April 13, 2021

What Daniel Shemtob is Doing with his Restaurants, Food Trucks, Catering and Shoe Companies Ep. 13


Daniel Shemtob is a self-made entrepreneur, a chef, and an overall creative. He is also a social media creator, dog lover and world traveler.

He started his first business at 19 and failed hard and fast. He started his next business The Lime Truck at age 20, then went on to win some wild accolades including, Best Restaurant, and Food Network’s Food Truck Race, and leveraged that to open their first brick and mortar in 2012. Since then he's grown multiple companies and restaurants in the food and beverage space. In 2019 he launched his D2C brand in the footwear space that’s good for you. It's called Snibbs.

Daniel believes in discipline, focus, always growing, work/life balance, and staying curious.

Where to Find Daniel Shemtob

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Transcript
Daniel Shemtob:

We've done some serious revenue in our first year. The numbers really high and we're really desirable to like venture capital right now. But the problem is that I don't want to put a big valuation on this company and try to go an unsustainable or rocky company.

Natasha:

Welcome to FASCINATING ENTREPRENEURS. How do people end up becoming an entrepreneur? How do they scale and grow their businesses? How do they plan for profit? Are they in it for life? Are they building to exit? These and a myriad of other topics will be discussed to pull back the veil on the wizardry of successful and FASCINATING ENTREPRENEURS.

I'm putting the finishing touches on a digital course for entrepreneurs to learn how to scale and grow their companies and find more profit in their current revenue. To download the free Profit Finder Guide that I've created, and also to put yourself on the wait list for the course, go to natashamiller.co.

Daniel Shemtob is truly a fascinating entrepreneur. He's the CEO of Snibbs, Hatch, Modern Art Catering Group, TLT, and The Lime Truck. On this episode, Daniel tells us how his restaurant and catering companies are doing, what he's looking forward to, and how he ended up creating a shoe company.

Daniel Shemtob:

I was a natural born entrepreneur.

You hear those? I started selling candy in high school for a big markup. I started my first like neighborhood business when I was like 10. I lived in Newport Beach neighborhood of like old people and I used to fly over the neighborhood that I would do any errands. If you're out of town, we'll grab your mail, we'll bring your trash in, do your groceries.

And then I would hire out other kids in the neighborhood to do the work and I'd take 50%. So I think I was born into just that concept. I think when I had my first bake sale is when I really started to see like how fun it could be. And so that sparked it. And then I had worked for people. I was in high school and I started my own business.

That was pretty lucrative, personal shopping in high school. And then I think I had my last job when I was 20 and I got fired for going to see my mom. At the time she had like an emergency happen and I had to leave. And he said, "If you want to leave, you're going to be fired." And I said, "Okay." And I did. That was the last time I ever worked for somebody.

So I think since 20 it's been a full-time very serious entrepreneurship.

Natasha:

Okay. I did not expect that. I've known you for a while, but that hustle at starting at 10 or earlier is remarkable. And did you follow the footsteps of someone in your family or someone you saw outside of yourself? Or was this just an internal flame?

Daniel Shemtob:

I guess it's two-fold. So my brother, when I was like 13, gave me the book "Rich Dad Poor Dad" for my birthday which talks about getting out of the rat race. And he made me report to him about reading it.

Natasha:

13 years old? Are you serious?

Daniel Shemtob:

Yeah. So I had an early taste of what that was like. And then coming from a very specific immigrant family of like Persian Jewish people they're very entrepreneurial. It's just born into us. I think of like merchants and traders and things like that. I think just seeing that everybody around me that was like successful or had their stuff together really were already working for themselves. That part was really impactful. And I think when it comes down to its core, I'm a creative person and I need a creative outlet.

And I think the idea of concepting something and then turning it into reality and manifesting that and seeing it, that's entrepreneurship at its core. And it's something that's really important to me. So whether or not like I knew I was going to be an entrepreneur, I do, I create, and I think just getting to do that in entrepreneurship, it gets to impact so many people on their livelihoods, I just meant a lot.

Natasha:

I was just on your website, you talked about high school and then college and then culinary arts school. You finished high school. I'm assuming.

Daniel Shemtob:

Yeah. Barely.

Natasha:

But then yeah, me too. Then college was not even on your radar.

Daniel Shemtob:

Yeah. So I tried going to college. I tried going to college while I was still in high school. 'Cause I knew it would be really difficult when I was on my own to continue it.

I didn't grow up with wealth. I had to make it for myself. And so I think right away, that kind of really challenges the concept of school because it's so expensive and you're not able to commit to something fully because you have to really prioritize school. So I think that was an early kind of realization.

And at the time I didn't appreciate learning. It's funny 'cause I think if I went to school now, I would love it more than anything, but it would be totally different. And so it didn't even cross my mind. I think I went to classes for three weeks because I promised my mom, I would go to school because I moved to LA. And I went for three weeks and I dropped out and I did that three semesters in a row, really trying to commit, but realizing it just wasn't for me. I didn't do any culinary school or anything either.

I figured the real-world experience was there. And the argument people have is school only takes a few years, like three, four years, and then you're done and you can move on. And I think in hindsight, that's true. But the data, maybe not so much. But I like real world experience. I think that's really important.

Natasha:

I love that. And if you ask my daughter Bennett, she would tell you that after going to an expensive college now, later, if she had to do it again, she wouldn't have gone. So thanks a lot.

So you started a business and you currently have five. At least five businesses, which we're going to talk about in a second. Do you have any of the businesses that you had.

Yeah, I have the Lime Truck. I started right before my 21st birthday. And it's still there. The only business I actually ever started in shut down was my first business when I was like 19. And it was like a legal services company that I really just didn't have any passion.

Yeah. Can imagine. Okay. So let's talk about your businesses.

Let's start from The Lime Truck and we'll go to all the rest. And if you could just say a little bit about each, that would be great. It'll be better than me trying to remember them all.

Daniel Shemtob:

So the first business that I have that I still currently have is The Lime Truck. And that was a food truck started in Orange County with the concept of just bringing really amazing ingredients in a fast way, which at the time, it didn't really exist. Quick service wasn't really a big segment of the food world. And so that was my first business. We took that and we had a food network show in 2011. And so I leveraged that notoriety and we opened our first fast casual restaurant in 2012, which we have a few of.

Then fast forward a couple of years and I started my footwear business that didn't launch for four and a half years after I created the company. And then my Japanese yakitori restaurant called Hatch. And then last year I bought out, unfortunately last year, I bought out all my partners and investors in my fast casual restaurants and folded in an acquisition of three catering companies called Modern Art Food, Inc. and The Spot Gourmet.

Natasha 06:59.

Is that acquisition of the three, were they owned by the same person?

Daniel Shemtob:

They were. Yeah. So you basically had one roof that serviced all these different brands. And so different companies like service high-end fashion. One of the companies services more like churches and like public arenas. And and then one of them was like more weddings and boutique events.

So at the time you didn't know the pandemic was coming. Fine, no one dead. It was a smart move, really looking at the future, to acquire a business that had customers that had physical items. And then what is happening with all of the restaurant businesses due to the strange last 365 days we've had?

It's been really tough. At best, you're fighting for every dollar to get in and you're working three times harder than you've ever had to for that same dollar that you had in the past. And that's the best case scenario. I got really lucky, like Hatch is actually doing better now because of the outdoor seating and we have a really beautiful patio that's actually extended our dining room and it's larger.

And so sometimes, things work out like that. But then my Westwood location really depended on the working crowd in UCLA and that, we had to temporarily shut down. So it's really a mixed bag. But the amount of difficulty, you close down, open, change the rules, change the capacity.

You're letting go of staff. You're trying to rehire. People are leaving because there's not enough demand. Every day is much more challenging and it's much more operational heavy. And you want to plan towards the future because that's what we're trained to do in business is annual meetings. And it's worth us right now.

You can only really plan ahead 30, 90 days because you might come up with the best plan ever. Like we had launched this thing that we had worked on for four months in my Japanese restaurant, which was this high ball cart that comes around to the tables and our brunch menu. And we spent so much time. Photos, new plates and new staff, because we were never open during Sunday day. We did all this work and when we went to go launch, it was the pandemic. And then now the pandemic started, they closed the outdoor seating. California stay at home order. So all that work went out the window and now they just reopened it.

And that same staff isn't there anymore because we had to shut down. And so now we have to redo the whole thing. And so it just shows you how little control you have when you thought you had-

Natasha:

Did you ever consider shutting down like The Lime Truck and the fast casuals and just waiting for the pandemic to end?

Daniel Shemtob:

In hindsight, actually, it wasn't going to be the worst idea if I didn't have ridiculously high rents, the teens of thousands. But yeah, it's where we landed with two of the concepts. I realized after throwing everything at the dartboard and trying everything that I had in my bag and getting nothing to show for it and spending a lot. It probably was wiser to just make a way. And so now we're at that point where we're just waiting to see when things reopened. So yeah, that, would've been a nice thought if we had this conversation a year ago.

Natasha:

Do you think you'll see turnover in fourth quarter of this year in a big way? Or you do really think 2022 is the turning point?

Daniel Shemtob:

It's so bizarre. So I've shifted a lot of my focus and I have a lot of clarity in the way I want to operate my businesses. And just from doing that, even in COVID, we've now got the restaurant up about 40% month over month, the last three months. And so the reopening of outdoor seating really helped. Snibbs is doing really well, my shoe, my footwear brand.

So there is hope this year. And I filmed a food network show and that is going to be airing in third quarter. And so I think that's going to be really big for us.

Natasha:

I really hope fourth quarter is wide open for you. That would be so perfect.

Daniel Shemtob:

It would be beautiful. And I'm genuinely excited and really working towards being able to monetize it in the best way possible.

Natasha:

It's great. Publicity. You're going to be a star again, not that you ever weren't. Let's switch to Snibbs. So walk us through the process of coming up with the Snibbs concept and how you brought it to market.

Daniel Shemtob:

Yeah. So Snibbs, it starts off as, or the footwear for chefs, doctors, nurses, people are on their feet all day who really need to something better.

And it came off a very simple problem that I was having, which was, there were no great chef shoes. I was either wearing Dansko and Crocs, which are really not great for mobility and kind of clunky. Or I was wearing Nike's and shoes that look really pretty, but really were dangerous in the work environment because of the non-slip or the fact that they break down or they're permeable.

And so I was really doing a lot of research and realized nothing like that existed. So I came up with the idea and I called up an orthopedic surgeon who focuses on different parts of the body and footwear. And I told him about my idea and how I wanted to make them actually good for you rather than just cool looking or really functional.

And so we worked together. Took me 40 revisions. I spent a lot of money, idea, a lot of time. Most people just copy issue and that's how they started. We didn't do anything like that, or maybe a lack of better knowledge, but it took us a very long time. And when we launched in 2019, one week before they did the stay at home order in California, my general plan was to give it to all my chef friends and really go after the hospitality sector.

And so working on something for four years, investing a lot of time and energy, and finding out that you launched it probably at the worst time was pretty heartbreaking. But being a scrappy entrepreneur and knowing that I can't change the way that the world is and the timing of the launch, we decided to just do what we could and we gave back. We started this cool campaign, which really was a catalyst to our brand because no one was getting PR, but we didn't even do it for that.

We just did it because we had these shoes and I didn't know if we were going to sell them or not. And so that campaign was amazing and we hit the ground running. We sold out, I want to say five weeks after we launched, 5,000 pairs of shoes, which everyone told me not to order them any. We reordered and it's been really great since, it's been really strong.

Natasha:

Yeah. So the shoes are interesting to me and my company used your shoes as a giveaway every week to someone that was nominated in the healthcare or the frontline industry. And that was really cool. And I think people really love them. My dad has a pair, he's 76. And I have a pair and I am not on my feet all day, but with an ankle issue. The foot bed is comfortable and wide. It doesn't smush the top toes. And they look like street shoes. They're pretty cool. So I'm a big fan. Talk to us a little bit about how you learned about manufacturing and where they're manufactured. And now are you an expert in shoe manufacturing?

Daniel Shemtob:

I'm definitely much smarter than I was before. So I had no idea about shoe manufacturing and that's probably one of the reasons why it took me so long to make the shoe to begin with. But you do what you need to do. You learn from people. You watch videos, you watch documentaries, read books, and you go to the wealth of the information that's on the internet.

What I decided to do early, which I think was a really smart move was, I was like, I'm going to go spend two weeks at our factory and figure it out. Because the difficulty really in working in China with manufacturing is there's a language barrier and there's a time barrier. Anytime you decide you want a sample, it's going to take you between two and four weeks to get it.

And that's if everything is rushed. So if you do 40 revisions, like we did it on our shoe, that's literally working with them every week and not getting something back for a month and that consistent trend. And so being there you've moved the needle by a lot. And so that was what I really realized. And the first factory took me unfortunately, a year and a half to figure this out.

But they weren't capable of making our shoe. Our shoe was too technically difficult to make. And so we had to go to a factory that was two times more expensive, which was a bummer. But then they started really producing really high quality shoes. We're actually the cheapest shoe in our factory by $150 in retail price, just because of their technical skill.

And they pay their wages like higher and it's just a better factory, but that's one of the tricks we learned. And yeah, I wouldn't say I'm an expert because we're working with this designer now that I spent a lot of money on and watching him talk about the technical details and analyze like our shoe and stuff like that. We're learning a lot more.

Natasha:

He's the expert. You're the visionary.

Daniel Shemtob:

Exactly. And I think it's a learning process. I would be really bummed out in three years if I learned everything there was about manufacturing. It should take some time, if you really want to get good at something.

Natasha:

Yeah it's always changing, right? So within that realm of shoes or apparel business, do you know what the industry benchmark for net profit is?

Daniel Shemtob:

I should but I don't know. I have no idea. I imagine it's very, so much because of marketing costs. I know what the gross margin for most shoe brands are on the actual footwear themselves. But when it comes to the individual economics of what each company is making.

Natasha:

Yeah. I've started asking everyone this question because a lot of people don't know. You probably know the restaurant industry number, because, pretty low. And at one point I thought why would anyone do that? And thank God they do, because restaurants are amazing. But it's a passion project. And I've learned that if the more restaurants you have, that multiple will end up driving that net income eventually. So it's just good.

I think I just want people to start thinking about what their benchmark for net income is in their realms just to get a lay of the land. And so the next question would be for Snibbs, and I know it's a startup and it's brand new, but what percentage of net income would make you be like, "Yes, we did it!"?

Daniel Shemtob:

It's a question I ask myself a lot. We are in the apparel footwear space, but I look at us as D2C in brand and online D2C brand. And that's really how I analyze like our economics and how I look at the growth. I'm not so concerned right now about sustainable profit. I think it's something that is important and I want to break even, but for me, I want to get as many people wearing the shoes as possible.

They're really great shoes. We call customers every week. I literally pick up the phone and I'm like, "Hey, I'm the owner of Snibbs." And "What are you doing calling?" And I'm like, "I just want to hear how often you're wearing them. Why are you putting them on? Like, why did you buy them?" And I'm learning a lot and I'm getting to get community around the shoe.

And that's really what it's all about right now. I think the first five years, if you focus on profitability, it's great. It depends what kind of company you're running, but I'm trying to build like a lifelong brand and I'm not going to do it in a way that it's turn and burn 'cause we've done some serious revenue in our first year.

The numbers are really high. We sold tens of thousands of shoes in our first year and we're really desirable to like venture capital right now. But the problem is that, I don't want to put a big valuation on this company and try to grow an unsustainable or a rocky company. And so we're taking a step back and keeping really, even-keeled. And we're growing the brand in a way that feels achievable and authentic. And as long as we have people enjoying them. As long as we have people reordering, I feel like that's a sign of good success for us.

Natasha:

It's amazing. You really have the long play in mind, which is great. And so when you're talking about building that brand and really fortifying it, I imagine, especially with knowing you and how you dress and how you like to change your look that other products will develop out of this shoe brand, right?

We already have our SpaceWalk, which is going to be our new shoe.

Oh, that is so cool. So you are definitely an entrepreneur, someone with a million ideas and then you're making a lot of them happen. So we talked a little bit about the challenges that you've had because of COVID. But if you had to talk about one major challenge that you're dealing with right now in your business, what can you point to?

Daniel Shemtob:

Ooh, that's a great question. I think what I am learning and I was told this by everyone who's much smarter than me was, focus on one thing. And I always said that's for people who aren't willing to work so hard or that's for people who yeah, I'll come up with a million excuses of why that's right for them and not right for me.

And this year, I really realized that the clarity creates more value than anything that I've ever done. And so just last month I focus all on clarity and like I've restructured my week. And just by Thursdays, I have an out of office email and it's basically says I'm planning for the future. Don't bother me.

And so that's my future date. All week, I do deliverables. I do meetings. I do meetings on one day, do deliverables on two. But that day where I plan for the future, that's my day to accelerate the company's chances of being successful. So I'm looking at things that are not part of the deliverables, but like goals, annual goals, like big ten-year picture targets.

And so having that clarity, I think was the biggest challenge. Luckily I've found some footing there and created some boundaries around what I'm trying to do this next year. And so that was the biggest challenge. And now executing on that clarity. So as a visionary, as a very multifaceted entrepreneur, I want to go in a million directions.

So I think my next biggest challenge is going to be sticking with the plan. And as long as I can not get bored and as long as I can really dial in what I'm doing, I think they're moving a lot of success on the other side.

Natasha:

And are you working with a coach or an advisor or mentors to help steer you along in this journey of trying to focus on that one big thing, the clarity?

Daniel Shemtob:

Who am I not working with may be is the way I can answer that. Yeah. So I think that mentors, advisors, forums, and entrepreneur organization, like these are the ways that you become successful. I have my D2C guy, like my direct to consumer person that I call every time I have an idea. "Hey, I was thinking about adding this QR code. What do you think about it?"

I have my mentor for my franchise. Like I have everything in there so that whenever I come up with an idea, I could bounce it off somebody who has a little bit more experience. And it's funny 'cause I've now gotten to be so wide that, yeah, I have a therapist for personal, but I also have a business-like therapist, I guess I would say. Like he only checks in with the emotion for me and not necessarily the physical.

Natasha:

Where did you find that?

Daniel Shemtob:

He's the most incredible human I've ever met in my whole entire life. Yeah, he's truly a very special person. And so having all these different people to check in with where, yeah, it's a physical plan. I'm checking in there, I'm checking in with the industry experts, but I'm also checking in with my heart and my mind to make sure that it feels authentic and that I'm really involved.

It's been about a year and a half that I've been doing that more and more, and really like sitting down with a strategy every time I meet with them. And it's been really impactful.

Natasha:

Do you think you would have accepted and embraced that kind of thing at 20 years old?

Daniel Shemtob:

I've always searched for it. I think I just, wasn't lucky enough to have that community. I think the community takes time and it takes time to be able to give back to that community. I think it's a give and take process.

Natasha:

You didn't have access, right? Yeah. It takes time to build up to that access.

Daniel Shemtob:

And it takes confidence to say that you don't know.

Natasha:

That is true. At this point in my life, I'm all out there saying, I have no idea. Can you just show me, can you tell me, I don't know what that means. Someone recently said to me, "We manage author's assets," And at this point in life, I probably should know what that means. But I was like, "Okay, can you break that down for me? What does that mean?"

Daniel Shemtob:

Yeah.

Natasha:

And it was beautiful to hear it, and so much better than to guess.

So you spoke on this a bit when I asked you about the one challenge you're working on, but if you could think of a strategy that you're going to really double down on, either in graphic design or digital marketing or building a C-suite, what is a strategy that you're really focusing on this year to scale and grow your business?

Daniel Shemtob:

Unfortunately, each business is so different. So I have to probably pick one. The most growth comes in Snibbs so I think that's probably the most fun to talk about. And for me, the biggest strategy is content diversity. So marketing is everything right, and we all know that. And so marketing is everything. If you have a great quality product, you already did the legwork to get the foundation.

And now you want to build stories 10 through 20 or whatever it is, you have to find really good marketing channels. And what I realized is really great content does that. Our first video we launched, we did about a million dollars. So that's off of one video. So now that video got tired and we saw what it did to our market.

And so now we're creating pretty much, I want to say we're creating between two and five videos a month now.

Natasha:

Your creative is really good. You're using an outside source for that?

Daniel Shemtob:

Yeah. We're using an outside source for that. We're actually using a ton of people. Ton of different people. And that's what I really mean in diversifying because one agency can really deliver one type of video and then maybe they can do more than one type, but I'm going to someone who's doing really great at viral videos. And I pay them to do 10, 15 videos, because if you get lucky on one of the viral videos, that's like hitting the jackpot. And so it's great. You can use that content and weave it into your other marketing materials. I think that's really something that I'm tripling down on and I'm really spending a lot of time with, and I'm even going to run a TV commercial.

I thought that would have been like the most kind of archaic way. But I think it could be effective. And if I'm wrong, I have an exact budget. I have an ROI that I want to hit, and I already created the content for other videos. So it's not a very expensive, it's a 15 to $20,000 try, but I'm really excited for it. And I feel like diversifying, just on TikTok, we did about a hundred thousand last year in revenue and that was all free.

Natasha:

We just heard from Daniel about how he balances and juggles all of his companies, what it's like to try to figure out a completely different industry, and what he's focusing on this year to scale and grow his business empire. For more information about Daniel, go to the show notes where you're listening to this podcast.

For more information about me, go to my website, natashamiller.co. Thank you so much for listening. I hope you loved the show. If you did, please subscribe. Also, if you haven't done so yet, please leave a review where you're listening to this podcast now. I'm Natasha Miller and you've been listening to FASCINATING ENTREPRENEURS.

Daniel Shemtob

CEO

Daniel Shemtob is a self-made entrepreneur, a chef, and an overall creative. He is also a social media creator, dog lover and world traveler.

He started his first business at 19 and failed hard and fast. He started his next business The Lime Truck at age 20, then went on to win some wild accolades including, Best Restaurant, and Food Network’s Food Truck Race, and leveraged that to open their first brick and mortar in 2012. Since then he's grown multiple companies and restaurants in the food and beverage space. In 2019 he launched his D2C brand in the footwear space that’s good for you. It's called Snibbs.

Daniel believes in discipline, focus, always growing, work/life balance, and staying curious.