Schedulefly Stories

Growing a software business one restaurant at a time

Month: October 2010 (Page 1 of 2)

Book Update – Phil Roberts of Parasole Restaurant Holdings

Phil Roberts co-founded Parasole in 1997, and he’s launched one successful concept after another, including nationally known Buca di Beppo and The Oceanaire Seafood Room. Phil is bold, innovative, and knows what people want before they do. This was one heck of an interview, so enjoy some advice from a man who has proven himself time and time again.

I also left a few controversial things that Phil said out of this post. You’ll have to pick up the book to read them. And trust me, you’ll want to…

A restaurant is like a Broadway play. You know it’s kind of like staging a Broadway play. In fact it’s very much like that. The script is the menu. You’ve got the set design. You’ve got the music. You’ve got the lines. And it all has to deliver as a whole, and not as a bunch of parts. You can’t get a couple of parts right and have it succeed. It’s got to succeed as a whole.

Focus, focus, focus. You focus on where you want to be in that fine dining spectrum. You’ve got everything from a QSR at the bottom to Alain Ducasse au Plaza Athenee in Paris. And somewhere along that line you’re going to pin the tail on the donkey. And you’ve got to decide just what level you want to be at. You want to avoid being too fancy in certain locations. You want to be the place where folks can come to fuel up, or have it be the main event. You want to focus on limiting your menu so you’re not trying to do a hundred things like The Cheesecake Factory, or something like that. You want to be able to take it to a dozen things and do them really well. Consistently. Time after time after time.

Edgy marketing gets free PR. Just make sure it fits the concept. Because in some of our places, we do some very edgy marketing. To the point where it really pisses people off. Which is a good thing because they aren’t our customer anyway, but we get a lot of press out of it. Billboards is our main method of communicating for Chino Latino. I ran a billboard that said, “Wok the dog,” and of course the Birkenstock crowd went crazy. And we got on TV. And with that we probably got 50…60…$100,000 of publicity on the six o’clock and nine o’clock news, and it had about a three day cycle, with people standing in front of the billboard, protesting. So we agreed to take it down at the end of the month. And I put another one up that said, “Mommy, Mr. Whiskers didn’t come home last night.” And of course they marched on us again. But again, it wasn’t our customer. But we were getting the publicity. Our sales went up like a hockey stick! And the young people loved it. The young, hipper people, that we wanted to attract just loved it. So my point is that that fits Chino Latino. It doesn’t fit Manny’s. It doesn’t fit The Good Earth. It doesn’t fit Pittsburgh Blue. I doesn’t fit Salut. It doesn’t fit Muffaletta. But it does fit Chino Latino. So the marketing has to be tailored, and has to be in lockstep with what the concept is. However you express yourself on the outside has got to describe the promise of what you’re going to get on the inside.

Partnerships. Find a ying to your yang. You can’t do a bad partnership with good people. And you can’t do a good partnership with bad people. I was fortunate to have Pete Mihajlov, who I went to college with, and we were buddies. And Pete’s set of muscles were totally different than mine. Pete is an MBA. He’s a business man. He understands debits and credits, and I don’t. So I brought the creative side to it, and he brought the business side to it. And to be a successful restaurant operation, you better have a cookbook in one hand, and a P&L in the other. So we complement each other in that fashion.

Want to own a restaurant? You better think about what you’re getting into. Oh, I think it initially looks glamorous, for sure. And I think the logic sometimes doesn’t go any deeper than, “Gee, I sure do like to eat out, it would be fun to own a restaurant.” And I think people get into it that way. And they don’t realize that some nights you are going to have to mop the dish room floor at three in the morning because the dishwasher quit, or didn’t come in. And also you are working when everybody else is playing. And I don’t think people think it through. They don’t think it through in that fashion.

And it’s also a very, very capital intensive proposition. Not just the bricks and mortar, but the equipment. If you’re going to open a 6,000 square foot restaurant, you better figure about $300 per square foot, all in. So you’re going to spend a couple of million bucks. And you’re going to have to borrow that, or find angels, or find some way to finance it. And it’s risky. It’s just risky. And you might just miss. You could miss on several levels. You could miss on location. You could miss on the concept. You could miss on the quality of the food. You could miss on the service. You could just miss on so many levels. You’ve got to bring the right food in the back of the door, and at the right price, and have the right person cooking it, and on the right kind of equipment, and then you better have it delivered efficiently, and the servers better know their stuff, and the dining room better fit the concept, and the table top better fit the concept, and the price better be right. There’s so many steps along the way where people could trip up. Any one of those would be bad!

Agree with Phil? Or disagree? Feel free to comment on this post…

Wil

Book Update – Mic Heynekamp of Eddyline Restaurant & Brewery and Soccoro Springs Restaurant & Brewery

Mic and Molley Heynekamp started Socorro Springs Restaurant & Brewery in 1999. After three and a half years of planning, they took their original $1,000,000 business plan down to $100,000. And they wound up starting with only $70,000. Ten years later they opened Eddyline Restaurant & Brewery. Both restaurants have been very successful, and Mic and Molley plan to open a third next May.

How could you not be inspired by a couple that started with 7% of what they initially thought it would take to get started, and made it work…extremely well? They run lean and highly profitable restaurants, and Mic had some fantastic wisdom to share, including…

Most Startup Books Are Wrong. When you look at all of the startup books, they say “Make sure you are well funded, and make sure you don’t skimp on equipment, and make sure you only use the best of the best.” And they are wrong. Because what that means is that you are that much closer to failure, because if you have a bad month or so, that’s it. You have so much money at risk. Whereas if you can do it really lean, you are way better off.

You Can Dominate In Small Towns. I think small towns are good, because you can go in there and there is the whole environment of … well there’s often a bunch of people in there half-assing it. And you can go in to a town like that and come out with a product that is high quality and is professionally run, and really clean up. That’s what happened when we went into Socorro. Being in a small town made it much easier to dominate our market. If we had gone into Albuquerque and Denver, we would have to compete with national chains who have their whole system down to a science. By choosing little towns, we went against all of the conventional wisdom. You are supposed to need a much larger population than the towns we entered had. And everyone told us, “You can’t do it there. It’s too small, it’s too small, it’s too small.” But by going into a little town like Buena Vista, you can get people excited easier. And it’s easy to get to know the locals real quickly. And you can rapidly change your product, if necessary, to make them happy. If you have a population of 2,500 locals, you can change to their tastes. If you have 100,000 locals, you can’t be as flexible. Now, I recognize there are weaknesses to that strategy. If you are going to focus on small towns, you better do a great job with all of the locals or you’re done. But I think it’s easy to accomplish that, without having mass corporate chains competing with you that can compete at below cost.

Hire In A Blink. You have to trust your instincts. When I was reading the book Blink, it reminded me exactly of how we choose our employees. When someone walks in that door, right then you’re like, “This person is perfect.” And other people might sound great, or they email you their resume, and you get all excited about them and they walk through the door and you’re like, “Uh-uh. This isn’t gonna work.”

Owners Wear Lots of Hats. Our job is to make sure that all of the details are getting covered, and we still have a plan for growth, and we still have a plan for improving things at both locations right now. And it’s our job to make sure the smallest of the small details are getting done, and the largest of the large things are happening.

Create a Pearl for Your Customers. The same guy who gave us so much advice – Tom Hennessey – he had this awesome article that he wrote about a restaurant being like an oyster. You know an oyster sits at the bottom of the ocean, and the tide comes in and the tide goes out, and brings some nutrients. And if the water is just right…not too murky, not too clear…it’s got enough agitation. If everything is just right, it produces a pearl. And that’s just like a restaurant. From the time a customer sees your restaurant and pulls of the street, and is on your parking lot, it’s essentially that oyster. And if everything goes right, at the end you will have created the pearl. You’ll have a happy customer.

It Doesn’t Matter If Your Burger Is Good. Unless… You’ll hear stuff like, “My burger is the best burger and the price is awesome.” Well yeah. But everything else sucks. And they ask why that matters. Well, when you sit down in a chair that rocks back and forth and the table wobbles and the table cloth is sticky and the silverware is mismatched and you go to use the ketchup and it’s all gooey and the music is blaring you are just rubbing your customers wrong.

Wil

Schedulefly Is A Lot Like A Hot Dog Stand

It occurred to me today that running Schedulefly has many similarities to running a hot dog stand. Both have simple menus and a clear focus on who they want to serve. We want to serve restaurants. Not hospitals. Hot dog stands want to serve people who want hot dogs. Not salads. We’re alike quite a few other ways…

-We both have to try to entice people to give us a try, but we don’t want to spend a lot of money to do it. So we rely on word of mouth, and being easy to find when somebody has a craving.

-We both focus relentlessly on making our product awesome, so our customers want to keep coming back for more.

-We both want people to enjoy the experience of doing business with us, so they will tell other people about us.

-We both have a clear focus on doing just one thing. Which means we get really good at it.

-We both keep things simple, because we know there are more people fall in love with simple things than people who fall in love with complex things.

-We both know there are lots of others that do what we do. But we don’t bother worrying about them. We know that if we pour all of our focus into our product and our service, we’ll do just fine.

-We get tons of suggestions on what we should add to our menu, but most of the time we have to genuinely thank the people for making suggestions (which means they care about us enough to try to help make us better from their perspective), but politely decline their suggestion because it doesn’t make sense for what we are trying to accomplish.

You might laugh at the analogy, and think “That’s silly. It’s got to be more complicated to run a software business than to run a hot dog stand.” And that may be the case for lots of software companies that have complicated products and a lack of focus. But not for us. In fact, I think our business is easier to run than a hot dog stand. Our audience is not limited to people within a few blocks of our stand…

Keepin’ It Simple,
Wil

To Get Better, Try Removing Features Instead of Adding Them

Wil sent me a quote this morning from the book “Made To Stick”:

A designer knows he has achieved perfection not when there is nothing left to add but when there is nothing left to take away

It is a quote from French Poet Antoine de Saint Exupéry. The quote is so good, yet so backwards in a world like ours where companies one up each other until their products become a bloated, confusing mess. Why is it like this? They just keep adding features and bells and whistles and switches and levers and buttons – all to beat the competition in hopes of getting new customers and also to up sell existing customers. What a shame. They are actually doing the opposite of what they think they are doing – they are making their products more like each other and really difficult to use. The problem is they get so big that locking customers in has become more important than making customers happy.

I can tell you as a designer who strives for simplicity (not for perfection), having a simple product really makes people happy and they come back again and again. It definitely turns away a bunch of people who need more, but that’s OK because there are other products for them. They would not be happy with ours and having unhappy customers (who are better off using another product) for the sake of more revenue would not be fun.

Keepin’ It Fun And Simple
Wes

Different

I just finished reading Different: Escaping the Competitive Herd. If you are interested in learning more about how to separate your restaurant from your competitors, and how to build a highly loyal customer base, read this book.

The author is a Harvard professor who is known for producing some fantastic business case studies. This is her first book, and I found it to be absolutely fascinating. She discusses how brands such as JetBlue, MINI (as in MINI Cooper), Harley Davidson, In-N-Out Burger, and several others bucked conventional wisdom and did things very differently from their competitors – and in the process attracted extremely loyal customers. That’s especially tough to do in the highly competitive segments (airlines, cars, motorcycles, and restaurants) they operate in.

Since most of you own, manage, or work for a restaurant, I couldn’t help but think of you as I read it. I suspect that differentiating your brand and attracting loyal customers is something you work towards daily. If so, then grab this book. You might come up with a few additional ideas.

Feel free to post any questions here, or comment if you’ve already read it. I’m curious what all of you do to differentiate…

Wil

Over 1 Million Alerts Served Each Month

With customers in 9 different timezones, our email servers are working round the clock! In fact – we now send more than 1 million helpful email and text message alerts each month. Alerts such as:

– Weekly schedules
– Time Off requests
– Shift trade requests
– Message Wall broadcasts
– Daily Crib Sheets
– Reminders

Some of these alerts are available to everyone – some just to managers. The request alerts can be approved or declined on the spot – from a mobile device – which then alerts the staff with the manager’s decision. I can’t help but think how many phone calls to each other and to the restaurant these alerts stop each month.

Keepin’ It Helpful
The Schedulefly Crew

Book Update – Chris Sommers of Pi Pizzeria

Pi Pizzeria of St. Louis has been wildly successful in a short amount of time. They opened their first location on “Pi Day” (3.14) 2008, and by that October then-Senator and presidential candidate Barack Obama enjoyed some of their pizza after a St. Louis campaign rally. He loved it, and Pi, which was already very popular, become a sensation. They now have four locations and a mobile pizza truck, and they are opening in Washington, D.C. in 2011.

Founder Chris Sommers left Salesforce.com to open Pi, after buying a recipe for an insanely god deep dish pizza from a small pizzeria that he frequented in San Francisco. Here are a few snippets from our conversation with Chris, who has learned a lot about owning restaurants over the last couple of years…

Growth Ain’t Easy To Manage. “You can either choose to operate or you can choose to expand, and I’ve chosen the latter. We struggle with growth. There are lots of offers of money and lots of interest. But there is money and there’s smart money. And we haven’t exactly figured out what the proper mix is. We know that we want to strike while the iron is hot, but we also don’t want to dilute and expand too fast. We’re just trying to be smart and prudent, and make sure there are not too many cooks in the kitchen, and that we don’t get heavily leveraged. It’s nice to use other people’s money for growth, but at the same time it gives us a lot of flexibility when we don’t have to answer to anybody or service a lot of debt.” (Pi opened on 3/14/2008 and currently has four locations plus a pizza truck, and they are opening another location in Washington, D.C.)

Learn How To Delegate. That’s also been a huge part of our success, is being able to delegate.

Being Green. It’s a core part of our DNA. It is just critical to make sure that it is factored into every decision you make, from vendors to products to design and build out. And as long as everybody on your management team down to the lowest level understands everything from what a reclaimed material is, to “Can I throw this away or do I recycle this?” It will cost you a little bit of money up front, but ultimately will save you a lot of money, and I think it is the only way to own and operate a business.

The Importance Of Communication & Transparency. Our hospitality mission is about communication and transparency. We don’t get upset if people make mistakes as long as we know about before I hear about it the next day from a guest or the web site or social media. We have a philosophy that you don’t win alone and you don’t lose alone. So keeping everybody informed, keeping the manager informed, and letting everybody know what’s going on helps us operate and keep the ship afloat when it could become unwieldy. As long as we know what’s going on if there is a potential for a table to be unhappy, as long as you inform your manager, we can fix the situation and nip it in the bud.

Evolve Or Die. Yes, the world is flat in every industry. If you look at fashion and what people are wearing or what people are eating. Stagnating is only going to get you so far. It used to get you maybe twenty or thirty years with one business, but it’s not going to any more. People are just more informed and their palates are more sophisticated. Their dollars are more stretched. You can’t get comfortable. When I talk to some of my other restaurateur buddies – especially the successful ones – you have to have a healthy level of paranoia that you are not keeping up. It can be to your demise if you get overboard with it, but you have to keep thinking about innovation. Recognize what’s really important to you and don’t change things that continue to be winners, but at the same time recognize and offer new things.

Dine In Lots Of Other Places. Unfortunately a lot of people don’t have a team in place that enables them to go out and visit other people’s establishments, but that is really critical. Whether it reinforces something that you are doing well, or drills home the fact that you are failing somewhere, it’s just a constant discussion. In ten minutes when I have my core manager’s meeting with my senior management team…a lot of what we discuss in those meetings is what we experience elsewhere, and not just what happens in our stores.

Make Job Applicants Do Their Homework. It starts off on our job application, with asking “Why is Pi important to you?” I don’t want to hire somebody who has not at least done their research and can’t come up with something creative.

Keepin’ It Educational,
The Schedulefly Crew

Book Update – Scott Maitland of Top of the Hill Restaurant and Brewery

We’re going to start pulling out a few quotes from each interview, and posting them here. There is so much incredible wisdom and advice and knowledge in these interviews that we can’t hold onto it until the book is completed. It wants to get out. It needs to be available.

Scott Maitland started Top of the Hill Restaurant and Brewery in Chapel Hill, NC in 1996. If you’ve visited Chapel Hill, you most likely stopped in for a bite to eat or a drink. It has become an institution. These are just a few snippets of what Scott had to say about owning a restaurant…

Know Your Community. Intimately. “At the end of the day an independent restaurant is all about your local community. And if you don’t understand that local community, then I think you’ve got real problems. That intimate knowledge of your local market is key. And I think your business plans and research need to incorporate that as much as anything else.”

Don’t Underestimate the Importance Of What Is On Your Menu. “I think everyone starting a restaurant will tell you that the menu is important, but I don’t think people really understand how important the menu is. It drives everything, from staffing and equipment needs, to the type of customers you are going to get, to the whole feel of the restaurant. So you’ve got to think long and hard to what it is that you want to offer.”

If You Raise Money, Start Your Pitch With Your Last Prospects. “If you are going to raise money, you are going to make a list of people that you are going to talk to to raise money. So if I tell you to go make a list of one hundred people that will give you money, by its very nature the top of the list is going to be populated with your best prospects. And the mistake most of us make is, we start off with our very best prospects. That’s what I did. I made my list and started with my very best prospects, and with no experience with my pitch, I gave lousy presentations, and burned my prospects. So the key is, if you are going to make a list, turn it upside down and start at the bottom. By the time you get to your best prospects, you are going to have a much better presentation. And a much better deal. It’s not just about showmanship. You see you make a presentation and you get rejected, and if you are intellectually very honest with yourself, you ask “Why?”, and you can’t get upset, and you have to focus on making your deal better.”

Be Careful When Hiring. “Don’t ever hire somebody to fill a spot. Don’t do it. Only hire somebody that you think is going to be good. I think it’s better to have no manager at all than to have a bad manager.”

Don’t Look At Yourself As A Restaurateur. But Rather As A Business Person. “I don’t consider myself a restaurateur. I consider myself a business person. I think that the reason Top of the Hill is able to do some of the things that other people don’t is because, quite frankly, myself personally, and henceforth the people that work for me, don’t feel trapped by the conventions of the restaurant business itself. We look at it as, we look at best practices, and those best practices can come from any organization. And we like to take a look at people that are doing well, and we say, ‘Hey, is there some inspiration for what we can do?’”

Foster Autonomy. “If you are going to have an organization that is going to initiate best practices, you can’t be top-down driven. Not that I don’t stay involved and want to stay involved, but you have to foster the ability for your junior leaders and your waiters and everybody to have their own sense of dominion over the place.”

Do More With One Location Vs. Opening A Second Location. “A couple of years after opening our second location, I looked at it and realized that I was splitting my energy between two stores. And by the way, God bless an independent that can run two or three stores. I’m told that once you get to five it gets easier, but I’m telling you, having two or three is a bear. So I realized that I could take half the energy I was putting into the new store and make more money. I took a look at the very best amount of money I could make in Raleigh, and realized that it was the equivalent of 5% of my sales here in Chapel Hill. So I asked myself, ‘If I focus all of my attention on Chapel Hill, can’t I run it 5% better?’ And sure enough, we combined teams, and got rid of some folks that were not necessarily at the top of their game, and we came back in and rejuvenated the menu here in Chapel Hill, and ultimately ended up cutting overhead costs by 12%. And truly I was suddenly making twice as much money and working half as much. Being able to focus on expanding what we have, rather than opening another location, has allowed us to really harness our energy in a synergistic way. I would caution folks to really consider carefully whether you want to expand to another town, or whether you even want to expand at all. Because any expansion – even though we feel really comfortable with what we’ve done – brings lots of challenges. You have to spend a lot of time creating a successful restaurant, and doubling it doesn’t necessarily mean that it’s going to make you any more money.”

Independents Have Something That Chains Never Will. “The other thing that the independent has that no amount of money can replace, is the true understanding of the local community. So whereas a well-funded chain restaurant can blow an independent away with restaurant design, menu design and all of that stuff…if they chose to, and there is enough capital behind it, it would be tough for an independent to reach them on that level. But the problem is that, by its definition, to justify that type of capital expense it needs to be replicatable, and that sense or replicatableness is a chain’s Achilles Heel. What the money can’t do, is it can’t drill down into one community and understand what that community needs. Chains can’t do that. An independent can.”

Learning A Ton With Every Interview We Conduct,

The Schedulefly Crew

Keep Your Eye On the Middle of the Target

My buddy David lost his job at a very large bank recently. His position was eliminated. He has a very mature, philosophical perspective on what happened. And his email to me on the topic is full of about as much business wisdom as you could squeeze into a paragraph.

“I see business as a series of concentric circles, like an bullseye target. The center is the core of the business and each circle represents a new market, further away from the core business. For energy derivatives at the bank, we kept expanding into “new” markets, which may receive praise from the business school cognoscenti, but in reality may be more of a death spiral or at least an exercise in diminishing returns. In the energy derivatives world, we focus on oil and gas drillers (center of the circle), then move to utilities, then large industrial business, and then finally small companies and governments which is where I was working. The further away we moved from the core of the business, the more energy that must be put into each dollar of revenue. Lower margins result and at some point, more energy/time/money is going in than is coming out. Growth grinds to a halt. That’s why I am not mad that I was laid off; I was working on the margins and it made sense that I be let go. Public companies have no real choice but to grow. Forcing themselves into new markets. This results in a constant ebb and flow of hirings and layoffs. Private companies get to play a different game.”

So David was operating in the outer circle of the target you see above. He makes a fascinating observation about public companies having no choice but to grow, so they wind up broadening their scope quite a bit to chase new markets. But private companies….well, we don’t have to lose focus. We can keep a laser focus on that middle circle, and never look elsewhere. But you know what the funny (or unfortunate) thing is? We seem to be so hard wired in America to lose focus and try to hit every circle. Heck, we even try to hit all circles in several targets – all at once. So even tons and tons of small businesses aim all over the target. I guess it just seems like the “smart” thing to do. You’ve got to “diversify”. But why?

For example, Wes, Tyler, and I can’t finish telling somebody what Schedulefly does before they are asking us if we have thought have expanding into “new markets.” Why do we only focus on restaurants? Now, if our market was tiny and already saturated, I’d understand. But even when we tell them that our market is gigantic (for a small business with three people) and virtually untapped, most people don’t get it. Sure, they may nod and say, “Yeah, that makes sense.” But you can tell in their voices and see it in their eyes that they think we are clueless. They think we just captured lightening in a bottle and we don’t know what to do with it.

Maybe that’s the case. But I could go on for days about why its so important for us to focus. Think about it. We live, eat, sleep, and breath the restaurant niche. I don’t have a clue what a retail store owner thinks when he hits our web site. But I am 100% positive that when a restaurant owner visits our site, we’re speaking her language. And I’m positive that we are the best at what we do – for restaurants. So since there are a few hundred thousand restaurants out there, most of which still use paper-and-pencil (or Excel) to create weekly staff schedules, and a tired cork board (or a heck of a lot of phone calls) to communicate important messages, I can’t think of any reason to get distracted – for even 5% of our time – and start going after the red, blue, black, and white circles. That yellow circle just looks gigantic to us, and we’ll keep aiming at it until it’s completely full.

Focusing On The Bullseye,

Wil

Restaurant Schedules Are Flyin’ In All 50 States

We have had a good week here at Schedulefly. A bunch of restaurants from a bunch of different cities joined the family this week – and are now scheduling and communicating with staff online. I decided to mess around with Google Earth and plot some of them – just curious where they were all located in a map. Since the export of data I was working with does not contain street addresses (just city/state) – many are plotted together in the same city by just one push pin but either way it’s pretty darn cool to see them all across the US. In every single state actually. Pretty amazing when you consider we do not have a sales team or a marketing department. We don’t cold call restaurants. We don’t do any direct selling. We don’t even use social media.

Keepin’ It Fun And Simple
The Schedulefly Crew

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