Speaker 1: Pushkin. Welcome back to Risky Business, a show about making
Speaker 1: better decisions. I'm Maria Kondikova. My regular co host, Nate
Speaker 1: Silver is off this week and instead I'm joined by
Speaker 1: a dear friend, Henry Rich, whom I've known for too
Speaker 1: many years.
Speaker 2: I don't want to age.
Speaker 1: Both of us, but we've known each other since our
Speaker 1: college days. We're very excited to have Henry on today.
Speaker 1: Henry is a serial entrepreneur. He's the head of the
Speaker 1: Oberon Restaurant Group, which has some of my favorite restaurants
Speaker 1: in New York City, and I can't wait to ask
Speaker 1: him about managing risk in one of the world's riskiest industries,
Speaker 1: learning from failure and the motivating force of regret. Henry,
Speaker 1: thanks so much for joining us.
Speaker 2: Absolute pleasure. Good to see you.
Speaker 1: Good to see you too. So a little bit of background.
Speaker 1: We met at Harvard. I was a freshman and you
Speaker 1: were a senior. You are older than I am rsually,
Speaker 1: and I'd love to actually start before we get you know,
Speaker 1: into everything that you're doing right now. Your background at
Speaker 1: Harvard is one of the most unique that that I know,
Speaker 1: and it's something that I would not have thought that
Speaker 1: you know today you'd be a successful entrepreneur kind of
Speaker 1: doing what you're doing right now.
Speaker 2: Because you majored.
Speaker 1: You created your own major, and it was in esthetics,
Speaker 1: if I remember correctly.
Speaker 2: Yes, how I got from that to being an entrepreneur
Speaker 2: was in part lack of other options, but also I
Speaker 2: think I just I left with this really strong kind
Speaker 2: of individual almost you know, existential streak that left me
Speaker 2: working for myself. And you know, the default for working
Speaker 2: for yourself is to create these entities around me that
Speaker 2: I could you know, manage and live my life.
Speaker 1: So yeah, so that makes sense. It's a little bit
Speaker 1: different from you know, most entrepreneurs who are like, you know,
Speaker 1: I majored in economics or I majored in business, and
Speaker 1: this is what I want to do. Your first company,
Speaker 1: I don't know if it was actually your first company,
Speaker 1: but your first company that I'm aware of, was a
Speaker 1: mint company called Oral Fixation. And I remember you graduated
Speaker 1: and you had come back and you gave you know,
Speaker 1: me and and other friends who were still in college
Speaker 1: these little boxes of mints. The Mohido flavors were my favorite.
Speaker 1: So talk us through how you decided to create a
Speaker 1: mint company, how that went, and what that taught you
Speaker 1: about risk and about kind of and about the world
Speaker 1: of business, because obviously that is also quite different from
Speaker 1: the restaurant world, even though we're both both are consumables.
Speaker 2: Yeah, you know, it's funny. I rarely talked about this
Speaker 2: this first company. I would say, I learned a lot
Speaker 2: about hedging and managing risk in terms of, you know,
Speaker 2: what not to do. So I decided to start a
Speaker 2: you know, small manufacturing company in a mature industry where
Speaker 2: most of our competitors were nineteenth century, multi billion dollar
Speaker 2: conglomerates like Wrigley, Mars, you know, Cadbury hershey NeSSI, these
Speaker 2: kind of companies, thinking that through I guess, just working
Speaker 2: hard and being smart and being you know, tasteful, that
Speaker 2: we could somehow dislodge these competitors. It was a terrible
Speaker 2: idea because we had to do our own manufacturing. We
Speaker 2: were selling into you know, thirty five countries, so I
Speaker 2: had to figure out the trade piece of it. All
Speaker 2: the regulations, had to do the consumer marketing, you know,
Speaker 2: manage multiple territories and channels like gift hotels, coffee shops,
Speaker 2: attend you know, hundreds of trade shows. I would say,
Speaker 2: what I learned from that experience is not to do
Speaker 2: just one thing. Because I really did put all my
Speaker 2: eggs in the basket of this company, which even if
Speaker 2: it had been you know, in a smarter category like
Speaker 2: yogurt or chocolate or somewhere where companies actually get acquired,
Speaker 2: it just it was totally susceptible to the Great Recession
Speaker 2: in ways that I didn't appreciate because I was, you know,
Speaker 2: a hebristic, twenty something year old. Seventy five percent of
Speaker 2: our sales dropped from September to October two thousand and eight.
Speaker 2: We literally had a leave in Brothers private label Mint
Speaker 2: for their office in Japan. We had warehouses ransacked in India,
Speaker 2: and a food Riot, our largest British distributor, was acquired.
Speaker 2: Their main customers were acquired by Icelandic banks. We were
Speaker 2: selling in countries whose currencies dropped twenty thirty percent against
Speaker 2: a dollar. So I really realized that I just had
Speaker 2: no idea what I was doing at all and sort
Speaker 2: of deserved to fail catastrophically, which is which is what
Speaker 2: happened with that company. But you know, I did learn
Speaker 2: how to do things on my own. I did learn
Speaker 2: a little bit about the food and beverage business, and
Speaker 2: it sort of you know, set me up for wanting
Speaker 2: to do something related but not you know, starting a
Speaker 2: manufacturing company with no money, which was just you know,
Speaker 2: an insane thing to do, but fun, fun in no way.
Speaker 1: You know, it's it's very rare to talk to someone
Speaker 1: and obviously you've had a lot of success since then.
Speaker 1: Who who takes responsibility and says, you know, I deserve
Speaker 1: to fail? Can you just unpack that a little bit?
Speaker 2: Yeah, there should never have got off It got off
Speaker 2: the ground through through sheer willpower that should never have existed.
Speaker 2: It should never have survived for whatever six years. I
Speaker 2: would say the most critical thing that I failed to
Speaker 2: understand is that what I thought I was contributing to
Speaker 2: this category, which was creating a product that actually had
Speaker 2: more personality, was significantly higher quality. Wasn't cutting every corner
Speaker 2: to hit the masses. These weren't things that were actually
Speaker 2: important for the success. I thought by creating a better
Speaker 2: design and you know, fifty cents instead of like two
Speaker 2: cents on the actual ingredients, we could you know, charge
Speaker 2: three dollars instead of two fifty and pass all of
Speaker 2: this value onto consumers. But this isn't This isn't a
Speaker 2: market segment where taste matters at all. What matters is
Speaker 2: distribution and power. I had this really interesting experience where,
Speaker 2: you know, we were doing the Mohto mint and then
Speaker 2: Wriglely would come out with mit Mohido and they would
Speaker 2: try to trademark and we did this, you know, fabulous
Speaker 2: fruit flavor. They did fibulous for TEENI tried to trademarket
Speaker 2: and they were sort of coming after us, and I
Speaker 2: didn't really understand. I was like, have they no shame,
Speaker 2: no honor? And one of these people came up to
Speaker 2: us at a show where they grabbed one of our
Speaker 2: tins and they didn't even bother turning their tag around.
Speaker 2: And I was like, hey, like, I know what you
Speaker 2: guys do. And the guy looked at me and he's like, yeah, well,
Speaker 2: who has forty seven thousand registers at Walmart? And he
Speaker 2: walked away and I realized I was just I was
Speaker 2: in the wrong place where nobody was asking for a
Speaker 2: better product in this category and it just simply didn't
Speaker 2: matter as opposed to a restaurant, where you know, you
Speaker 2: can have a restaurant that's been there for fifty years
Speaker 2: if you open a slightly better restaurant right next to it,
Speaker 2: your level of taste, your level of execution, your level
Speaker 2: of hard work actually does matter, and people will just
Speaker 2: gravitate to the thing that is slightly better and it's
Speaker 2: much less gated. And I just didn't know that I
Speaker 2: was entering a profoundly gated industry without any of the
Speaker 2: tools that I would have needed to succeed. And the
Speaker 2: world didn't need it, right, And I took a lesson
Speaker 2: that I shouldn't do stuff just to because I think
Speaker 2: it's funny, or to be independent. If it doesn't have
Speaker 2: another reason to be, it's going to fail and it
Speaker 2: should fail.
Speaker 1: Right.
Speaker 2: The world doesn't need, didn't need another breath Man company.
Speaker 2: And that was a you know, strong lesson. And maybe
Speaker 2: people would say, like, hey, the lasting Brooklyn needs is
Speaker 2: another wine bar. But these are things that can be done,
Speaker 2: you know, on a scale from one to one hundred
Speaker 2: and more or less. Well yeah, yeah, well.
Speaker 1: Let's talk about that transition. So you had a business
Speaker 1: that failed, right, as you say, like epic failure, something.
Speaker 2: That I was holding debts that I didn't really have
Speaker 2: a plan to pay off. So I had a timeline.
Speaker 2: You know with like basically within two years that I
Speaker 2: had to figure it out. So a lot of pressure.
Speaker 2: Two thousand and eight, two thousand and ninety ten, you know,
Speaker 2: not not a great environment. Although many amazing companies were
Speaker 2: founded then, but.
Speaker 1: Yeah, so not a great environment. You have debt, you
Speaker 1: had a failed business, and so you decide, of all things,
Speaker 1: to go into the restaurant business. Henry, what is the
Speaker 1: rate of failure in the restaurant business?
Speaker 2: You know, I think something like ninety percent, but I
Speaker 2: can't remember if it's like ninety percent in the first
Speaker 2: year or whatever. But yeah, that's right. Yeah, yeah, which
Speaker 2: makes sense because.
Speaker 1: Obviously like the obvious solution, right, you have debt, you
Speaker 1: just had a failing business. Let's go into a business
Speaker 1: where ninety percent of business is fill.
Speaker 2: Yeah, well, I think this is this is this is
Speaker 2: part of a problem. I'm like attracted a little bit
Speaker 2: to difficulty in a way that feels kind of like
Speaker 2: exciting and glorious, but then you know, the consequences can
Speaker 2: be overwhelming if you don't, you know, catch a wave.
Speaker 2: But I don't know why, I just I was extremely
Speaker 2: attracted to opening restaurants in Brooklyn in that window of time.
Speaker 2: You know, around like twenty ten, twenty eleven, where there
Speaker 2: was this kind of farm to table thing happening, and
Speaker 2: it just felt like an amazing opportunity to try to
Speaker 2: make some really nice additions to these to these parts
Speaker 2: of the neighborhoods that would otherwise, you know, be chained
Speaker 2: or things that are not really serving the community. So
Speaker 2: I never envisioned it as like this is what I
Speaker 2: do now, I'm a restaurant tour I just I went
Speaker 2: into restaurants, you know, to participate in that kind of
Speaker 2: Brooklyn moment. But also because as opposed to this manufacturing
Speaker 2: company which totally defined me, restaurants are also things where
Speaker 2: you can open one and it's sort of just open right,
Speaker 2: whether you're actively managing or not, and then you can
Speaker 2: open a few. And I didn't want to be kind
Speaker 2: of under the weight of one huge crushing thing, so
Speaker 2: I opened them all as you know, separate businesses. I
Speaker 2: could rise or fall separately and accumulate over time. But
Speaker 2: I also really I really liked that about it, that
Speaker 2: you could own a restaurant without it being like you're
Speaker 2: in there nine to five every day.
Speaker 1: Yeah, well, some free publicity rootless still exists and it's amazing.
Speaker 1: It's one of my favorite restaurants. And I think, I
Speaker 1: think you did a wonderful job. How do you get
Speaker 1: someone to believe in you and finance help you finance
Speaker 1: a restaurant, help that get off the ground after you know,
Speaker 1: when you say you know I've had that, you know
Speaker 1: I've had a failed business. How do you actually how
Speaker 1: did you convince people to come on board? How did
Speaker 1: you craft that vision? And what are the pieces that
Speaker 1: kind of have to come together in order to open restaurant? One? Right,
Speaker 1: globe was successful, so I think that probably helped kind
Speaker 1: of restaurant two, three, four, et cetera. But that first
Speaker 1: that first step had us at work.
Speaker 2: It was hard.
Speaker 1: It's a big risk for everyone, right, for you and
Speaker 1: for your investors.
Speaker 2: Yeah, no, obviously in our restaurant, Like the first thing
Speaker 2: you say is like, you can lose all of this money,
Speaker 2: and statistically speaking, you will, and if it works, there's
Speaker 2: no like IPO, there's there's no acquisition. It's just that
Speaker 2: you'll receive dividends over time. So on balance, the risk
Speaker 2: reward profile in the restaurant industry is poor, right, It
Speaker 2: just so happens that you know, almost all of our
Speaker 2: restaurants have paid back and people have made quite a
Speaker 2: bit of money off them, and they're going to stay
Speaker 2: open for a long time. But at the time of
Speaker 2: the first one, yeah, I mean it was friends and
Speaker 2: family and you know, we really script by. It was
Speaker 2: we raised two hundred and fifty thousand dollars, and we
Speaker 2: did a lot of work ourselves. We you know, gave
Speaker 2: out sweat equity for people working for free. I wasn't
Speaker 2: that asking for favors, because I do think that people
Speaker 2: saw me and saw the location. I basically had one
Speaker 2: twenty five thousand dollars line of credit left that I
Speaker 2: had gotten, you know, in two thousand and six or something,
Speaker 2: and I took eighteen thousand dollars out of it and
Speaker 2: put the down payment on the lease without any money raised.
Speaker 2: And so I could be like, hey, here's a space,
Speaker 2: look at this corner, look at this neighborhood. We're in Brooklyn.
Speaker 2: This is happening. And I think it's sort of it's
Speaker 2: difficult to raise money for because most of these things
Speaker 2: are not good investment. But to have an investment that
Speaker 2: you can actually kind of have breakfast, lunch and dinner
Speaker 2: in and like bring your friends and have that I
Speaker 2: own this restaurant moment is actually an extraordinary social benefit
Speaker 2: as opposed to the most kind of random, high risk
Speaker 2: investments that you would take, which are impersonal and likely
Speaker 2: you'll never visit the business, let alone experience it and
Speaker 2: have it add to your life. So in a way,
Speaker 2: it's it's not the best financially, but I think I
Speaker 2: was able to truthfully explain all of these intangible social
Speaker 2: emotional benefits of being a part of something that I
Speaker 2: think was very cool.
Speaker 1: Yeah, that's really interesting because you know, Nate and I
Speaker 1: talk a lot about kind of expected value of decisions
Speaker 1: on the show, right, and how how you think about
Speaker 1: taking risks right, positive expected value, negative expected value, And
Speaker 1: usually you're thinking about it in monetary terms, but there
Speaker 1: are situations where there are these intangibles that might you know,
Speaker 1: kind of add to the expected value, right, even though
Speaker 1: it's not even though the kind of monetary payout may
Speaker 1: not be as big. So I think what you're saying
Speaker 1: here is that in the restaurant business, like you're actually
Speaker 1: trying to appeal to those other things you're not going
Speaker 1: to It's not like you're going to pitch a meme coin.
Speaker 2: Or something like that.
Speaker 1: You're like, Okay, you'll double your money really quickly. You're saying, yeah,
Speaker 1: you know, this is a risk, but the rewards are
Speaker 1: actually much more personal, much more meaningful. It's much more
Speaker 1: of an investment kind of in in these I want
Speaker 1: to say intangibles, even though they're very tangible, right, but
Speaker 1: it is.
Speaker 2: Just non financial. They're just they're just non financial values.
Speaker 2: And I mean, you've just actually nailed a through line
Speaker 2: on all of the work I do, including the climate stuff,
Speaker 2: which is like, there's a risk. There's a risk that
Speaker 2: you don't do everything that you can in the moments
Speaker 2: that you knew that you should, and that you might
Speaker 2: look back on that and feel a certain type of
Speaker 2: way about your entire life. That's a risk, it's not
Speaker 2: a financial risk. I think this kind of talk made
Speaker 2: a lot more sense when people believe that they had
Speaker 2: souls and things. But I think this is one area
Speaker 2: where maybe like the kind of the philosophical like existentialist,
Speaker 2: you know, esthetic training is in all of the work,
Speaker 2: which is I get scared about like not taking opportunities
Speaker 2: and not doing things and not bringing things into the
Speaker 2: world that I believe should exist, and kind of carrying
Speaker 2: that emotional weight for the rest of my life. And
Speaker 2: you know, when it comes to people making decisions, people
Speaker 2: make decisions for non financial reasons, you know, mostly right
Speaker 2: like in their day to day life. But when you
Speaker 2: talk about it in a business, it kind of gets
Speaker 2: written out for some strange reason, and people wonder why they,
Speaker 2: you know, are dissociated and unhappy. There's this whole ledger
Speaker 2: that we should be thinking a lot more about. So
Speaker 2: that's sort of I mean, it's that's why I think
Speaker 2: these are cool investments, is because the idea that you
Speaker 2: could you know, walk into one and you know, experience
Speaker 2: it and let alone if it's like a climate positive
Speaker 2: or mission aligned in some other way. Nobody invests in
Speaker 2: a restaurant for financial reasons. It's cause like you live there,
Speaker 2: or you believe in the chef, or you want to
Speaker 2: you know, flex to some group of people that you're
Speaker 2: like a restaurant owner independent alas raise money as well. Yeah,
Speaker 2: I am the owner, right, Yeah, it's I mean, it's
Speaker 2: kind of a nice thing, which is why people like
Speaker 2: a lot of whom have like unlimited me and it's
Speaker 2: like some of them are like randomly investing in restaurants.
Speaker 1: Yeah, yeah, I know, I think that that's really interesting.
Speaker 1: And there's one more thing that you actually just mentioned,
Speaker 1: which we don't talk a lot about, but I think
Speaker 1: it's an important kind of decision heuristic, if you will,
Speaker 1: that people don't think enough about, which is the risk
Speaker 1: of regret, right, the risk of kind of the path
Speaker 1: not taken? And how much are you going to regret
Speaker 1: what you didn't do versus what you did do? And
Speaker 1: it seems like in your case, when you weigh those two,
Speaker 1: what you didn't do, you know is weighed on you
Speaker 1: much more heavily, and so you are probably programmed kind
Speaker 1: of against the status quo bias.
Speaker 2: Right.
Speaker 1: So many people they just have inertia and they're like
Speaker 1: it's fine, Like I just I don't want to I
Speaker 1: don't want to act because I don't want to rock
Speaker 1: the boat. And it seems like for you, what you're
Speaker 1: saying is no, like the risk that I run by
Speaker 1: not rocking the boat is actually much higher.
Speaker 2: Yeah. I mean this is described in a lot of
Speaker 2: different ways. Is like you know, writers that don't write things.
Speaker 2: It goes from you know, being this like heavenly gift
Speaker 2: to this like hellish burden. I certainly, you know, like
Speaker 2: wake up and fall asleep every day with the dread
Speaker 2: and not of like whatever I'm working on emails they
Speaker 2: haven't received, but things that I haven't finished or started
Speaker 2: one hundred percent. And I think, you know, probably good
Speaker 2: that not everybody is programmed that way. But I think
Speaker 2: I also I also have to control myself because you know,
Speaker 2: I make really bad investment decisions as well, just because
Speaker 2: I like these kind of heroic yellow kind of bets.
Speaker 2: I tend to invest in, like, you know, pro social things.
Speaker 2: I apply non financial criteria to things that should be
Speaker 2: strictly financial, and I know that that's you know, kind
Speaker 2: of dumb, and I'm trying to get better at it,
Speaker 2: and you know, outsource the decisions that I continue to
Speaker 2: make poorly. But all of the work on effective forecasting,
Speaker 2: the research says that no matter how how many times
Speaker 2: we receive the information, we always get it wrong how
Speaker 2: happy or sad we're going to be about a particular thing.
Speaker 2: Like if you ask somebody like, how happy will you
Speaker 2: be on a scale from one to ten if your
Speaker 2: team wins a Super Bowl? Somebody says ten. Then you
Speaker 2: ask them afterwards and they're like, it's a seven, and
Speaker 2: then you ask them again next year and they say
Speaker 2: it's a ten. Like there's certain things like this that
Speaker 2: we that we don't learn, right, So kind of trying
Speaker 2: to work within my own you know, cognitive biases when
Speaker 2: it comes to investment decisions and or managing my business.
Speaker 2: Risk is something that I try to create rules around.
Speaker 2: But you know, with mixed success, which is why I
Speaker 2: try to start a lot of different things because I
Speaker 2: know I'm going to screw one of them up, just
Speaker 2: like out of boredom one day.
Speaker 1: So well, that's that's a high level of self awareness
Speaker 1: and I applaug you for that. But you know, having
Speaker 1: rules is actually a really good way around these effective
Speaker 1: forecasting errors, and that is a really that is a
Speaker 1: really interesting that's an interesting bias as well. Yeah, we
Speaker 1: are very bad at knowing what our future self is
Speaker 1: going to feel like will want you know, just we're
Speaker 1: bad at making decisions for our future self and very
Speaker 1: we just we take our current self and we project
Speaker 1: ourselves into the future, not realizing you're going to be
Speaker 1: a different person. It's a different time. It's incredibly difficult. Yeah,
Speaker 1: it's incredibly difficult to learn we're going to take a
Speaker 1: quick break and when we return Henry's take on regret. So,
Speaker 1: after Rugolo was a success, you opened a number of
Speaker 1: other restaurants that are still open to this day. You
Speaker 1: did have some Actually, one of the things that I
Speaker 1: find really interesting is you're not afraid to pivot. So
Speaker 1: I remember when you open Meta, which is now Rodora, right,
Speaker 1: and so the initial concept, you know, you were very
Speaker 1: good at say this isn't working and we're going to
Speaker 1: We're going to pivot to this, And as far as
Speaker 1: I could tell, that was also the moment where you
Speaker 1: pivoted to kind of a more environmentally conscious approach to
Speaker 1: the restaurant business. Can you talk us through kind of
Speaker 1: that that process of changing Meta into what it is
Speaker 1: today and kind of your general approach now to actually
Speaker 1: marrying some of these goals of climate activism and kind
Speaker 1: of knowing what's happening to our world with a consumption
Speaker 1: business like the restaurant business.
Speaker 2: Yeah, I mean the initial twist was I was visited
Speaker 2: by this guy, Anthony Mian who started Mission Chinese with
Speaker 2: Danny Boyen, and he was getting into his nonprofit called
Speaker 2: Zero Foodprint, and he said to me, you know, Henry,
Speaker 2: did you know that food is responsible for twenty five
Speaker 2: to thirty percent of global emissions. I was like, now,
Speaker 2: I did not realize I was running a coal power
Speaker 2: plant for fun, you know, because I, you know, like
Speaker 2: to hang out with friends and eat and drink. That's
Speaker 2: that's not great news. And he was like, yeah, and
Speaker 2: did you know that like five of the top ten
Speaker 2: most impactful policy changes that can be made to a
Speaker 2: climate catastrophe have to do with food and beverage. Like,
Speaker 2: isn't that awesome that we get to work on this?
Speaker 2: And it really appealed to my sense of, you know
Speaker 2: whatever agency individualism, the reason that I would assume everybody
Speaker 2: becomes an entrepreneur, right because you it's not like the
Speaker 2: most straightforward way to make money, so you have to
Speaker 2: kind of again have these like non financial reasons for
Speaker 2: doing it, whether you know, running toward or running from.
Speaker 2: And I think the big one for me was this
Speaker 2: was an opportunity for me to you know, when you
Speaker 2: get the call in the middle of the night and
Speaker 2: then the pipe breaks and you call the plumber and
Speaker 2: you're just like, I hate my life, it's sort of
Speaker 2: a reason to actually tap into something deeper and just
Speaker 2: like like what you see in the mirror and put
Speaker 2: up with the petty and dignities of running a restaurant
Speaker 2: and being an entrepreneur. Which is why it's so shocking
Speaker 2: to me that so few restauranteurs have have taken on
Speaker 2: this sustainability mantles. It's because it's it's an opportunity to
Speaker 2: give your work meaning in a much broader kind of
Speaker 2: local community or global context. It's an opportunity to give
Speaker 2: you know, all the people that work for you, like
Speaker 2: an exciting extra reason to to come to work. And
Speaker 2: then there are all these kind of narrow business reasons
Speaker 2: for doing it, like retaining people. But yeah, he sort
Speaker 2: of once you told me that, I couldn't look away
Speaker 2: from the fact that you know, basically, if you're working
Speaker 2: in food, you either need to be for me. It
Speaker 2: was like, we either need to work on this actively
Speaker 2: or we need to close because what we're doing is harmful,
Speaker 2: and it's harmful in a way that is that weighed
Speaker 2: on me because you know, we all have carbon footprints,
Speaker 2: but restaurants carbon footprints are significant, right and and if
Speaker 2: you if you kind of of look at the data
Speaker 2: of you know, the social cost of that into the future,
Speaker 2: and you think about the harm that you can cause
Speaker 2: by doing nothing other than business as usual. It was
Speaker 2: it was too much for me to kind of bear
Speaker 2: psychologically flip side, you know, actually kind of pivoting to
Speaker 2: being a bit more proactive about you know, creating a
Speaker 2: trash free restaurant, pivoting toward you know, scope through carbon
Speaker 2: neutral operations. Suddenly, this is something that gave me energy
Speaker 2: and made me feel like, yeah, obviously we're a small
Speaker 2: restaurant group, but in our sphere of influence, we can
Speaker 2: show a way of doing something, not just like you know,
Speaker 2: lying there helpless and saying like, oh, it's so difficult
Speaker 2: to be a restaurant owner and doing nothing. So that
Speaker 2: felt really good to me. And you know, I'm not
Speaker 2: saying it was exclusively for selfish reasons, but I do
Speaker 2: think participating in this broader conversation has given me a
Speaker 2: lot of just like personal joy and satisfaction in the
Speaker 2: work that I do, which can be really annoying. And
Speaker 2: I hope it would be a template for more people
Speaker 2: kind of jumping on board. But you know, sustainability in
Speaker 2: restaurants is not really a thing unfortunately for them.
Speaker 1: Yeah, so so talk us through a little bit about
Speaker 1: what that decision process looks like, right when you're opening
Speaker 1: a new restaurant, or when when you kind of pivoted
Speaker 1: to Redore for that first trial. What does it look
Speaker 1: like when you're making those decisions, Because obviously you're still
Speaker 1: looking to run a profitable business, so you have so
Speaker 1: many you now have so many different needs, right, you
Speaker 1: need to you need to make a profit, right for
Speaker 1: for you and for your investors. You need people to
Speaker 1: enjoy the food and to enjoy the restaurant, and you
Speaker 1: need to kind of have that beyond point. And now
Speaker 1: you're also saying, Okay, we're not going to have a
Speaker 1: carbon footprint, we're going to be zero waste, we're going
Speaker 1: to have all of these other things going on. How
Speaker 1: does that decision calculus look like? How do you how
Speaker 1: do you go through that process? How do you make
Speaker 1: it a reality? And how people have everyone be happy?
Speaker 2: Well, it's very challenging because a restaurant is already a
Speaker 2: massive compromise between like the front of house, the back
Speaker 2: of house, you know, the operations, the guest experience, the
Speaker 2: you know, return to investors. How easy or difficult it
Speaker 2: is to work there. You know, very few people get
Speaker 2: into the restaurant world in order to like work on sustainability. Right,
Speaker 2: So now we're saying, okay, whereas you know, fifteen years ago,
Speaker 2: anybody who knows the LIB was living in New York
Speaker 2: knows like you were just outside of restaurants, you see
Speaker 2: like hundreds of like black trash bags just like filled
Speaker 2: with mostly recycling and compass. Because if you think about
Speaker 2: when a restaurant buys, it is like mostly comes in cardboard,
Speaker 2: comes in, you know, plastic or whatever, and it's mostly food.
Speaker 2: It's not actually non recyclable trash that people were putting
Speaker 2: in the trash. So all these people that are kind
Speaker 2: of used to just having a trash bin, it's like,
Speaker 2: all right, now you're going to have three. You know,
Speaker 2: there's like trash and I don't really know what you
Speaker 2: need to put in there in most of our ust
Speaker 2: restaurants because it is mostly recycling and composts recycling and compost.
Speaker 2: And they look at me as this kind of like
Speaker 2: out of touch, you know, business owner who's not like
Speaker 2: worked you know, in a restaurant alongside them, and they're like,
Speaker 2: all right, so you're going to take our jobs, which
Speaker 2: are extremely difficult, and you're going to make them more difficult.
Speaker 2: And also in the world of restaurants, what's seen as
Speaker 2: quality is basically speed, right, So if you order an
Speaker 2: espresso and it comes out in like thirty seconds, you're like, Wow,
Speaker 2: the spaces has this incredible service and sustainable practices within
Speaker 2: the restaurant do slow things down. You're washing recycling, you know,
Speaker 2: you're like, which bind do I put this in? And
Speaker 2: so you are operating, you know, either with more staff
Speaker 2: or staff who are more committed and operating more efficiently.
Speaker 2: So it does it does hurt profits and or you
Speaker 2: pass it on to the guests. The problem is people
Speaker 2: don't really care on the consumer side. They don't put
Speaker 2: a value on us being like scope through a carbon
Speaker 2: neutral They're like, what does that even mean? And then
Speaker 2: you explain it to them and they really don't know
Speaker 2: what it means. And Redora being you know, trash free
Speaker 2: is so extreme. There are there are only a few
Speaker 2: like trash free restaurants in the world. And we learned
Speaker 2: about how to do this from a few you know,
Speaker 2: dear friends chef Doug McMaster who runs Silo in London
Speaker 2: and Lauren Singer who's many things, but when I met her,
Speaker 2: she was kind of a zero waste sustainability influencer and
Speaker 2: running this company of trash is for Tosters and then
Speaker 2: package Free, and they sort of showed us how to
Speaker 2: operate without a trash bin. But it's almost like it
Speaker 2: really is almost like a performative level of sustainability that
Speaker 2: I think can be off putting for people. So we
Speaker 2: do all these things, but I think people come to
Speaker 2: Redora because it's cool and the wine is good, and
Speaker 2: it's a nice design and it's like an amazing location
Speaker 2: in four Green, two blocks from the park. You know,
Speaker 2: it's not because it's sustainable.
Speaker 1: Yeah. I think you're very you know, every single restaurant
Speaker 1: that you open, you're very good at trying to figure
Speaker 1: out what's the identity of this restaurant is. You know,
Speaker 1: like on a E. S which is one of your
Speaker 1: more recent restaurants, you have it as like a book
Speaker 1: bar right in a book space and an event space.
Speaker 1: So I think it's very interesting to see how you're
Speaker 1: you're trying to marry these things and how you are
Speaker 1: looking at risk and you are in a way you're
Speaker 1: mitigating the risk right by kind of loading the loading
Speaker 1: the dice on the other side, and saying, yes, I'm
Speaker 1: taking all these risks with the climate stuff. Yes, it's
Speaker 1: not going to be as profitable for those reasons, but
Speaker 1: I'm going to ensure that people like it more because
Speaker 1: there is a unique identifier that's going to kind of
Speaker 1: make people come here, even though it might be a
Speaker 1: little slower, even though we might have to jump through
Speaker 1: a few more hurdles.
Speaker 2: Is that fair? Yeah, I think I think that's fair.
Speaker 2: You know, we always try to have a concept for
Speaker 2: a particular community or a particular reason. Meta was kind
Speaker 2: of bringing the style of you know, open fire cooking
Speaker 2: and Redora. It was like, okay, like first like trash
Speaker 2: free restaurant in New York, and then June was the
Speaker 2: first natural wine bar in Brooklyn, you know, quickly followed
Speaker 2: by the Four Horsemen, and now there's like again like
Speaker 2: five thousand, you know, a nice wine bar with candles
Speaker 2: and bookshelves of you know, vintage feminist erotica for sale.
Speaker 2: Is like another vibe that I just like wanted to
Speaker 2: have somewhere, you know, nearby that the one could visit
Speaker 2: and you know, lo and behold, we're having all of
Speaker 2: these amazing poetry readings where people are like matching like
Speaker 2: Catullus to like a particular wine and like Lorca, and
Speaker 2: people are kind.
Speaker 1: Of having that your aesthetics is coming back.
Speaker 2: Yeah, it's squeezed in you know, here and there. But
Speaker 2: I think, like from a management perspective also, I would
Speaker 2: say the way that I managed Risks by kind of
Speaker 2: trying to constantly improve quality and make sure that we're
Speaker 2: being competitive as I focus on like the very very
Speaker 2: macro like okay, like this does this location makes sense?
Speaker 2: Is a lease owner a do people actually care about
Speaker 2: the screen concept at all? And then the very very
Speaker 2: micro like you know what is like the fonts on
Speaker 2: the menu, the thousand little details that actually create the
Speaker 2: guest experience because you know, and people kind of sometimes
Speaker 2: don't understand. They're like I thought you were kind of
Speaker 2: like the finance like big picture guy, and you're kind
Speaker 2: of going in and you know you want to like
Speaker 2: switch the candles out. Why are you so annoying? But
Speaker 2: I think like focusing like as an owner, focusing on
Speaker 2: because I'm a guest in my own restaurants, right and
Speaker 2: I want to kind of like relentlessly bring the guest
Speaker 2: experience back to the center of what our priorities are
Speaker 2: and what we're trying to achieve, because there's a lot
Speaker 2: of other things that people are trying to achieve, Like
Speaker 2: bartenders are trying to try out new exciting things, you know,
Speaker 2: brought in by like liquor apps that they're friends with.
Speaker 2: Chefs are trying to make their name. There's a lot
Speaker 2: of incentives that kind of pull people away from guests
Speaker 2: experience in restaurants, which is why sometimes you'll go to
Speaker 2: a restaurant it just won't be as good as like
Speaker 2: a home cooked meal, right, which which is just it's
Speaker 2: actually quite straightforward to do, but you constantly have to
Speaker 2: be refocusing on the guests and their enjoyment and their
Speaker 2: enjoyment with like again themselves, friends, family, versus the things
Speaker 2: that will happen when you take your eye off the
Speaker 2: ball that make a place increasingly not guest friendly when
Speaker 2: it comes to reservation policies or hours or like not
Speaker 2: seating partial parties. These are things that kind of I
Speaker 2: have to regularly correct.
Speaker 1: Yeah, no, that makes sense. I do want to ask
Speaker 1: about kind of one other broader question when it comes
Speaker 1: to risks. So obviously things can happen that no one
Speaker 1: could have foreseen, like COVID and I'm very curious none
Speaker 1: of your restaurants closed during COVID and you actually kind
Speaker 1: of continue you were successful, right, and this was a
Speaker 1: time where like restaurants were decimated. How did you approach
Speaker 1: something which was a new kind of risk environment, new challenge?
Speaker 1: How did you think about it? And you know, ultimately,
Speaker 1: how did you survive and thrive during a time that
Speaker 1: was so difficult for so many for so many businesses.
Speaker 2: Yeah, that's well, I think this is where my failure
Speaker 2: maybe came in handy. I think a lot of people
Speaker 2: thought that, you know, the cavalry was coming and you know,
Speaker 2: people just stop paying run And a lot of restaurant
Speaker 2: owners were like, well, they have to bail us out.
Speaker 2: And you know, having lived through the Great Recession, having
Speaker 2: like my business destroyed and kind of like my livelihood destroyed,
Speaker 2: I was just like, no, they don't, like we're you know,
Speaker 2: we're entrepreneurs. Like we're like out here swinging for the
Speaker 2: fences for like a great riches in glory. Like we
Speaker 2: don't deserve a bailout, guys. And like so I behaved
Speaker 2: as though no one was coming. So like you know, Rukula,
Speaker 2: there was you know, the mandate to close on Monday
Speaker 2: or whatever, and by Monday night we were, you know,
Speaker 2: doing takeout, which was allowed. Redora, we pivoted to being
Speaker 2: you know, a general goods store selling like paper, towels,
Speaker 2: toilet paper, wine, you know whatever, all of these things,
Speaker 2: trying to be like a local shop for the community.
Speaker 2: We did the same thing at June. I pivoted very
Speaker 2: very quickly. I guess is I I'm used to slash
Speaker 2: operate well in a quickly changing environment. I get excited
Speaker 2: by things, by by challenges, and I think that, you know,
Speaker 2: it's just like, okay, what is what needs to be
Speaker 2: done in these situations? And so then when the money
Speaker 2: came right like the two rounds of p PAP, the
Speaker 2: IDL Loans, Restaurant Revitalization Fund, I was just like what
Speaker 2: the I was so unexpected, And so it was just
Speaker 2: kind of on top of businesses that were operating at
Speaker 2: break even or better. I Meanridora, we weren't eligible for
Speaker 2: our F because we made more money of the pandemic
Speaker 2: than we made the year before. So I was sort
Speaker 2: of I saw a lot of like very close friends
Speaker 2: of mine be pretty overwhelmed by by the extent of
Speaker 2: the change extent of the risk, and you know, to
Speaker 2: another degree, I realized that I was I had also
Speaker 2: my thesis of like don't put your all year eggs
Speaker 2: in one basket, had sort of once again been challenged
Speaker 2: by putting all of my eggs in one industry, which
Speaker 2: was you know, highly susceptible. And I just I just
Speaker 2: didn't want to fail again. I was too old and just,
Speaker 2: and so we we came out a lot stronger. And
Speaker 2: I think that I think a lot of people did.
Speaker 2: I do think there's a massive debt overhang. I think
Speaker 2: that a lot of a lot of things happened in
Speaker 2: the pandemic where if you if you fired your entire stuff,
Speaker 2: if you didn't pivot to figure out another thing for
Speaker 2: people to do, a lot of these people left New
Speaker 2: York and you had to rehire everybody at on the
Speaker 2: same day that like thousands of other restaurants were rehiring.
Speaker 2: And I don't think people realize how much debt was
Speaker 2: actually handed out that kind of fueled this resurgence. That
Speaker 2: debt is still there, right like, these loans are still
Speaker 2: out there for a lot of these businesses, and I
Speaker 2: don't know, maybe some people think it's going to be forgiven,
Speaker 2: but I don't. So just because you don't expect anything,
Speaker 2: I don't know, I know, I know, no one's uh
Speaker 2: you know, and you know, it just seems like a
Speaker 2: little bit of attachment theory. I'm definitely the kind of uh,
Speaker 2: do you know this experiment where there's like the kid
Speaker 2: and the parent leaves and like the stranger comes back,
Speaker 2: and like you can tell you if you're like anxious,
Speaker 2: avoidant whatever. Like I'm definitely like the kid that just
Speaker 2: was like, Okay, I guess this is what we're doing now,
Speaker 2: you know.
Speaker 1: And.
Speaker 2: That, just I guess is a superpower in times where
Speaker 2: you know, a lot is changing, and I think it's
Speaker 2: it's a massive liability in times where things are smooth
Speaker 2: and boring, because you know, I have a tendency, certainly
Speaker 2: in my own personal investments to try to make things
Speaker 2: interesting and like just just doing dumb stuff like buying
Speaker 2: options in like renewable companies when I should be buying
Speaker 2: stocks and whatever. Just I have, I know this about myself,
Speaker 2: and so I've tried to try to make the restaurants
Speaker 2: interesting enough so that I can do like really really
Speaker 2: boring investments.
Speaker 1: After the break, Henry talks about managing risk in his
Speaker 1: personal life.
Speaker 2: I also wanted to tell you, like when it comes
Speaker 2: to personal things, I'm incredibly risk averse. Like I just
Speaker 2: had another child, you know, five thank you, five days ago,
Speaker 2: and so a little a little bit underslept. But you know,
Speaker 2: my partner was on like antibiotics and this sleeping medication
Speaker 2: unism throughout it, and everything was everything was saying like
Speaker 2: this is totally fine, there's nothing wrong. But I did
Speaker 2: like more research and I was like, okay, it's this
Speaker 2: hermiasin Like there actually are these recent Naah papers where
Speaker 2: if you like have a boy, there is like this
Speaker 2: number of potential genetic defects, and I'm like, great, I
Speaker 2: have a girl, and there are these other things that
Speaker 2: could you know, could potentially happen that like if you
Speaker 2: took it in the first or the third trimester, but
Speaker 2: she took it in the second. And so I'm asking
Speaker 2: these the nurses these questions and they're just like you
Speaker 2: are psychotic, Like your baby is completely fine. I'm like, look,
Speaker 2: I'm just trying to gather information so that if like X,
Speaker 2: Y or Z happens in two weeks, as it said
Speaker 2: it might in the study, you know, like if something
Speaker 2: went from a point one percent chance to a one
Speaker 2: percent chance. I want to know, because, like anything happening
Speaker 2: in the first month of life is existential, and I
Speaker 2: think I can't remember if this is anything that we've
Speaker 2: ever talked about, but just like on a personal level,
Speaker 2: I lost my mom to an accident at a very
Speaker 2: young age, and so these kind of lowering existential risk
Speaker 2: from like five percent to one percent two point five percent.
Speaker 2: I also am constantly circling around my restaurants and people
Speaker 2: in my life trying to do this for like early screenings,
Speaker 2: like anything to remove like the worst outcomes of like
Speaker 2: total failure. And so that's also why I think my
Speaker 2: businesses sort of tend to survive, is I don't let
Speaker 2: them die like even when they should. Yeah, if that
Speaker 2: makes sense, I.
Speaker 1: Think that that's incredibly smart and something that has probably
Speaker 1: allowed you to survive in a very risky and very
Speaker 1: risky area because a lot of people and a lot
Speaker 1: of entrepreneurs don't have enough appreciation for the risk of ruin, right,
Speaker 1: the risk of going to zero, the risk of not
Speaker 1: being able to continue. And it seems like that's something
Speaker 1: that you are thinking about in just globally right in
Speaker 1: every element of your life.
Speaker 2: Certain, yeah, in connection to my to my children, in
Speaker 2: connection of my businesses, in connection to the climate, and yeah, no,
Speaker 2: I mean definitely, like the fat tail on all these
Speaker 2: things is problematic, and I just try to, you know,
Speaker 2: winnow it down. And I do that, you know, in
Speaker 2: any situation by just gathering information. So if I see
Speaker 2: something like my great grandmother was a worse nurse in
Speaker 2: World War One, and my grandmother was dying of a
Speaker 2: fever and being read her last rights and they thought
Speaker 2: she had I don't know the flu, and my great
Speaker 2: grandmother was like, is diphtheria? I know the smell of
Speaker 2: diphtheria from just you know, being like in the trenches.
Speaker 2: You need to treat her for diphtheria or she's going
Speaker 2: to die in ten minutes. And they did and it
Speaker 2: saved her life. So it's just like information like that
Speaker 2: that I find that it's very helpful to have in
Speaker 2: terms of you know, risk mitigation, but also like from
Speaker 2: a business point of view, in terms of like team management.
Speaker 2: I'm also very early. I try to be very early
Speaker 2: to catch things like I'm not going to wait for
Speaker 2: some like major accident like somebody falling down the stairs,
Speaker 2: some like horrific like harassment situation. I try to look
Speaker 2: at like general conditions that could lead to a catastrophic
Speaker 2: outcome and eliminate the risk. That's the other thing I do.
Speaker 1: So, So what's next for you, Henry.
Speaker 2: I'm working on a cool museum project in the city
Speaker 2: that I'll be able to talk about in a couple
Speaker 2: of months. I am working on a little kind of hotel,
Speaker 2: bike shop, restaurant project in the Catskills where I live
Speaker 2: most of the time. A lot of the things I
Speaker 2: do are just like things that kind of I want.
Speaker 2: I opened a little like grow grocery store in my
Speaker 2: town as well, just just to have more access to
Speaker 2: local produce. And then I'm kind of pivoting to more
Speaker 2: focus on just this book on you know, individual action
Speaker 2: and kind of building climate identity as a consumer in
Speaker 2: the ways in which you know, being of this generation,
Speaker 2: whether we like it or not. I think a lot
Speaker 2: of the meaning of one's life as you look back
Speaker 2: in it will be you know, what individual parts that
Speaker 2: I play in this like massive success or you know,
Speaker 2: catastrophic failure and being able to look back at your
Speaker 2: whole life and you know, one won't be able to
Speaker 2: hide from yourself what you know when and just again
Speaker 2: the risk of looking back and not liking what I
Speaker 2: see is haunting for me. And I also think that
Speaker 2: there's a lot of like low grade anxiety that people
Speaker 2: feel about not the threat, but the paralysis. So trying
Speaker 2: to create tools and you know, heuristics for people to
Speaker 2: actually tap into someone to feel good about and not
Speaker 2: just feel you know, low key sleepwalking toward armageddon Like
Speaker 2: that's that's an odd Like there's a lot of issues
Speaker 2: in the world that I can name, like nuclear proliferation.
Speaker 2: I mean, there's many many things where there's literally nothing
Speaker 2: you can do if you're just a normal person who's
Speaker 2: not like in the top tier of government or think tank.
Speaker 2: But climate you know that that's one where we all
Speaker 2: have an actual role. I think people just need a
Speaker 2: bit of guidance and some tools to help them get there.
Speaker 2: So opening these, you know whatever, climate positive restaurants, I've
Speaker 2: had thousands of interactions on a consumer level with people
Speaker 2: being like what is this, Like I don't I feel
Speaker 2: like you're lying to me, Like I don't feel better
Speaker 2: after coming here because like now the rest of my
Speaker 2: life feels like it's problematic and just the ways in
Speaker 2: which trying to create this climate positive experience it just
Speaker 2: didn't have anywhere to land for people emotionally, and just
Speaker 2: trying to work on that larger background issue of not
Speaker 2: having a way to account for non financial values like
Speaker 2: doing you know, the right thing, and to actually feel
Speaker 2: good about that, to feel joy right and to have
Speaker 2: it like help cut down on that low grade anxiety.
Speaker 2: It's a rationally selfish thing to do if people only
Speaker 2: had a place to put that good feeling. So kind
Speaker 2: of working on that.
Speaker 1: I love that and I think that's a really beautiful
Speaker 1: place to end. This was incredibly interesting and very inspiring.
Speaker 1: So I hope that your I hope that your approach
Speaker 1: to risk and kind of your example will indeed help people.
Speaker 1: So thank you so much for sharing, thank you for
Speaker 1: joining us, and I, as a personal selfish consumer, can't
Speaker 1: wait for your next restaurant to open.
Speaker 2: Thanks Maria, really great to see you.
Speaker 1: Good to see you too. Let us know what you
Speaker 1: think of the show. Reach out to us at Risky
Speaker 1: Business at pushkin dot fm. Risky Business is hosted by me,
Speaker 1: Maria Kandikova and Nate Silver, who will be back next week.
Speaker 1: The show is a co production of Pushkin Industries and iHeartMedia.
Speaker 1: This episode was produced by Isabel Carter. Our associate producer
Speaker 1: is Gabriel Hunter Chang. Our executive producer is Jacob Goldstein.
Speaker 1: Sarah Bruguer is our engineer. If you like the show,
Speaker 1: please rate and review us so other people can find
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Speaker 1: Thanks for tuning in.