In a counterintuitive move, Big Sea went ahead with an acquisition — despite the economic crisis.
Sometimes a crisis can be an ideal time to speed up strategic moves, not put them on hold.
That’s the case for Big Sea, a St. Petersburg marketing firm that boasts a deep roster of clients that includes HSN, bowling alley chain Pin Chasers and nonprofit institutions like Mote Marine Laboratory & Aquarium and Stetson University College of Law.
In late November, Big Sea founder and CEO Andi Graham spoke with Donny Minchillo, CEO of St. Pete-based web development firm Pineapple Development, about how the two companies might work together. Pineapple had developed e-commerce platforms for companies such as pool supply chain Pinch-A-Penny and was looking for a way to expand its capabilities.
“He just said, ‘Hey, here’s what we’re doing,’” says Graham, 43. “‘We’ve got legs here, but I’m not a marketer; I’m a developer.’”
‘We’re signing clients all over the country, not just St. Pete. We've got clients in California, in New York, and we've done demos already in almost every state.’ Andi Graham, CEO of Big Sea, a St. Petersburg marketing firm
Minchillo, Graham says, also wanted to divest himself of a residential cleaning business he and his wife, Jackie — who has a background in marketing and public relations — had acquired. They wanted to concentrate on growing Pineapple, for which Minchillo had big plans.
“They were going through a period where they’d run a few different small businesses,” Graham says.
Merger discussions ensued. But those chats came to a screeching halt when the coronavirus pandemic shut down the economy. Big Sea, which has 21 employees, applied and received Paycheck Protection Program funds and lost only two clients during the crisis. And instead of pulling back, Graham forged ahead: she acquired a 70% stake in Pineapple Development for $310,000.
Graham and Minchillo, in addition to the merger, have an ambitious goal to kickstart their new partnership: an online restaurant take-out order platform that can take on the likes of Uber Eats, BiteSquad and DoorDash — third-party food delivery apps wildly popular with consumers that also slam eateries with high fees.
The Big Sea/Pineapple system, Pineapple Pickup, is a Shopify-based template set up with custom configuration and plugins that allow restaurants to take online take-out orders and streamline the fulfillment of those orders.
Pineapple Pickup could be a savvy move at the perfect time, when, because of COVID-19, restaurants are relying on delivery and pickup orders to make up for reduced seating capacity. “Around the last week of March, Danny started building it,” Graham says. “He said, ‘I know people are going to need this.’”
That’s because Pineapple Pickup charges a fee of 7% — far lower than its larger competitors, which take up to a 30% cut of a delivery order. (Of course, one feature the other apps do is deliver meals, which comes with other costs, in transport, labor and insurance.)
With Pineapple Pickup, established restaurants that just want a mechanism for pickup orders now have a locally made, less expensive alternative. Three Birds Tavern, a popular bar and restaurant in the bustling 4th Street corridor just north of downtown St. Pete, was one of the first establishments to sign up.
“They launched on the platform right away,” Graham says. Three Birds, she explains, “has a very loyal crowd. They’ve been around for 11 years. They just want people to be able to order online and make payments. That’s what Pineapple Pickup is for — restaurants that are already busy, already have a fan base, or know how to use social media to market themselves, which, as it turns out, there are a lot of.”
Restaurants, however, comprise just one sector that needs help during the pandemic. Pin Chasers, for example, a Big Sea client since 2009, was forced to close its three bowling alleys for the first time in nearly 60 years, Graham says. Owner Anthony Perrone continued to pay his employees, leaving scant funds in the budget for marketing.
“What a move for a CEO to make,” Graham says. “He did not have to do that. He could have furloughed everyone. So we did a lot of free work for him. We helped him make a video that talked about reopening and all the practices they were going to be implementing.”
Big Sea makes $6,000-$8,000 per month, on average, from each client engagement. So doing free work is a substantial financial hit. However, Graham and her business partner, COO Dzuy Nguyen, have already landed additional clients thanks to positive word of mouth and the part they played in the Pineapple Pickup launch.
“We’re signing clients all over the country, not just St. Pete,” Graham says. “We've got clients in California, in New York, and we've done demos already in almost every state.”