Archive for August, 2011

First – headlines from this week in Sabi.

Sabi Makes its First $1Pretty monumental for us. Outside of prize money that we’ve won for talking about our business, this was the first time we earned money for actually doing it. A catering for a 150-person law firm downtown. We got the job by giving away free sushi (while testing our menu) in the kitchen we work out of. It pays to be nice.

Launch in T-Minus 2 days – Needless to say, we’re feeling calm, relaxed, and overly prepared…

Record crushing blog hits – We’ve had over 1,200 people read the blog over the past 48hrs. Pretty awesome, you guys are great, and seeing/hearing the reactions to our launch just gives us more momentum & motivation to work harder. Every comment you guys leave us (you can do so by clicking the little bubble with a # inside it on the top right of the page) – is fuel to the fire.


And now to today’s post. There have been three overwhelming reactions to the Pivot, and the video about our pre-launch activities :

1. I would never order (trust) delivery sushi”

2. “cool idea, but I think you’re going to have a really hard time trying to get people to know who the heck you are, since you don’t have a physical storefront

3. great idea!”, “best of luck!!”, “unlimited potential to change the restaurant industry!” “thank god you guys are finally opening“, “wow, you guys are really good looking” (ok, I made that last one up)

This of course was nothing new. Hell, we wouldn’t order delivery sushi ourselves. With Styrofoam packaging, questionable freshness, and poor value – there’s no reason to!

Here’s what we do know, our sushi is delicious. We get all our fish fresh every single day. (that means NO fish from yesterday. Which is a pretty powerful point that I challenge any sushi restaurant to match.)

Which basically means, if we can get people to try our food, and hear us out, we’ve got a chance to actually make this thing special. This is where you come in (you blog reading legend, you). We’re trying to come up with the first series of marketing campaigns we’re going to run in Denver. We’ve come up with a few possibilities centering around a few messages…(below) – each campaign would have a several pronged attack, posters, videos, guerilla stunts, and PR (trust me, we sit around and think of this shit all the time) – each would be fun and cool, but we want to first choose two messages that we’ll focus on and repeat. One message will be an overarching campaign, and the other will be a more niche campaign around one “hesitation point” that would prevent customers from trying it for the first time. I won’t explain each in detail, because I just want to get feedback from the most simple/basic look at each message (since that’s how customers would see it).

The Marketing Campaign Possibilities

1. The “Bringing Fresh Back to Denver” Campaign


2. The “Boxed Sushi is disgusting.” style message


3. The “Restaurant Without a Restaurant” campaign

4. The Damn that looks High Quality campaign

What do you guys think! Let us know, drop a comment with your opinion (you can even do it anonymously) by clicking the little speech bubble in the top right corner of the post.

All credit on the posters go to Trevor, the self-taught Doctor of Photoshop. He started on a 5 year old Dell laptop that barely could support Solitaire (let alone Photoshop) with one goal : create cool shit.

Shaan

what the hell is going on with Sabi Sushi?

part. II – The Pivot

(if you missed part one, The Location Hunt catch-up here)

I couldn’t help but laugh. Not a “hahaha- you’re so witty!” laugh. It was a “hahaha- are you serious? I just spent the last year believing steadfastly in something, and you just made me go back and question everything….asshole!” – you know, one of those laughs.

The Pivot came during our last day at the Mass Challenge. For those of you who haven’t heard, it’s the largest start-up competition in the world, with over $1,000,000 in prize money, and a 3-month accelerator program in downtown Boston for its 125-Finalists (which Sabi is one of….nobigdeal.)

On our last day in Boston, we reached out to a mentor on the list named John P., founder of BlueLeaf, and to our surprise, one of the original franchisees of Boston Market (formerly Boston Chicken). He sat us down in his ultra modern, inside-of-an-ipod designed office.

We walked in, expecting to shake hands, trade business cards – hear him drop a few big names and thank him for his time. Instead, he flipped through our business plan (the one that’s won us over $25,000, and entrance into this prestigious Mass Challenge) and jotted down a few notes. Now most people would hesitate to be brutally honest, especially considering that we just met, but John immediately began to rip us into shreds….(this is what makes John awesome, he’ll support you, but will do so as a straight-shooter). (UPDATE: John’s response to this blog)

We had the following verbal joust:

John P. – I love your concept, obviously, that’s why I took this meeting…I do think there’s a huge need for great sushi, and more accessible through your style, price, speed…but I don’t think you’re going about this the right way. 

Shaan/Dan – (zoning out, ready to hear another person talk generically about how 90% of restaurants fail)

John P – Let me ask you this. How much does it take to open a location?

Shaan – About $400k to be safe

John P – And how long is the lease?

Shaan – 10 years..

John P – How long does it take to find a location…6 months? And then to build/design it – another 5-6 months?

Shaan – (nodding, grimly)

John P – So lets say you sign this lease tomorrow. You put in $400,000 to build it, it takes 6 months to open, you’re on the hook for 10 years…and the landlord’s asking for a $100,000 security deposit? And assuming that goes well, it’ll take another year or so to get the 2nd location, and you’ll have to go raise another half a million dollars to pay for it…

Shaan – (nodding, and quickly becoming nauseated)

John – so from the start, commitment is pretty heavy…How many customers do you have on board so far? Have you tested the concept…at all?

Shaan – Well its hard to test the restaurant…without the restaurant!

John – That’s what I thought to myself before you guys came in. I’ve owned restaurants before. And well: everything’s great about owning a restaurant…except the f*%&ing restaurant! So listen to this idea, and tell me what you think…

That’s when he outlined the idea. A radical one. An idea so strange that he left me (someone who talks so much that he’s on pace for an arthiritic jaw by the age of 28) – speechless, with no rebuttal.

The Idea: (well…the most basic, simple version of the idea)

– Who – take a highly dense urban area of young professionals

– What – deliver them awesome sushi. Deliver it in a way that makes them understand that you’re changing the game of delivery. Deliver food created by a tremendous sushi chef. Deliver on time. Deliver for free. Deliver in packaging that looks like it was designed by Apple (N.M.S. – No More Styrofoam).  Don’t just deliver food, deliver happiness.

– When – stop waiting on external factors. Rent a commercial kitchen. Get a business license. Set a launch date (1 month from the moment we heard the idea).

– Where – Downtown Denver

Why – Focus on our strengths – great food, hustle, creative marketing, and again, great food. Think about what Food Trucks (a restaurant, on wheels) has done so successfully. We will be the next step in the evolution of the industry (a restaurant, online).

– How – Rent a commercial kitchen 1mi from the heart of downtown Denver. Get initial customers through Sabi Sushi VIP tastings, and just meeting people, telling them our story, and letting them try our food. We also had to change the mechanics behind our delivery model (sorry, that’s our secret) to make sure that all the orders are fresh, accurate, and on time.

—-

…so that’s it? Delivery sushi…?  No….it’s The Restaurant Without a Restaurant. We’re taking the entire restaurant experience: ordering, service, food, and packaging – and doing it our way. What does that mean? It means its going to be bold, its going to be creative, and its going to be better than its been done before.

which leave us with one last bullet point:

The Long-Term Dream – With this model, we can quickly/cheaply test new markets, and grow the company organically. We want to be an example for who may not be the most marketing/design savvy, or be the best at managing a restaurant – focus on making great food. We can plug them into our business model, host them on our smooth website, deliver their food in our efficient system, and let them focus on making killer dishes. Do what you do – at its best.

Will it work? Will people be too sketched out by the thought of sushi being delivered to them? Honestly…I have no idea.

What I do know is that we’re off to a great start. We’ve got promising relationships with the Colorado Athletic Club and the Westin Hotel downtown. Everyone that’s tasted our food has loved it (although people generally enjoy all types of free food).

Seeing people’s reactions to the website (currently under dev. thanks to my man Frank L and ongoing support from our guy at Duke – Siyaun T.) and the food so far have me believing that this is really going to be huge. The point is, it doesn’t matter what I think is going to happen…I’m just happy its happening. In fact, its happening in 3 days. That’s right, we’re launching Sept 1st. We’ve already been doing private menu tastings (see vid below) to get feedback and our name out there. We’re starting small at first, just targeting one ‘hotspot’ for a few buildings downtown, but soon we’ll be doing it big. That’s where we’ll end the : “what the hell’s going on with Sabi Sushi” series with part III – The Launch . No promises on when I’ll get that blog up, this next week’s looking a little busy…

With an idea that’s so disruptive to an industry as this is – it’s either going to explode, or completely fizzle out, rarely do game-changing ideas fall into mediocrity. Which is good, because mediocrity is a place that you’ll never find Sabi Sushi.

Shaan

We get it. We’ve written on the Sabi blog about crazy adventures from the past year, talented artists we’ve met, and side businesses we’ve started as learning experiences. There’s still the question…

What the hell is going on with Sabi Sushi..? You know, the restaurant…the reason we read this blog?

Where are you guys located? Are you open yet? What the hell is taking so long?!!

Well…we’re just 10 days away from launching (more on that to come), so here it is. We’re going to tell you everything about Sabi Sushi in 3 parts: The Location Hunt, The Pivot, and The Launch.

The Location Hunt

This is a series of tales chronicling our exciting, frustrating, and often humorous location search of the past year. Due to the nature of lease negotiations (all our prospective landlords read the blog) – we were never able to divulge any information about the locations we were in discussions with..until today (now that we’ve secured our location).

Here’s a cliff notes version of three (of about 10) locations we seriously considered.

Location #1 – “The Hill”.

misleading, yet epic picture of the Hill

Cliff Notes – The Hill location was a part of our early “college market” target strategy. We knew we could connect with the students, and hoped it could overcome their shortcomings (lack of disposable income, slow summers/holidays).  We found a struggling sushi restaurant that was owned by an otherwise successful sushi restaurant group, and had the brilliant idea to buy them out of their space. This would give us a pre-built space (saving time and $), sushi equipment, all the while getting rid of a competitor (what is that, like six birds with one stone??).

They had poured ~$300k into building/designing/equipping the space, and were looking for a buy-out at that price. We were looking at their poor sales, and desperate situation and procceeded to offer them $80k for everything (equipment, lease, liquor license etc..). They rejected our offer, scoffingly saying “we’re not even on the market, we were just trying to give you nice young guys the chance to blow us away with an offer…not to lowball us! We’re going to turn it around here, just give us a few months..”  – It’s been 8 months since then, and their struggling more than ever, and have put the restaurant up on Craigslist for $50,000.

One Story for the Road:

One of the owners of the sushi restaurant we were negotiating with (for anonymity lets call him Joe, and his restaurant Sushi Dot) took a trip out to L.A. to scope out our chef’s restaurant to see if we (3 young, non-Japanese kids) had any substance behind us. His restaurant group owned several sushi restaurants in Boulder, and wanted to see what competition was coming to town.

Our Chef, Phillip, noticed Joe sitting quietly, observing, and eating his very traditional meal (tuna roll, with Tamago). This meal is often considered the “judging” meal in a sushi restaurant. Phillip, being the friendly guy that he is, began unknowingly chatting with our rival.

As Phillip told us: “soon enough, he admitted that he was Joe from Sushi Dot, and that he came out here to see what competition we would be.  I looked him straight in the eye and told him ‘listen. I know you’re here because you’re worried about us becoming competition for you in Boulder…but just take this into consideration. When these Sabi boys open up, with the food quality, financial backing, and marketing power that they haveits not going to be competition – they’re going to blow you out the f*&king water.”  And then Phillip laughed as he told us that we should’ve seen the look on the rival’s face.

Location #2 – The 29th St. Walking Mall

cliff notes – Dan worked undercover at Noodles & Co (learning the best practices from one of the leaders in our industry) where he noticed that this location near our house was actually doing phenomenal business. And so was the Chipotle next door. And Smashburger. And Modmarket…we soon realized that this location was a hot-bed for fast-casual restaurants. They were outperforming their average unit volume (AUV) by over 25%!

We initially met with a lady at the leasing office (lets call her Nikki) and she was super excited about our concept. She called in her colleague (fellow sushi lover) and they giggled with enthusiasm about the potential of having us in their out-door walking mall. They were a part of Macerich, the corporate titan of commercial real-estate. In fact, that weekend Nikki flew out to L.A. to try Phillip’s signature sushi, and immediately gave corporate the green light to go ahead with negotiating a deal with us.

The relationship between Macerich and Sabi was an abusive one. They would continually miss deadlines for providing us with key materials (ie. the lease). Then, when the materials would arrive, key deal terms which were already agreed upon would be changed in their favor in the fine print.

They tossed us around like a rag doll in the negotiations, and gave us a shitty lease with so many F-You clauses in it that it might as well have been divorce papers.

We eventually packed up our bags, gave them a satisfying “we’re done.” email, and moved on from an A+ location because we didn’t want to be in business with landlords that cared more about their bottom line than their tenant’s success.

One Story for the Road:

We’d never negotiated a lease before, so we tried to do our homework. Through a few methods that I cannot reveal, we were able to obtain leases of other restaurants. We studied them, cross-compared each line of legal jargon, and revised our own lease based on the “best of …” all the other leases.

We went into our first meeting with Nikki to discuss the lease, and made our first request to change a deal-term. She immediately told us “sorry guys – no way. We NEVER do that. Company policy.” Then, in perhaps one of the most satisfying moments of Sabi. Trevor pointed out…”actually…if you look here, on page 33, line 16 of Chipotle’s lease, you actually agreed to that exact provision…” Nikki’s jaw dropped, she had no idea how we had seen anyone else’s lease, and realized that her negotiating leverage on each deal term was gone, because we’d already seen what she would do for all the other tenants.

NOTE: As a start-up, there are few moments where you’re armed with MORE information, certainty, and leverage over your opponents…when it happens, cherish it.

Location #3 – Denver University

The Original Chipotle (formerly a Dolly Madison Ice Cream Shop)

Cliff Notes: This location was just a few feet away from the Original Chipotle in Denver, CO. Unlike the two above deals, we actually got along well with the existing tenant and with the landlord (learned from our previous mistakes). The only downside was that the landlord, an experienced elderly man, didn’t have much risk tolerance. In the end, we had to walk away because he was asking us to put down a $100,000 security deposit…you know, because as a start-up, we have that kind of money available to be tied up in a 10-year security deposit.

Location #4 – The heart of Downtown Denver...

The winner of our year-long location search. It’s a location that allows us to serve all of downtown from one spot. The location where lease terms, construction costs, parking, visibility, and layout are all non-factors.

A little mysterious? A tease? A Cop-Out? Hey, gimme a break. I had to find a way to give you guys a cliffhanger leading up to Wednesday’s post, Part II of What the Hell is going on with Sabi Sushi?  – The Pivot, where we explain how a man named John Prendergast completely changed the course of Sabi Sushi.

Shaan

the 48 hr business.  (a weekend diversion from the madness that is Sabi Sushi. )


note, incase you missed it – here’s part I of the 48 hr business mission. For those who don’t want to read the whole thing – here’s a shortcut to the  final product – The Fatband

The rules were set, mission in place – time to get to work. Within minutes ideas were flying.

I don’t know what it is, but if you put Shaan and I in a room together for more than 5 minutes we’ll have about 25 ideas about ideas that we see no flaws in. (I’m not sure if this is a good or bad thing).

The first hour was somewhat of a cluster. Half-baked ideas covered our whiteboards, none standing out from the pack. We decided to take a step back and outline exactly what it is we wanted from this project:

1. Play to our strengths – design (Trevor) and sales (Shaan), and ideally using a product or service that we already understand.

2. Automated– the business, once started, should be able to run autonomously or in the hands of 1-2 employees/interns. Creating the product or generating sales leads can’t eat up any significant amount of time once we were passed the 48hr mark.

3. Be Fun – if you need an explanation for this, you’re probably super lame. Leave the blog.

4. Make it Rain (a.k.a Pay Rent) – The goal was simple. This project had to make enough to pay rent each month, anything on top of that was just gravy….but who doesn’t like gravy.

We ran through a few possible ideas, custom designed t-shirts, video slideshows to make virtual house tours better….before we realized we had the idea right on our wrist. Our “DO WHAT YOU DO” bracelets which had garnered so much attention. People had been asking to have/buy them right off our wrists for months, so we’d given over 200 away just for Sabi “marketing” (read,  flirting).

photo courtesy of Mei Ratz

5 reasons Fatbands are great:

1. People want to wear them. (its not merchandise for your business if even your employees hate wearing them)

2. Bang for your buck – you can get them for as low as $0.75 per unit, which is microscopic compared to t-shirts, hats etc…

3. No inventory  – we design all bands on photoshop, and only order the ones people like. Preserves cashflow, minimizes waste.

4. Has the potential to destroy the terrible fad that is sillybandz

Now that we had our product, we got started. Here are the key “lessons learned” from Day 1.

be a user: Since we had just purchased these thick, silicone wristbands for Sabi, we knew what the user buying experience was like. This helped us find the following opportunities:

Naming your business: When we were trying to buy the wristbands, we had no idea how to find them. We’d seen them in the I ❤ Boobies breast cancer campaign, but that was pretty much it. This helped us realize all the keywords people use to search for these (wristband, thick, 1 inch, silicone, livestrong, etc..) and an interesting opportunity. We could create a genericized trademark! Like Kleenex, Jacuzzi, and so many before us, we had a chance to create our brand while simultaneously giving people a generic name for the object! Ergo, Fatbands was born.

draw by hand, re-draw by computer: It took us several tries to get the layout how we wanted it, and most of those were done via photoshop. The advantage to using photoshop is that you can take a sketchy idea and dress it up to look good. The downside is that the building/revising process takes forever. Sketch roughly on paper first, dress it up later*.

*We call this the girlfriend principle. If she looks good when she first wakes up in the morning (whiteboard), then she’s sure as hell going to look good dressed up. If you only see her dressed up (photoshop designs), you might wake-up in the morning next to something you regret.

Side note, Our analogies, while mildly offensive, are undeniably effective, and for every outraged educated female blog reader, we have a male, sitting in his boxers, reading our blog while watching Southpark re-runs. That analogy was for you, you boxer-wearing slob of a man.

Undercut competitors with style, not price: Many of our competitors had better prices, and a vast selections of bands, sizes, styles etc…I’m sure they started with good intentions, but over-time they become bloated as they can’t say no to new products. This is the McDonalds vs. In-n-Out debate. McDonalds has 34 combinations of burgers/sandwiches alone (not to mention salads, meals, dollar menu, kids menu, drinks, McCafe, the notorious Chicken Maharaja Mac in my motherland of India).

Fresh Off the Bun

Meanwhile – In-n-Out challenged McDonalds “burger supremacy” (and won over an army of loyalists) by simplifying and being GREAT at a few things, rather than good at many. We tried to do the same thing to our wristband competitors::

Them:                                                                                              Us

 

 

 


F*&% Website Dev. – To those html and CSS veterans out there, I support you and honor you. In the world of entrepreneurship, our programmers are our troops. I can’t imagine going through what you go through. Dealing with different browser compatibilities, writing php scripts, only hearing complaints, never compliments…things that are so easy for you, were so difficult for me. I’m surprised there’s not a greater number of nerds suffering from PTSD.

ps. How did I do?  www.thefatband.com 

— The Results —

The hour-by-hour breakdown of our activity

48 hours, 10 hrs of sleep, 5 mental breakdowns, 2 customer orders (50th birthday party, and a aspiring photographer promoting her business)…and 1 month’s rent as profit! Things have gone well since we launched, recieving a few more orders from small businesses here in Colorado. We’ve also got a couple of long-shots out there (London 2012 Olympics, Denver Broncos – as seen on the website)
Overall, the pressure of time forced us to learn, adapt, and quickly prioritize what’s important and what’s not.  Try it yourself, pick a weekend, and go for it! And of course, let us know how it goes, and if you need that 1st customer – we’ve felt that pain before and will probably be there with our credit card ready.

Shaan and Trev

the proposition outlined in this post took place 1 week ago. the following are all true events. any resemblance to names, places, or characters is purely intentional. enjoy. ——-

Zero to $ixty in 48hrs – How to Start a Profitable Business in Two Days

the backstory:

It’s been about a year since we graduated from Duke, and we’ve gone through some pretty interesting times. For our business we’ve gone through a round of fundraising, formalized our legal structure, written a 300 pg business plan, and become a finalist in the biggest start-up competition in the world.

All in all. Pretty heavy stuff.
However, in doing so its taken us a loooong time to launch. And for good reason. You can’t sign a 10year lease commitment, or pour in 400k to building a restaurant unless you’re SURE.  The location has to be “the one”. Basically…we’ve been married to Sabi…


and it was time for an affair.

A fling.

A rebound.

Whatever you want to call it, Trevor and I decided one day to take a break from Sabi, and instead of going fishing, running or whatever the hell else normal people do, we decided to take all the principles we’ve learned in creating Sabi and use it to launch a new side-business, and make it profitable….in 48 hours.

THE RULES

We both got pretty excited about the sound of this challenge, and decided to set some ground rules:

1. Clock starts now.  Too many times do people wait for the “right time” to try something. The ‘right time’ to have a baby. The ‘right time’ to start a diet. There’s no such thing as the ‘right time’. Starting in and of itself is a major accomplishment. GO.

2. No Excuses. If we don’t know something, we have to figure it out. If we can’t figure it out, we have to figure out a way to convince ourselves it wasn’t important in the first place, and move on.

3. Run Fast, Fall Hard. We spend a lot of time reading books, blogs, or watching videos from some of the brightest minds in the world. I’m looking at you Jason Freedman, Eric Reis, and CDixon.  It’s easy to nod our heads and regurgitate their start-up jargon, but difficult to actually implement their advice.  “Zero to $ixty” is one big experiment. The lean startup methodology, the rule of 80/20, iterating on the MVP, finding our One Simple Thing, etc…we’ll try to pull as much as we can from the things that we’ve learned.

4. Profit by hour 49 or the project fails. No moral victories.

5. Don’t be afraid to die. I’ve always felt like the man you fear most is the one who’s not afraid to die. This venture is a kamikaze mission. Too often we work on building our businesses for so long that we become too attached to them, too fearful to make changes, and lose our ONLY advantage over established big-businesses – our agility.

Five rules. Seemed simple enough. We were feeling good about the mission. Then we looked at the clock and realized we were already a 1hr 35minutes into the game. Time to get moving.

coming Friday – hours 1-24 of the mission. deciding on what the business should be, scouting the competition, and our first fight.

-Shaan

4pm on a Sunday afternoon.

The MGMT Pandora station was blaring through my headphones as I sat at my desk figuring out a sweet design for the cups in our restaurant. I felt the air rush into the room as the door opened and closed…

“We’re f&$%ed” said Dan as him and Shaan entered the room.

Now, working in a start-up for the last year has done a lot of things for me, some good some bad. One of which is the acceptance of the phrase “we’re f&$%ed.” In fact, I hear this phrase so much on daily basis that I have become totally immune to it’s affects.

However, today was different. They seriously both looked shocked, scared and disgusted like they had just seen Rosie O’donnell in a swimsuit competition. What the hell could have happened?

They informed me that as of 12pm the next day we would be homeless. Apparently there was a miscommunication between us and the apartment office, but they had leased our place to someone else and there was “nothing they could do about it.”

Hmmm I’d say that rates pretty high on the f&$%ed scale. In less than 24 hrs we had to pack and clean every inch of our apartment and find another place to stay. We were forced into action, our only hope was to divide and conquer. Dan hit Craigslist like a madman, Shaan was on the phone with friends trying to find a place for us to crash and I started cleaning with a fervor that would make my momma proud.

Within an hour Dan had set up 3 showings in Denver, and I had destroyed the blob like creature growing under our refrigerator drawers. Looking back it was pretty fun working like this. Nobody was freaking out, we were all just going for it, cause we had to!

I moved in on the bathroom as Shaan and Dan sped off towards Denver to see the potential places.

Exactly 85 minutes later, with one arm elbow deep in the toilet, I received a text from Dan: “Laundry room. Big kitchen. 3 bedrooms. Swimming pool. Next to a golf course. A/C. $300 less than we’re paying now. YOU WANT OR NOT?” “YESSSIR!!” was my eloquent reply.

10 minutes later they had signed the lease, paid the deposit as well as our first months rent, and I headed out to pick up our UHaul.

I won’t bore you with the rather uneventful night of packing, so lets fast forward to the end…Oh wait… I’m not going to mention any names, but one of us may or may not have crashed the UHaul into another UHaul while parking it (good thing we got the insurance!)

1pm the next day

We were in our new home a far better place than we were just the day before. It took a lot of work and some luck to make it happen but we had done it. It’s amazing how short deadlines can spur tremendous action and innovation. For the past few weeks we had been looking for a place in Denver but nothing had really worked out. But, when the deadline was enforced by our landlord we had to act, there was no other option.

Lesson of the day: Set short deadlines and go like hell to make them, good things will happen.

Trev