Jan. 19, 2021

How Josh Kopel Built Three New Businesses in the last 10 Months Ep.1

How Josh Kopel Built Three New Businesses in the last 10 Months Ep.1

Born in Baton Rouge, Louisiana, the spawn of bootleggers and retail giants, Josh Kopel was bred for the hospitality industry. Throughout his 20+ year career in food and beverage, he has managed venues ranging from the Alligator Bayou Bar, located on Alligator Bayou Road, seated on Alligator Bayou to the hottest Hollywood nightclubs, bars, and ultra-lounges. He went independent in 2010, opening his first concept Five0Four—a New Orleans-inspired bar—on the Walk of Fame in the heart of Hollywood. Ten years later, he's created a family of brands ranging from Michelin-rated fine-dining to fast-casual, all with a central focus on Southern hospitality and Southern cuisine.

>> 1:22 What is the average net income of restaurants, and what was Josh's?

>> 2:34 Why Josh sold his VERY successful and profitable bar in Hollywood.

>> 5:39 Why he decided to close Preux & Proper- Michelin-rated restaurant in DTLA

>> 9:06 The birth of the Full Comp Podcast

>> 11:16 How Yelp became a sponsor for the Full Comp podcast.

>> 16:39 The birth of inhousedelivery.com and how it's going now.


>> 20:34 What is the Pineapple Post and how to find it.


>> 23:53 "I asked myself, what is the one investment I could make that I wouldn't regret in six months or in six years? For me, it was building an audience, starting a conversation, creating a platform. And that, that has served me incredibly well and has led to everything that we've discussed on this episode."


Where to Find Josh

  • IG @joshkopel
  • IG @fullcomppodcast


Top Tech Tools

  • Evernote
  • Slack
  • Instagram

SPONSORS

This episode is sponsored by Entire Productions- Creating events (both in-person and virtual) that don't suck! and Entire Productions Marketing- carefully curated premium gifting and branded promo items.

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Transcript

Natasha (00:31):

Okay, Josh Kopel. Thank you so much for being here. I cannot wait to hear what you have to say and what you answer. My question is about...so you, when we met, you had a handful of nightlife, entertainment and hospitality companies. Let's name them off. I know about Preux and Proper.

Josh Kopel (01:00):

Preux and Proper, a Michelin rated, fine dining seated in downtown Los Angeles had it for six years. Plus the year it took me to build it Five Oh Four Hollywood, had it for a decade. It was a New Orleans inspired dive bar on Hollywood Boulevard. And then South city fried chicken, which was my response to the fried chicken craze, which we had for about a year and a half.

Natasha (01:22):

It's still very valid, that chicken fried chicken phase. So, you know me, and this is what I want to know. Let's talk numbers. So what is the, um, general net profit in the restaurant industry? What does that happen?

Josh Kopel (01:39):

6% is the average for full service.

Natasha (01:42):

And what...Is that the same for bars and for the chicken restaurant?

Josh Kopel (01:48):

No. The bar was much closer to 20 to 30%, depending on the year - much, much higher. But I guess we should talk about ratios, right? So food to booze, the fine dining restaurant ended at about 10% and I was 50/50 food to booze. The fast casual was all food, no booze. And the net was probably about 4 to 5%.

Natasha (02:14):

Did you know that going in?

Josh:

No, I had no idea!

Natasha:

Because the obvious question that's going to come up is...obviously you're making hand over fist in the bar with booze, right? Okay.

Josh Kopel (02:27):

Absolutely. The bar itself financed the fine dining restaurant...

Natasha (02:31):

And that you sold that club. Why?

Josh Kopel (02:34):

Liability. Bandwidth. The bar itself was a cash register, which is phenomenal, but the bigger concern is, you know, I was always worried about getting sued. I was always facing workers' comp issues to the point where we landed on the state fund, which is $50,000 a year for workers' comp.

At some point it becomes less about money and more about quality of life still. Right. For me, based off of the trajectory that I envisioned for my career, the bar was a great jumping off point in that it took me from being an unknown quantity in the hospitality industry in Los Angeles to making me well-known and getting me the press that I needed to build a career outside of that.

Natasha (03:20):

Did you know, when you started that bar that you had a path forward to Preux and Proper to finding

Josh Kopel (03:31):

Yes, but I didn't end up walking that path. Okay. There's actually a clip people can find online, which is me standing in front of Preux and Proper. It's on the front page of the LA times Food section and it says Five Oh Four is coming to downtown LA. So Preux and Proper was actually intended to be the second location for Five Oh Four.

I was just going to expand that one concept, but you know, businesses, like children, take on a life of their own. Midway through building it out. I realized that based on what that market needed and what we were already creating on some subconscious level, I had decided to evolve the concept. And because it was fancier - significantly and noticeably fancier than Five Oh Four; it would have been very difficult to tell that story publicly that these have the same name, but they are very different.

Natasha (04:29):

Right, right. Completely. I mean, the way you described the bar is “dive bar,” and Preux and Proper just by the name alone....I know that you renamed that, but, but also the facade and the building that...I've been to the restaurant...wouldn't have translated terribly well to the dive bar. You'd have to do a lot of work to wreck that place and make it a dive bar.

Okay. So we're going to fast forward, we know your numbers and I'm so glad that you're okay with saying them out loud. As you know, I'm on the bandwagon of getting down to reality. Revenue is great and it drives (?). You have to have revenue to have a business, but profit is, you know, the sanity and you are married and you have a child. This life of the bar and the overhanging fear of lawsuits and such, and liability, it doesn't really bode well for your new lifestyle. So let's talk about COVID really quick and just get it out of the way: you did what in March?

Josh Kopel (05:39):

I closed the restaurant. I had started...I guess we should, we should drop back to fourth quarter of last year. Over a year and a half ago, I started a technology company to solve my own problem, which was answering the phones at the fine dining restaurant, and at the bar for that matter...and that is FLO.

It was a side hustle. I had started to solve my own problems, which eventually became a beast on its own. I found myself in the B2B space, servicing other restaurants with the technology we had created. In the fourth quarter of last year, I decided to streamline: I sold the bar.

I sold the fast casual concept so that I could focus on the fine dining restaurant and FLO. In March being an owner and an operator, I had unique insight into what was going on within the hospitality industry, relative to this burgeoning pandemic, and it didn't feel good. It didn't feel good at all.

I knew it was going to be more than the three weeks that the state was going to mandate that we shut down dine-in operations. I was overwhelmed with fear about keeping my team safe, my patrons safe, and most importantly, my family safe. So I knew we weren't going to reopen in three weeks. At that point, I turned to my business partner and I said, let's see if we can offload it, let's try and sell it. And we were able to actually...

Natasha (07:09):

Why? You decided a lot earlier on than I expected or that I knew...interesting. You were psychologically ready for that change in your life.

Josh Kopel (07:19):

Well, let's get back to the numbers. I knew that in the best of years Preux and Proper, wasn't making a ton of money bottom line. With the rocky road ahead, I didn't know how we were going to be able to sustain ourselves in the worst of times when we weren't doing particularly well in the best of times.

We had achieved every, every accolade, we were Michelin-rated. We were busy all the time, and yet, we were still struggling with the finance. Like every restaurant, it's a game of pennies. If that's the case, in the booming bustling economy of 2019, how on Earth are we going to survive in 2020? I took that as my opportunity to step out and try and find a more prudent path forward within the industry.

Natasha (08:12):

And this is actually, the segue is one of the reasons why I do find you a true “fascinating entrepreneur,” because you went from bar to Michelin-rated fine dining to FLO, which was a really great pivot. That is what an entrepreneur to me is, is that you're looking for, you're looking at, and you're open to the ideas of something new, and Flo is not a restaurant. It is not a bar. It is not a fast casual restaurant. It is a technology and it's B2B, and it's amazing.

But from there, here is what I think is fascinating. We're going to talk Full Comp, we're going to talk about in-house delivery, and we're going to talk about Pineapple Post. So Full Comp, lay it on me. What is it all about?

Josh Kopel (09:55)

I’m just a dude with the shovel looking for holes to fill. And, you know, I looked at the hospitality landscape. I obviously was unemployed in March. I had ample opportunity to listen to a bunch of podcasts, read a bunch of articles, and they were all talking about how the pandemic had obliterated the hospitality industry. I just didn't see it that way. Maybe it's because I spent my entire professional life within the industry, always teetering on failure using the profits from one business to finance the losses of another.

I just didn't see that my businesses or the industry at large was seated on a solid foundation. So I wanted to have that conversation. I started by saying, here's the problem with the industry: No one cared. I said, well, you know, these are the problems with your business: no one wanted to hear it. Then I said: these are the problems with my business and my company and myself as a leader and as a manager and how I've chosen to run my companies and that message resonated. I decided to have that conversation with other people.

Natasha (10:12):

Why do you think that resonated because people are looking for what's in it for me. So why was shining a light on you the answer?

Josh Kopel (10:21):

Because vulnerability is a super power and vulnerability gives people the courage to talk about themselves and just talk about their own issues. My industry by and large is very closed off and people don't want to talk about how difficult it is, because if they did then collectively, we would all have to deal with these foundational issues. So we all ignored it.

We all lied to each other. And when I stood up and I said, Hey, I'm having real issues. I would love the opportunity to talk with you about your issues and we can collectively come up with solutions - that message resonated. It went from being an idea to a platform and that platform created an audience, which eventually evolved into a community.

Natasha (11:07):

So how did you approach Yelp, your sponsor, for their partnership?

Josh Kopel (11:16):

I got lucky. They approached me. They were looking to be part of the conversation. They were looking to have a role in the recovery of the restaurant industry. We had a relationship, they knew who I was. They knew that Full Comp was a thought leadership project that it actually started in the fourth quarter of last year and had been evolving over time.

Natasha (11:40):

Okay. So Full Comp, how many episodes had you recorded before Yelp came to you?

Josh: Zero.

Natasha:

Whatever. You're the luckiest most fascinating entrepreneur on the planet. Okay. So, Yelp really enables you to put out these podcasts: two a week?

Josh Kopel (12:06):

Yelp helped me get an audience. Yelp helped with lines of distribution. I was able to work with the team over there to create what I believed was a world-class product: that the podcast looked good and sounded good. There was cohesive branding. Through that strategic partnership, that enabled me to get the distribution to get the wide audience. The legitimacy of their brand plus the audience provided me with gave me the opportunity to get huge guests on the show, whether we're talking about Jon Taffer or Seth Godin.

Natasha (12:45):

Why did John Taffer talk to you? Was it you, was it your viewership or listenership? Was it Yelp? Do you even know?

Josh Kopel (12:57):

It's some combination of all of that and the fact that I'm a true believer. I don't have a standardized email that I send out requesting that people beyond the show. When I reached out to Seth Godin who I frickin’ idolize…

Natasha (14:00)

That was a great episode.

Josh Kopel (14:03):

He is a great man and so prolific in the ideas of how to organically grow your audience by supplying value. Every page that I took was a page off of his playbook.

But when I reached out, I was a fan and somebody that genuinely cares and some mixture of the message that are provided with, plus the timing of him releasing a new book resonated, and we were able to make that work, but it's everyone that I have on the show. It's somebody that I selfishly want to talk to. Full Comp is a selfish exploit. I tell everyone: I talk to the people that I want to talk to. I ask the questions that I want to ask, and then I put it out there for the world to hear, but these are the,

Natasha (14:03):

How do you react to people that come to you that want to be on your show, that are in your industry, that you really aren't interested in interviewing? Does that happen?

Josh Kopel (14:17):

It has. I just think it's a bad fit. When people come to us with products and services, I think that the reason the show resonates is because we're not selling anything. Yelp has been an amazing strategic partner in the way that they've taken a back seat. They don't control the content, they don't mandate 10 to 12 ads per episode. They came at it with the right intention and I'm not there to sell people on anything.

If there's a technology that I think is truly innovative and helpful, I want to get that out there, but the goal with every episode is the same. It makes it really easy to vet potential candidates for interviewing, which is: Is someone going to be able to walk away from this interview, having listened to it and have something that they can take into their day to day life with it's either a tool or a resource or a new way to look at the world? I'm super specific.

Natasha (15:21):

Isn’t it such a freeing feeling to be giving, giving, giving, even though you're taking, because you're enjoying it now. You were giving hospitality, you were giving great memories in taste and smell and experience, but now you're really mentoring and teaching people that you may not even be aware of. That has to feel pretty powerful, unless you're not aware of it.

Josh Kopel (15:52):

There's a large audience, and I appreciate that, but one of the things that I wanted in this world where everybody is an expert, and I can totally appreciate that. I wanted to be the hinge and not the door. I didn't want to be the guy that stood up and said, Hey, I have great ideas. Listen to my great ideas. I wanted to say, Hey, here's somebody that has great ideas. I'm sure you have a bunch of questions for them. Hey, me too. Let's talk about it. And I think that that's created the accessibility that created the broad market.

Natasha (16:27):

Out of that, you have some new endeavors which are rocking my world. Let's talk about inhousedelivery.com first.

Josh Kopel (16:39):

Let's do it. Hopefully you will never end up being sponsored by Uber Eats or Grubhub, because I'm about to throw the book at them. One of the things that I tried to do with FLO - it's the same thing that we try to do with in-house delivery, which is solve a foundational issue within the system - something that is obviously wrong. Third-party delivery doesn't work for restaurants. It doesn't work for customers. It doesn't work for the drivers that are transitioning, and it doesn't work for the third party delivery companies themselves.

Nobody's making money. Uber Eats doesn't make any money. The drivers don't make any money. The restaurants don't make any money and the customers are charged a premium. It's an unfortunate circumstance. Especially when you see the delivery rates went from 10% of gross sales to 90% of gross sales, it really highlights the inefficiencies in the system. So I asked myself, what's the future of third party delivery?

The future of third party delivery is first party delivery so that the restaurants take it in house. They do it themselves. Uber, GrubHub, DoorDash, they masquerade as infrastructural solutions to help you deliver to customers. But what they really are, are marketplaces to charge you a premium for access to your own customers.

Natasha (17:59):

They're getting it both sides from the restaurant and from the consumer.

Josh Kopel (18:06):

Rather than being that barrier between you and your customer, I said: let's offer the same service that they're providing and we'll offer the infrastructure to where you can offer delivery. We'll offer you the independent contractors or help you set up your staff. If you want to use them in-house…

Natasha:

The technology as well?

Josh Kopel:

The technology. It's a technology company, it's a technological solution. We provide you with the tech and then Uber eats and GrubHub become what they were always intended to be, which is a marketplace for new customers. You take your existing customers off those platforms and service them yourselves, and you are leveraging our tech to do so.

Natasha (18:46):

This is a startup at this point.

Josh Kopel:

Yeah, it is.

Natasha:

Are you operating yet or when will you be?

Josh Kopel (18:56):

We Are operating currently, and the results have been staggering. Our current clients see a 25 to 50% reduction in delivery costs. The conversion is through the roof. We provide you with all the conversion materials you need so that when a GrubHub driver sends out or delivers to someone you've provided materials so that they know how to deliver from you in-house moving forward.

The onboarding is as simple as could be. We provide operational efficiencies that you wouldn't find anywhere else, through dispatch, through driver routing. We also provide customer feedback privately so that you don't get slammed on public platforms, but you are made aware of issues.

Natasha (19:41):

So many questions. One: are you an investor or do you own this company?

Josh Kopel:

I am a partner in this company.

Natasha:

So that's big time. Two: what regions, where is it available or is it limited?

Josh Kopel (19:55):

Available almost through the entire country. We're In 44 States currently.

Natasha (20:00):

I would like to get that information to my friends that own restaurants immediately, which I will do. I thought I had to wait. And then, investors, are you backed by venture capital, angel?

Josh Kopel (20:14):

Angels currently. It was bootstrapped for quite some time, we do have some angels involved as well. It is definitely the solution of the moment, right? In order to scale this thing up and scale it up rapidly in the next six months; we've taken on investor capital to grow at a more rapid rate.

Natasha (20:34):

And who beside Uber eats, Caviar, GrubHub...is there an independent competitor out there right now?

Josh Kopel:

No, ma'am.

Natasha:

I might consider investing. Moving right on to Pineapple Post - newsletters. It's interesting that newsletters and podcasts have risen to the top. It's kind of like, you know, phases back in the old days...We had only radio to listen to, then radio moved to TV and we thought radio would be obliterated. It really wasn't, it changed.

Now we're back to basically radio with podcasts and newspapers/print are a little bit on the obsolete side, but newsletters have risen to the top again. So what is Pineapple Post? How can we find it? What's it about?

Josh Kopel (21:25):

Yeah, they can go to pineapplepost.news to sign up, but it's a really simple concept. Through the Full Comp media universe, we're creating a ton of content, and creating a ton of value, but I wanted a platform whereby I could share other people's valuable content because it's not just about creation, right? It's also about curation.

The Pineapple Post is a weekly email that goes out on Sundays and we curate the best content from the week: the news and the information and the resources that you need to stay informed. A very small portion of it comes from me and the media universe that we've created, and a lot more of it comes from the podcasters and the news outlets that are creating a ton of value for readers and listening.

Natasha (22:16):

Who is your target demographic here?

Josh Kopel (22:18):

Restaurant owners and operators and generally speaking: hospitality professionals and enthusiasts.

Natasha (22:24):

Okay, great. It's exhausting looking at this paper of what you're doing. I do have two other things. So one is FLO. You're putting a pin in that, or are you closing it or are you going to ramp it up when we can all get together and eat in person?

Josh Kopel (22:43):

Timing is everything. So, FLO is currently rocking and rolling and it'll continue to do so. And as we get back to dine-in business, I believe that that will begin to ramp up again.

Natasha (22:54):

Great. Now, can people in the restaurant industry, in the hospitality industry work with you one-on-one as a coach to help them with anything, the restaurant endeavors, podcast endeavors, newsletter endeavors, technology company endeavors. Is that something that you're open to doing?

Josh Kopel (23:16):

Anyone can contact me for any reason through the website and set up a 15 minute call.

Natasha (23:21):

Great. We're going to have all the links to everything Josh Kopel, everywhere. But if you want to give the one link verbally that you want people to identify with?

Josh Kopel (23:33):

JoshKopel.com is the easiest way to get in touch with me and just see all of the projects we're working on.

Natasha (23:39):

Awesome. Anything that you want to add at the end? I am going to ask you about some of the apps that you use, but, anything that you really want to fire on before we

Josh Kopel (23:53):

Absolutely, you listened to an interview like this and it's all good news. I must say that back in March, I filed for unemployment for the first time in my life. I filed for unemployment with a wife and a two year old daughter. I was never more scared in my life. I had sold off two businesses, but in March I shut down a business that I had dedicated almost a decade of my life to, and I didn't sell it because I wanted to, I sold it because I felt like I needed to.

I was back at zero. I asked myself, what is the one investment I could make that I wouldn't regret in six months or in six years? For me, it was building an audience, starting a conversation, creating a platform. And that has served me incredibly well and has led to everything that we've discussed on this episode.

Josh Kopel (24:45):

But so much of it comes down to one decision that I made and it was that I wasn't going to let the world or circumstance stop me from doing what I believed in my heart was my calling, which is serving people. And if I couldn't do it through food and beverage, I would serve my industry through the creation and curation of resources and tools and information. One of the things Seth Godin talks a lot about, especially in our episode is that you don't need permission to do great work. You can do it on your own, and so that's what I would advocate for.

Natasha (25:24):

Beautifully stated and such a needed message right now, for so many people. So if you're down and out, if you're in a hole, climb out a little bit, peek up, listen to Josh's podcast and start creating. Thank you so much.

Josh Kopel

Chief Executive Officer at FLO Hospitality

Born in Baton Rouge, Louisiana, the spawn of bootleggers and retail giants, Josh Kopel was bred for the hospitality industry. Throughout his 20+ year career in food and beverage, he has managed venues ranging from the Alligator Bayou Bar, located on Alligator Bayou Road, seated on Alligator Bayou to the hottest Hollywood nightclubs, bars, and ultra-lounges. He went independent in 2010, opening his first concept Five0Four—a New Orleans-inspired bar—on the Walk of Fame in the heart of Hollywood. Ten years later, he's created a family of brands ranging from Michelin-rated fine-dining to fast-casual, all with a central focus on Southern hospitality and Southern cuisine.