...wait, you mean cool startups that are getting lots of help & attention & funding actually need a place to eat? Gee, it's a shame nobody's as interested in providing support to those businesses (http://news.ycombinator.com/item?id=2609076).
It's unlikely that this business can be saved; if they're anything like most such small shops, they've been struggling for a long time without any of the kind of support that sexy YC startups receive. They likely have razor-thin margins and not a lot of money in the bank; getting their rent raised on them is just the straw breaking their back. They'll "pivot", but only as much as their meager resources will allow.
I've seen way too many good small businesses just completely fall over lately, but since they don't offer the kind of investment opportunity that the next Google does, nobody cares.
...unless it happens to be their favorite little sandwich shop.
It's not the food industry that needs disrupted; it's the real estate industry. The small ethnic dining establishments operated by first or second generation immigrants tend to be easy targets for real estate scum. The landlords suck up all their profit; the immigrants just do what they do best: work hard without complaining.
Restaurants hate them, since they don't have to pay the overhead of rent/property taxes. Plus, they can park directly outside a restaurant and steal their business. No need to deal with any landlord. It's getting political though; brick & mortar restaurants are very much against them for obvious reasons.
I once spent some time thinking about a way to help restaurant entrepreneurs (and make some money off of them). I didn't think of the analogy to YCombinator, but it is kind of the same idea. Here's my idea.
You build a restaurant, with a special kitchen. The kitchen is split into 4 or so separate work area, each fully equipped and with room for a chef and his assistants to work. There is one shared pantry and shared big walk in refrigerator. Each of the separate work areas has its own smaller pantry and fridge.
Each of the separate work areas is run by a separate chef, who leases the spot from you. There is a single menu, with a section for each chef's dishes, and the menu makes sure to prominently name the chefs.
You handle front of house. You also handle the wine, and maybe you also run a bar. You also keep the shared pantry and fridge stocked with all the ingredients that should be found in any fine restaurant's kitchen. (The individual chefs deal with stocking any speciality ingredients they need). Decor, advertising, and basically everything else other than composing the menu and cooking the food is handled by you.
The chefs set the prices in their section of the menu. You handle all the money, calculating each chef's share and paying them. You deal with the accounting, taxes, and all that.
The idea here is that a young, talented chef who doesn't yet have the resources to go out and open a restaurant can lease a spot in your food incubator, where all he has to worry about is covering 1/4th of a menu with fine food and building up a following. When he's well known and people are coming in just to eat his food, he can go off and start his own restaurant (perhaps with an investment from you--you've had a chance to see how he is as a chef, and to see at least some of his management skills by watching him manage his assistants).
Note also that this is a good place for the diners. When you are going out with someone, and you want Italian and they want Mexican, why argue about it? Go to the food incubator and one of you can order from the Italian chef's part of the menu and one from the Mexican chef's part of the menu. Think of it as essentially the fine dining or gourmet equivalent of the food court.
The beauty of this is that there are ALWAYS going to be young chefs who want to get out from being an anonymous sous chef at someone else's restaurant and move up to their own place, and so there should always be chefs eager to lease a spot at your food incubator to get that started. If they succeed, great! If they fail, there's someone else to take their place--and since you are making your money out of leasing space to them, you make money in either case. (On top of what you are getting for the wine and bar).
While not quite the "fine dining" experience, the combination has been proven in at least one location -- Alfredo, Weinstein & Ho in Halifax. It's been around for a lot of years (it wasn't new when I lived there thirty years ago). Unsurprisingly, it's a combination kosher, Italian and Chinese restaurant (the signature dish is something called "Kosher Chinese spaghetti").
It's not quite the "incubator" idea you have, and it may not hit all tastes, but it is a good place to go when people can't agree on a theme, and it's never empty.
Sounds like a really intriguing idea. I thought of one hurdle you didn't address, though. It's not a showstopper, but since this is your idea, I'm curious whether you think it needs to be addressed and, if so, how you'd go about it. Isn't part of the experience at a nice restaurant that you have a wait staff that knows the menu inside and out and can make recommendations? If you effectively have 4 menus that are all changing relatively frequently, it seems like you're asking a tremendous amount of the wait staff, which is either going to drive up your labor cost or make it nearly impossible to find waiters? After all, if you're able to familiarize yourself with 16 new menus a year to the point that you know how every dish is prepared and what compliments what, you can probably do something with more social standing. Do you see this as a problem?
Good question. I think the menus from each chef would be relatively small, showcasing their top 2 or 3 dishes, so it would not be like the waiters need to learn 4 restaurant's worth of menus.
Also, since the purpose of the restaurant is to showcase the chefs, and the clientele is going to largely be foodies, perhaps information on preparation and such would be included on the menu.
It might be good to have the chefs come out during service and meet the customers. After all, as I said, the chefs are there to build their reputations, and the customers are likely to be foodies. If the chefs can build up good will with them, they are likely to get more buzz and more good blog write ups when they eventually go off and open their own place.
I am very glad I am not the only one that thought about something like this.
My idea was to purchase somewhere that is square, have a central kitchen, but have four different restaurants so you go to one of the four corners and can get completely different experiences.
How does the food industry need disruption? Payment processing and things like that are one thing, smaller parts like menu ordering, recommendations, etc are things already being tackled all over the place...but how else would you disrupt the restaurant system? Genuinely interested in the topic and opinions.
I'm always happy to talk with anyone about this -- I have a couple of restaurants as clients, I care a lot about the health of their business, and they face a lot of interesting challenges.
For problems with a tech bent, the entire POS industry that restaurants rely on is ripe for the plucking. Restaurants pay tens of thousands of dollars for truly awful software operating on antique hardware, along with support contracts and all kinds of other expensive goodies.
Then there's their ordering systems: they still make phone calls to their food vendors after looking at fax printouts.
For non-tech-related stuff: restaurateurs could use help with marketing. They could use help with financing. They could use help with staff training. They could use help with organization. They could use help with customer metrics.
Things that we take for granted when it comes to improving our customer experience -- like A/B testing for example -- are completely nonexistent in these other industries, and they make up a hell of a lot more revenue than the startup field does.
I'd really like for someone else to get to these guys before I do, because they deserve a lot better than this.
What comes to my mind is how Five Guys is hugely disrupting McDonald's and fast food chains with a simple menu of premium burgers, fries, soft drinks, and that's it. And Chipotle (coincidentally owned by McD I think), who make really good burritos, and that's it.
Since they serve entirely different market segments I seriously doubt that Five Guys is disrupting McDonalds. McDonalds probably pulls more profit out of Manhattan that Five Guys does across the entire country. Five Guys may have a better product, but McD has a better business...
There are probably quite a few regulars at Bistro Elan who could buy the building and become their new landlord
PG: Have you considered buying it yourself? I'm assuming that you are one of those regulars and can probably afford it. You said the business was doing well in another comment so I assume they could continue paying you rent at their current rate.
On the one hand I get that losing your favorite restaurant kind of sucks, but on the other hand is it really worthwhile to artificially keep alive a company that cannot survive on its own. Also if the place is as good as pg seems to indicate then the people involved will no doubt find a new kitchen to call home and will be serving the food you love in short order. I mean my favorite Japanese place has closed down twice in recent times, but the head chef, and the reason the places where awesome, is still cooking.
Depends on what defines a restaurant, is it the building or the people. While the building itself isn't mobile, the people who run the restaurant certainly are. If the manager, head chef, sous chef, maitre d', and a few other key people where to close up shop at their current location and set up a new place serving the same food a couple of blocks down the road, wouldn't that count as mobile. Sure it will cost a bit of cash upfront, but if they can negotiate a better deal on the rent, they'll quickly make that back.
I am not familiar with restaurant prices in California, but theirs seem low. Can't a raise in prices compensate for the rent? Would that make them less competitive compared to surrounding places? For how long until those places have to raise prices too?
Maybe there is already a non-profit willing to preserve such things. I don't live nearby (in fact, I live in another country) so I can't really say how meaningful the restaurant is to the history of Palo Alto (I'll take pg's word) and its preservation may really interest some already existing entity.
The logical conclusion of the intuition to save this restaurant from rentiers is that all of the FIRE industries should be owned by the community that enables them, not private hands of a few psychopaths.
It's unlikely that this business can be saved; if they're anything like most such small shops, they've been struggling for a long time without any of the kind of support that sexy YC startups receive. They likely have razor-thin margins and not a lot of money in the bank; getting their rent raised on them is just the straw breaking their back. They'll "pivot", but only as much as their meager resources will allow.
I've seen way too many good small businesses just completely fall over lately, but since they don't offer the kind of investment opportunity that the next Google does, nobody cares.
...unless it happens to be their favorite little sandwich shop.