Comfort Food? There's An App for That

By Brad Stone

Jonathan Kaplan is the creator of Flip Video, that sublimely simple pocket-size camcorder that jumped off the shelves in consumer electronics stores over the past five years. Now, Kaplan is cooking up something new: grilled cheese.

Kaplan sold his firm, Pure Digital Technologies, to Cisco Systems (CSCO) for $590 million in 2009, then left the company earlier this year, right before Cisco closed down the Flip unit in April, along with its entire consumer division. Kaplan's new startup is one of the oddest ideas to come out of Silicon Valley in years. It's called The Melt, and the grand plan is to start a nationwide chain of restaurants offering nothing but five variations on the old lunchtime standby, along with a hearty accompanying soup. Kaplan wants to extend the popularity of grilled cheese beyond elementary school cafeterias and smoky college dorm rooms, and he's enlisted some formidable help in both the kitchen and the boardroom. Celebrity chef Michael Mina is assisting with the menu and sits on The Melt's board of directors, along with Ron Johnson, Apple (AAPL)'s senior vice-president for retail, and Sequoia Capital partner Mike Moritz, an early investor in Google (GOOG). "People have a reaction to grilled cheese that is different than other food groups and is more similar to chocolate than hamburger," Kaplan says. "They talk about loving grilled cheese, they don't talk about liking it."

Kaplan wants to build a fast-casual dining chain along the lines of Chipotle Mexican Grill (CMG), with its 1,000-plus restaurants and $9 billion market cap, but with a basic menu that rivals the Flip camera in its simplicity. Restaurants will have five soup-sandwich combinations on the menu, such as the Classic (cheddar and potato bread with tomato soup) and the Mission (pepper jack on sourdough, with a roasted corn and tortilla soup). Kaplan's chefs are also working on more gourmet options, like a goat cheese and mint sandwich with carrot ginger soup. Each combo will cost $7.95. Kaplan won't discuss the exact amount of funding he's raised but says he's got enough to introduce five restaurants in the San Francisco Bay Area by Thanksgiving of this year and 25 around the country by the end of next of year. "If we always did what was expected of us, we'd still be investing in 8-inch disk drives," says Moritz, who grew up in Wales eating a grilled cheese equivalent called the "chip butty"—a French fry sandwich. "This is a company that if all goes well, could become very large."

Kaplan has seasoned the grilled cheese with a dash of high tech. He worked with Swedish appliance maker Electrolux to develop a specialized oven—part micro­wave, part induction burner—that supposedly can prepare two "perfectly toasted" sandwiches in less than a minute. The Melt also exploits some Valley buzzwords: local, social, and mobile commerce. The company will tweet its specials; Kaplan also says The Melt is working on smartphone apps. When a customer orders a meal online, the restaurant will be able to track their location and pop the sandwich into the oven when they're nearby, enabling the customer to pick up fresh lunch without waiting in line.

Kaplan is focused on The Melt, but hasn't forgotten the untimely demise of Flip Video. When Cisco announced it would stop selling the Flip, many fans and critics wondered why the company didn't simply find a buyer for Pure Digital, since the devices were still selling briskly. Kaplan says he was contacted by many bankers and private equity firms soliciting his help in acquiring the Flip assets. While he concedes it would have been a "nightmare" for Cisco to license back Flip technology that it had already integrated into its products, he still sounds crestfallen. "I'm not John Chambers," he says of Cisco's chief executive officer. "I had a whole different set of priorities and dreams and hopes when I joined Cisco. It's disappointing."

Then he's back to talking about The Melt, and unlocking a hidden reservoir of nostalgia that he believes people have for melted cheese on toasted bread. "Both the Flip and The Melt are all about making memories," Kaplan says, spreading the fromage a little thickly himself. "When I think about having a billion people eating grilled cheese, I think about a billion happy people."

The bottom line Kaplan's new chain of grilled cheese restaurants hits all the buzzwords: It's local, social, and will come with a smartphone app.

Stone is a senior writer for Bloomberg Businessweek.

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