Startup "Bodega" draws fire for name, biz model

A fledgling Silicon Valley company aimed at disrupting the convenience store is drawing fire for both its name and its premise.

Critics are accusing the San Francisco startup, called Bodega, of trying to put mom-and-pop stores out of business. Bodegas are small grocery stores or delis common in Los Angeles, New York City and other U.S. cities. Specifically, some Twitter users seized on an interview with one of the company's founders, former Google executive Paul McDonald, in Fast Company.

"Eventually, centralized shopping locations won't be necessary, because there will be 100,000 Bodegas spread out, with one always 100 feet away from you," he told the business publication. 

Bodega stocks "small automated stores" -- essentially "smart" vending machines -- with necessities in offices, apartment buildings and other semi-public places. Goods vary by location: At an office, it may contain supplies, while at the gym it may stock apparel or health supplements. The company, launched this year, recently raised $2.5 million in funding from investors including First Round Capital, Forerunner Ventures and Homebrew.

How Bodega works: Using an app, you locate the desired vending machine store of your choosing, enter the store's code and remove an item. The camera-equipped machine notes the items removed and, because the app is linked to a card, it automatically charges your items. The receipt then shows up in your email inbox. Currently, it can be found at 30 locations around the San Francisco area.

Many on Twitter derided the startup as an example of how the tech elite are out of touch with the wider community and are worsening gentrification. Others attacked the company for its name, saying it misses the essential point of a bodega -- human interaction. 

Bodegas are often run by first-generation immigrants and may play a large role in the local community. More than 10,000 bodegas are located throughout New York City's five boroughs.   

McDonald apologized for the furor in a blog post on Wednesday, acknowledging that the company "hit a nerve" and saying that harming traditional bodegas is not its intent. 

"When we first came up with the idea to call the company Bodega, we recognized that there was a risk of it being interpreted as misappropriation," he wrote. "We did some homework  --  speaking to New Yorkers, branding people, and even running some survey work asking about the name and any potential offense it might cause. But it's clear that we may not have been asking the right questions of the right people... We commit to reviewing the feedback and understanding the reactions from today." 

He also explained the company's choice of name, writing, "Like NYC's bodegas, we want to build a shopping experience that stands for convenience and ubiquity for people who don't have easy access to a corner store."