen faster? Of course, of course, you know, when I was an undergrad, I had an entrepreneurship professor tell me once the two things every entrepreneur gets wrong is it takes more money and more time. Of course. You know, when I was an undergrad, I had an entrepreneur. And so certainly we raised more capital than I thought we would need to get to where we are. And we and we certainly took us a minute longer, but we're really excited to be where we are. We think we're in a great place in a great industry and really, really dedicated to our customers at the end of the day. I like to say it is our job to serve restaurant owners the way they serve their clients. yes every restaurant owner wants every Yes, every restaurant owner wants. guest to leave happy that's what is their lifeblood and so my lifeblood our lifeblood is making sure every restaurant owner feels that way from us we are not a software company we want to be a service we want to help amazing uh for people that don't know give me the high level what does margin edge do so margin edge basically uh allows you to track all of your costs in the restaurant day today and manage cash flows so basically we see everything you buy either by edi or taking a Basically, we see everything you buy either by EBI or taking a picture of an invoice. picture of it We see everything you sell because we're integrated into 50 point of sale systems. We synchronize all of that data with your recipes, with your inventories, with your daily budgets, all of that. And we dump all that to your accounting system so you know all your finances all the time. And then we have a bill payment layer on top where you can pay your bills. We're moving two billion dollars a year in payments right now. Two billion dollars. a year in payments flow through us. And today we're very excited about our launch of our new credit card. amazing congratulations we are issuing as of today we are issuing credit cards so if you've got a restaurant and you've got your manager who goes out to trader joe's to buy something or costco or restaurant depot buys from amazon all the places you have to use petty cash you can now get your mark wow look at that yep that's not a wasabi card this is wasabi's card amazing yeah so for my restaurant if i swipe this card it shows up in margin edge it goes to my accounting system it goes into margin edge i get a text message automatically take a picture of the receipt that flows into margin edge so all your managers get all their cost track you can issue cards in margin edge to your managers you can cancel them you can set limits all those things through our software and you never miss an expense now you and I both know as operators what happens is at the end of the period you think you have a P &L and then a fucking statement comes in either from a vendor or from a credit card and there are a bunch of expenses that weren't captured in that period so what this does and what we also have a statement reconciliations we ingest statements from vendors so what we're doing is all the time just making sure statements for vendors so what we're doing is all the time just making sure your numbers are right your number so at the end of a period you know if you made money or not and you're high -fiving the right people how big is this petty cash problem i mean in my restaurant so wasabi does three million in sales we spend a hundred thousand dollars on card wow right and that's just amazon it's utilities it's nuts .com it's uh it's the stuff you buy online it's it's uh it's all that miscellaneous stuff it's the occasional uh small wares it breaks right you need a new blender all that stuff we the new blender all that stuff we spend 100 grand i think that's that's probably pretty normal three spend a hundred grand i think that's that's probably pretty good percent of revenue yeah and uh and so yeah when you look at it at all the restaurants three percent of your revenue not getting captured till after a p l close you and i both know if you make 10 that's not bad and that's 30 of your 10 so you need your numbers you need them live there's also a theft problem unfortunately right in the business and so seeing a receipt you know your manager went to walmart when you look at the amex but you know what they bought was it a tv yeah right or was it something they needed for the restaurant right but if they get us if they get something they needed for the restaurant right but if they get us that that receipt scanned right they get a text message they know they have to scan that receipt and that's the expectation we know if they bought a tv or if they bought something for the restaurant wow right so it's about it's about locking everything down visibility and it's the whole concept of margin edge that you should know what's going on in your business every day did you know that toast powers over 140 000 restaurants across the united states canada and uk it's an incredible company i'm on the toast customer advisory board They are proud sponsors of this show, Restaurant Influencers. We couldn't do it without their support. They power our barbecue restaurants in San Diego. If you have questions about Toast, if you're thinking about bringing Toast on to be your primary technology partner at your restaurants, please reach out to me. I'm happy to get a local Toast representative to take care of you. You can reach me at Sean P. Welch on Instagram. Once again, thank you to Toast for believing in the power of the technology. Instagram. Once again, thank you to Toast for believing in the power of technology, the power of storytelling, the power of hospitality. Back to the show. Is banking broken? I mean, look, I have a buddy that uses the term shrapnel and says restaurant. Yeah, no, seriously, restaurant bank accounts are hit with shrapnel. If you or I look at our bank account in our restaurant, there's a ton of transactions. Yes. Like DoorDash made a deposit. Uber Eats made a deposit. Your credit card statements made deposits. Your credit card statement is made. You got things coming out left and right. You got tips. You got this. You got that. And then you're looking at your bank account and you're like, I don't fucking know. Like, did they take the right amount? Did they deposit the right amount? Is all that shit being tracked? It feels like shrapnel, right? You're getting hit from all sides. What Margin Edge is all about is minimizing that shrapnel. So is banking broken? I don't know. But we need work. We need help. So what do you think is the biggest challenge? How many customers do you guys have? is the biggest challenge how many customers you guys have 12 000 12 000 so 12 000 customers what's 12 ,000. 12 ,000. So 12 ,000 customers. the biggest challenge when you release a new product well i think it very much depends on the product i mean i think you know we released a scale that is in restaurant that was our first hardware oh really yeah this is really cool so like this thing here oh wow yeah uh i can bring it yeah bring it on so this scale for example was a company in toronto that we bought called freepore and essentially what it does is it's got a barcode scanner and a scale and so when you take a bottle of liquor yes bottles and scan it it knows it's Bacardi and it knows the empty way getting PTSD from the times that I was dude liquor inventory with my bar manager yeah no literally like how much is in the bottle like that's right I know how much I have no clue what this does you scan it it knows the empty weight you weigh it and it knows it's precisely how much liquors in there and it takes seconds. Is that thing plugged in? No? No, it's not turned off. Yeah, that's right. seconds is that thing plugged in no no it's not But basically, you take the bottles, right? You scan it, you weigh it, you move to the next one. Wow. And, you know, you can take your bar inventory down 80 % in time and the accuracy is perfect because we know the actual weight of the liquor. And so this gets to the actual versus theoretical. Is your bartender overpouring? Are they giving away pours, right? All the things that we know happen in the industry. This is all about that. So you asked me about product release and how we got here. So this was our first hardware. We had some challenges, right? We had some challenges. we got here yeah so this was our first hardware we had some challenges right we had some challenges with hardware and frankly we uh we re -engineered it we're having a new one built we're going to have a better physical model coming out this summer um product releases can be challenging we're releasing a credit card tonight that's a whole different thing right it's fintech it's our capital when you when you swipe that card and 100 bucks comes out that's must that's a margin edge is 100 right so there's a lot that goes into making sure that the right people are getting the right credit at the right times there's enough capital the liquidity is there like there's a lot that goes what are you like there's a lot that goes into that what are you worried about like what's your biggest concern with the new with the new with the card specifically uh well i mean we're pretty good at this we like i said we're managing two billion in payments right now and so we're moving a lot of cash every day um but uh what do i worry about if you had asked me three weeks ago i was worried enough people would take it oh but now we've done our early tests and early betas and the uptake is actually way more than we thought it would be so now i'm actually looking at the the um the amount of liquidity we plan to use against the You're looking at the amount of liquidity we plan to use against the product is actually the wrong number. And so now we're like, oh, wait a second. This might be too popular. And we got a plan for that. And we did a little scurrying around that, which honestly I haven't had to do before. It was interesting. Why still run Wasabi? Oh, man. The easy, honest answer? Yeah. Makes money. It's a great restaurant. It's been around for 17 years. This one opened in 2009. I opened failure. So I've been through the hard This one opened in 2009. parts. But this is one of those lottery. This is one that feels like a lottery ticket, right? You open the right concept in the right place with the right team paid for itself literally in six months. It's made money for 17 years. Yeah. Why wouldn't you own that? It's a it's a great it's a great business. We get one of the things I'm most proud of there is the number of people who have worked there over 10 years. It's like eight. It's crazy. I was mentioning our GM has been there for 16 of the 17 years that's amazing um we take good care of people and it's for 16 of the 17 years. That's amazing. We take good care. a good business and i don't know why you would sell something like that uh it's also in my neighborhood and i get free sushi we did the math at one point i got three kids i opened my first sushi joint when i my first kid was born we did the math at one point and i forget exactly but it was in the hundreds of thousands of dollars of sushi that we've eaten every year so that doesn't hurt what do you learn coming to this show i mean obviously you're participating as margin edge but also as a restaurant owner going and looking at other products other services an owner going and looking at other products, other services, other innovation. Yeah, I mean, look, the thing that I'm always amazed by is how much noise there is in the industry. And this has been true for 11 years since the day we started Margin Edge. It's always been a real sensitivity of mine that operators are so busy and there's so many people that want to sell technology to them. And so much of it is garbage. So much of it is half built. So much of it isn't structured in a way that is really good for the business. We didn't hire a single person in sales and marketing for three and a half years in sales and marketing for three and a half. because my co -founder and I said we're not going to have anybody go out and talk about it until we're really proud of it. And I just don't think everyone does that. And so one of the things I'm always amazed by, and this is a little bit negative, I'm sorry, but there's just too much noise. Well, there's never been more noise. There's so much noise. With AI now, there's never been more noise. I was saying to somebody just earlier that I've been shown three websites of companies claiming to do a bunch of stuff that we do in the last four weeks. And I went to the website, In the last four weeks, I went to the website and then I went to LinkedIn and every case. there were two employees or less and it was less than six months old. We're 11 years and $40 million in engineering spend into this. You're not going to vibe code it. You're just not. You can vibe code the website that says you do everything we do. Right. You could tell Claude copy margin edges website, put it in a different voice. Yeah, that's not hard. We're tens of millions of dollars in engineering and 700 people over 100 people over science sees human in the loop process like all this stuff like it's hard and i sciences, human in the loop process, like all this stuff like. feel and the point to get back to your question the point is if you're an operator how the hell are you supposed to know the difference the websites look the same right so you try the other thing it's shit you have a terrible experience and you're like well technology sucks it's not completely true you tried the wrong technology what uh what gets you excited about the future not just a margin edge but just the future future of restaurants look i've got a i've got my oldest son is into computer science in college and there's all these articles about how it's a dying field and I told him which is a dying field software computer science yeah yeah because software cannot be written by AI and what I've told him is I believe very very firmly that we are in the same thing that happened to me when I was his age and I was in college it was 1995 I graduated in 97 the internet was just coming out the internet changed everything it changed software but it changed everything AI is clearly going to do that not just margin edge everything and I think he has more opportunity today than any kid since 1995 because so much is changing and I feel very blessed to be in a position where I have capital, I have brand, I have presence, I have a great team, I have an engineering team, I can leverage all of this stuff, all these new tools, all this AI and provide more and more value to restaurateurs. today than any kid I think when you look at us or any software three to five years from now it will be unrecognizable to what we do today just like in 2003. recognizable to what we do today just like in 2003 software was unrecognizable with 1997 or 1998 and i'm super excited to be in the middle of it we're going to do some very cool shit what is the magic of hospitality how do you describe it uh i think the magic of hospitality isn't hospitality it's a human condition thing which is the most powerful thing in the human condition is empathy it's connecting with people uh my favorite book art of happiness by the dalai Lama, the whole book, the point is empathy. llama the whole book the point is That's how you get happy. And I think hospitality is about connecting with people. I think it's about empathy. I think it's about trying to be helpful and help people get to a better place. And so I don't think it's about the restaurants. I think it's about the human condition. I think it's what we want to do as humans. Well, I am grateful that you took the time on a very busy show to come on to Entrepreneur. Like I said, you've been somebody that I respect, admire. anyone that's building what you've built, the reputation that Anyone that's building what you've built, the reputation. you guys have in the industry. But the fact that you still run restaurants, I mean, you're one of the sick people like me. But we love it. We love it. We can't live without it. We're grateful for the opportunity. And we're really excited to see what you guys are going to build. Thank you so much for having me. Yeah, we're going to put all the links to Margin Edge into the show notes. Check out the card. If you do get the card, please send me a message at Sean P. Welchef on Instagram. We're always looking for implementation stories. so not just not just tell me about it show me show me how you did it show me how it worked in your restaurants and uh I can't wait to come and see wasabi nice please do I'm gonna make that happen some conveyor belt sushi 100 % um we appreciate you guys for watching thank you to toast our title sponsor of this show uh we are grateful to informa for letting us come over here at the national restaurant association if you haven't been please make a point next year to leave your restaurant and come to Chicago worth the trip next year to leave your restaurant and come to Chicago. It is worth the trip. I promise you, your restaurant will not close because you leave. You will run a better restaurant and you'll learn. You'll move your business forward. Ask people that have been there, that have done that. There's incredible people that come to this show, come to the Margin Edge team. They've got great connections to other restauranteurs that can help move your business forward. Lots of great people here. As always, guys, stay curious, get involved, and don't be afraid to ask for help. We'll see you next episode. you for watching thank you for listening if you've made it this long you are part of the community Thank you for watching. you're part of the tribe we can't do this alone we started no one was listening now we have a community of digital hospitality leaders all over the globe please check out our new series called restaurant technology sub stack it's a sub stack newsletter it's free it's some of our deep work on the best technology for restaurants also go to youtube and subscribe to cali barbecue media Subscribe to Kali Barbecue Media, Kali BBQ Media on YouTube. We've been putting out a lot of new original content. Hopefully you guys like that content. If you want to work with us, go to BeTheShow .media. We show up all over the United States, some international countries. We would love to work with you and your growing brand on digital storytelling. You can reach out to me anytime, at Sean P. Welchef on Instagram. I'm weirdly available. Stay curious, get involved, and don't be afraid to ask for help. We'll catch you next episode.