Opening a Restaurant at the Worst Possible Time: Part 5
This is the fifth and final post in a series of long-form write-ups on my experiences in helping out in the food & beverage industry in a developing country. This particular section dives into future plans, and what I learned from this experience. TL;DR, we failed. I go into how and why we failed below.
1. Introduction, The First Week & Bargaining 101
2. Licenses, The Bridge Conundrum & Picking Potted Plants
3. Locked Social Media Accounts, Staffing, Utensil Shopping & PR nightmares
4. The Menu, First Look (Video), COVID-19, Kitchen Setup & Bulk Computer Equipment
5. Some Statistics, A Failure, Stopping the Bleeding & Future Plans — you are here
The electronic-jazz music I curated for Maruchi, inspired by Dubai Marina restaurants. Ehrling’s a vibe.
When I first came around to penning my thoughts about the restaurant in April — which was mid-pandemic, during the second wave in Hong Kong — I had a general idea that these writeups would, at the very minimum, span multiple sections and thousands of words. At the time, I thought it would be best to preface each writeup with a hook for prospective readers. I explain the formative sentence below:
‘.. on my experiences in helping out in the food & beverage industry in a developing country.’
With half a decade clocked in the professional tech field, I’d previously only worked on software consulting services, which at the very ground level, are intangible assets. App development could constantly be iterated on and reworked if mistakes (bug fixes) occurred. By conveniently choosing this easier option compared to working with my hands, I lost out on the gratification you gain building a product that you can touch and feel. I’ve tried satisfying this curiosity by either lending a helping hand to friends who need furniture built or by working on electrical circuits at PwC, but nothing truly scratched the itch. I have always wanted to walk into an establishment and have ‘presence’. This was one of the biggest reasons which attracted me to Maruchi and in a similar vein, work in the restaurant industry. The brick & mortar space has a certain appeal, especially in a developing country like India, where the guards salute you when you walk in. It’s always the little things for me.
Always Hungry, Always Analytical
I ran a quick analysis of all my writing, including this post. The figures tell a tale:
18 pages, 249 Paragraphs, 396 sentences, 8,109 words 46,908 characters.
35% of words were unique.
Reading Time — 31 minutes, 29 seconds
Speaking Time — 45 minutes, 03 seconds
Hand Writing Time — 11 hours, 30 minutes
My nights post-work was spent writing, re-writing, and consequently removing entire paragraphs of text related to the inner-workings of the restaurant. I chose to omit large sections about optimal CCTV camera placement, minimum-guarantee contracts, building an online presence, and the various tie-ups with meat vendors because the content neither fit the narrative nor did it add any substance. No one cared where we sourced our meat from. It was a fine balance, workshopping with Dhruv, my writer friend from Columbia, and figuring out what would be interesting to readers.
If I would commit to a project of this undertaking again I would have preferred to log each and every day and journal my thoughts. I instead leveraged three tools which helped me keep track of the trove of information I collected over three months:
Google Photos and my incessant need to pictographically document each and every aspect of a process. This helped a lot when framing concepts for my writeups because I could easily go online, search for a relevant date, and plug in a picture for context. Everyone loves pictures and love captions even more.
My Notes, which started off as a seed on my Notes app ended up flowering on Roam Research. Creating a mindmap was essential to filling in the gaps. Whenever I learned something new about the restaurant industry I wrote.
My conversations with Shubham, the owner, and my friend, across WhatsApp and Discord. Before this, I barely used the messaging platform, but the ubiquitous nature of the green-colored app and its pervasiveness of group chats forced my hand. I can safely say I don’t know a single person in India who hasn’t received a forward morning greetings message on Whatsapp.
I wasn’t entirely sure how to go about conducting a post-mortem investigation for Maruchi, so I went back to my schooling days and used the scientific method of testing.
1. Posing a Testable Question (or making an observation)
2. Conduct Background Research.
3. State a Hypothesis.
4. Design & Perform your Experiment.
5. Collect Data.
6. Draw Conclusions.
7. Publish one’s findings: I think it’s safe to say I covered this ground adequately.
Brave New World
In my first writeup, my sub-headline was 30 days, 70 Uber trips, 3 states, and 1 restaurant. Post failure, I can safely venture and say I worked tirelessly for longer than a month, took more than a hundred-odd round Uber trips, and crossed as many continents as the aforementioned states. I’ve spent thousands of hours on this project, across multiple timezones, because I love the service industry. For some reason, putting a smile on the face of strangers comes more naturally to me than helping close friends. It’s not that I don’t help friends, but assisting an outsider makes me happier because I know I’m not doing my actions with malicious intent. Not that I have malicious intent when helping friends. Landing at the property at 9 in the morning, getting back home at midnight, unsurprisingly ended up being worse than my consulting hours.
Now the main question. Why did we fail? Allow me to flip the script with a quote first from Shakespeare’s Brutus at Philippi:
‘There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.’
Unfortunately, in most of these cases, the tide had not led to fortune. Brutus had been defeated at Philippi. Working on Maruchi was tough. Every step we took forward was hindered by problems stemming from electrical, staffing, or interior design. Everything lagged, and making progress and following up with vendors took more time than I necessarily had the patience I had on hand. This wasn’t specific to our restaurant, and as I mentioned in my first writeup, collaborating with the Indian government is analogous to drowning in quicksand. Also, the protests in Delhi limited the outside exposure and purchasing power of the people living in the NCR region. As soon as our project started picking up speed around mid-December, the Government of India enacted the Citizenship Amendment Act (CAA), sparking widespread national protests (especially in Delhi). No one wanted to go out during these tumultuous times or spend money.
And if you really want to talk about tumultuous times COVID-19 really screwed the project sideways. The coronavirus pandemic contributed to the declining of the f&b industry worldwide.
‘90 percent of New York restaurants haven’t made rent.’ — Gothamist
There is only so much liquid capital a company can have before they bleed. And bleed Management did. With strong opposition to taking on outside capital or loans from banks, how can one singlehandedly build up a restaurant when a step forward means two steps back?
Coming to terms with this failure isn’t easy at all. All along the way, patrons who had visited the previous versions of nightclubs and restaurants on the property stated that the place was haunted, or had bad karma. Looking back, would I still take part in this process knowing what I know now? That it might fail? The answer wouldn’t change.
‘Around 60 percent of new restaurants fail within the first year. And nearly 80 percent shutter before their fifth anniversary.’ ¹
I am young and PRIVILEGED enough to take on a huge amount of risk, with little to no downside. I get to work on projects that I like because of the emotional support I’ve received from family and friends and appreciating investments from other slightly questionable endeavors. Bouncing back when you’re in tech means discarding ideas and processes with no regard because, in the end, everything you make is intangible. I can’t feel what I’ve touched and everything else even remotely personable is veneered through numbers and data. I wanted to work at a restaurant, similar to my want to be a farmer, because of the ‘get your hands dirty’ philosophy. The farmer occupation is a story for another day. This may come across as extremely narcissistic, but I wanted to walk into a place and get my salaam from the guards.
From the Entrepreneur publication (I hate this word with all my heart), an excerpt from Michael Noice. There are generally three types of failure:
These could have been foreseen but weren’t. This is the worst kind of failure, and it usually occurs because one didn’t follow best practices, didn’t have the right talent, or didn’t pay attention to detail. If you’ve experienced a preventable failure, it’s time to more deeply analyze the effort’s weaknesses and stick to what works in future ventures.
These often happen in complex situations and involve unique sets of factors. This is the type of failure currently dogging energy firms beset by an oil price collapse that almost no one saw coming. The lesson from this type of failure is to create systems to try to spot small failures resulting from complex factors and take corrective action before it snowballs and destroys the company.
These are the best kind. They happen fast and don’t consume too many resources. They provide the most useful information for the least cost. This is the philosophy behind the trial-and-error approach, in which a business conducts experiments to find a product or business model that works. The lesson here is clear: If something works, do more of it. If it doesn’t, go back to the drawing board.
Imagine hitting the trifecta without even being privy to this acclimation.
Preventable in regards to not being aware of the slowness of the Indian Government (even after dealing with them for over half a century),
Unavoidable because of the protests and the pandemic, and
Intelligent since Management still managed to flip the place and lock-in a lease for 5-years, with a minimum monthly rent guarantee and a percentage of the profits on top.
There's a difference between taking a calculated risk, and being reckless — and reckless people more often than not believe they were taking a calculated risk. This is especially true of people with gambler personalities. I am this person.
Excuse the brevity, but calculated risks, no matter how the numbers look, or how precise the calculations, often still fail. The idea that all risk can be eliminated is a fallacy, as there is always a risk of failure unless you're already independently wealthy.
Venture Capitalists talk about the Friends, Family & Fools Round, which is a sardonic way of saying you scammed the people closest to you to invest in your vision. Management never took outside capital, whether this was in the form of friends, family, or banks and that is a massive accomplishment. They were never in debt and still managed to make a profit (and continuing profit, for the next 5 years at least). Hindsight truly is 20/20, but if you don’t try risky projects, what’s the point?
Grammarly indicated the tone of this piece was sad, worried, and dissatisfied. I’m not entirely sure if this was because of the penultimate writeup or because of the bleak outlook of the restaurant and in effect the service industry (due to the pandemic).
As an old Chinese saying goes,
It means, as long as you are here to stay, there will always be a chance.
Management isn’t going anywhere.
Some More Pictures
G., Self, J. T., Njite, D., & King, T. (2005). Why Restaurants Fail. Cornell Hotel and Restaurant Administration Quarterly, 46(3), 304–322. https://doi.org/10.1177/0010880405275598