Bitcoin boosts press for Boston-based Veggie Galaxy
Bitcoin has built a healthy following among small merchants for its well-known benefits: low processing fees, built-in chargeback protection and a dedicated user base. But, there’s an overlooked advantage business owners are tapping into with the help of the alternative currency: press coverage.
This story is about Adam Penn, a 50-year-old business owner from Queens, New York, who began accepting bitcoin at his Boston-based restaurants this May. In just a few short months, the decision has led to his name and the name of his business appearing in The New York Times and CBS News.
Despite the high-profile mentions, you won’t hear Penn’s name on the Food Network. Rather, he owns and manages Cambridge, Massachusetts vegetarian diner Veggie Galaxy and its Harvard Square-based sister location Veggie Planet, with his wife Kathy Tanner.
Before he took the “out there” advice of fellow Boston-based restaurateur Jamme Chandler and began accepting bitcoin payments, Penn hadn’t been featured outside local publications like Boston.com, The Weekly Dig and Boston Magazine.
Today, the unintentional marketing strategy is paying off. For starters, Penn and Veggie Galaxy recently played host to Boston’s inaugural Bitcoin Buttonwood Exchange, without even realizing it would.
Veggie Galaxy hosts Boston’s first-ever Bitcoin Buttonwood
In August, on a humid summer night outside Veggie Galaxy, as usual, the line is out the door with typical dinner customers: the hipsters with garish rompers, 20-something couples and older alterna-types who line up for innovative vegetarian dishes like the glazed seitan loaf and the beer-battered smoked tofu.
Except for a paper sign scotch-taped to a tree outside, you’d never know the inaugural Boston Bitcoin Buttonwood is well under way, spread out over two café tables fenced in on the sidewalk.
A small group of bitcoin enthusiasts are discussing the “big opportunities” posed by bitcoin, debating the pronunciation of Freicoin and waxing philosophical about how bitcoin doesn’t actually exist at all.
The attendees are poring over menus, and the conversation turns to the establishment. Anders Brownworth, a 41-year-old research and development professional and bitcoin enthusiast, sums up the sentiment of the group toward Veggie Galaxy saying, “The only reason I’m here is they accept bitcoin.”
Still, that’s not an insult against the chef. Brownworth told CoinDesk he’s happy to continue supporting Veggie Galaxy, as he believes merchants will play a key role in the currency’s widespread adoption. James D’Angelo, co-founder of Bitcoin Evangels, the local bitcoin group organizing the event, agrees, and is kind enough to illustrate the benefits merchants can achieve to the gathered group with a hand-drawn pie chart.
D’Angelo says that with so many costs – rent, food, labor – merchants only make about 20 percent in profit from their businesses, of which 3 percent goes to major payment processors. Bitcoin, he said, is the key to returning part of this percentage back to merchants.
“Three percent means you can go to the Bahamas, it means you can pay for your children’s school,” D’Angelo said.
D’Angelo reasons that as more merchants like Penn benefit from bitcoin, user adoption will increase. Still, as the event proved, the day when merchants will be able to see a substantial return from simply accepting bitcoin payments is still far off.
A bitcoin sale is made
Penn is quick to downplay this drawback – he says he’s found it easy to convert bitcoin payments into US dollars immediately using BitPay, a Georgia-based bitcoin payment processor. Still, there are obstacles that prevent customers from initiating this process.
At the Bitcoin Buttonwood, the event’s first purchase is stalled due to technical difficulties. The buyer needs to download a bitcoin wallet, but can’t on his iPhone, and worse, his laptop isn’t fully charged. The process takes more than 20 minutes in total, with the buyer eventually departing to use the outlets inside.
Customers aren’t the only ones having issues. Penn told CoinDesk that his restaurant is so busy on weekends, he now only accepts bitcoin Monday through Friday.
“The initial learning curve didn’t last long, but every time we hire a new server we have to train him or her in the process for accepting bitcoin and help them put BitPay on his or her phone,” Penn said.
He says this isn’t a permanent decision, and that he’ll happily accept bitcoin on weekends when it becomes easier for him to do so.
For small merchants, exposure may be the biggest benefit
While Penn has seen substantial interest in his bitcoin use from media outlets, he’s surprised at the lack of bitcoin business he’s received, especially given the excitement that was generated by reddit and local bitcoin groups.
“We probably have about one or two checks a week paid via bitcoin, although we have had a couple of large groups of bitcoin users,” Penn told CoinDesk.
While it’s hard to put a dollar figure on exposure, the travel section of The New York Times charges thousands of dollars for even a half page of weekday advertising. With this in mind, it’s easy to surmise that even a mention in an article is worth a substantial amount to a small merchant whose most expensive entree runs around $12.
Penn, however, doesn’t focus on any potential cost savings. He says the greatest benefit has been what these new customers have been able to add to the community. As for his advice to other merchants who want to accept the currency, he says they should ask ‘Why not?’
“You’re likely to gain loyal customers who are very active online and who will happily spread the word that your business is now accepting bitcoin,” Penn told CoinDesk. “At this point, I’d say that those are the primary benefits, more than the actual dollar amount of business gained. But as bitcoin use becomes more widespread, hopefully the dollars will follow.”
Image credits: Veggie Galaxy