We're just not gonna have all those things that might hurt your body, hurt your stomach, make you feel bloated or heavy, so you should eat our pizza and have a few slices and feel like you can still go through the day with a little power instead of, you know, having to crawl under your desk in a shame spiral maybe from what some of the traditional, that's really delicious, and, um, and we're really proud of that.

Howdy y'all. I'm Elizabeth Gore. Welcome to the Big Idea from Yahoo Finance. As the co-founder of the small business funding platform, Hello Wallace, it has always been my mission to ensure entrepreneurs have everything they need to succeed. So let's cowboy up.Today's big idea question is, how can food delivery be the best part of your restaurant? Today's industry is food delivery service. All right, how many of y'all order takeout? My family certainly lives on it. Is it healthy? Is it not? What's the best option? Well, 40% of you order it 4 to 5 times a month.That's an average of Americans getting takeout every 6 days. Today, we get to talk to the most brilliant restaurateur, Donald Moore. Years at the Cheesecake Factory, now he is partnering with Gwyneth Paltrow at Goop Kitchen. I got to tell y'all, it is darn good food. I had a lot of it this week in New York City, but I want all of you restaurant folks to listen and understand the future of takeout, because we're going to learn a lot here today. Let's listen to Donald.Donald, welcome to the Big Idea. So excited to have you on.

It's nice to be here. We're, uh, super humbled that you're interested in talking to us and, and letting us share a little story about our companies and what we're up to. Um, really, really, really honored.

Thank you. Well, you know, you, it's, it's, I don't wanna say food dynasty, but the way you've evolved with the business side of food, uh, why step into the takeout world? I'm so interested.

Sure, so the origin story is, you know, after, uh, when I was a cheesecake in the last few years there, um, we tried to acquire a company called Mendocino Farms, which is in California and now Texas and a few other states. I'd met the founders there, Mario Del Perro and Ellen Chen, who are incredible, uh, leaders and really built a special company. And, you know, after that acquisition didn't go through, we, um, Mario and I just got really tight and said one day we have to work together, and I said I'll probably never leave my job, butAnd we stayed really close, and he had offered me a job to come run that company, and I turned it down because I was too loyal to where I was and then we connected right before the pandemic and we're like, why don't we put together a venture studio, it'd be him, um, another gentleman named Tonio and who, uh, his family owned a grocery store chain in Chicagoland called Dominic's, and then another gentleman named Nathan Tan, who was part of leading brand strategy and advertising and marketing for Mercedes and Cadillac, and really modernized both those companies.And we sort of brought together our superpowers and then really uh and brought a team and and Nathan through um a a a relationship with Gwyneth at Goop had done one of their first brand partnerships and Gwyneth had always loved the idea of being in food, you know, Goop itself started as a food blog of her recommending really incredible restaurants all over the world where she had traveled and people really, you know, admiring her taste, uh, and then, you know, a lot of this and what the way we cook today came from the clean.Cookbook, which is a New York Times bestselling cookbook that she wrote, and a lot of the disciplines with the food and the stuff that we don't put in our food like preservatives and sugar, refined sugars and dairy and stuff, um, you know, came from the clean plate cookbook and she had studied that as her dad was getting sick and really wanted to improve, um, the sort of things that you put in your body and the decisions you make.

Well, and Gwyneth, uh, a lot of people don't realize, she, she, she gave me some of my, my best advice on venture capital fundraising and so on. Um, but really the business models behind some of these businesses and making decisions to go into what you could think is a saturated industry, but when you and I talked, you know, you told me that really healthy, affordable, approachable food for takeout, really, it, it isn't an expanding market.

Yeah, I mean, the delivery space was growing prior to the pandemic, and what we had noticed was nobody cared about delivery. You know, when you think about restaurants, they, um, they think delivery is like, uh, something I have to deal with, you know, just get the food out, you don't see it all the way through, and we sort ofBecame absolute nerds and students of like what was wrong with delivery, and then who is who was doing it well, like the Domino's and the Chinese takeout restaurants and what we could learn from them, and we sort of went through every part of the experience and said, how can we improve the packaging? How can we um put a have a container that's a little bit bigger so you could toss your salad easily and everything could get coated? How could weUh, customize these recessed inserts for dressings, um, so that you wouldn't forget dressings or give a little bit more dressing in case you like to salad a little bit dressed heavy, so when you're home and you don't have a server that you can ask, you could do that. Or if you had a delivery issue or a problem, we get a live voice like you would in a Four Seasons or Ritz-Carlton, and we went crazy about everything that was wrong in the delivery said, how could we be best in class at this.And we pretty much got laughed in the face by everybody, and it says don't do this, bad idea, nobody's done it, and uh, and here we are 5 years later with a lot of challenges, but we're really on to something.And the team's done an incredible job and um it's an exciting place to be right now and we're our restaurants are very, very busy and we're humbled by the guests' response. Hey,

youwouldn't be a good entrepreneur if, if 100 people told you first it was a bad idea, right? That's when you know you're on to something.

This was 1000 people and we still have people today telling us it's a bad idea. Well,

let's, let's just use some statistics to prove them wrong. You were hoping your Santa Monica spot would do maybe 2500 a day.But you blew past that. Tell that story, it's, it's so exciting.

Yeah, so we, we, but we wrote a model based off a lot of research that, um, basically was like, if you were doing $2500 a day and you can have this food cost and this labor, you'd be best in class, and we sort of studied all the sort of hundreds of millions and billions of dollars that went into these ghosts in dark kitchens from companies like Cloud Kitchens and Reef Technology, and Kitchen United and others. And um, and we were, and if you build your kitchen for $50,000 you get the right return.Um, but a lot of what, a lot of those brands didn't have was Goop and Gwyneth Paltrow with the trust, the credibility, the brand.The commitment to excellence of the 15 year head start that that brand had built and she had really think, I think the other thing I would give Gwyneth a lot of credit for is she's just not interested in what people think of her. She wants to do what's best for you and your body, your relationship with your partner, the world, and, um, and for us, my partners Mario, Nathan, and Tony and the original team, we love that. We want to be bold and do something that hadn't been done before and take some chances and, um, or we'd be just like everybody else.So we built our first kitchen. It was a quarter of a million dollars. People laughed at us. We had to take out a window on Santa Monica Boulevard to fit this piece of equipment in. They're, we've never seen this before. We wrote a bit, a budget of $2.6 million and the first day the Wi Fi goes out, we do 0 $0. We didn't have enough contingency planning in the, in the internet. We still have some of those issues five years later, but we're getting better. And then the next day it did $6700 and it's.We do $10,000 a day and then we're, well, we need more space and we started to do $250,000 to $30,000 a day and then you had a restaurant doing the sales per square foot, uh, you know, 67 times best in class of any restaurant company and you know, we were doing the sales per square foot of an apple in a Tiffany's store and we really, really were onto something and I, you know, I sent the team a video, the original team a video, that crazy ones video that Steve Jobs had put out years ago this morning saying thank you for theYou know, the, the crazy support you did and taking a chance on us when we started this company 5 years ago because nobody had done something like this. And, uh, and I'm really proud of that original team, you know, Robert and Kim and Doug and the Brents and Matt Gibbons. There were, there's a lot of days we're like, what are we doing, but we really figured it out and we're quite proud of the, the, the journey we're on.

Well, and you let me in on a little secret, so, um, that, that I'm gonna just blow wide open here. So my favorite thing at Goop Kitchen is the salmon spring rolls. However, your pizza, holy moly, I mean, pizza in New York is hard to compete with. So I told you that I was obsessed with it. I actually ate it for breakfast and lunch and dinner two days in a row, but then you told me a secret that I didn't know. I mean, it's not a secret, but it's gluten-free.

That's right. Yeah, all of our food is gluten-free, no preservatives, no refined sugars, very little use of dairy, no corn, no peanuts. So, yeah, I'll come back to the pizza, but when we started the R&D process, um, we were making all these really healthy things, and Gwyneth looked at us and we made, I remember we made a granola bar, and she looked at us and she goes, guys, that's a bummer bar. Nobody wants to eat.And that hurt, but we, uh, we got better, and we've all, you know, we're all chefs and culinarians, and we've taken a punch pretty much our whole life cause most of what we do is rejection, and, uh, and she, it, but in that moment it was a light bulb moment for us where we started to realize that, um, we're making real food that you eat in your favorite restaurants in New York, in London, in Rome, or in yourYou know, in, in Texas, wherever in that suburb that you love, your local restaurant, but we're just not gonna have all those things that might hurt your body, hurt your stomach, make you feel bloated or heavy, so you should eat our pizza and have a few slices and feel like you can still go through the day with a little power instead of, you know, having to crawl under your desk in a shame spiral maybe from what some of the traditional, that's really delicious, and, um, and we're really proud of that, so.So we, I remember the store, we were making that pizza in the pandemic, R&Ding it in a parking lot next to our first kitchen because it was the COVID thing. We couldn't go in and out of the kitchen. We're eating on the back of my pickup truck to get the R&D right, and uh, and here we are today. We're quite protective of that recipe of everything we do, but that one in particular we feel is really special because we were looking for really 4 characteristics.Crispy, chewy, tender, and moist and sort of what you get from New York pizza, and we want to replicate some of that, the, the samethings.

I'm gonna get you a t-shirt that says no bummer bars on it.Hey, um, we love to admit our mistakes on this show. We call them our dirty unicorns, and I'm curious if you, uh, could share a mistake you've made in business that we can all learn from.

Sure. Imean, I think that sometimes I can, I'm, you know, my partners and some other people joke with me that I'm the unicorn rancher. So if we're even in a mall and I see somebody sharp walking down, he or she's walking down has a chef coat on, and they look professional, I might get up from the conversation and go say, hey, how are you doing at your job? And, you know, most of our companies with my partners had people that we worked with for 20 to 25 years.And, um, and, you know, and I think that in our vendors are the same way. So, you know, that creates immense trust and loyalty, and I, we know that these are the best and brightest, but I, I think sometimes, you know, instead of working with people that you've been with for a long time, and I'm not trying to take anything away from the teams that we have in our companies, but getting an outside perspective and bringing in some new blood and people that maybe come from a different background and industry with a mix of really incredible people that know how to operate.I, I probably have leaned to the people that I've worked with so much and I think that's built amazing businesses and I wouldn't change that. But what I would do is continue to challenge myself and our team to look outside and bring in a different mix of people that really create the right kind of tension in the business and, um, then, you know, I think restaurant people in general.are very servant, very hospitable, very warm, want to collaborate, want to partner and if you can bring a little bit more academic and be school in a little bit more bluntness, uh, and get that right mix and not to like have a cliche.Thing, but that that emulsification of that sort of business background and restaurant, I think yields the best and that, and, and then can really get you thinking differently about how to, how to run a great business.

Iappreciate that cause, you know, sometimes, you know, most founders are very values driven. They love.Their people and sometimes the team you start with, they don't have to change as you grow, but you do need new types of skill sets, right, um, because the companies change, consumer behavior changes, logistics change, and, and that can be really hard, right?

Yeah, yeah, for sure, and I, I think another one that's sort of connected to that is we fall in love with what we create and that people aren't spending money on it. You can only change the name and change the ingredients and the descriptions andYou just got to cut bait and move on. And restaurant people in general, you know, when they make, especially chefs and creators, we get so caught up in what we created.And that stuff can just drag you down and you just got to be quicker to move, you know, take your shot, hit it, move on if it's not working, and I think I see a lot of fatigue in restaurant industry of just like holding on to things and that, you know, the world's moving so fast right now, you just got to cut bait a little bit quicker.

Is there, um, a dish or a product that you adored that you had to let go of?

Mostly all of them, but I, you know, I, I remember we, even the cheesecake days or even at Goop Kitchen, we'll put something on, we'll just fall in love with it. We, at Goop Kitchen, we did this salad pizza, and we're gonna offer it in one of our brick and mortar locations, uh, in in Del Mar, San Diego this year, which we're trying a little bit more of a dine-in experience, and, uh, but you was this great green pizza of like pesto and then you tossed our arugula salad.And you put it on top of the pizza and uh and in the delivery world where you can't do that for the customer or the guests, they don't understand that they eat salad separately and why didn't they like, what's this thing? I got a salad with my pizza. We love that dish and together it was like basil and tomatoes or buffalo sauce and ranch or blue cheese. It could not have been more harmonious, but our guests didn't get it, so we're, we, uh, we kept that on too long. We tried to teach and educate through social media and stickers and.And I'm sad to see when that one go because I think it was a really special, but it was, it is as good as it was delicious, it was more beautiful to look at.

Look at you,you actually look kind of heartbroken right now. Yeah,

I'm, I'm shrinking in my seat right now. I'm sad aboutthat.

So what is, what is next for Goop Kitchen? What are you excited about that's coming?

Yeah, well, we're, we're, we, you know, we just opened up our first restaurant in New York City. The response has been overwhelmingly positive. It's our busiest location. It's number 15.And we just opened before that, we opened up in the San Francisco, Northern California market and our San Francisco location was our busiest ever. We're absolutely getting clobbered in New York in the best possible way, and, um, and we're really, really humbled by the response. We're gonna open 6 more locations in New York this year in East Williamsburg, Upper Upper East Side, Flatiron, Upper West Side, and Tribeca, and we're really, and then one in Brooklyn as well. We're really excited about continuing to grow in the New York market.Because our guests understand us there and they want this kind of food and then we're, we, we're signing some leases in Florida, which is great and then we'll look at the center of the country probably in the Dallas and Austin area.

Yeah, I, I respectfully invite you to Texas, please. We need you.

We love the Texas market. We, we know the great operators there and people love good food in Texas and yes we do.We're excited about that. So, yeah, I think what I'm most excited about is the, the teams we have in our company. You know, we have an incredible corporate team. We've had basically zero corporate turnover in 5 years, 0 store level leadership, uh, which is the most important position in our company, and we're bringing in young, sharp men and women that are best in class at what they do. And yeah, I think the part of my job as a co-founder and CEO is 50% of my time needs to be spent on people, with current ones and attracting new ones.And um and the people that we're bringing in are really having an impact on our business and we're just trying to get better every day, you know, you know, why we exist is we want to improve the well-being.Um, of every community we serve or every market we serve, and that's not just the customers or the guests, that's actually the people if we hire someone's daughter or son, we want them to wake up feeling inspired, feel safe at work, you know, not, not be afraid to ask for help and go home feeling fulfilled. So we're in, and, and there's this whole 360 approach to the way we do things.Um, so we're, we're really pumped up about continuing to grow and influencing wellness, uh, but also the wellness of our staff members and the people we serve and our vendors as well. Well,

I, uh, you've, you've shown over the years that, uh, how you value your people makes a very successful business. Hey, for, for the, the aspiring entrepreneurs watching right now who their whole life dream has been to open a small restaurant.What, what, what are the steps you would tell them from a business perspective to, to think through whether it's a location, whether it's brick and mortar and takeout? I realize this is a huge question, but, you know, as, as, as such a successful entrepreneur in the space, I, I would love to just hear your advice.

Sure, we, you know, at DFG Ventures, our parent, my parent company where I'm a partner, and we've started up 5 businesses. So this is a relevant question for me, and we've done a lot in the last 5 years. And, you know, I think 2 the stat is 2% of all restaurants make it after 2 years. What I would say is, wow,

Donald, say that stat one more time.

2% of all restaurants make after 2 years is in and that's a couple of years ago, but um what I would say is take your time.Save more money than you think you need, a lot more money than you need, and then find incredible mentors. Like I, this is the number one question myself and my partners asking anytime anybody we're talking to. We ask two things, who are your mentors and tell us why. And then we ask if you could write a job description.You're doing what you want to do 100% of the time. What would that look like? And I stole that from a New York Times, uh, Wednesday business CEO corner thing probably 10 years ago. And so money, mentors, have people that are honest with you, beat up your idea, you know, study what's working. This is a Bill Gates thing, but study what's working in a business in a sector and what you, and then study everybody that failed at it, and then you got or go get help.And um where you're gonna have people that are really, really honest with you and they're gonna help you know, really, you know, go to your toughest person and say have them eat your food or bounce off your hospitality model um and you know whether it's doing you're in a sector that's doing something that you wanna be a little bit better like everybody loves Hillstone and those restaurants or In N-Out Burger because they're so consistent, um, or if you're gonna invent a new category, I one of the most important things is have an incredible conviction around what you're doing.And believe in it, but we, you know, we, we talk a lot about in our companies about we don't really wanna know what you like, we really wanna know what you don't like, you know, of course we will, we'll, we'll study to great depth of like what are they spending money on, what are people wanting the pizza, I just got this great feedback on pizza. How do we do that more?But when we walk around a dining room in a new concept or get guest feedback, like, and I even if somebody sends me a text and says I love this tonight, I'm like I thank you so much for that feedback that means a lot. Tell me what we can do better, and just be willing to get beat up and, and then, you know, look, you know, and, and I think what this is a major flaw of a lot of new restaurateurs is they can get sort of knee jerked around with like one or two bits of feedback, you know, find the themes.Um, and, and go from there. But the most important part is, is I had an old mentor say to me, it's just about cold beer and good cheeseburgers and french fries.

Don't you're making me hungry.

Yeah, don't overcomplicate this. Like people want delicious food and they want it to be hot and fresh and cared for, and they want hospitality. They want to be seen, noticed, and recognized. And if you make a mistake, own it and just try to get it right and die trying to get it right. I know that seems a little simplified and maybe not as complex of an answer.You're looking for as in a world of like AI and automation, but it's about hospitality and delicious. You look at the brands that have made it for decades, the Chick fil A's, In N-Out Burgers, the Raisin Canes, the Hillstones, these ones that do it. Oh, it's all about food quality and hospitality. And if you're not centered there and that's not your passion, don't get in the restaurant business. Uh, I would not do it because that's what's gonna get people to come back and make your restaurant a habitual thing versus coming at once or twice a year.

Uh, Donald, my mind went straight to that movie, The Menu where her ordering a cheeseburger saved her life. That's cold beer and cheeseburgers, man, I love it. Um, 11 last thing I do want to ask you is you just did a great job mentoring us about the business side of restaurants. I actually think it's one of the toughest.Founder roles, um, cause, cause restaurant business is so difficult. In the moment that a founder is just at their wits' end for whatever reason, um, you know, what, especially the last few years with pricing changes and tariffs and supply chain, and, oh my goodness, it's just been hard.When, when you're at your lowest as a founder, and you're just trudging along, you, you're such a values-driven guy, Donald, with good people around you. What do you say to them in that moment? How do they handle that moment? Cause it can be very isolating.

It is, there's a great Bill Gurley thing that's going around on social media right now that the job of a CEO founder is to be the biggest cheerleader when things are going bad and to be the toughest person in the company when things are going well, and, and I, I, I firmly believe that, but, you know, it's a tough business, but the one thing we always come back to, and we say this to each other, and we try to, we stole this from Amazon where you kind of keep a chair, you always sort of have a guest in the room of every time you're making a decision.Is that people are always gonna have to eat.And um and we're one of the largest employers of of staff members in the country, our industry is. And so if you believe with great conviction that people are always gonna have to eat, and people love delicious food and hospitality, then you just gotta power through. And most of the days in the restaurant industry, at one restaurant or, you know, when we were at Cheesecake Factory, we were feeding 100 million people a year, are bad. They're rough. You're dealing with bad news and butI, you know, I was thinking about preparing for this time with you today and just thinking through every tariffs or wars or we had things where there was cartels blocking roads in Mexico and you couldn't get avocados and it raised the price by 2 and I could, I could share a million stories of those over the last, you know, 20-30 years I've been in this industry. You just gotta know that this restaurant industry is gonna be around forever, even with everything that's happening in the world.And um you gotta prioritize people, you gotta prioritize the big two things which are food costs and labor, but if you don't have top line, you don't have anything. And uh, you know, then David Overton you say to me, if you have lines at the door, you can fix all of your problems.And I still believe that. No, we don't know, we don't have lines at the door because we're doing delivery, but in 1909 of our 15 restaurants at good kitchen right now, we still throttle, which means we can't take all the orders that are available every day because we're so busy. So that's a reminder to us that people want this product and we can work to get better on the biggest issues and you know, some people aren't cut out for that, but we love it. We, you know, like I had to say to the people in all of our offices thatWhen we have a problem, let's celebrate that. Like that is exactly what your job is, why you have an office in our corporate office is to solve problems. And the people that like really love problems and really detect, fix, and prevent them from happening over and over again are the best, most successful business people that I've ever seen, and the ones that hide from them and sort of brush them under the rug and act like they, you know, those companies don't make it, and then they have a really dysfunctional culture.At their company, so we're, we're, we sort of celebrate the problems and we really celebrate people that come, bring them to the larger group. Well, um, and, and that's a very uncomfortable thing to do when you have to walk into a room and say I, my part of the business is not doing a good job and, um, and we would, we, we, we, we give those people a standing ovation. That might sound a little corny, but that matters a lot to us.

It sounds amazing, and uh thank you, cause I, I think it's like acknowledging and celebrating the problems is an amazing way to look at it. And I gotta tell you, Donald, you're umThe, the spirit that you've built, uh, from, I think your mom's work ethic and your siblings, and it just comes through in everything you do and thank you for feeding us. Thank you for coming on the Big Idea. Uh congratulations to you and Gwyneth for an awesome business. I can't wait to welcome y'all to Texas, um, and thank you most of all for coming on The Big Idea.

Yeah, it's my pleasure and I really, really appreciate you taking the time to celebrate our little growing company. It means a lot to us.

At the end of each episode, I'd love to give a shout out to a small business doing amazing work. Today we get to shout out one of Donald's favorites. Sushi Sassaoon and Pacific Palisades was founded by Nobi Kasuhara in 2008. Since then, they have proudly served casual, high quality fish paired with warm, flavorful rice. Now they're serving Culver City and Santa Monica areas. You've got to go check them out and get their signature dishes. Check them out at sassaboon.info.Thank you, Donald, for coming on the show and thank all of you for joining us. This has been a big idea from Yahoo Finance. Come say howdy to me at any of my social channels at Elizabeth Gore USA. You can scan the QR code below and find us anywhere you get your podcasts. Thanks for joining us today. And as my grandma always said, hold your head up high and give them hell.

This content was not intended to be financial advice and should not be used as a substitute for professional financial services.