Seth Cohen [00:00:00]:

There's three numbers that are important when you're opening a restaurant. Your cogs, your labor, and your occupancy costs. If you can keep those three numbers in line, then you have a business that works.

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Angelo Esposito [00:00:15]:

Welcome to Wisking It All with your host, Angelo Esposito, co founder of WISK.ai, a food and beverage intelligence platform. We're going to be interviewing hospitality professionals around the world to really understand how they do what they do. Welcome to another episode of wiisking it all. We're here today with the president and co founder of Sweetfin, Seth Cohen. Seth, thank you for joining us today.

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Seth Cohen [00:00:44]:

Thank you for having me, Angelo.

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Angelo Esposito [00:00:46]:

Of course. So on this show, we have a mix of restauranteurs and restaurants tech companies, and we like to kind of just dive in and understand why people do what they do and how they got there. And so your story is quite fascinating. I know that. And correct me if I'm wrong, but from what I saw online, there's about 20 Sweetfin locations, mainly in California. But I'd love to understand, take a step back and see how you got there. So maybe just for our listeners, can you give them a high level of just for those that don't know, what is Sweetfin?

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Seth Cohen [00:01:17]:

Sweetfin is a premium poke concept. I usually say we were pioneers in the poke space, really took a category of food that didn't exist in 2015 when we opened our first location and built a really strong, fast casual model around poke, which was a very novel concept. Again, when we started in 2015, Poke had originated from Hawaii. It was a dish that I just loved to eat growing up in LA. There's a big sushi culture and a big japanese food culture, and I just thought potentially poke was an interesting vehicle in which you could build a fast casual model around. And so back in 2014, we started brainstorming this model, my friend Brett from USC. And then we brought on a chef, Dakota, who had just finished filming Top Chef, and another partner, Alan Nathan, who was a little bit more experienced in the restaurant space. And together we put our heads and expertise together and kind of swung the bat and thought there was a real opportunity to build a meaningful brand and potentially start a new category in poke.

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Seth Cohen [00:02:30]:

And our thesis, and I guess our hypothesis was correct. We opened our first store in 2015 in Santa Monica to just a ton of media, a ton of great press. People in the community loved what we were doing. We had lines out the door for a full year where we were at the point where we could barely even keep up with the demand of our product, and people liked the fact that we were taking something that was familiar in terms of flavor. The way we explained it at the beginning was taking sushi and familiar flavors of sushi and putting it into a bowl. And people love the fact that you could customize it and make it as healthy or as unhealthy as you wanted it. And we got off to a really great start. And then, as happens in the restaurant industry, you had a lot of copycats come in and the market and the category kind of blew up.

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Seth Cohen [00:03:26]:

But we've always stuck to our guns in terms of differentiating ourselves as a brand and a product, being 100% gluten free, focusing on sustainability, utilizing better products, being chef driven, having a strong brand identity design, focusing on technology to really set us ourselves apart. And so over the last eight and a half years, we built 20 corporate owned locations. Sweet pin. And we're just at the kind of inflection point of really putting fuel on our fire and growing to the next level and bringing Sweetfin out of Southern California and going to other markets.

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Angelo Esposito [00:04:00]:

Wow, 20 locations. I mean, we have a big restaurant audience that listens to this, so I think a lot of them will definitely understand how hard one location is, so getting to 20 is no easy feat. But maybe before diving more into that, I always like to understand maybe how people got where they are. So just taking a few steps back, what got you to that first location? What were you doing pre restaurant life that you're like, I need more stress in my life. I want to open a restaurant.

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Seth Cohen [00:04:30]:

I love stress. Ignorance is bliss. Had no prior experience, real background in the restaurant industry. My family wasn't in the industry, so I had no idea what I was getting into, which I think was a benefit. But my background, I just had a few passions that really kind of, if I build a Venn diagram of what I'm interested in, kind of the center makes sense, know hospitality. And so I grew up, just, for whatever reason, being enamored with the food network. I love to watch it. I love to cook.

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Seth Cohen [00:05:14]:

I just loved food. I was a very creative kid, and kind of that was my creative outlet, cooking. And so I just had know innate passion for hospitality and the food world as a whole. And so I went to USC. I studied entrepreneurship. I did a million and one jobs, from financial analysts to working at Live nation to promoting clubs, I did it all. And postgraduate, I ended up working with my family, who's in real estate finance. And at the time, it just wasn't for me.

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Seth Cohen [00:05:57]:

I just, again, just had this calling, I wanted to do something in hospitality, something in food. I always had a good kind of branding and marketing mind. And so this intersectionality of food, this passion for food and marketing and branding, and this understanding of real estate moved me towards wanting to develop a brand in that space. And so I was kind of doing an analysis of where the world was at the time. Coming out of the great recession, early two thousand and ten s. And you just saw the rise of fast casual. And there are some great operators out there, from shake shack to sweet green to Chipotle and Mendocino farms. And I just saw that that was the future of the way in which people wanted to eat.

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Seth Cohen [00:06:45]:

It was a high quality product, quick speed of service, and from a business model standpoint, you didn't need all the front of house labor that you would need from traditional casual fine dining restaurant. So I had a list of ten different concepts that I was thinking about starting. And for whatever reason, this idea of poke, which truly did not exist when we went to pitch landlords about it, in trying to get our first space, they literally thought we were talking about Facebook poke.

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Angelo Esposito [00:07:16]:

I forgot about those pokes.

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Seth Cohen [00:07:18]:

People had no idea. They thought we were like a dating app or something. And it just was one of those cuisine types that seemed like it just had the opportunity to really explode. The mediterranean diet was becoming more and more popular, people becoming more pescatarian in the way they ate, this kind of love for japanese and korean flavors, providing a product that could be customizable, a product that could be healthy and gluten free, something that was great for takeout and delivery. So I had these mental checkboxes and I just kept coming back to this poke idea and I was just thinking, keep it simple. Poke, tarot chips and iced teas. And so that was the original concept. And so we got pretty lucky in that we met a great chef who really bought into our concept and put her own very unique and interesting and innovative spin on what we were doing that so creative at the time.

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Seth Cohen [00:08:21]:

And we brought something to market that was truly innovative, because despite these fast casual restaurants gaining in popularity, there wasn't a lot of innovation. Everyone was really kind of doing the same thing. There was a million better for you burger concepts or a million customizable pizza concepts. So everyone was kind of like not doing things that were super interesting, at least to me. And so I thought this could be something that's new and novel and interesting and yeah, that's how we brought it to market.

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Angelo Esposito [00:08:57]:

Well, that's awesome. And so for the people listening. Right. I'm sure there's obviously big differences of location number one, location number five, and then getting to 20. So love to maybe walk through some of that journey because I find a lot of people can take away nuggets of wisdom from failures, but also successes and everything in between. So maybe just jumping that first location. What were some of the challenges you faced when opening venue number one or establishment number one?

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Seth Cohen [00:09:22]:

I mean, there are so many. I think, man, I have so many nuggets.

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Angelo Esposito [00:09:28]:

You're like, where to start?

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Seth Cohen [00:09:31]:

First of all, we're starting a new concept. I'm an unproven operator. I'm 25 years old or 24 years old at the time. We are starting a concept that is a brand new category that landlords have no idea what it is. So we need to convince the landlord that, a, I'm a good operator and our team is a good operator, and b, what we're going to do is not going to close in six months and they're going to have to release and give someone more ti. So that was the biggest kind of number one hurdle and challenge of like, how can we present ourselves in a professional way where a landlord is going to want to have us in their building? Because at the end of the day, people who own real estate, for the most part, are super risk averse. And so the process of retenanting and removing a tenant is something that no one wants to do. So you need to convince someone that you're a great operator.

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Seth Cohen [00:10:30]:

So that was challenge number one. And we again swung the bad and we missed on a few spaces and we got super lucky that we were in Lois on a space in downtown LA. I thought it was like the greatest space ever. This is where we need to open our concept. I was completely wrong. Thank God they decided to go with another operator. They're like, oh, we're going to go with a fast casual grilled cheese concept because that's what people like to eat these days. I'm like, you don't know what you're talking about, but okay.

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Seth Cohen [00:11:01]:

And so we missed on that space. Unfortunately, we found this, what we thought was like a sea location in Santa Monica. But from a branding and marketing standpoint, it made sense. We're like, we're selling fresh fish and we're a coastal concept. We should probably start in Santa Monica, not in the middle of the financial district. It worked out well. So that was number one. Finding real estate was challenging and so my kind of recommendation there was, after a couple no's was putting together a really clear, concise, professional looking deck that represented the partners and the concept in a way in which that anyone who looked at this from an ownership standpoint knew that we were serious about the concept and we weren't just kind of like throwing this thing together and hoping that it worked.

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Seth Cohen [00:11:54]:

So that was number one. Then we got hit with the tidal wave. This is obviously a good problem to have. People wanted to support us, and the product was connecting. We had a really strong product market fit. And so that in itself came with its own problems, but actually going. Taking a step back. One of the reasons why we had such high demand for the product was because we sat empty for a long time, and we had these beautiful vinyls outside of our windows that was showcasing what the product was going to look like.

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Seth Cohen [00:12:23]:

And the reason why we sat empty was because the health inspector and the city just kind of kept dragging us along. Again, as a first time operator, you don't realize how quickly you can go from capitalized to under capitalized when you're paying dead rent. And so I learned that quickly. So we had to kind of go back to our investors and personally write some checks in order to get to the point where we are kind of on a financial good footprint or good stability to open. But again, nugget number two is raise more money than you think you need. Things are going to happen. Construction is going to be more expensive. It always is.

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Seth Cohen [00:13:07]:

And you could get like a nasty inspector that drags you out three months, six months, a year, hopefully not. But it happens. You just need to have reserves. So then we open. We have a lot of demand because people have been walking by these vinyls for a year. What is this thing that's finally going to open? So we finally lines out the doors. And part of the concept, as I said, was we wanted to do homemade tarot chips. So we had homemade tarot chips.

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Seth Cohen [00:13:35]:

And then, similar to some of other japanese concepts in LA, we took inspiration from the super high end, like Nobu and Matsuhisa. And so they had these dishes, you'd get this albuquerque tataki that had a nice ponzu and crispy onions. So I said, okay, we need to have crispy onions on our kind of poke bowls. But our whole concept was doing everything homemade and handmade, in house. So we opened a restaurant that had no hood, no idea how much our demand would be. And so we had no fryer. So we literally had someone working 24 hours in the store just more or less illegally utilizing a plug in, like, stovetop fry. Like, enough crispy onions and tarot chips to get us throughout the day.

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Seth Cohen [00:14:33]:

I don't know if there's a lesson there other than you need to be flexible and adaptable. And then we ended up moving that production outside of the restaurant because we needed to. But those were kind of the three big initial lessons I learned when we opened store. Number one.

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Angelo Esposito [00:14:49]:

No, it's amazing. Definitely, I can attest in the tech space. But similar lesson on always raise more than you need. I'll say whatever you're going to raise, just, like, multiply by 1.3. You need a little 30% extra because things always happen and nothing goes according to plan. That's some good advice. And I guess, like you mentioned, you had a good prom, you're busy, product was good. When did you know was like, obviously demands there, but when did you know? It's like, okay, it's time to start.

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Angelo Esposito [00:15:19]:

Location number two or three. Like, how long in the journey and what kind of metrics were you looking at to be, or you and your team looking at to be like, hey, it's time, let's open number two?

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Seth Cohen [00:15:28]:

Basically, yeah. At the time, I wasn't super sophisticated in understanding the business. I learned on the job and had good partner who taught me what KPIs we should be looking at. Got it. But at the end of the day, I think we just looked at product market fit, and is this something that people want to eat? Is this a brand that people are connecting with? And the answer quickly became very clear that the answer was yes. So I think a few months. I spent the first three months just at the restaurants nearly every day, all the time meeting the neighbors, trying to understand what was working, what wasn't working, wearing as many hats as I could. I enjoyed it.

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Seth Cohen [00:16:20]:

It was exhilarating. It was super exciting for me. And then I think after a few months, we were able to hire properly and take a step back and then think a little bit more big picture. And so we went out and raised kind of like a strategic friends and family kind of our first seed round, and with the intention of opening an additional four stores. And that's what we did. We started to look for leases in different spaces and started to grow the concept from there. I love it.

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Angelo Esposito [00:16:54]:

And out of curiosity, at what point did you guys really realize, okay, this is formulaic in the sense of ROI. Like x amount in, x amount out, obviously, give and take. But was it as early as number two, number three, or do you feel like you really needed a certain scale? And once you hit ten locations, you kind of had this methodology packed down. Obviously, things happen, but generally speaking, when was that tipping point where you're like, okay, we got something that's super repeatable?

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Seth Cohen [00:17:19]:

The truth is, we're still looking for that. And just because we're always trying to innovate and get a little bit better each store, and we're testing different things. And so even at 20, we're still learning. And I'd say from a design standpoint, after, like, number two or three, we brought our design in house. My partner Bret handles that. And we have a very kind of pretty repeatable design aesthetic that we can copy but also have a little bit of uniqueness from location to location. Got it. We're testing open line model.

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Seth Cohen [00:18:02]:

We're testing locations as small as 550 sqft. We're testing locations that are in lifestyle shopping centers, locations that are in more suburban areas. So we're still learning and testing and. Got it. We don't have the exact prototype for Sweetfin, which makes things interesting. But at the end of the day, we understand what the business does in terms of more or less, hey, this is our average unit volume. This is the minimum amount of square foot feet we need to reach those sales numbers. This is how we stack a location.

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Seth Cohen [00:18:42]:

We understand our cogs, obviously, our labor model, our labor cost, and then overall four wall profitability. And so when we're looking at opening a new store, what is the sales to investment ratio? What is the IRR going to be on our capital that we're committing to building a new location? Because we are building with our own funds and our investor funds. So we're pretty cautious about opening new locations.

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Angelo Esposito [00:19:10]:

Love that. And I know one of the, I think, slogans you guys use, and if I'm misquoting this, please correct me, but is pole to bowl? So the idea of just being like, just that freshness and raw ingredients, health conscious, all that good stuff when it comes to developing the menu, considering that health conscious side, the sustainable side, how do you guys think about developing menu items while keeping true to the health conscious and the sustainable ethos?

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Seth Cohen [00:19:40]:

I guess, yeah, it gets harder as you get bigger because you need to appeal to the masses as you open more locations. And the supply chain gets a little bit trickier as you grow outside of your home market. And now we're at 20 stores. I think at the end of the day, we always have to kind of get back to our core chef driven DNA, and that's who we are. We're innovative. We have a culinary director that's on our team. We're always testing and tasting and learning from others, but we want to be distinct. We want to be unique.

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Seth Cohen [00:20:19]:

We're not copycats. A lot of people copy us, which is fine, it's flattering, but we want our own distinct, Sweetfin flavor. And we really pull from, I say our culinary north star is just pulling from general, like, what is California and what is in our backyard. So we have amazing produce. We have such a diverse city, being in LA with some of the best food in the world from all different types of cultures. So we always took this idea of poke and thought, like, this is a great jumping off point, but we're not going to be traditional. We're not going to try to be traditional. In fact, we tell people we're not traditional.

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Seth Cohen [00:21:05]:

So what can we do with this dish to make it unique and make it our own and make it truly like a melting pot of California? So we've done ceviches, we've done aguachiles, we've done Korean takes on poke, Chinese takes on poke, obviously pull from japanese and peruvian. And so what we do, which I think is really fun and this is what gets me the most excited, is we have these really unique, fun collaborations that we typically launch every quarter. And we partner with a great, either food content creator or a top chef. People that really have their own unique culinary point of view. And we create something that's totally new and different and we bring it to the market and that allows us to basically remain relevant, but also it allows us to innovate from a culinary standpoint and stay true to our chef driven DNA. So that's how we think about innovation. But we're always tasting stuff. And I'm throwing ideas to our culinary director.

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Seth Cohen [00:22:09]:

Our culinary director is throwing ideas to us. And my favorite thing to do is, hey, let's meet at the restaurant. Taste stuff. Let's taste, taste, taste, taste, taste. And you got to be careful, though, because you don't want the menu to get too big. Right? That's always a balance. But, yeah, just being innovative and thinking outside of the box, that's awesome.

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Angelo Esposito [00:22:28]:

And it sounds like a big part of it is obviously the product and staying true to your core values, it sounds like another big chunk is to your success. And correct me if I'm wrong, but it sounds like having the right team in place. Right? You mentioned your partner as a chef, having all those right people again. I know there's probably a million and one things you did to get to the point where you are, but any high level strategies that you can look back and maybe share that have helped in the kind of growth and success in a competitive market. Right? And I know sometimes it's tough to pinpoint because I'm in the same boat. When you're doing day to day and just growing a company, you're like, there's a million things you could think of, but if you can think of one or two things you want to share just high level that have really contributed to maybe Sweetfin's growth and success, that would be awesome.

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Seth Cohen [00:23:15]:

I think number one is just having a very strong company mission. Our mission as a company is to fuel life through freshness. So everything we do is around that mission. Bringing products to market and serving food that makes people feel good and is super fresh. And through that mission we have our core values and sticking to those, being very clear about them, making sure it's part of your company culture and your company DNA. I think being unique and standing out and taking risks. And also, even if you're a small company like ours, we operate as a startup, but a lot of people feel like we're a lot bigger than we are, especially with our team, because we put a lot of care and attention and detail into the little things, from packaging to branding to the way things are written on our website and spending a little bit more on content than maybe a restaurant would typically. And just portraying ourselves as a professional team and organization and company.

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Seth Cohen [00:24:31]:

And so I think that's really important for our segment. A growing, fast casual brand that may be different for a single restaurant operator, but for us, you need to have consistency in everything that you do. You need to have very strong sops and standard operating procedures within the four walls of your restaurant to make sure that there's, again, consistency is key, especially when you scale. So I would say those are the main things that come to mind in terms of what I would say as a recommendation.

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Angelo Esposito [00:25:11]:

No, I love that. Being a co founder yourself and obviously a leader when it comes to team, what qualities do you really value to kind of build that culture? I'd love to know. Obviously one location is different than getting to 20. So I'd love to hear from you. What kind of qualities do you look for when kind of growing such a large team?

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Seth Cohen [00:25:33]:

I think I look for two things. Number one, personality. You could really teach most people the skills that they need to succeed. However, you need someone with a personality that truly enjoys hospitality, has a general, genuine warmth, excitement, energy to what they bring on a daily basis. And then obviously you want to bring someone that's intelligent, so you can teach them the skills that they need to operate and someone who has high emotional eq, intelligence, empathy, all the things that are important to leading our stores and then bringing in people with a hardworking mentality and can do attitude. People that are willing to roll their sleeves up, get their hands dirty and get in the stores and do anything needed to help us succeed. There's no middle management at our company. Everyone, I'll jump into a store and if I see they're backed up on dishes, I'll clean dishes or cut fish or whatever needs to be done.

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Seth Cohen [00:26:42]:

I think that starts from the top and then trickles downward. We have a very flat organization, even in our stores. There's not like assistant general manager, general manager, front of house, back of house. These are like clear delineation of what people do and what they don't do. Everyone is expected to learn everyone's job and help out as needed. So I would say those are the two main things.

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Angelo Esposito [00:27:04]:

Typically happy employees and the employees you mentioned that have high eq, empathetic, hardworking, et cetera, will probably lead to good customer experiences. But switching gears to the customer experience side, how do you guys incorporate customer feedback into your business? Right? Yeah. How do you kind of just loop that in? So you guys are continually improving and kind of have that feedback loop.

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Seth Cohen [00:27:29]:

We are thinking about investing a little bit more into that. There's some great software products out there that we're talking to that kind of bolt onto our loyalty platform. But we have an aggregator that aggregates all of both positive and negative reviews that we're getting across a multitude of different platforms. And we look at it and listen. There are some people that are just miserable and complain about everything.

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Angelo Esposito [00:28:04]:

Right?

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Seth Cohen [00:28:07]:

You got to take it with a grain of salt. We try to support our teams and not attack them for every negative review that's left, but chalk it up to a learning experience. And if we do see a trend, we will bring it up to our gms. We'll go into the stores and utilize those as a coaching moment. But if you come in to the restaurants or communicate with your gms constantly and it's just negativity, negativity, negativity. Then you're never going to get anywhere. So I always try to lead with positivity. Hey, this is what you're doing great.

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Seth Cohen [00:28:43]:

But here's an opportunity for us to get a little bit better. And so it makes things a little bit easier when you're having those conversations.

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Angelo Esposito [00:28:52]:

Makes sense. We're almost wrapping up. What I'd love to know is, I got two more for you. One is I need to know, what future plans or expansions do you have in mind for Sweetfin? Anything you can share?

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Seth Cohen [00:29:04]:

Nothing I can share yet. However, we see a massive market opportunity. Our category kind of took its punches, but it's back on its feet. It's starting to grow at a healthy clip again. There's not one strong, dominant brand in this category across the country. It's a very fragmented market. We've done a great job building a strong brand in southern California, and we don't see why can't be all over the country. So that's our goal, is to take the concept all over the country and continue to grow.

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Angelo Esposito [00:29:43]:

That's exciting. And last but not least, Seth, I got to ask you, what advice do you have for aspiring entrepreneurs? And it could be specific in the food industry, but in general, any advice you wanted to share with aspiring entrepreneurs?

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Seth Cohen [00:29:54]:

I think you need to rip the band aid off. There's so many reasons why there isn't a good reason to do something. And so you can kind of like, I don't know what they call it. Paralysis by analysis, I think is the terminology. Right? Yeah, analysis paralysis, where you can just. Anyone who's logical and anyone who thinks logically, there's probably not a good reason to start a business, especially a food business. When you look at the statistics, they're not in your favor. However, I think if you come into the business with a plan and a real business plan, an understanding of the finances, having a strong marketing kind of plan in terms of how you're going to launch and how you're going to sustain business and traffic, and really understanding the numbers, I always look at, there's three numbers that are important when you're opening a restaurant.

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Seth Cohen [00:30:50]:

Your cogs, your labor, and your occupancy costs. If you can keep those three numbers in line, then you have a business that works. So just, again, not just if someone has an idea and they haven't done r and D and they haven't done costing, and they're just going to open a restaurant, they're just going to wing it and see how it goes. That's not someone that I'm interested in backing financially. But if there's someone that has a thought, well thought out concept, has built a business plan, has projections, and really understands the numbers, I think there's a huge opportunity for people to succeed. People are not going to stop eating. I'll go to these restaurant conferences, and you see the scale at which some of these operators are performing at. It's inspiring.

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Seth Cohen [00:31:38]:

So I'm fired up about the industry. So I think you just kind of, kind of rip the band aid off, but also at the same know, be smart about it. Be cautious, be thoughtful, but you got to shoot your shot.

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Angelo Esposito [00:31:52]:

Well said. So for people listening, once again, we were joined today by Seth Cohn, the president and the co founder of Sweetfin. For people that want to check it out, it's sweetfin.com. And then, Seth, I don't know if you want to plug any other areas. Maybe you want to plug Instagram or any other channels. Obviously, we'll put them all in the link, but if you want to plug.

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Seth Cohen [00:32:12]:

It, you can see us on IG at Sweetfin and then we have stores all over LA. If you're down in Orange County, San Diego, you can order direct from us. That's what we prefer through our app or website or visit us in store. But if you must, you can also find us on Uber and DoorDash. Amazing.

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Angelo Esposito [00:32:30]:

Well, Seth, thank you for joining us today on the Wisking It All podcast. It was a pleasure having you, and thanks for sharing some nuggets of wisdom.

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Seth Cohen [00:32:38]:

My pleasure. Thanks for having me.

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Angelo Esposito [00:32:40]:

Feel free to check out WISK.AI for more resources and schedule a demo with one of our product specialists to see if it's a fit for.

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