STARR Restaurants: Stephen Starr. How a Non-Foodie Built Thriving Restaurants on Gut Instinct

I saw something that you talked about in this business and it would just stress me out so much, which is somebody might go to your restaurant five times, love it, and then the sixth time, something might happen that is big enough that they'll never go back and they're really mad. Yeah, you know, the more you say what you just said, the more I realize what a stupid business this is, that's being. One of our landlords, Seymour Rubin, said to me, goes, "Why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation?" One guy could decide, "That's it, I'm leaving." And the whole restaurant falls apart that night. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raazan on the show today, how Steven Star built one of the most beloved and lucrative restaurant groups in the country, one hip at a time. It's paired to almost any other small business, owning a restaurant makes almost no sense. The startup costs are high, you have to take out a long term lease, your inventory is perishable, finding staff is a nightmare, the hours are crushing, the customers can be demanding and annoying, and if you execute well, at the end of the month, your net margins are around 5%, 10 if you're lucky. If you really want to make money in the restaurant business, you're better off trying to buy a Taco Bell franchise where margins are closer to 20%. Or you can do what today's guest, Steven Star has done. Build really awesome restaurants that serve lots of guests, do it consistently, and replicate the model multiple times. Right now, Steven Star owns 9 of the 100 highest grossing independent restaurants in the United States. These include places like pastis and buddhikhan in New York, Ladiplamat in Washington, DC, and Makoto in Miami. In each one of stars 40 restaurants, you'll find a unique dazzling design in addition to great food. And together, these restaurants pull in nearly half a billion dollars a year in revenue. Now you may have heard the statistic that around half of all restaurants in the US don't make it past year 5. Steven Star has had to shut a few restaurants down over the years. But his incredible track record at building restaurants that even 10 or 15 years in are still hard to get a reservation at has a lot to do with so many things that most of us don't even notice. The lighting, the temperature inside, the music in the background, the way you're greeted when you walk in. These are things Steven's been obsessed with ever since he opened his first restaurant, the Continental, back in 1995. And here's the other thing, he's not a foodie, he doesn't really know much about cooking at all. In fact, before he even got into restaurants, he had a whole first chapter as a comedy and music promoter. And as you'll hear, for a guy who's launched such forward-facing crowd-pleasing businesses, he kind of prefers to stay in the background, which makes sense when you consider his childhood. Steven Star grew up in the mid-1950s and '60s in New Jersey just outside of Philadelphia. He says he didn't have many friends when he was young, so he had to create his own entertainment. You know, I was surrounded by televisions, because my father was a television repair guy. So the whole house had TVs everywhere. I watched every TV show in the world and very much fell in love with the Dick Van Dyke show back then. And I wanted to also be a comedy writer. What I watched on TV was the shows, but you know what I was more obsessed with? The credits. Like I knew the producers, I knew the writer. I remembered, "Hey, Sheldon Leonard, he did that other show too." And I had a real, real, real, to real tape recorder. And I created my own little environment in this room. I was obsessed with music, mainly the Beatles and all this Presley. So I have my little fantasy imagination periods where I would do Beatles versus Elvis. And I do that for three hours. I play one song versus another song and I rate them. So basically, loved TV. I used to do my own skits and radio shows. And then I became sort of intrigued by being an announcer on the radio. So like radio was a thing that you were really, when you actually got a license, I read like when you were a teenager, like to be on the radio. Yes. I went to the Federal Courthouse in Philadelphia. I took my test and I passed. And what I used to do, I used to go and sneak into a college radio station. And in one part of the station at night, the young college kid was, who seemed like an old guy to me, was on the air. And I kind of sneak in and go into the production studio. And then I learned how to do production by myself, just by trial and error. And I'd take the albums from the radio station. And I would do my own audition tapes. One day, however, the guy that was on the air caught me. And I thought, oh boy, I'm in big trouble. And he said, listen, you can't let this sneak into a radio station. Like it's not cool. You can get arrested or whatever. He says, but listen, I'll help you. And then I came in like twice a week and he taught me how to edit splice tape and all that. And I just made all my little audition tapes. I pretty much mimic the FM DJs of the time, you know, by talking like this. This is Steven Star at WMMR. Right. And then I wanted to be a concert promoter. And I promoted my first big concert in my high school, which was a band called Mata Hoopal. Oh, yeah. Which has had a hit record called all the young dudes, all the young dudes, right? Right. Written by David Bowie. I got that bug up from wanting to be a concert promoter. I loved it. Became friends with the band, brought the band to my house. My mom cooked them dinner. So the entertainment bug was now really in me. I'm just wondering as an 18 year old, 17 year old high school kid, how did you become a concert promoter? I mean, who's gonna like how do that work? I don't understand. I'm just imagining today an 18 year old saying, I want to bring Mata Hoopal or that's not just you can't just snap your fingers. I'm a concert promoter. I wanted to break out of the normal lifestyle that I was in in New Jersey. It was boring. It didn't satisfy me. I wanted to do big things. I became the student council president of the school. And somehow they allowed us to have a concert once a year. Ah. So we had the opportunity to book Moby Grape, Alice Cooper, who wasn't big yet. We're Mata Hoopal and we chose Mata Hoopal. Steven, when you're, I know that you went to temple to study communications, but I also know that your, you lost your mom at a pretty young age, you were just 19. Yes. Which I can't imagine how, I mean, what that would have been like to be a kid and, and for that to happen. I mean, it was awful. I was 19. I had younger sisters, three younger sisters, six, seven, 13, something like that. No, it was horrible. And it definitely did something to me that made me want to work really hard and maybe try and forget. But even prior to that, when I went to college, my goal was to be, I wanted to be rich because we didn't, we had a middle class family, but we didn't have much. And I wanted to take care of everybody. And I remember sending my, typing a letter to my mother, telling her that don't worry by the time I'm 21, mom, I will be a millionaire. Okay. And there's, there's conflicting, I've heard conflicting things that you did graduate or that you left before you graduate first. Let's just clarify that. Did you finish or did you leave early? I left early. I left the like the third year because my, my sisters were young and I couldn't, I had to be there and help them. So I had no choice at that point. But I guess from what I gather in 1977, right? So you are roughly 21 years old. You open a diner and a comedy club in Philadelphia called Grandma Minis. Tell me the story of how you, of how that came about. I mean, because you were, what was the idea for that? I just wanted to do something that could make some money for myself. And not that I thought it was beneath me, but it just wasn't in my DNA to like work in a restaurant or be a waiter. So I went to this deli and the deli was called Grandma Minis. And I befriended the owner. And I said, you know what? At night here, what are you doing? There's nothing reclosed. I said, I have an idea. What if you did comedy? Because I had been going to New York to see comedy shows at Catcher Rising Star in New York City. And he said, sure, I mean, I'm open to it. So I started going back to Catcher Rising Star and I'd watch this show. And the comedian would get off the stage and you go over to the bar and I'd say, hi, my name is Steven Star. I'm think I'm going to open a comedy club in Philadelphia. would you be interested and they all go, "Yes, of course." And I get their phone numbers. And then we finally had our first show. And I start booking comedy there. - All right, so just to one fact, so Grandma Minis was a, in the existing diner, at a existing-- - It was a deli. It was a deli. - It was a deli. - We put a stage up like after it was closed, there was enough room in there. - How big was it? - We had probably only hold around 80, 90 people. That's it. - And you just got to know the owner or you, and he said, "Yeah, you can use this place at night and we'll just split the ticket sales or something." Like, "How did that work?" - No, basically, no. No, he said, "You keep the door, and I'll keep the bar and food." - God. And how did you, like, again, you're such a young guy? You know, sometimes you hear about, you know, young people in their 18, 19, 20 who are doing these things that you often hear people in their 40s doing, and then you find out that, well, maybe they looked older, they were taller, they were bigger, they had a presence that kind of enabled them to kind of get away with it. Did you have any of those things? - No, I wasn't a look older, I wasn't, like, special in that way. You know what I think it is? This is why I heard you or could interview her. You're like, "Bobber Walters." - I don't know about that. - I made my kids have asked me that question. My wife, my, I have a couple wives have asked me that question. I do believe I must have had charisma, people liked me. You know, I remember one guy in the very beginning when I first opened my first real night club that he was the guy that owned that building, and he was a tough guy, and he told me, he says, "You know what? You're very disarming." That was the word he used for me. He goes, "You're very disarming." I just think I was, I had a thing. Yeah. There's another piece here. I also worked on the boardwalk in Atlantic City, which is a big piece of who I am, and how I became who I am. - You were trying to boardwalk when? - In my was 16, 15, 16, 17. - Yeah. - Boardwalk in Atlantic City as a salesman. In a store that sold everything. It sold watches, rings, stereos, and I learned so much from working on the boardwalk in Atlantic City. I learned about human nature. I learned how to talk to people. I learned how to sell. We were paid on commission, and we got paid based upon how much profit we made on each item that we sold. In the beginning, we felt terrible. We didn't know how to do that. We, a ring that was worth 20 bucks. We were being encouraged to try and sell for 200 bucks, and we thought that was wrong. But eventually, just like a Navy seal or a Marine, we got to be trained killers, and we learned how to sell, and how to convince people. So I think the ability to feel confident, my confidence, was being a salesperson on the boardwalk in Atlantic City. - Yeah. Okay, so you have this burgeoning comedy club at Graham on Minis, and you start to bring comics, and how does it do? - It became very popular, and then the gentleman owned the place, and then all of a sudden one day goes, you know what, this doesn't make any sense for me. You're keeping the door, I could do it. I want you to leave. I'm doing this myself. - Oh, he said he was gonna use my, why are you making all the money for booking these gigs? I'm gonna just book the comics myself. - And he threw me out. I was devastated, and I then said, you know, kind of like Rocky. I said, you know what, I'm gonna, can I curse on this thing? - Yeah, yeah, sure. - Yeah. I was gonna say, you know, fuck him. I'm gonna come back and fucking put you out of business. - Okay. - Because I was the one that knew these comics, you know, I'm the people I had befriended. So I started looking for place to open another club. I found a bankrupt building that was a restaurant. Somehow it convinced the bank I had no money to sell it to me. - Where was it? - That second in Bainbridge streets in Philadelphia. Price was $150,000. - Okay, and how are you gonna buy that with zero collateral and zero assets? - I didn't even know what collateral was. I saw the sign on the building. Somehow got the appointment with continental bank at the time, met with the man, and told him my idea. - What was your idea? What was the pitch you gave him? - Pitch was the open-to-comedy club like I had opened for someone else. - And how? - Why would a banker even take you seriously as a 22-year-old with no collateral and no cash? - I have no idea except that I think it was a time that wasn't like, I think people still believed in people. Like bankers still would go on an instinct or a feeling. - Yeah. - So it was probably a set of a dead building. Maybe he couldn't lease it or sell it for a long time. And this kid came in that sort of disarmed him to use that word. So he let me $40,000. And then there was someone else, I forgot who it was. I either borrowed or whatever, 10. And for 50 or 60 grand, I piecemealed this thing together. - Yeah, it's so interesting because we've had stories like this on the show in the past, like where people got a property or a lease in the 70s or early 80s. And it's so clear the contrast between that time and today, you know, the red tape today, the regulations, the corporate own banks, like it's just a completely different. It could never happen again. I could never do when I did back then. - Yeah, I mean, it's just a different, sorry. So you, and what did you call this club, by the way? (laughing) - So there was catchurizing star in New York, which is really the godfather of all comedy clubs. And I called it stars, S-T-A-R-S. - And presumably you could get some of the comics from New York to come to Philly 'cause it's only an hour and a half, two hours by train. - Oh yeah, I mean, I'd already known them and lined them up. - So tell me some of the people you brought in. - So the, I believe the first show was Richard Belzer. - Wow. - Went on to be on law and order, right? - Yeah. - As the cop. Pat Benatar. - Pat Benatar, the singer. - Yeah, but she was known as Patty Benatar back then. - She was a comic? - No, no, no, she wasn't a comedian. - Yeah. - 'Cause the show's consisted of a comedian and the musical act ending with a headlining comedian. - Okay. - And Patty Benatar back then was, she sang all cabaret songs. It wasn't like rock and roll then. So that was one of our first shows. I booked Jerry Seinfeld played there. He was a, the host of amateur night. I paid him $75. Bob Sagitt started in our club. - Wow. - So I tried to run it seriously, but I had no idea what I was doing. Classic story is the opening night. We put all, it sold out. Put all the cover charges, which I forgot what they were, then $5, $8. We put them on the check as opposed to taking the cash at the window. Put the cover charge on the check and the people drank and they ate on the check. Around 65% of the audience walked out on the check. That opening night. So they didn't pay. And I had no money. I remember crying that night. What did I do? 'Cause I didn't have the money to pay the comedians. - And how did you do the food side of it? I mean, again, like, that's a different business. That is even know what to do. (laughing) - I didn't. I hired a chef. He was a young guy. I don't know how good he was, but we figured it out. This is why even today with all the restaurants I own, I see what we do to open a restaurant. The tens of thousands of dollars we spend on training. And this and that and audio visual and crazy stuff that we do. And I look back at what I did this and I say to myself, what the fuck? I didn't, we never did any of this now. All this training. You just come to the door, you have a young chef, but he would say, hey, we need a deep fryer. We need a grill. We need a prep space. And you would say, well, just do what you need to do. Just make it happen like that. - I mean, I learned as I was going along, and we kept the food light. I mean, we did burgers and fries and whatever we did. So it wasn't very complicated. I remember at one point, this is the sad story. You know how when you open a new business the old days, you put the first dollar, like you hang it on the wall. - Yeah, right. - You know, that first buck. - Yep. - So at one point, it got so bad we couldn't pay our bills. I had to take the money down off the wall to use it to pay for something that was like COD. - Yeah, I mean, I imagine that a comedy club, even with a two drink minimum, you got staff, you've got, right, you've got to pay back the loan. I mean, and from what I've read about it, the stars, it just, as awesome as it sounds like it was, I wish I was there. I wish I was there right now. But as a business, it doesn't sound like it was sustainable. It was a lot, it was hemorrhaging money. - Yeah, it wasn't sustainable. I wasn't making any money. Maybe I was able to eat a couple hundred bucks a week for myself, but I was always getting behind the eight ball. And then eventually that comedy club evolved and morphed into a club that did mainly music. - So you just kind of switched it over the same venue, the same exact place, and you still called it stars? - Call it stars and did some mind blowing shows, man. I mean, great jazz artists, Nina Simone, Buddy Rich and the four tops and temptations. And then the punk thing started. So then we started doing the Ramones, the Clash, and all kinds of punk bands. Just very, very memorable shows. And it's such an intimate environment. - How many people could you fit in? And it's not much like 120, 120 people. Okay, so this, so you switch over to music and how did that do as a business? It did okay and it really was the thing that it was the catalyst for me to become a real concert promoter. And that motivated me to look for something bigger which I did and stars eventually went away. Okay, so this was the transition to a new venue I think called Ripley Music Hall, right? Yeah. And from what I read it's 500 C venues, so it's a bigger place. Also in center city in Philadelphia. Yeah, a few blocks away. It was on South Street. Okay, going back just quickly to stars, you got a loan from a bank in 77 to open it up. Did you were able to pay that back? I don't think so. No, I didn't pay it back. I was too stupid to realize I could, I just walked away from it because I mean the building was $150,000. I should have tried to sell it, but I didn't. I just walked away and nothing happened. There was nobody, I didn't get sued or. Right, the bank just repossessed it and then they probably figured out, okay, again, amazing different time right because today that could have ruined you for a while, right? Like it just. Yes. No, no, but it's true when people ask me, "Hey, what's your advice?" I feel so bad because the way things are constructed now does very little room for entrepreneurship. Yeah. Unless you have a lot of money or your family has money, I mean, just to have an idea and have virtually no money, it's hard, man. It's hard. It's not the same country. Yeah. Okay, so you go move to music. So now music really becomes your thing, Ripley Music Hall. And this is the early 80s you're bringing in. I've read you two and Bruce Springsteen and Cindy Lopper and Miles Davis and I mean James Brown, Ray Charles, just incredible artists to a 500-seat club. Yeah, I had this thing and I had that really carried on to the restaurant business that I never wanted to do the same thing every day or all the time. So every night it was my goal was to have something different. So one night you'd have Ray Charles and the next night you'd have your rhythmics. It was like my own Ed Sullivan show. And just to kind of go back on the business side, how were you able to finance the Ripley Music Hall? Like how I'm assuming you didn't buy that building maybe you leased it, but how were you able to do that? I did that one initially kind of on my own, similar to stars, but eventually I got an investor who was participated in transitioning to concerts. When you did concerts you needed real money for deposits and stuff like that. And Steven, here's what I'm wondering about. Running a music venue, it's hard, right? And you were not a guy out of business school or you were really kind of learning as you were going along, but it sounds like again, just figuring out how to make this sustainable was tough for you at that time. Like you didn't, it was not easy to make a profit doing this. No. Actually, you weren't making a profit. No, very little. And if I had been, if I had gone to business school, I never would have done it because none of it, none of it made sense. You know, a little of this is you're almost in a imposter. You know, you're pretending to be something that you're not. You know, I was this promoter bringing in this act, that act, we're doing great convincing somebody to play for me as opposed to my competitor. When at the end of the day, what was left over was very little, but a lot of the brands started developing, right? People started knowing that I was this success, but I wasn't. What about you? I mean, this strikes me as a kind of a business which really depends on relationships. I'm in San Francisco. So I think of Bill Graham, the legendary promoter here, right? Who lived here. And I mean, what gave you an advantage, do you think? I mean, did you particularly good music taste? Were you like, quote, unquote, cool? Were you just like, why, why do you think you were able to even successfully bring these artists into Philly? Of course, I was obsessed with music. I loved music. Many of the promoters back then were older than me. And they were not in it so much for the music as they were in it for the business of it. Right. You know, I met, I met Bill Graham a couple times. And I think he was the real deal. But a lot of these guys were just in it because it was a good business and they can get checks and, you know, do drugs. That's what I was getting at. Like, you don't strike me. Maybe I'm wrong. Like, me don't strike me as I kind of guy. Not with me. Girls I always liked and tried to get, but not drugs and all that. No, that wasn't my motivation. And at the end of the day, I was always very, good to the bands. I gave the bands not just what they asked for, but more. I always felt I had to perform better than my competition because I was younger, not as successful. So I just tried harder. Right. And there's one other thing here that you may have read also that a lot of my motivation when I was in college, I had a girlfriend. You know, my mom had died. And around nine months after my mother died, the girlfriend who I was in love with left me broke up, messed me up for a long time. That may have been a more of a catalyst for my success than my mother actually dying. In the end, my motivation to open that club was two things to get her back or to like say, fuck you, look, I made it. So I have to tell you that because that's such a big part of what motivated me back then. It's like that Michael Jordan line in this hall of fame speech where he talks about another another log in the fire. Maybe you were motivated by proving yourself, maybe even being a little angry or having a little chip on your shoulder. Yeah, for sure. All right. So from what I gather, the Ripley music called business side was just not sustainable. And that eventually closed, I think in the mid 80s. But you stayed with being a concert promoter. That really became your from what I've read your main thing like and it sounds like that was actually a much more sustainable profitable business to do. Yes, because the nightclub part of it, the Ripley musical, all that really was was a way to get the big agencies to do business with you. Say, so they have a new act and they say, listen, we have this new band in excess or REM. We need you to book them for $3,000. You'll probably lose money, but stick with us because if you do us a solid, when they get big, we're going to take care of you. And that's so we ended up just losing money to hopefully make money later. It was like a loss leader thing. Right. So the club didn't work out after a while. It was just too much. It was hard to make a living there. And then I continued with the concert promoting and did did fairly well with that. And for people who don't really know what that means. So if you had like a Madonna, because I know you did promote concerts from Madonna and Philly, like a huge act like that. There's a minimum guarantee for her and maybe a share of the profits and then there's all the ticket sales and you go to the promotion. You're not paying for the venue. That's a different cost. No, no, no, you pay for the venue. You pay for the venue. Okay. So basically they're saying, you're like the contractor for my house. You're doing everything. You're handling the whole thing. And then whatever's left is yours. What would be sort of a good margin you can make on that? I think you make after all the expenses are over, you're only making around 15%. So, you know, in nowadays it's a whole different thing. The nowadays the act gets everything. And then the promoter, which is really basically one promoter, live nation now, they own a lot of the venues. They get the parking and they because they own ticket master, they get that ticket charges back then. When I was doing this, we only got the ticket sales. Right. So it'd be a modest profit. But you probably were making more money than you were running comedy clubs. Oh, absolutely. Right. Absolutely. Much more. And did you, it seems like a very like sharp elbows business. Like you kind of have to be a son of a bitch a little bit to succeed. Is that true, do you think? No, for me it was different because I was David and there was a Goliath in town who was, you know, had been there longer and more entrenched. I had to be the good guy. I had to be the schmoozer. Because in the end the bands only cared about one thing. How much you gave them money and what the K-Ring was backstage. It was pretty a simple formula. And what about like dealing with the egos of like, you know, when you, I'm always amazed by like real estate agents. They have this ability because they're dealing with people who can be really petty and just patchy-land and difficult and they're generally very common, you know, because they're in the client services business. Similarly, when you're dealing with artists, they can be jerks, right? They could just be, and their people around them can be worse. It never bothered me. Honestly, I looked at it like the acts themselves were so, they were bigger than life. They were not even real. They were almost like cartoons and whatever it is they wanted that was overwhelming or overbearing. It was part of the game. I knew I was playing the game. I was enjoying. It was fun to be in the game and have an act tell us. Don't look at us when we walk down the hallways on our way to the stage. The people that weren't fun were the people that worked behind the scenes. The agents. Yeah. They're booking agents. Those were the real assholes back then, obnoxious because, you know, there was a food chain. The concert broader was the lowest on the food chain. We were at the bottom. I mean, I think there's also something just like a sort of an intrinsic temperament that some people have. Like I couldn't do that. I would lose my mind, you know? I mean, do you lose your temper or do you or you just kind of even keeled all the time? No, I'm not even keeled. I lose my temper. The restaurant business is what brings out the temper in people. That's when you become like a dictator, like a Saddam Hussein. But the music business, no, I didn't lose my temper. It was it was stressful, but it was fun. And you know, when you're watching something that you love happen, music, comedy, it's so satisfying. And you could put up with the other stuff. Yeah. But it was also it was a challenge. How do I get this guy who is treating me like shit, who is not giving me the axe that I want? How can I convince him somehow some way that I'm better at this than my competitor? And I was young. So I love that challenge. And by sheer force of my will, I was able to turn people's minds around. I was able to take I was to be a nobody in this music business and convince the biggest agents in the world to take me seriously. And that to me was I won. You know, it's interesting. As you mentioned that as a kid, you would be in your room with a real to real and on your own a lot of the times and maybe even a bit of an introvert. But you were doing a job that really required because you just you mentioned this idea that I just out smooths these people. But you don't strike me as somebody who really likes to do that or feels comfortable doing that. So am I right about that? You're right and you're wrong. You know, I don't like going to parties and hanging out and let's have dinner. Let's go out for a drink. I hate it that part. Yeah. But it's you know, in the am I ever since I was a kid and then the music bit of the nightclub business, the music business and how the restaurant business were always throwing the party right. I've been thrown to party for years. But I'm never in the party. I know exactly what you mean by the way because I love throwing parties. We throw parties all the time and I cook and I make sure everyone's glass is filled and I'm just making sure that somebody has somebody to talk to. But I actually am not in the party. I totally and I actually like that role a lot more. I used to be sad about it because I remember going to my own nightclubs. I used to want to show and I'd be like in the back my arms folded watching everybody just watching them and I thought I was pathetic. Okay, you're not having fun. You're not part of the event. But eventually I like you just said I kind of like that role because I was like I was watching over my little creation and everybody was happy and that was my satisfaction. So I read and I don't know if the year is exactly right but around 1990 you sold this company, this promotion company and production company to a bigger or different promoter. To the big guy electric factory concerts. I imagine you did it because the offer was pretty good. The offer was pretty good. Also I saw the way the music business was going. The bands were getting more. They were all sometimes getting 100% of the door. And if we didn't have some sort of ticket master deal which I didn't have it was going to be harder and harder to compete. So yeah, I sold my company to my competitor. I felt bad about it but I felt it was time. It makes sense because you could see where this industry is going. What were you thinking about doing? I mean, did you think, all right, I'm done with the music business and I've got to find something new or did you already when you sold the business, did you already have an idea in your mind? No, I know I do. I pretended I was still in the music business because I kept the office. I would go to work every day and look at my roll of decks and make some calls and then go out to a deli and have coffee and go back to my office and look at my roll of decks and then it became hit me. Oh shit, I'm not in this business anymore. So at that point I had a child. So I spent a lot of time with my daughter, Sarah. A lot of time going to the gym, a lot of time pretending I was still in business. And then eventually I said, I got to do something because you didn't have like money for the rest of your life, right, from that sale. Rest of life money? No, no, no. So again, just through traveling and stuff, I was in New York one night and went to this restaurant called Global 33 on First Avenue. And I just was totally blown away by this place. It was so cool. But we're so cool about it. The walls were cool, they were padded like vinyl walls that were beige and there were greens and the curls were extremely good looking and I saw these like martini glasses. And I didn't even know what a martini was really never drank martinis. And there was a DJ there and I said to this DJ, what is this? He goes to some martini bar and I went back again a couple times and it was packed lying to get in. And then I said, this is something I gotta try and do something like this in Philly. When we come back in just a moment, Stephen opens his first bar in restaurant even though the food part really scares him. Stay with us. I'm Guy Razz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Razz. So it's the mid 1990s and Stephen is looking for something new to do after selling his concert promotion company. He's inspired by a martini bar he visits in New York City and he starts looking for location in Philadelphia to do his own version. I saw this diner at second-a-market street in Philadelphia. It was called a continental. It was a great guy that owned it his last name I think was Poulos. And I said, you know what, would you ever think about renting this out to me? He goes, why? Why would I do that? I said, because I think I could do something here. He goes, what are you going to do? I'm doing three thousand a week. What are you going to do? Five, six. Eventually he gave in because he waited. Well, he wasn't busy and he leased it to me. And it had this, I don't want to jump in too much. I had this neon sign out front. That's a continental. Yes. And it was built in 1962. So it wasn't a 50s diner. 50s diner would not have been cool. This was a 60s diner. I had a little different vibe to it. And I say that about the neon sign because anyone who's been to Philadelphia knows that restaurant now, but that sign was there. It was called the continental diner. Right, exactly. So I went through several different ideas, talked to a few different designers and came back to the idea of doing the martini bar. And I hired the guy that did Global 33. His name was Miguel Calvo. He happened to be the DJ. He was both the designer of the restaurant and the DJ backman. Okay. And then a local friend of mine named Owen Camahira, who was a artist in Philadelphia. And the three of us put together the idea and the concept for the design of the restaurant. So I did the whole thing for $90,000. Well, drywall. What was com Depot? So the diner was the diner. We took the existing booths and re-appulsored them in green. Olive, right? Green with red piping. There's the Pimento. Yeah. So existing booths, re-appulsored. The bar top, which was Formica, we encased it in concrete, kept the bar stools and a re-appulsored them in red and green. And then Owen Camahira, the artist, brilliant idea, brilliant idea. He created lighting fixtures that were big olives with giant toothpick through the lighting fixture. So from the street, it was this incredible postcard that you could see through the blinds. And Miguel came up with this great drink rack, glass rack above the bar. And all the martini glasses, he filled them in loose sight. So all the cocktail glasses were hanging above you. They looked like they were full. 90 grand to do all that. 90 grand. And I remember the heat, the heater would go out every 20 minutes. I'd have to run down like the pilot because I didn't have money to replace the heating system. You opened it in 1995. And what happened? Opened in 1995. I had this a lot of incredible build up. I put these like full-page ads and like these sort of hipster local papers. It was like studs turquoise like these little quotes. And people were just, they were sort of intrigued by this thing, martini bar. And it was packed from the day I opened it. There was a line around the block. And just like the concert business, I always thought, you know, you knew when a show was a success. And the first five minutes you put the tickets on sale. Hit that ticket machine, boom. You start seeing the tickets flying out. Done. You knew you had a winner. I used to have the same theory about restaurants. If it was packed from the day I opened the door, we're going to fail. So this place had lines around the block ticket and people loved the food. It was sort of global tapas food. And it just was this huge, huge success. And this little restaurant that did $3,000 a week being this previous owner eventually ended up doing $100,000 a week. Wow. And I imagine like at the time, There were places like this in New York City, which is two hours from Philly, but there was probably not that much like this in Philly. So I mean, I live in Washington DC around that time. So I remember if something like that opened in DC, everybody would be like, 'cause New York was the center of gravity still is, in a lot of ways, but I imagine it was so popular because it was so different from everything around there. - Absolutely. You know, and then that movie came out, Swinger. - Swingers, '96. - It came out right afterwards, and man, I said, "God is good to me." - And then sex in the city and drinking cosmos, and that whole thing. It was all young people coming out, who never knew what a martini was. They were getting drunk on martinis, 'cause they didn't know how to handle them. - Okay, in that bar, obviously martinis were the star, but was food? I mean, actually before we, I ask you about the food there, are you a food person or like, I say that as somebody who is, I love food. I'm gonna be a modest here. I'm a very good home cook. People listening to the show know I talk about it. I have dinners at my house all the time. I love to cook. It's my, I've worked in kitchens. It's a huge passion of mine. Is that who you are? Are you like a food person? - No, I certainly wasn't then. Back, I was a rock and roll guy. I was a music guy. I was a loved comedy, and food was just something to do as part of my social life. I sort of matured and grew into it. And now I know it very well, obviously, and I have a great respect and reverence for it. Back then, going to a restaurant was just something to do. It was like going to the movies. - Right, but when you open the continental, you knew you wanted the martinis to be great. - Yeah. - And was food also important? Were you obsessive about food? - Yes, but there's another part of the story. I hate doing this too, 'cause we're skipping something. In between, when I was still in the music business, a friend of mine wanted to open a restaurant that was based upon a 50s concept, like Johnny Rockets or something like that. And I opened a place that was like a fast food restaurant. It was called Shake Burger and Roll. Cool name. And great little design I came up with, the guy from a good interior designer from New York. The place was packed, you couldn't get in, and it went out of business in nine months. - And why is that? - I couldn't figure out how to run it. It was like Yogi Barra, who said, nobody goes there anymore, 'cause it's too crowded. It was just so crowded, we couldn't get the food out. I mean, I remember one time, the local police department came over to get like 40 burgers. Awesome. The burgers go out, the cop comes back 20 minutes later. He goes, what the hell is this? He opens up the thing, he opens the bun. All the, there's 40 buns, but no burgers inside the bun. - No. - So the reason I'm telling you this story, I was scared to death of food. I was afraid to do food. So when I did the continental, I knew I had to have it, but I actually was so scared. I just wanted to hire a chef and give him or her a percentage of the business just to take care of it 'cause I didn't know what I was doing. - And is that what you did? You would do? - Oh, I tried, they all turned me down. - They wanted a salary. - They just wanted a salary. - Yeah. - And thank God, I would have shot myself. I'd given them like 30% of the business. And look, you learn by making mistakes, and I knew all the mistakes I made, and I couldn't manage a restaurant. I remember at the continental Sunday nights, I was the manager, and I hated it. I hated being there all night. I hated dealing with drunks. It was tough. - Yeah, it's a tough business. I want to point something out because, and I think it's important to point out, not everything you touch as a restaurant tour was gold. Like you have had things that didn't work out. And I think early on, you tried a Soviet-themed eatery that I'm assuming serve Russian food or parogies or maybe, and that didn't quite, I guess it didn't quite work out. I hate using the word "Soviet" sounds very, very life-hielding, treasonous. It was Russian. It was called Cafe Republic. It served great cocktails. Russian vodka. We had the Siberian Sixback, which was six little shot glasses of vodka, one of which was a brand-name knife found called Karl Marxbaka. - I'm sure he would have been proud. (laughs) - And we had a statue of Lenin in the bar, and we had Russian food beef stroganoff, parogies, and caviar. But it was in a weird neighborhood in Philly, had no parking, and didn't work out. - Meantime, the continental was doing very well. - I mean, continental became an iconic restaurant in Philadelphia. It was, I'd say, the most popular restaurant in Philly, and it created a renaissance in the old city section of Philadelphia. It really was the catalyst for that renaissance with restaurants and retail. - All right, so on the strength of that, you, I guess, see the potential to really lean into restaurants, right? And you then open Budacan, also in Philadelphia, which describe it for people I've been there, but describe for people who don't know what this restaurant is. - Budacan, the original Budacan was a Pan Asian restaurant, so it was sort of fusion. It's very theatrical and it's design, and centerpiece of it is a 12-foot golden Buda. Again, I don't take credit for the culinary concept. I did not create on my own. It started with Wolfgang Puck at the restaurant he had in California called Shinwai on Maine. Then another gentleman opened a place called China Grill in New York and in Miami, and I had gone to all these places, loved the energy, and I went and spoke with different designers to ask if they would design my restaurant, one of which was Philippe Stark, who turned me down, but said, "There's ways of buying my furniture, "call these people." So I ended up designing myself with my friend Owen Camahira. - This is the same guy who helped you redesign the concept. - I kind of know for 90,000. - Owen, yeah. - And Philippe Stark in the late 90s, I mean, he was doing hotels around the world and he had it lined with Target, maybe not then, but he was already, I mean, I can't imagine he could have afforded him at that point. - I didn't even think about it, but he didn't want to do it 'cause I think it was in Philadelphia. But Owen and I said, "Come on, let's do it." We bought his furniture, we were made it look like his restaurant. Boom, again, when Owen and I walked out of that restaurant, just got dark, we looked through the windows, and we saw this thing, and it was just like, we got choked up, it was so awesome. - And the cash flow from the Continental could support opening Boudicone, or did you also know? - If for Continental it was all mine. The Boudicone, we got an investor. - Okay. - It was actually a friend of mine who had a venture capital fund, and one of his clients was willing to do this. So this particular client put up a 1.9 million. Today, Kitchens cost one million, just a kitchen. And the restaurant. - Yeah. - So, all right, the interior, it was gonna be like, that was gonna be part of the experience, right? It was dark wood and moody. - Absolutely. I was very much a part of that. - What do you think that instinct came from? 'Cause again, if you were to do, I don't know, a profile, like an AI profile of a guy, or a woman, anybody, who is gonna design a restaurant like this, you wouldn't say, this was a concert promoter, and comedy club manager, and, you know, like you wouldn't naturally think like, oh, that's the person who's gonna have these amazing, interesting ideas. Where do you think that came from? - The design aesthetic is something that was just in me that I unleashed once I started seeing things. I, you know, I wasn't the director, I was the executive producer in the movie business. So I was, you know, Samuel Goldman. - Right. - I kind of had an aesthetic of what, they write a aesthetic to know the right director to hire, the right lead actor and actress, and maybe what the soundtracks sounded like, and just was there, I don't know where it came from. - And you knew what you liked? - I knew what I liked, I also knew what people liked. And back then, restaurants were a little mundane. People wanted to feel sexy and escape, and that's what we did in the beginning, we'd put you to another place. - So you were sort of like the guy who could unleash other people to kind of make it happen, focus on the big picture, and then hire the right people. But they would still come to you with design schemes that you might suggest tweaks to or say, well, let's think about maybe something a little darker, or maybe, you know, teak wood instead of the light blonde, whatever, right? Is that fair? - Yeah, but I, again, if you would talk to any of the designers that worked with me, they'll tell you that I'm a unique client. In the sense that I respect what they do, most business people, and I don't look at myself as a businessman, I think it's insulting to be called a businessman. I'm a creative person that happens to end up being a businessman because I have to be. But where a business guy will go, those damn designers, they spend money, 'cause they don't give a shit what they spend. They just want to, and I don't look at it like that at all. I look at it like, give me the best that you can give me. If it's too much, I'll tell you. I want to blow people away, man. Shock and awe. And, you know, part of it is a bad thing, 'cause I have to be concerned with money too, with budgets. - Yeah. - When I saw that movie, The Aviator, with Leonardo DiCaprio, about what's his name, Howard Hughes? - Howard Hughes, yeah. - It scared me because it felt like me, because he Howard Hughes kept going, no, more. Let's do it again, shoot that scene again. I don't care. Let's bring in the, and it was frightening because I said, oh shit, I do stuff like this, but on a much smaller level with these restaurants, you know, you got to control yourself at a certain point too. And I think it's just worth kind of noting, a quality of many successful entrepreneurs is not that they're the smartest or they're the best ideas or, you know, they got the top grades. It's that they're very good at building teams. That's really critical. And it sounds like that was just a talent you had. I make all these connections to the music business. So it's like being in an A&R guy, you know, you're out looking for new bands. Yeah. I'm really good at recognizing talent. Also, last night when I was on Instagram, I saw this thing that Steve Jobs said that freaked me out because I say it all the time. He was being interviewed by Dan Rather. What's your business model? He went with the Beatles because these guys collectively were the most brilliant people in the world, individually. They did really good work, but nothing like they did when they were together. Yeah. I'm not enough by myself to have that group, that core of two to three other people made me stronger, made me better. Yeah. All right. So you are, you now have Budacan has really proven the concept, right? And I mean, just to put this in a perspective, and again, I love Philadelphia, an amazing city, but it's not New York and it's not Los Angeles. It's not the focus of the world. And yet this restaurant, you were getting like major celebrities coming to Philadelphia to eat and Budacan. Like I read that at a certain point, the weight to get a table on a Saturday night was like two months. Yes, it was a, it was like a nightclub. It was like studio 54 of restaurants. You know, back then, people were still allowed to smoke in the restaurants. Yeah. So we had a smoking section, but then there was like this whole single thing at the bar, people. It was surreal how popular it was. What did you see in profits pretty quickly? From the get go, from continental on? Yeah. You know, I was still old school, then I have computers. I had a checkbook. And I remember, I just figured it wouldn't be that profitable. I'd make some money out of it. I never thought it would make a lot of money. And all of a sudden, I remember telling my wife at the time, I'd say, you know, I just looked at the checkbook last week. She goes, yeah, how much was in there? I said 30,000. And then four weeks later, I said, something's wrong. Why? I have $75,000 in the checkbook. Are you sure you paid everything? Yeah. So it just kept growing and growing. When we come back in just a moment, Steven makes the big leap from Philadelphia to New York City. Stay with us. I'm Guy Ross in listening to How I Built This. I'm Guy Ross. So it's the late 1990s and Steven has another hit with Budacan in Philadelphia. And he's realizing just how great that city is as a launch pad for new restaurants. Well, it's fairly, here's the deal. It was like the Wild West. It was like opening. It was like the West Coast when the New Yorkers all moved in and took over Hollywood. There was nothing here. It was all old school restaurants. They were boring. So you open continental people freak out. You open Budacan. They'd never saw anything like it. Yeah. All right. So you start to open a succession of restaurants. I think between 98 and 2001, after Budacan, you open Tangerine, Blue Angel Pod, Alma, D'Aquiba in succession. And in terms of like the, is the formula for a successful restaurant kind of, I don't want to downplay, but is it basically like get butts in the chair, keep costs low and keep tables turning over? Like is it as simple as that? I mean, that's not the formula. That's the goal. But the formula is a lot of its magic. I mean, it just happens. You got to do basically you got to do something that people really like when they walk in. There's got to be something that touches them. Like you have to hear that seven. They're forced like like that. You take your breath away a little bit and it could be from a light, a lighting. It could be from a vibe, a smell, whatever. And it's not an easy for it. It's not it's there's no recipe for it. So by 2001, I think you at that point, you had maybe six, maybe seven restaurants in Philadelphia operating. And you were according to the reporting at the time, they were, they were doing very well 30 million in sales, five and a half million in profit, which is pretty great for restaurants. I mean, a restaurant is lucky if it's doing 10%. Not lucky, but it's like, it's doing a pretty good. Like that, 10% is kind of standard, right? Yes. We were doing way more than that in the beginning. And that's because things again, the world didn't completely change yet. You know, the same guy that was able to build a restaurant and open it for $90,000 was able to make a 20 or 25% profit today, not possible. Today would be between the rent, labor costs, this cost, that cost, that regulation, this thing, that thing, whatever thing. You're lucky. Like you said, to make 10%. And your restaurants were still, I mean, you still needed investors to help build the next restaurant. But did you have the same investors who helped you kind of finance the six or seven restaurants that you had in the city? Yeah. It was only myself and one other, the venture capital guy who had his client, who was just me and them in the beginning for the first 10, 12 restaurants at a bank loan. So it was good. And most people you read about or you talk to in the restaurant business, they got like 15 people that invest money in them and it's a nightmare because you don't have 15 different people who think they own the restaurant. How were you, what were you doing on a day to day basis? Were you going from one place to the next place because you weren't managing them. You admitted you hated that part of it. So on a day to day basis, were you just like jumping from one place to the next and checking in on them? Like what? Tell me what you were doing. I had a staff of people under me, the directors that were basically, if you look back at old, their checkers. I had a bunch of checkers. Was that mean? They go out and check stuff. Go check that. Go check that restaurant. Now they have fancy names, but they're just checkers. And that's what I did. I just checked on things, but my emphasis was on the food. Even though I was not a chef, I was not a self-proclaimed foodie, but I had a very good palate and good palate memory. So I remembered what things should taste like. And my obsession even to this day is to taste the food and make sure the food is consistent. I am the number one person doing that. But basically the ambiance, the people will tell you that work for me. I'm obsessed with the air conditioning, the lights, the sound along with the food. Yeah, it's interesting because we don't always think of those things as diners when we're sitting in a restaurant. So at this point, I guess you decide that you want to expand out to New York City, which is the restaurant capital of the country. So again, it makes sense. And in 2006, you indeed, you opened two restaurants in New York, Boudacan and Mora Mota, which you already created in Philly. So I assume you're thinking like, if I'm going to expand and build, I've got to go to New York, like where the action is. Yeah. And I wanted to do it. I wanted to, you know, I guess part of it was ego. I had also been nominated for James Beard Award a few times when I was in Philly. And I would go there and get nominated. And I never would win because, you know, I was, I don't think I was really taken seriously. And I didn't think the people in New York, the chefs and the restaurant owners, took me that seriously either. I wanted to make it big apple. So we did it. We did it for Boudacan and Mora Mota. Boudacan, I got scared with Boudacan because Boudacan basically wasn't that novel. I mean, really was like kind of a little bit of a knock off food wise from China Grill. So I knew I had to change the food, make it different and come up with a design that was spectacular. So who do I go to? I went to Follipstark again. And it just didn't work out. And I went to plan B and went to Christian Leogre, which is another French architect designer who's a genius. He agreed to do it for a giant amount of money. And he put together probably the most spectacular restaurant that I've ever done. Boudacan in New York. It's just breathtaking. I said to people around me, I said, you know what? This is it. They said, "We mean this is it." I said, "I can't do any better than this. This is a Sergeant Pepper. I just did Sergeant Pepper. How am I going to do better than this?" It seems like really what just gets you out of bed is working with teams to develop a concept, and then grinding and spending a year or two years just like focused on bring that concept to life. That's what you actually love doing. Absolutely. What gets me out of bed other than having to go pee now as I get older is the excitement of creating. And after it comes to life, I'm not so excited anymore. But I love the process. I love the stress. You mean you love the process and once it actually opens, like then you're kind of over it? No, no, no. You want to move on? Move on. It's sad. That's my sad time when it opens. That's no longer. I mean, of course I pay attention to it. I go to the restaurants all the time. I'm always eating the food, unfortunately. But the thrill has gone the day after it opens. You know, I saw something that you talked about in this business and it would just stress me out so much, which is, you know, somebody might love you and love you and talk about it. And then 30 seconds later, if something goes slightly wrong with the restaurant, they're going to hate you with all their passion. Like, you're in a business where somebody might go to your restaurant five times, love it. And then the sixth time, something might happen that is correctable, but is big enough that they'll never go back and they're really mad. Yeah. A very of all of you are honest with yourselves. You've done that before. You've gone to a place and then one time they kind of screw you. That's it. Fuck them. And you can't physically make it great. Like you've got to rely on the waiter, the matrede. Every part of that working, how do you make sure? I mean, I guess you can't guarantee it, but are there things you can do to try and get close? Yes. I'll tell you what they are. The more you say what you just said, the more I realized what a stupid business is, this is to be in. Right. You're right. Look, one of our landlords, Seymour Rubin, said to me, he goes, "Why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation?" Yeah. "One guy could decide that's it I'm leaving and the whole restaurant falls apart that night." I said, "You know what, Seymour, you're right. Stupid business." You know, when you send an army into battle, the generals give you a statistic of how many casualties you're going to have. Like every so often, there's got to be something that's too salty, the waiter that was rude, a host that didn't look up when you walked in, there's got to be a cook that walked out, a server that said that he or she were sexually harassed. I mean, it happens all the time. I mean, I have a big staff of people now, but I'm still on the phone at 1130 at night dealing with fires. Yeah. You know what, it's made me a smarter, wiser person dealing with all this. And probably, hopefully, we'll delay dementia quite a few years because my brain is constantly having to think. As an upper, yeah. And then customers, right? Like in San Francisco, many restaurants add a fee for mandatory healthcare that they have to provide to their employees. And that is passed down to the customer who gets mad at the restaurant. It feels like there are so many challenges. Yes, there is. And that's why I will say this that I could never, ever, ever do this again. I don't think anyone could replicate what I did without having some giant money behind them from the beginning. By the way, when we open new restaurants, I'm not financing them myself anymore. Yeah. And landlord wants us to open. They have to put up a good significant part of the money now to open a restaurant that would cost $16, $17 million. It's impossible. So, you know, the best advice I have if you want to go, I would say don't go into the restaurant business, but if I do, keep it smaller. There's a sweet spot of around, I think around 85 to 95 seats, trying to turn the tables two and a half free times. If I continue to do this, I'm going to try and stay within that model. Okay. I want it. I mean, we can't mention all your restaurants. There's 40 plus restaurants. And you've got Michelin stars now in some of these restaurants. And you've won a James Beer Award for a restaurant tour. And I mean, again, Michelin stars, not something that I probably was even on your radar, right? No. Was that important to you to be? No, it wasn't important. It's still not important. I shouldn't say that because now they won't give it to me. No, and then they can take your stars away. Yeah. No, but I mean, it's nice. Look, a James Beer Award, that was the thing, man. It was like the Academy Award or an Emmy. Like people could say it's not important. It was important. It felt good. It was emotional to be recognized like that, for sure. Yeah. Okay. Let's talk about a low point here, COVID, you've got at that point, almost 40 restaurants, 37, I think. And then overnight, this entire industry, and it's still in recovery in many cities in the United States, collapses. Yeah. So this thing happened. I was devastated, of course, like everyone else. And then I looked and I said, how much money we have in the bank? It's a few million dollars, five, seven. I said, okay, cool. We're cool. They said, but what about the accounts payable? 15 million. Wow. 10 to 15 million. So I said, how could we possibly ever put, what are we going to do? But what happened is that everybody was very, all the vendors, except for maybe one, was very understanding. And we paid a little bit to everybody. So they know our intentions were good. But I had, and we laid everyone off, but I couldn't lay everybody off because we were too big to do that. How many employees did you have at that point? Four, five thousand. Five thousand? Yeah. I mean, well, the server is managers. Wow. You know, couldn't pay them anymore. And we had to lay off most of the office, but I couldn't lay off all of the office because you couldn't lay off the controller. We had the books and I didn't even know how to pay a bill. So there were millions of dollars in salaries we had to continue to pay. And then I said, you know what? We used to do these gift certificate things every holiday, always sold star gift certificates. So I said, you know what? Let's, what the hell? We need to raise a few hundred thousand, maybe a couple hundred thousand bucks. So I said, let's do buy one, get one free. One meal, get one free. Buy one. Yeah. Get one free. Well, in like 36 hours, we did like ten million dollars. Wow. It was very emotional because we had our people like believed in, like it was almost therapy for them, saying, you know what? It's a good deal. Let's take advantage of this star thing right now because you know, we're going to come back from this thing. And then the thing that saved everyone was the PPP money, the government thing. Without that gone. We would have been gone. You think the star group would have been, would have been gone? Absolutely. No question. It saved us. No question. No question. Never could have survived it. Because your restaurant, I mean, your, your main asset is your brand, right? It's your aesthetic, your brand. It's not, you don't physically own these buildings that you're in. But nah, I want a couple of them. They're not, I mean, we'd be great to own a lot of them, but we only own a two or three. Yeah. All right, I want to ask about opening a restaurant today because you still open restaurants, right? And you still have ambitions to open more. Imagine, right? Are you trying to working on restaurants right now, right? We're working on a few. I have some changes of mind here that I'll talk to you about. Yeah, tell me. I think that, again, I'm going to scale down the model. We still want to make it special and sort of take your breath away in a different kind of way. But I think opening restaurants that are 200 seats, the expense of those restaurants is just, it's too risky. And how many years does it take before you can recover that money? You can't. In other words, if you open it up on your own in the borrowed $12 million, it's going to take you 10 years. At least. Yeah, not worth it. So that's why to open the things that I do, you have to have landlords that want you for other reasons other than your rent. You're helping get tenants and build neighborhoods. That's what it boils down to. Otherwise, I just open small restaurants and you're better off doing something like that. Why did that happen? I'm just curious to get your take on why that happened and why you were able to do this 30 years ago. And now it's just even for you. It's so hard. Well affordability, right? The key word in the next election. Things are too expensive. COVID happened. Everything doubled. The air conditioning. But used to cost 600,000 is now 1.7 1.8 million. They said, oh, it will come down. It didn't come down. Kitchens, $500,000 kitchen normally, 1.5 million, 1.8 million. It's just off the charts. And minimum wage went up. I think minimum wage should have gone up. I think it's the right thing to do. But I think at a certain point, especially with tip-to-plays, I don't know if it should keep going up because it's going to be impossible for restaurants to really keep to stay in business. And is there, I imagine, that with 46 restaurants now? Yes. Is there a point where it stops or is it just, you just naturally are always looking for new opportunities and new places and new concepts to open more restaurants up? I think it naturally will stop. I mean, I've done so much. And we'll see who, if we sell or if my daughter Sarah or my son who's not old enough to do this, yeah, Julian, maybe they'd be interested. But the other thing I'd like to do is the opposite of what I've done. I'd like to do like a fast casual thing, like Shake Shack. Like what Danny Meyer did with Shake Shack? Yeah. It's the sort of warrior in me. I'd love to compete with Shake Shack and do my own version or different, you know, something else that's fast casual. Yeah. You are not quite 70 yet, right? Mm-hmm. Not quite. Not quite. Okay. And so you mentioned your daughter who's involved in the business. Is that your kind of hope that maybe she will take over the star group? No, I don't think she wants. I don't think she would. It's a brutal, brutal business. The best thing for everybody is to have an exit. Right. Private equity probably the last thing you want to do, but I would do it. The perfect exit is to be acquired by a company that has some sort of a synergy and relationship to what you do. My fantasy, you know, we run the Louis Vuitton restaurant in New York City. It would be that LVMH come in and acquire star restaurants or part of us. Luxury brand, great taste, great design, aesthetic. I'd be proud to have somebody like that come in and buy us. Or even like a Disney, you know, I don't know why they would buy it. But a Disney, somebody like that, somebody that I look up to that I admire. Private equity, it's about money who knows if they take care of it the way that I would. That's a thing. Your name is associated with these restaurants and there's a certain expectation. There's always a risk that whoever buys it, even if they write a big fat check, within three years, diners are saying, "It's not the same. It sucks. Quality's gone down." And that would hurt, but you know, it's like when Bob Dylan and Bruce Springsteen sold their publishing. It hurt them, but like there were like a few hundred millions of dollars. So that kind of, at some point, you got to take care of yourself and your family. So, you know, your restaurants generate over $4 million now a year. I mean, even though they're not in every city in America, a lot of people know these restaurants. It's a, you know, and for a guy who really came from a completely different world, had no experience in this business. You know, you built something that's had impact, certainly on the restaurant industry. I mean, how much of where you got to do you think had to do with your hard work and your skills and how much you think had to do with being lucky, being at the right place, the right time? Presented wise, I don't know, a lot of hard work, right? I could not stand being bored. I always had to have something to do. So part of it was that. But there's a lot of luck, a lot of luck. And then back to the music analogy. You know, you talked to a Bruce Springsteen about his career. He said it could never happen again. It was a different time. Radio was a certain way people, you know, they toured, bands played clubs. It's a different time now. I couldn't do it. So a lot of it's luck, a lot of it. Bet Steven Star, founder of Star Restaurants. By the way, if you've seen Sex in the City of the movie, you might remember the rehearsal dinner scene. He was actually filmed at Budacan in New York and after the movie came out for about six months, reservations there became almost impossible to get. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's totally free. And if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, please send up for my newsletter at gyros.com or on Substac. This episode was produced by Alex Chung with music composed by Rum Teenare of Louis. He was edited by Niva Grant with research by Sam Paulson. Our audio engineers were Patrick Murray and Robert Rodriguez. Our production staff also includes Carrie Thompson, Carla Estevez, Casey Herman, J.C. Howard, Sam Paulson, Chris Messini, Catherine Cipher, John Isabella, and Elaine Coats. I'm Guy Raaz and you've been listening to How I Built This. [Music]