The Daily Gullet proudly presents the third of five exclusive excerpts from Steven Shaw's upcoming book, (HarperCollins). Find part one here, and part two here. -The Editors.Special to the Daily Gullet, by Steven Shaw
Security is tight at 630 Fifth Avenue, one of the mega office buildings in the Rockefeller Center complex. Since 9/11, visitors have had to wait in line, check in with security, show a drivers license, and carry a bar-coded visitor’s pass that gets scanned upon entry and departure. Every move is tracked. According to my security pass, I arrive at the headquarters of the Starwich Corporation at 9:58 A.M.
Starwich is a projected six weeks away from opening its first sandwich shops—four of them almost at once—in New York City. The business plan calls for quickly following those openings with a dozen additional New York stores, plus branches in Boston, Providence, Washington, D.C., and Philadelphia.
Sitting in their office, surrounded by experimental coffee-cup lids, electronic smart-cards, Starwich baseball caps, and piles of spreadsheets, Spiro Baltas (the CEO) and Michael Ryan (the president) tell me the Starwich story. They had the same kind of thought that so many food lovers have: Why can’t we get a decent sandwich anywhere? They wished for a quick, casual, convenient restaurant serving high-quality sandwichy, salady food in a comfortable setting at a reasonable price—like Subway, only better. But instead of just wishing, which is the stage at which I usually bow out of things, they actually did something about it.
By the time you read this book, there may be a Starwich sandwich shop on every major street corner and mall food court in America, right across from the Starbucks. The similarity in names is no coincidence: Starwich hopes to be the Starbucks of sandwiches and salads—if the company has its way, “Starwich will redefine the sandwich shop as Starbucks has redefined the coffee house.”
Or, Starwich may fail. Most new restaurants do. But I have a good feeling about these guys, because I like their coffee-cup lids. All good restaurants need to serve good food, but sometimes it’s the little non-food items that put them over the top.
The inadequacy of coffee-cup lids has been a pet peeve of mine for years. My wife, Ellen, and I between us must have a dozen pair of ruined trousers from coffee spills in the van—New York City is full of potholes and we put in a lot of time driving around exploring every nook and cranny of the city. The lids with the little oval-shaped holes don’t work because the coffee can fly right out through the hole if the van hits a pothole. The lids with the little flaps that peel and lock back don’t work for three reasons: I usually destroy the lid when separating the flap, the lock-back mechanism of the flap is prone to fail, and therefore the flap hits me in the nose while I drink, and all this requires so much attention that it’s impossible to drive safely while going through the machinations.
Starwich, in conjunction with the Solo cup company, has devised a solution: beneath this new specially designed lid is a rotating plastic disc insert. The lid has a hole, and the disc insert has a hole to match. A little lever-like toggle— almost like a sliding dimmer on a light switch—causes the insert to rotate back and forth. When the holes line up, you can drink. When the holes don’t line up, it’s like the cylinders of a lock falling into place: the coffee stays in the cup even if you hit a speed bump. It’s a totally reliable one-handed operation: the answer to my coffee-cup prayers. It’s the sort of innovation that gets a restaurant noticed, and earns repeat business. The coffee also needs to be good.
Bizarrely, I recently had learned that my grandfather Arthur Shaw was a pioneer of insulated coffee cups. But he never, the family history runs, figured out how to make the lids (his problem was that he tried to make the lids out of the same material as the cups). My mother even has his original shares of the now defunct Insul-Cup Corporation. I guess I come by my fixation honestly.
Baltas and Ryan vie for my attention as I spend about an hour playing obsessively with a coffee cup lid while fantasizing about how a successful Insul-Cup Corporation could have given me a life of gentlemanly leisure. “We can give you some of those to take with you,” they hint in an attempt to refocus me, “and over here we have our five corporate principles . . .” I’m not sure what those principles are, because when I left the corporate world I swore I’d never read another business plan, but the general idea is that Starwich is all about the details: making sandwiches and salads isn’t rocket science, but it needs to be done just so.
Starwich’s plan is to issue each customer a “smart card,” a small plastic credit card–sized device with an embedded computer chip. The Starwich smart card remembers your name, your three favorite sandwich combinations (right down to special requests like “extra mayo”), and your last ten orders. Customers can also access their profiles online, where they can add money to a virtual account that lets them pay for sandwiches with the smart card (if you add $50, you get $55 worth of credit).
Both gentlemen, now in their mid-thirties, are veteran restaurant employees and managers. They met when they both worked at BR Guest, Inc., one of New York’s largest and most successful restaurant groups—if you have ever been to New York City and dined at Blue Water Grill or Ruby Foo’s, you’ve been to a BR Guest restaurant. Over time, each revealed to the other a longstanding ambition to open a high-quality sandwich shop. Starwich is the result of the combination of their visions.
Just about the last thing a middle class parent wants to hear is that the eldest son has decided to work in a restaurant or hotel—and not as the chef or owner. It’s almost as bad as learning that he’s going to become a janitor or, worse, a food writer. “I was the black sheep in my family,” says Baltas. “No one in my family considered running restaurants a ‘real’ job.”
Yet many restaurants are multimillion-dollar businesses, as complex and “legitimate” as (and now it turns out as likely to stay in business as) the most cutting-edge computer companies. Baltas’s family came around after watching him orchestrate the operations of several large restaurants and restaurant groups. “It was an eye-opener,” he says with obvious triumph, “for my family to see that the restaurant industry is very much big business.”
Baltas’s first job out of college had him working as the morning front desk manager at a Marriott hotel near his home town of Boston. But, like me, he can’t stand getting up early in the morning. So he jumped on an opportunity to move into a management position at the hotel’s restaurant— at night. He was hooked.
After a stint at the Four Seasons Hotel in Boston, where he learned the wine side of the business, Baltas came to New York in 1998 as restaurant and wine director of the legendary Tavern on the Green restaurant. Later, he worked for the Sbarro restaurant group (which, in addition to the shopping-mall Italian eateries it operates worldwide, also runs fine-dining restaurants in New York) and the BR Guest group. That’s where he met Michael Ryan.
At age sixteen, Ryan took his first job baking pizzas at a local pizzeria in Glen Ellyn, Illinois. He made pizzas there for seven years, paying his way through college in pursuit of a degree in advertising. In college, in addition to his pizza duties, he managed a fraternity-house kitchen and did stints around town as a waiter, cook, and assistant restaurant manager. He became a restaurant-business junkie—he never did pursue that career in advertising. Instead, he joined a small team of entrepreneurs to start up a fine-dining dinner cruise ship company called Odyssey Cruises in Chicago. This eight-hundred-passenger vessel had, in its first year, sales of over $13 million. In 1997, Ryan became regional operations director at Lettuce Entertain You Enterprises. Founded by industry legend Rich Melman, this company built restaurants such as Shaw’s Crab House, Mity Nice Grill, and Vong Chicago, which together generate more than $25 million annually. Three years later, Ryan moved to New York City to become director of operations for BR Guest, with restaurants that collectively gross more than $100 million a year.
So why, with all this background at the high end of the industry, would Baltas and Ryan want to open a chain of sandwich shops? For one thing, sandwiches are currently a $150 billion business—one of the largest segments of the restaurant industry. There’s a lot more money in sandwiches than in fancy French restaurants. For another thing, both Baltas and Ryan felt something was missing— an empty niche existed in the restaurant business: a quickcasual, high-quality sandwich operation. And for still another thing, they themselves wanted a place to eat. “I was annoyed,” says Baltas, “that every time I wanted to take my wife and kids out for a quick bite I had to either overpay at a fancy restaurant or eat crap at a chain.”
But more important, I think, is an emerging trend: many of the best people in the business are focusing on the middle and lower ends of the market. For example, chef Tom Colicchio operates three highly successful upscale restaurants: Gramercy Tavern and Craft in Manhattan and Craftsteak in Las Vegas. Yet his most recent restaurant ventures have been sandwich shops called ’wichcraft (with locations in Manhattan and Las Vegas, and more planned). Alain Ducasse, arguably the world’s preeminent French chef, has lately focused his attention on a chain of casual eateries called Spoon. Gray Kunz and Jean-Georges Vongerichten, two of America’s top haute cuisine chefs, have collaborated on the Spice Market, a restaurant specializing in the street foods of Southeast Asia. As the American consumer becomes more savvy about food, the demand for better food at every level rises, and the sheer volume and cost effectiveness of casual dining— no maitre d’, no fine crystal, no lovebirds taking up a table for three hours—make it the logical new market for the best chefs and restaurateurs. After all, good food is good food. Excellence doesn’t have to come in a fancy package.
This isn’t the sort of business one starts with money borrowed from mom and dad. Starwich is a serious venture capital operation. In order to raise money, Baltas and Ryan needed to assemble a compelling proposal and shop it around to hundreds of venture capitalists. That they decided to undertake this effort in the middle of a full-blown recession, knowing full well that restaurant investments are considered some of the riskiest long shots in the venture capital universe, is a testament either to bravery, idealism, or insanity.
In the end, though, Starwich’s success will depend on the answer to the question “Where should we go for dinner?” Or, in this case, lunch. For the business to work, a sufficient number of people will have to answer “Starwich” to that question. Starwich hopes that everybody will love its sandwiches, but it is specifically targeted at two groups: the “corporate consumer” and “young, newly settled couples.”
Still, Starwich will have to sell a lot of $9 sandwiches and salads to pay the rent, cover its employees’ salaries, and earn back several million dollars for its investors. “Sure, we’re taking a risk,” Baltas says. “But what’s the worst thing that can happen? We go back to our old jobs?”
Finally, the first Starwich store opens. On my first visit I tuck into the Soft-Shell Crab BLT and breathe a sigh of relief: it’s excellent, and the store is as comfortable and hospitable as the Starwich partners said it would be. I think Starwich is going to make it.
This is the third of five parts. Part one is here, and part two here.
Steven Shaw (aka ) is executive director of the eGullet Society. He has been known to do other things on occasion.
Photograph of the author by Ellen R. Shapiro.
Copyright 2005 Steven A. Shaw. Reprinted by kind permission of the author and HarperCollins Publishers.
