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Paul Davidescu of Tangoo.

Handout

THE CHALLENGE

Paul Davidescu likes to plan big nights out on the town – for other people. His company, Tangoo, designed a mobile app that acts like a pocket concierge, but there's a catch: these outings are based on mood, not food.

"It's unsettling when you realize that on top of work life it can be stressful to organize social outings on your free time. Where is the freedom in that?" asks Tangoo's co-founder and CEO.

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At the outset the idea was to turn locals into tourists and create progressive dinner events, nicknamed "resto-cocktail hops," where groups would have three different courses at three different up-and-coming restaurants around Vancouver. But after 18 months, his start-up money dried up and he was plagued by seemingly insurmountable operational glitches.

THE BACKGROUND

Tangoo – originally launched in partnership with Vancity Buzz in early 2012 – was part of a school project when Mr. Davidescu was earning his Bachelor of Commerce degree from the Sauder School of Business at the University of British Columbia.

But the inspiration came two years earlier from the 2010 Vancouver Winter Olympics.

"There was magic in the air," Mr. Davidescu says. People were more open-minded and social, he adds. "During the Games you could walk into any restaurant or pub and know it was going to be a good night because everyone was ready to have fun."

Mr. Davidescu wanted to recapture that easy-going, social feeling for any night of the week.

It started with theme nights. Up to 50 customers would prepay for a $60 dining package in advance and Tangoo would hand pick two or three interesting dining establishments and bars that fit a certain theme. The participants would "hop" from one venue to the next. Everything was prepaid so there was no bill to worry about and you could make new friends along the way. The original tagline for Tangoo was, "Less thinking. More experiencing."

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But human behaviour is unpredictable and operational problems began when people signed up or cancelled last minute, leaving restaurants with seats to fill or with large parties and overwhelmed staff.

"We could book 30 spots at a particular restaurant or lounge and, in some cases, only 15 would show up, but in others 40 people would arrive," Mr. Davidescu says. "It was also hard to choose a theme that appealed to the masses."

Having tested the patience of their participating restaurants to the limits, Tangoo was failing operationally, lacking tech and business resources, and it was out of funds that were needed for further retooling of the existing model. The company needed to rethink its dining package fast, or face having to "cut their losses" and quit.

THE SOLUTION

In August, 2013, the night before the pitch of his career at Launch Academy's 300-person Pitch Day, Vancouver's key entrepreneurial event, Mr. Davidescu realized Tangoo's existing business strategy wasn't going to work, so he started over.

"We revamped the whole model and did a 180-degree pivot," he says.

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Tangoo re-emerged overnight as a pocket concierge, an app that would help individuals plan outings either with friends, partners, clients or bosses. There was no need to sign up because it would always be at-the-ready on your phone.

Mr. Davidescu's original event concept was essentially digitalized and distilled into recommending locations that fit one's mood and occasion. The curation app began doing for social gatherings what Songza has done for the music playlist: Users simply select the mood they're in and type of event – casual, fancy, dinner with the boss, lunch with the team – and the app recommends food and cocktail locations that fit.

"Importantly, we're still solving the same problem: eliminating stress from planning a social outing and letting you best connect with the people you care about," Mr. Davidescu says.

THE RESULT

Tangoo's revamped model took shape at the Launch Academy Investor Pitch Day, winning first place. It has since been featured on CBC's Dragons' Den, with the episode scheduled to air on Nov. 26, 2014.

Dining establishments participating on the new platform include independents such as Vij's, Chill Winston, Pidgin, and Morocco West, alongside top restaurant groups such as Heather Hospitality Group, Glowbal Group, and Thai House Group.

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Since its soft launch last month, Tangoo has grown its user base to 2,000 in Vancouver and Whistler, with a launch in Toronto, Montreal and Calgary currently being developed.

A free service to both restaurants and users, Tangoo has begun to offer restaurants the chance to experiment with premium profiles that give them, for example, opportunities to engage customers by soliciting feedback and offering targeted promotions tailored to a user's mood.

Tangoo's staff now includes chief technical officer Joshua Chan, chief operating officer Jonathan Hill and IOS developer Alex Guyenne, along with several interns. The team released its free iOS app late this summer and it is working on its Android app.

Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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