Course: Introduction to Business



Title: Nom Nom

Length: 9:31

Synopsis: Nom Nom is food truck that sells banh mi, Vietnamese sandwiches, in the Los Angeles area. Prior to the actual launch of the business, Nom Nom’s owners created a website and other electronic links to the venture, creating buzz with photos and descriptions of their as-yet non-existent products. Response for Nom Nom was so great that the truck sold out completely within 30 minutes of its first day of operation. Nom Nom has never looked back. It has become a key player in the cultural lives of many local Angelenos, with movie companies, reality shows, TV and newspaper reporters all clamoring to jump on the Nom Nom bandwagon. Currently Nom Nom owners plan to expand to “brick and mortar” restaurants, and are looking into franchising their business. The film is done mainly in interview form, with co-owners David Stankulas and Jennifer Green talking about their venture.

Classroom Application: Instructors should find this video helpful when discussing concepts related to entrepreneurship and starting a small business. Discussion Questions 2 and 5 are especially relevant to topics related to the initial planning and strategy-devising stages of an entrepreneurial venture. Discussion Question 2 focuses on developing a practical strategy for a small business that is just starting out, while Discussion Question 5 looks at the “big picture” for how to turn a good idea into a reality.

When discussing the every-day concerns of running a small business, instructors should find Discussion Questions 1 and 4 to be helpful. Both questions get into the nitty-gritty of running a small business in unique circumstances—in this case, operating a restaurant on a truck. Instructors might try to generalize the situation, pointing out that just about all entrepreneurial ventures must overcome tricky and difficult problems in order to become successful.

Finally, Discussion Question 3 gets into ideas related to new media and how media outlets such as Facebook and Twitter can replace more traditional forms of business promotion. Emphasize that though these methods are effective, creating “buzz” is not always easy to do, and for some kinds of small businesses, new media methods are not likely to be effective or appropriate.

Discussion Questions

1. Do the special advantages of having a restaurant on a truck outweigh the disadvantages for the owners of Nom Nom? Explain.

Answer: [Answers will vary.] In the particular case of Nom Nom, the advantages seem to outweigh the disadvantages. The disadvantages—which include cramped conditions and extremely small storage space—make it exceptionally difficult for the truck to operate as a restaurant. However, the advantages of being a truck, which include novelty, mobility, being perceived as “adorable,” and being able to cash in on the food truck craze, have all worked together to make Nom Nom a success. As owner David Stankunas says, Nom Nom wouldn’t have been nearly as successful initially had it been an ordinary restaurant, rather than a truck.

2. What was the strategy of Stankunas and the other owners of Nom Nom when they began the venture? How has this strategy changed or evolved?

Answer: The owners never planned on being limited to a single truck. Their plan was to begin with one truck and build their brand. Once the brand was established, the owners thought they would move on to obtaining additional trucks, establish “brick and mortar” restaurants, then finally franchise their business. Those plans have recently changed, as the phenomenal success of Nom Nom has made it seem likely that they will acquire “brick and mortar” restaurants far ahead of schedule. Franchising the operation may not be too far beyond that.

3. Suppose the Nom Nom partners had launched their venture in the mid-1990s. Do you think it would have been as successful then as it was today? Explain.

Answer: No, it would not have been nearly as successful. Nom Nom owes an enormous amount of its success to the Internet and other assorted forms of electronic media, including Twitter, Facebook, and websites like Yelp. Without these electronic methods of promoting the venture, Nom Nom might have taken much longer to achieve success, and may not have been successful at all. As things turned out, Nom Nom was already something that customers were excited about even before the first truck ever became operational.

4. Why is communication perhaps more important for Nom Nom than it is for most conventional restaurants and businesses?

Answer: Because of the high volume of customers it serves (up to a thousand a day!) Nom Nom needs to be very smart about logistics, especially supply deliveries. With limited refrigerator and other storage space, Nom Nom co-owner and chef Jennifer Green needs to anticipate supply needs accurately and plan for timely deliveries so the truck is not caught with a “sold out” sign. Communication with suppliers is an ongoing concern for Nom Nom as Green and others make sure that the trucks get what they need when they need it.

5. How does owner David Stankunas feel about planning a business? What advice does he give for would-be entrepreneurs?

Answer: Stankunas is not a believer in overplanning, spending a lot of time creating formal business plans, or calculating such things as theoretical cost estimates. Instead, Stankunas advocates a position of “just do it” and “build it, and they will come.” He thinks it is more important to make steady progress on one’s entrepreneurial plans than to spend too much time trying to anticipate possible problems, since there is no way to predict the future. Stankunas cites his own experience in creating a company website before there was an actual company as evidence of the success of his approach. That preliminary work not only created “buzz” for the venture, it also helped solidify ideas in Stankunas’s own mind about what Nom Nom was and what it wasn’t. So when the venture finally got launched, the owners had a clear view of what they were actually creating.

Quiz

1. Where does Nom Nom typically locate its truck?

a. in the same location every day

b. in “hot” locations that are likely to have a lot of foot traffic

c. in the busiest intersections in and around Los Angeles

d. in Hollywood so it can be near movie stars

Answer: b

Explanation: As co-owner Jennifer Green explains, Nom Nom spends quite a bit of time and energy deciding where to park their truck. Typically, they try to find places in which “hot” or popular events are taking place, such as an outdoor musical concert, that will attract a lot of people on foot.

2. What is an important way in which Nom Nom is publicizing its brand?

a. hiring a celebrity spokesperson

b. advertising on TV

c. giving out free Nom Nom merchandise

d. teaming up with Sony to promote its new movie

Answer: d

Explanation: Nom Nom is avoiding conventional advertising that might include TV ads, celebrity spokespeople, and giving out merchandise. Instead, Nom Nom has let other businesses come to it with opportunities for synergy. Nom Nom took on the Sony deal, agreeing to put up posters and distribute t-shirts for Sony’s new movie in exchange for Sony promoting Nom Nom in its publicity campaign.

3. Which statement best summarizes co-owner David Stankunas’s business planning philosophy?

a. You can never do enough planning.

b. Don’t overplan or overthink.

c. Planning is a complete waste of time.

d. Before you start a business, write up a formal business plan.

Answer: b

Explanation: Stankunas warns against overplanning and overthinking a new business. He thinks the most important thing is to make progress every day toward getting the business on its feet. That said, Stankunas is not totally against planning; he simply thinks that planning should not be overemphasized.

4. Why is Stankunas eager to create a “brick and mortar” version of Nom Nom?

a. The trucks are beginning to become unpopular.

b. The trucks are too expensive to maintain.

c. A restaurant is more profitable than a truck.

d. He is eager to enjoy the prestige of being a restaurant owner.

Answer: c

Explanation: Though the investment for a restaurant is much greater than the investment for a truck, a restaurant can be more profitable than a truck because it can serve a more complete menu in which a typical customer spends more money and orders more food.

5. Some locations for the Nom Nom truck are off limits even though they have the perfect blend of being a “hot spot” and having a lot of foot traffic. What might be the problem in these cases?

a. The truck doesn’t have a liquor license.

b. The neighborhoods are too upscale for a food truck.

c. The truck is unable to find a parking space.

d. The owners don’t want to get so much business that they overwhelm the chefs.

Answer: c

Explanation: One of the biggest problems for the Nom Nom truck is finding a good parking space. The truck needs a double space and many of the locations that are right for the truck have very limited parking.

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