Brands mostly use web scraping and social media monitoring to know how their customers communicate about them and gain insights for new products. Cafeteria connects the teens to brands of interest so that they can provide input on strategy and product development.
The startup will be launching an iOS app Thursday. Three months before the Thursday launch, the startup tested the app in beta, onboarding teens across 60 U.S. cities.
Co-founder Rishi Malhotra comes from experience running India-based music streaming service Saavn, now known as JioSaavn - where he was acquired in 2019 by Mukesh Ambani's Reliance Jio - and was ex-CEO of Luminary Podcasts. He is joined on the founding team by chief business officer Mark Silverstein, who previously served as chief content officer at Luminary, and chief design officer Leeann Sheely, formerly VP of design at both Luminary and JioSaavn.
The company has raised $3 million in funding led by Collaborative Fund and Imaginary Ventures, with participation by Bertelsmann and veteran music industry exec Guy Oseary, who has worked with Madonna and Red Hot Chili Peppers.
Cafeteria operates in the consumer insights and market research industry, being the first to operate with real-time authentic feedback from teenagers. Having zero-party data collection, customizable analytics, and a strong leadership under CEO Rishi Malhotra it gives brands actionable, timely insights tailored to 'Generation Teen,' says Andrew Montgomery, partner at Collaborative Fund, in an email to TechCrunch.
Montgomery said that with the perfect product-market fit in the consumer insights market, Cafeteria has authentic and actionable insight directly for brands from teenagers.
How does it work?
As soon as a teen signs up for the application, they will choose the brands that interest them. Cafeteria then invites them to join its surveys known as Tables. Teens can answer via a text or voice.
To earn the money, teens get around $5-$20 depending on their insights. The users can then transfer the balance into their Venmo, PayPal, Cash App, or directly to their bank account through Cafeteria's integration with Dots-an API for payouts. Users must have at least $10 in their Cafeteria wallet to transfer the balance.
According to the company, on average, these Table sessions last five minutes. Cafeteria told that teens provide insights-from what celebrity Nike should collaborate with — apparently, Adam Sandler is as famous as Taylor Swift and Sabrina Carpenter-being able to experience this is very much appreciated and how they would spend their 100 dollars at a mall.
Cafeteria has thousands of users today who enter the app either through referral or word of mouth. All the users are placed on a waitlist, after which they can be onboarded.
When Teens are onboarded, they receive a lifestyle Table, where they need to answer 20 to 25 questions about retail, shoes, food, music, the first car, banking, and many more. They also get to choose eight brands that they love.
The company also limits the number of surveys or tables teens get per month to three to five. According to Malhotra, the activity teen gets from scrolling social media is more rewarding for teens, but the company does not want them to become daily or weekly active users.
The company emphasized all users' identities through names and emails into the brands. Brands could only be allowed to see gender, age, and zip code.
For minors under 18 years, the company offers optional features where it can include parents' emails in the sign-up process for the service but does not enforce it.
It has a moderation policy that comprises humans and AI. It tracks all the comments for disinformation and harmful content and flags the user if it finds such input.
The privacy policy on its website mentions that the services offered are not meant to be used by children under 14, and if the company learns of any user below that age, it deletes the data.
How is it helping brands?
Cafeteria collects the data from teens and puts it into a dashboard called Albums, organized. The Albums contain insights headlined with titles like this: "Edikted, Zara, Adidas and Skims are breaking through as brands that teen girls want to try next" and "On average, teens say $314 is what they would pay to see their favorite artist."
The company has a standard plan offering lifestyle Album insights and cohort competitor insights for $5,000 per month. Brands can create two Tables by paying 8,000 dollars a month with at least eight questions across at least eight users. Additionally, there's a charge of $2,500 a month for every extra survey done.
Malhotra said that Cafeteria has onboarded top brands for its initial phase, but he did not name any of them. He mentioned that the company has completed over 2,200 Tables with over 50,000 insights.
The company believes it has core strength in collecting unstructured data and then creating insights out of it. "We are building large language models that put the insight data in context. We are training different models that help us make sense of a lot of data," Malhotra said.
Future plans with Cafeteria: The brand wants to engage with teens better in the future as well as provide a store credit or even a percentage discount. Building out the capacity for brands to run prompts against insight albums and search for different metrics.