Learning From Failure, Avoiding Regret, and Managing Risk with Restaurateur Henry Rich

these little boxes of mints. The Mohido flavors were my favorite. So talk us through how you decided to create a mint company, how that went, and what that taught you about risk and about kind of and about the world of business, because obviously that is also quite different from the restaurant world, even though we're both both are consumables.

what not to do. So I decided to start a you know, small manufacturing company in a mature industry where most of our competitors were nineteenth century, multi billion dollar conglomerates like Wrigley, Mars, you know, Cadbury hershey NeSSI, these kind of companies, thinking that through I guess, just working hard and being smart and being you know, tasteful, that we could somehow dislodge these competitors. It was a terrible

idea because we had to do our own manufacturing. We were selling into you know, thirty five countries, so I had to figure out the trade piece of it. All the regulations, had to do the consumer marketing, you know, manage multiple territories and channels like gift hotels, coffee shops, attend you know, hundreds of trade shows. I would say, what I learned from that experience is not to do

just one thing. Because I really did put all my eggs in the basket of this company, which even if it had been you know, in a smarter category like yogurt or chocolate or somewhere where companies actually get acquired, it just it was totally susceptible to the Great Recession in ways that I didn't appreciate because I was, you know, a hebristic, twenty something year old. Seventy five percent of our sales dropped from September to October two thousand and eight.

We literally had a leave in Brothers private label Mint for their office in Japan. We had warehouses ransacked in India, and a food Riot, our largest British distributor, was acquired. Their main customers were acquired by Icelandic banks. We were selling in countries whose currencies dropped twenty thirty percent against a dollar. So I really realized that I just had no idea what I was doing at all and sort of deserved to fail catastrophically, which is which is what

happened with that company. But you know, I did learn how to do things on my own. I did learn a little bit about the food and beverage business, and it sort of you know, set me up for wanting to do something related but not you know, starting a manufacturing company with no money, which was just you know, an insane thing to do, but fun, fun in no way.

important for the success. I thought by creating a better design and you know, fifty cents instead of like two cents on the actual ingredients, we could you know, charge three dollars instead of two fifty and pass all of this value onto consumers. But this isn't This isn't a market segment where taste matters at all. What matters is

distribution and power. I had this really interesting experience where, you know, we were doing the Mohto mint and then Wriglely would come out with mit Mohido and they would try to trademark and we did this, you know, fabulous fruit flavor. They did fibulous for TEENI tried to trademarket and they were sort of coming after us, and I didn't really understand. I was like, have they no shame,

no honor? And one of these people came up to us at a show where they grabbed one of our tins and they didn't even bother turning their tag around. And I was like, hey, like, I know what you guys do. And the guy looked at me and he's like, yeah, well,

who has forty seven thousand registers at Walmart? And he walked away and I realized I was just I was in the wrong place where nobody was asking for a better product in this category and it just simply didn't matter as opposed to a restaurant, where you know, you can have a restaurant that's been there for fifty years if you open a slightly better restaurant right next to it, your level of taste, your level of execution, your level of hard work actually does matter, and people will just

gravitate to the thing that is slightly better and it's much less gated. And I just didn't know that I was entering a profoundly gated industry without any of the tools that I would have needed to succeed. And the world didn't need it, right, And I took a lesson that I shouldn't do stuff just to because I think it's funny, or to be independent. If it doesn't have another reason to be, it's going to fail and it should fail.

You know, around like twenty ten, twenty eleven, where there was this kind of farm to table thing happening, and it just felt like an amazing opportunity to try to make some really nice additions to these to these parts of the neighborhoods that would otherwise, you know, be chained or things that are not really serving the community. So I never envisioned it as like this is what I do now, I'm a restaurant tour I just I went into restaurants, you know, to participate in that kind of

Brooklyn moment. But also because as opposed to this manufacturing company which totally defined me, restaurants are also things where you can open one and it's sort of just open right, whether you're actively managing or not, and then you can open a few. And I didn't want to be kind of under the weight of one huge crushing thing, so I opened them all as you know, separate businesses. I

could rise or fall separately and accumulate over time. But I also really I really liked that about it, that you could own a restaurant without it being like you're in there nine to five every day.

kind of have to come together in order to open restaurant? One? Right, globe was successful, so I think that probably helped kind of restaurant two, three, four, et cetera. But that first that first step had us at work.

you'll receive dividends over time. So on balance, the risk reward profile in the restaurant industry is poor, right, It just so happens that you know, almost all of our restaurants have paid back and people have made quite a bit of money off them, and they're going to stay open for a long time. But at the time of the first one, yeah, I mean it was friends and family and you know, we really script by. It was we raised two hundred and fifty thousand dollars, and we

did a lot of work ourselves. We you know, gave out sweat equity for people working for free. I wasn't that asking for favors, because I do think that people saw me and saw the location. I basically had one twenty five thousand dollars line of credit left that I had gotten, you know, in two thousand and six or something, and I took eighteen thousand dollars out of it and put the down payment on the lease without any money raised. And so I could be like, hey, here's a space,

look at this corner, look at this neighborhood. We're in Brooklyn. This is happening. And I think it's sort of it's difficult to raise money for because most of these things

are not good investment. But to have an investment that you can actually kind of have breakfast, lunch and dinner in and like bring your friends and have that I own this restaurant moment is actually an extraordinary social benefit as opposed to the most kind of random, high risk investments that you would take, which are impersonal and likely you'll never visit the business, let alone experience it and

have it add to your life. So in a way, it's it's not the best financially, but I think I was able to truthfully explain all of these intangible social emotional benefits of being a part of something that I think was very cool.

not be as big. So I think what you're saying here is that in the restaurant business, like you're actually trying to appeal to those other things you're not going to It's not like you're going to pitch a meme coin.

a financial risk. I think this kind of talk made a lot more sense when people believe that they had souls and things. But I think this is one area where maybe like the kind of the philosophical like existentialist, you know, esthetic training is in all of the work, which is I get scared about like not taking opportunities and not doing things and not bringing things into the world that I believe should exist, and kind of carrying

that emotional weight for the rest of my life. And you know, when it comes to people making decisions, people make decisions for non financial reasons, you know, mostly right like in their day to day life. But when you talk about it in a business, it kind of gets written out for some strange reason, and people wonder why they, you know, are dissociated and unhappy. There's this whole ledger

that we should be thinking a lot more about. So that's sort of I mean, it's that's why I think these are cool investments, is because the idea that you could you know, walk into one and you know, experience it and let alone if it's like a climate positive or mission aligned in some other way. Nobody invests in a restaurant for financial reasons. It's cause like you live there, or you believe in the chef, or you want to you know, flex to some group of people that you're

like a restaurant owner independent alas raise money as well. Yeah, I am the owner, right, Yeah, it's I mean, it's kind of a nice thing, which is why people like a lot of whom have like unlimited me and it's like some of them are like randomly investing in restaurants.

what you didn't do versus what you did do? And it seems like in your case, when you weigh those two, what you didn't do, you know is weighed on you much more heavily, and so you are probably programmed kind of against the status quo bias.

that not everybody is programmed that way. But I think I also I also have to control myself because you know, I make really bad investment decisions as well, just because I like these kind of heroic yellow kind of bets. I tend to invest in, like, you know, pro social things. I apply non financial criteria to things that should be strictly financial, and I know that that's you know, kind of dumb, and I'm trying to get better at it, and you know, outsource the decisions that I continue to

make poorly. But all of the work on effective forecasting, the research says that no matter how how many times we receive the information, we always get it wrong how happy or sad we're going to be about a particular thing. Like if you ask somebody like, how happy will you be on a scale from one to ten if your team wins a Super Bowl? Somebody says ten. Then you ask them afterwards and they're like, it's a seven, and then you ask them again next year and they say

it's a ten. Like there's certain things like this that we that we don't learn, right, So kind of trying to work within my own you know, cognitive biases when it comes to investment decisions and or managing my business. Risk is something that I try to create rules around. But you know, with mixed success, which is why I try to start a lot of different things because I know I'm going to screw one of them up, just like out of boredom one day.

really interesting that's an interesting bias as well. Yeah, we are very bad at knowing what our future self is going to feel like will want you know, just we're bad at making decisions for our future self and very we just we take our current self and we project ourselves into the future, not realizing you're going to be a different person. It's a different time. It's incredibly difficult. Yeah, it's incredibly difficult to learn we're going to take a

quick break and when we return Henry's take on regret. So, after Rugolo was a success, you opened a number of other restaurants that are still open to this day. You did have some Actually, one of the things that I

find really interesting is you're not afraid to pivot. So I remember when you open Meta, which is now Rodora, right, and so the initial concept, you know, you were very good at say this isn't working and we're going to We're going to pivot to this, And as far as I could tell, that was also the moment where you pivoted to kind of a more environmentally conscious approach to

the restaurant business. Can you talk us through kind of that that process of changing Meta into what it is today and kind of your general approach now to actually marrying some of these goals of climate activism and kind of knowing what's happening to our world with a consumption business like the restaurant business.

that's not great news. And he was like, yeah, and did you know that like five of the top ten most impactful policy changes that can be made to a climate catastrophe have to do with food and beverage. Like, isn't that awesome that we get to work on this?

And it really appealed to my sense of, you know whatever agency individualism, the reason that I would assume everybody becomes an entrepreneur, right because you it's not like the most straightforward way to make money, so you have to kind of again have these like non financial reasons for doing it, whether you know, running toward or running from.

And I think the big one for me was this was an opportunity for me to you know, when you get the call in the middle of the night and then the pipe breaks and you call the plumber and you're just like, I hate my life, it's sort of a reason to actually tap into something deeper and just like like what you see in the mirror and put up with the petty and dignities of running a restaurant and being an entrepreneur. Which is why it's so shocking to me that so few restauranteurs have have taken on

this sustainability mantles. It's because it's it's an opportunity to give your work meaning in a much broader kind of local community or global context. It's an opportunity to give you know, all the people that work for you, like an exciting extra reason to to come to work. And then there are all these kind of narrow business reasons for doing it, like retaining people. But yeah, he sort of once you told me that, I couldn't look away from the fact that you know, basically, if you're working

in food, you either need to be for me. It was like, we either need to work on this actively or we need to close because what we're doing is harmful, and it's harmful in a way that is that weighed on me because you know, we all have carbon footprints, but restaurants carbon footprints are significant, right and and if you if you kind of of look at the data of you know, the social cost of that into the future, and you think about the harm that you can cause

by doing nothing other than business as usual. It was it was too much for me to kind of bear psychologically flip side, you know, actually kind of pivoting to being a bit more proactive about you know, creating a trash free restaurant, pivoting toward you know, scope through carbon

neutral operations. Suddenly, this is something that gave me energy and made me feel like, yeah, obviously we're a small restaurant group, but in our sphere of influence, we can show a way of doing something, not just like you know, lying there helpless and saying like, oh, it's so difficult to be a restaurant owner and doing nothing. So that

felt really good to me. And you know, I'm not saying it was exclusively for selfish reasons, but I do think participating in this broader conversation has given me a lot of just like personal joy and satisfaction in the work that I do, which can be really annoying. And I hope it would be a template for more people kind of jumping on board. But you know, sustainability in restaurants is not really a thing unfortunately for them.

for you and for your investors. You need people to enjoy the food and to enjoy the restaurant, and you need to kind of have that beyond point. And now you're also saying, Okay, we're not going to have a carbon footprint, we're going to be zero waste, we're going to have all of these other things going on. How does that decision calculus look like? How do you how do you go through that process? How do you make it a reality? And how people have everyone be happy?

into the restaurant world in order to like work on sustainability. Right, So now we're saying, okay, whereas you know, fifteen years ago, anybody who knows the LIB was living in New York knows like you were just outside of restaurants, you see like hundreds of like black trash bags just like filled with mostly recycling and compass. Because if you think about when a restaurant buys, it is like mostly comes in cardboard, comes in, you know, plastic or whatever, and it's mostly food.

It's not actually non recyclable trash that people were putting in the trash. So all these people that are kind of used to just having a trash bin, it's like, all right, now you're going to have three. You know, there's like trash and I don't really know what you need to put in there in most of our ust restaurants because it is mostly recycling and composts recycling and compost.

And they look at me as this kind of like out of touch, you know, business owner who's not like worked you know, in a restaurant alongside them, and they're like, all right, so you're going to take our jobs, which are extremely difficult, and you're going to make them more difficult.

And also in the world of restaurants, what's seen as quality is basically speed, right, So if you order an espresso and it comes out in like thirty seconds, you're like, Wow, the spaces has this incredible service and sustainable practices within the restaurant do slow things down. You're washing recycling, you know, you're like, which bind do I put this in? And so you are operating, you know, either with more staff or staff who are more committed and operating more efficiently.

So it does it does hurt profits and or you pass it on to the guests. The problem is people don't really care on the consumer side. They don't put a value on us being like scope through a carbon neutral They're like, what does that even mean? And then you explain it to them and they really don't know what it means. And Redora being you know, trash free is so extreme. There are there are only a few

like trash free restaurants in the world. And we learned about how to do this from a few you know, dear friends chef Doug McMaster who runs Silo in London and Lauren Singer who's many things, but when I met her, she was kind of a zero waste sustainability influencer and running this company of trash is for Tosters and then package Free, and they sort of showed us how to operate without a trash bin. But it's almost like it really is almost like a performative level of sustainability that

I think can be off putting for people. So we do all these things, but I think people come to Redora because it's cool and the wine is good, and it's a nice design and it's like an amazing location in four Green, two blocks from the park. You know, it's not because it's sustainable.

So I think it's very interesting to see how you're you're trying to marry these things and how you are looking at risk and you are in a way you're mitigating the risk right by kind of loading the loading the dice on the other side, and saying, yes, I'm

taking all these risks with the climate stuff. Yes, it's not going to be as profitable for those reasons, but I'm going to ensure that people like it more because there is a unique identifier that's going to kind of make people come here, even though it might be a little slower, even though we might have to jump through a few more hurdles.

and Redora. It was like, okay, like first like trash free restaurant in New York, and then June was the first natural wine bar in Brooklyn, you know, quickly followed by the Four Horsemen, and now there's like again like five thousand, you know, a nice wine bar with candles and bookshelves of you know, vintage feminist erotica for sale.

Is like another vibe that I just like wanted to have somewhere, you know, nearby that the one could visit and you know, lo and behold, we're having all of these amazing poetry readings where people are like matching like Catullus to like a particular wine and like Lorca, and people are kind.

the screen concept at all? And then the very very micro like you know what is like the fonts on the menu, the thousand little details that actually create the guest experience because you know, and people kind of sometimes don't understand. They're like I thought you were kind of like the finance like big picture guy, and you're kind of going in and you know you want to like

switch the candles out. Why are you so annoying? But I think like focusing like as an owner, focusing on because I'm a guest in my own restaurants, right and I want to kind of like relentlessly bring the guest experience back to the center of what our priorities are and what we're trying to achieve, because there's a lot of other things that people are trying to achieve, Like bartenders are trying to try out new exciting things, you know, brought in by like liquor apps that they're friends with.

Chefs are trying to make their name. There's a lot of incentives that kind of pull people away from guests experience in restaurants, which is why sometimes you'll go to a restaurant it just won't be as good as like a home cooked meal, right, which which is just it's actually quite straightforward to do, but you constantly have to be refocusing on the guests and their enjoyment and their enjoyment with like again themselves, friends, family, versus the things

that will happen when you take your eye off the ball that make a place increasingly not guest friendly when it comes to reservation policies or hours or like not seating partial parties. These are things that kind of I have to regularly correct.

How did you think about it? And you know, ultimately, how did you survive and thrive during a time that was so difficult for so many for so many businesses.

we're entrepreneurs. Like we're like out here swinging for the fences for like a great riches in glory. Like we don't deserve a bailout, guys. And like so I behaved as though no one was coming. So like you know, Rukula, there was you know, the mandate to close on Monday or whatever, and by Monday night we were, you know,

doing takeout, which was allowed. Redora, we pivoted to being you know, a general goods store selling like paper, towels, toilet paper, wine, you know whatever, all of these things, trying to be like a local shop for the community. We did the same thing at June. I pivoted very very quickly. I guess is I I'm used to slash operate well in a quickly changing environment. I get excited by things, by by challenges, and I think that, you know, it's just like, okay, what is what needs to be

done in these situations? And so then when the money came right like the two rounds of p PAP, the IDL Loans, Restaurant Revitalization Fund, I was just like what the I was so unexpected, And so it was just kind of on top of businesses that were operating at break even or better. I Meanridora, we weren't eligible for our F because we made more money of the pandemic

than we made the year before. So I was sort of I saw a lot of like very close friends of mine be pretty overwhelmed by by the extent of the change extent of the risk, and you know, to another degree, I realized that I was I had also my thesis of like don't put your all year eggs in one basket, had sort of once again been challenged by putting all of my eggs in one industry, which was you know, highly susceptible. And I just I just didn't want to fail again. I was too old and just,

and so we we came out a lot stronger. And I think that I think a lot of people did. I do think there's a massive debt overhang. I think that a lot of a lot of things happened in the pandemic where if you if you fired your entire stuff, if you didn't pivot to figure out another thing for people to do, a lot of these people left New York and you had to rehire everybody at on the same day that like thousands of other restaurants were rehiring. And I don't think people realize how much debt was

actually handed out that kind of fueled this resurgence. That debt is still there, right like, these loans are still out there for a lot of these businesses, and I don't know, maybe some people think it's going to be forgiven, but I don't. So just because you don't expect anything, I don't know, I know, I know, no one's uh you know, and you know, it just seems like a

little bit of attachment theory. I'm definitely the kind of uh, do you know this experiment where there's like the kid and the parent leaves and like the stranger comes back, and like you can tell you if you're like anxious, avoidant whatever. Like I'm definitely like the kid that just was like, Okay, I guess this is what we're doing now, you know.

stocks and whatever. Just I have, I know this about myself, and so I've tried to try to make the restaurants interesting enough so that I can do like really really boring investments.

this is totally fine, there's nothing wrong. But I did like more research and I was like, okay, it's this hermiasin Like there actually are these recent Naah papers where if you like have a boy, there is like this number of potential genetic defects, and I'm like, great, I have a girl, and there are these other things that could you know, could potentially happen that like if you took it in the first or the third trimester, but

she took it in the second. And so I'm asking these the nurses these questions and they're just like you are psychotic, Like your baby is completely fine. I'm like, look, I'm just trying to gather information so that if like X, Y or Z happens in two weeks, as it said it might in the study, you know, like if something went from a point one percent chance to a one

percent chance. I want to know, because, like anything happening in the first month of life is existential, and I think I can't remember if this is anything that we've ever talked about, but just like on a personal level, I lost my mom to an accident at a very young age, and so these kind of lowering existential risk from like five percent to one percent two point five percent.

I also am constantly circling around my restaurants and people in my life trying to do this for like early screenings, like anything to remove like the worst outcomes of like total failure. And so that's also why I think my businesses sort of tend to survive, is I don't let them die like even when they should. Yeah, if that makes sense, I.

any situation by just gathering information. So if I see something like my great grandmother was a worse nurse in World War One, and my grandmother was dying of a fever and being read her last rights and they thought she had I don't know the flu, and my great grandmother was like, is diphtheria? I know the smell of diphtheria from just you know, being like in the trenches. You need to treat her for diphtheria or she's going to die in ten minutes. And they did and it

saved her life. So it's just like information like that that I find that it's very helpful to have in terms of you know, risk mitigation, but also like from a business point of view, in terms of like team management. I'm also very early. I try to be very early to catch things like I'm not going to wait for some like major accident like somebody falling down the stairs, some like horrific like harassment situation. I try to look at like general conditions that could lead to a catastrophic

outcome and eliminate the risk. That's the other thing I do.

local produce. And then I'm kind of pivoting to more focus on just this book on you know, individual action and kind of building climate identity as a consumer in the ways in which you know, being of this generation,

whether we like it or not. I think a lot of the meaning of one's life as you look back in it will be you know, what individual parts that I play in this like massive success or you know, catastrophic failure and being able to look back at your whole life and you know, one won't be able to hide from yourself what you know when and just again the risk of looking back and not liking what I see is haunting for me. And I also think that there's a lot of like low grade anxiety that people

feel about not the threat, but the paralysis. So trying to create tools and you know, heuristics for people to actually tap into someone to feel good about and not just feel you know, low key sleepwalking toward armageddon Like that's that's an odd Like there's a lot of issues in the world that I can name, like nuclear proliferation.

I mean, there's many many things where there's literally nothing you can do if you're just a normal person who's not like in the top tier of government or think tank. But climate you know that that's one where we all have an actual role. I think people just need a bit of guidance and some tools to help them get there.

So opening these, you know whatever, climate positive restaurants, I've had thousands of interactions on a consumer level with people being like what is this, Like I don't I feel like you're lying to me, Like I don't feel better after coming here because like now the rest of my life feels like it's problematic and just the ways in which trying to create this climate positive experience it just didn't have anywhere to land for people emotionally, and just

trying to work on that larger background issue of not having a way to account for non financial values like doing you know, the right thing, and to actually feel good about that, to feel joy right and to have it like help cut down on that low grade anxiety. It's a rationally selfish thing to do if people only had a place to put that good feeling. So kind of working on that.

Sarah Bruguer is our engineer. If you like the show, please rate and review us so other people can find us too. And if you want to listen to an ad free version, sign up for Pushkin Plus. For six, nine nine a month, you get access to ad free listening. Thanks for tuning in.