David Grutman - How He Built One Of The Most Powerful Hospitality Empires

10:35David Grutman:Love that. So you recommend for anybody that's building a hospitality portfolio to have both a mix of home run swing, enterprise value, and let me get my foot in this market or with this person. Yeah, and it's less.

10:48Open Residency Host:What's your thing for risk? I don't love a lot of risk, but unfortunately, my ego pushes me to be very risky, which has worked out okay.

10:58David Grutman:I think there's pluses and minuses that we'll get into that. I'm curious because I've seen, I saw so much conflicting numbers on the internet and I've asked some of my buddies that own clubs and restaurants, what type of like profit and EBITDA does like a club or a restaurant run on it? Because you're, you're doing tens of millions of dollars, 30, 40, 50 million.

11:15Open Residency Host:So certain nightclubs could do over 20 % consistently and certain restaurants could do anywhere from 10 % to 20 % or 5%. It just depends.

11:26David Grutman:What is that big variable that you're going to get 20 versus five?

11:28Open Residency Host:So the big variable obviously is just revenue. At the end of the day, if you're doing real, real revenue, you can work out, you can fix the rest because there's a certain point where the electric bill is the electric bill. And whether you do 10 million or 20 million, but obviously those expenses go down, your rent is your rent, right? So as you do more revenue, all those expenses, percentages go down. As a percent of revenue goes down. Yeah.

11:54David Grutman:Because you're outpacing your flat costs. Right. It's all about revenue, man, at the end of the day. Yeah, it is. What about first generation versus second generation, just locations and -

12:03Open Residency Host:Right, so I mean, of course, the dream is to have a second generation restaurant that it's quicker to get to market because the HVAC, the kitchen, the bathrooms, everything's pretty much there. You just have to kind of reskin and redesign it. But the negative is someone else made that mistake and you're just taking over their mistake and just fixing it. Now, Poppy Steak for the first Poppy Steak was a restaurant that had opened and closed in that space three times. Couldn't make it. So we did this poppy steak, you know, we wanted to feel like a new space inside, although we left the bar, the bar and the kitchen, the kitchen, we kind of opened it up more and we closed.

12:40Open Residency Host:It's a sub level space with windows. So you could see people walking by you. We enclosed all that. We took a big risk. We said, listen, we're going to enclose the whole thing. So when you walk into poppy steak, you're kind of walking into a new world, your own world. And by doing that, you don't get lunch because there's no natural sunlight, obviously. But poppy steak is by far one of the most successful things in my portfolio and great partnerships I've ever had.

13:06David Grutman:And something like that, how much does something like that cost for like a nice restaurant?

13:09Open Residency Host:Anywhere between 1 ,200 and 1 ,500 a square foot. So let's say it's 10 ,000 square feet. You're looking at 12,$15 million, man, plus pre-opening, plus this, plus that. Where Poppy Steak, you know, we only spent a million four to reopen it. Now, we just closed it and did over almost four million in renovations over this last summer to keep it new and keep it fresh.

13:32David Grutman:Tell us about that origin story of Poppy Steak. It's an interesting one. Such a strong brand.

13:37Open Residency Host:He's a very special guy. His name is David Einhorn. He goes by Poppy. He was grilling a steak behind my house. He was coming down from New York and he had really kind of taken over the nightlife scene over there, being a face on the nightlife scene, I mean. And he would come over to my house and he started grilling this kosher steak behind my house. And I'd bring all my friends to taste it. And he put his famous poppy sauce on it. And social media, well, I started going crazy. I said, let's put it on the menu at Komodo. And it just took off. And I sell a lot of ducks, but I really sold a lot of poppy steaks.

14:10Open Residency Host:And it was just fun, something fun to do with my friend. And in doing so, seeing how popular that was, another friend of ours, Noah Tepperberg and myself, were flying with Poppy to Chicago for Noah's Tao opening and suggested, hey, you guys should do maybe a second generation restaurant together or you should do a restaurant together. And we found the second generation space where Poppy Steak is now. I thought it'd do six, 7 million. Who knew it would do 20 million plus and 30 million plus in Vegas. And now we're doing other markets. And I think it's going to be even bigger.

14:43David Grutman:What's the MSRP on one of those big steaks? I have not gone yet. I'm going to go next week.

14:47Open Residency Host:You know, we have a couple, we have a thousand dollar steak that comes in a beef case and you get a whole show. That's the one that I see on the internet. Yeah, that's the one that's like a full FOMO experience for people.

14:56David Grutman:Yeah. What about doing business with friends? You mentioned Noah Tepperberg from Tao. I'm a New York guy, so I know his venues from back in the day in my 20s. I mean, you're doing business. I mean, you're doing business with two good friends, it seems like. What has it been like doing business with friends?

15:10Open Residency Host:You know, when things are great, it's great, but at least when things aren't going great, you have a friend that's going to sit there and kind of back you up and help push you as well. And you're kind of in it together. If my friends were only there for the good times, they probably wouldn't be such long friends with me. You know, there's always, just like anything else, there's good times and bad times. But just like Michael Rapinoe with Live Nation, I've been lucky enough to pick some great partners.

15:32David Grutman:Do you think David in his 20s or 30s was as mature as he sounds right now?

15:37Open Residency Host:No, I was really a crazy human being. I probably had, as bad as my ADD is now, it was really bad then. but also I'm with you on the ADD.

15:47David Grutman:We're in it together. Don't worry about it. Okay. I like that. We're in it together.

15:50Open Residency Host:But even in my twenties, I took business very seriously. I mean, I was the first one in the office at like eight, 9 AM that was unheard of in the nightlife business. And I would stay till like nine, 10 o 'clock before coming back in at nighttime again. So where people you hear people that have known me for so long, they'll be like, no one allowed work. And because I would get in there in the office so early and I'd always stay so late.

16:10David Grutman:When I think about hospitality, I think about going home two, three, four, five o 'clock and then waking up at noon or one.

16:17Open Residency Host:One, yeah. That's what my competition would always do.

16:20David Grutman:Operating on low sleep. Low sleep you're operating.

16:22Open Residency Host:Yeah, but when you're in your 20s and 30s, it's a little bit different than your 50s.

16:26David Grutman:Valid. When you're building these kind of new concepts, what are those like non-negotiables? Like you're talking about like owning the IP?

16:33Open Residency Host:Well, non-negotiable is, it's, you know, listen, you always put a budget together. You go to build a place and then you have to value engineer. Always the bathrooms suffer. That's the first thing to suffer is the bathrooms. The bathrooms suffer. You think you're going to have the most regal, insane bathrooms. And then when you realize that you're so over budget, you're like, oh, subway tiles in the bathroom. That's good enough in the bathroom. But one thing I never try to value engineer is acoustics. I think the acoustics in a restaurant is so, so important. It's something people don't really understand.

17:02Open Residency Host:That if you hear ching, ching, ching, and bang, bang, bang, and it doesn't feel right on your ears inside your place, you'll always have a uncomfortable experience no matter what. So I never, I never let acoustics get value engineered out in lighting. Lighting is the most important thing as well.

17:19David Grutman:Let's go through all of those kinds of random things. Cause I already know that when you walk into one of your restaurants, what's going on in your brain is probably ping pong ball. You're looking at every little thing. What are those things you own a spot? You go in there. What are you looking for? What are you looking at?

17:32Open Residency Host:Well, I always walk into a place and I look up, not down. I'm looking to see if there's light bulbs out, like I talk about all the time. But also I take a second to try to feel what the vibe and energy is in the space. Cause you could really get a good sense of what's going on in a restaurant by just walking in and taking the breath and seeing how everyone's moving. And then I'm always looking to see what's the look like on my guests faces. Are they having fun? Are they enjoying themselves? Are they sharing? Are they doing stuff? Is their menu sitting on top of their plates, which means they're not getting serviced.

18:00Open Residency Host:Are their glasses empty? Are their plates dirty? Are they just sitting there? Are they stacking plates? Are they trying to get the attention of a server? I'm looking at everything. Have the plates been removed, but yet they didn't wipe down the table right afterwards. It's all about the details. And those details is what create the experience.

18:17David Grutman:What's the most overlooked thing that these owners of other hospitality groups are missing? What's the big thing that they're missing?

18:24Open Residency Host:You know, I'll walk into other people's places and sometimes I'll see like exposed rope lighting. I'll see stuff that's just not detail oriented or they just don't get it aesthetically. but I'll see it too when when I see a server order and then fire everything instead of pacing out the meal for people when it happens to me I lose my mind but when I see them do it to others I could I could tell when they it's it's the worst no one really orders just the appetizer main course dessert anymore people order multiple things to share if they don't pace that meal out for you and just bang you out with everything like you'll have you ever been to a place where you got your main course and your salad at the same time or your main course and it's i don't like that it's it's it's them trying to push you out of the place and it's the worst drive velocity yeah it's just drive it's just it's just a lazy way of of doing hospitality and this is just over the

19:15David Grutman:last 20 25 years you just have your own rules and you just embed this in your team right i just it's

19:20Open Residency Host:but not only that i look on social media if i see like a bunch of like main courses or like a bunch of big plates with a bunch of small plates. I'm like, hey, do me a favor. Check on that table and see how the server ordered the food. And they'll be like, David, you're right. They put everything in and fired it all right away.

19:40David Grutman:So you're literally being that monocle. Like you're looking on -

19:43Open Residency Host:I'm the sickest human being you've ever met with this thing. I study everyone because people tag me in their posts of the tables when they're eating at my restaurants. And I sit there and I'm like, do me a favor. Go check on that. I'll call my manager right away.

19:56David Grutman:How important is the people in the actual environment? Because I feel like you've done an amazing job, especially on launches to make it culturally relevant. Of course. Like, how do you understand and feel that like, hey, maybe my, you know, my restaurant or my club is starting to go downhill or uphill based on the people that are in there? How do you engineer that?

20:17Open Residency Host:Well, listen, you engineer it by activating your spots the right way and making sure that you're like new constantly. You know, like Poppy Steak, we didn't really have to redo Poppy Steak in Miami, but with Vegas looking so beautiful and where the next city is going to be and what that's going to look like, we wanted to make sure that the OG Poppy Steak was on the same kind of level. So, you know, this summer we closed it for four months, redid it and held back reservations a lot too, instead of it just being so accessible for everybody. Now it's created such as well. Here we are year seven, eight, I forget which one, but like people are dying to go to Poppy Steak now.

20:54And it's like the old crowd that was there in the beginning is wants to come back,

20:58Open Residency Host:but the new hot shit crowd is like, they all want to go. So it's, it's great to do things like that.

21:03David Grutman:I think one of the best things that you've done when I think about you and your brand is you've, you have this great balance of exclusivity, but also being inclusive. So like your places are like hard to get into, but I do feel like everybody eventually gets a chance to go to.

21:16Open Residency Host:Of course, man. Listen, you don't want to make it, with restaurants, it's just supply and demand. So you want to take care of people the best way you can, but you also don't want people waiting for, we've been through that, where people wait 40 minutes an hour and they get really upset too. So it's a careful balance.

21:33David Grutman:Let's go into the new people business that you're in. We talked about this on our call before. You're in venture now.

21:40Open Residency Host:Yeah.

21:41David Grutman:Hotels, restaurants, clubs, now venture. I'm sure it's been a fun journey for you. I want to read some stuff. You are a crazy person and you and your team gave me a bunch of people's numbers and owners of the companies that you're in.

21:53Open Residency Host:Let's prep this the right way. So you and I do a call to say, hey, we're coming on the podcast. Can you tell me about some of your investments with consumer, whatever I go, I'll tell you what, better yet. Let me just send you every investment I've ever made. And here's the founder's name and cell phone number. Call whoever you want.

22:09David Grutman:I love that. Are you a big guy that you give trust first until people break it? Or was there an intuition?

22:17Open Residency Host:There's always an intuition, guys. Let's just be honest. But I'm not a gatekeeper at all. And by the way, in that list of founders, if you found a founder that'd be great for your show, I'd be so happy for you.

22:29David Grutman:First and foremost, I could start with that one. Shahab from Symbiotica. Let me tell you about this call. This is what he says. David is a dear friend. People don't realize the quality of humans David and Isabella are, which is very rare at that level. Grumman is the nicest guy you'll ever meet. I agree. Very rare at this level. Without asking for anything in return, he personally made introductions that led to investments from The Weeknd, Kendall Jenner, Haley Bieber, Jay Balvin, Ryan Tedder, and the CEO of Equinox and Joe and the Juice. You cannot replicate what he has. He has a massive heart, and I'm lucky to have him in my corner.

23:01Him and Mike from Resort Pass both said that you said, I'm going to be your most valuable

23:08David Grutman:investor. Call any of my CEOs, which I love. Why do you say that?

23:13Open Residency Host:Because I just know what, I know there's a lot of people out there that always say they're going to do great things and they just never do. I come out firing them.

23:21David Grutman:I may or may not have said that exact line where this is going to be one of the best value investments you ever get on WhatsApp to someone I'm negotiating with like three, four days ago. I'll show you the receipts right after this. I said the same exact line before I knew it from you.

23:33Open Residency Host:Yeah, I have great confidence that if I invest in you and I really am full blast that it's going to be a really great outcome for you.

23:40David Grutman:One of the big things, you know, in the beginning when we talked about kind of your filter system, I think another huge thing is like, how do I utilize this kind of, let's just call it root ecosystem and put it in organically? What are some like tangible types of things that you've done where like, okay, you invest in X company. How are you kind of like cross pollinating and integrating it into your world? What does that look like in practice?

24:01Open Residency Host:Well, a couple of things is, can I do a collaboration with another one of the brands that I've invested in? Like Symbiotic and Coconut Cult just did a great collaboration. Oakberry and I have done great collaborations. I've done stuff with Prince. I've done with even Happy Dad and other brands. So I always see, is there ways to do collaborations within the brands I invest in? That's a great way for both people to kind of market with each other.

24:23David Grutman:That's super low left and high impact. That's a win-win for everybody.

24:25Open Residency Host:It's so easy. And having great relationships, you kind of know what people love and what they don't love. And if I have a brand that I think people would, like it fits into their ecosystem, I always want to share that as well. So I think just getting people to become cheerleaders of the brand for you is a great thing. And then being almost best friends, I guess best friends with the GoPuff founders, that helps too. So we're able to have the founders of GoPuff and myself on a Zoom with you and saying what we could do for the brand and looking at just your life as a whole too. It's like, how do we make your life better?

24:57David Grutman:And that's just amplifying through their distribution. You take any CPG product.

25:00Open Residency Host:Besides that. I mean, it just gives them a national footprint right away. and they have a lot of data that helps founders out too. They could tell you what's trending, what's not trending, what flavors are trending, what flavors are not trending, where they see it going. You know, freeze-dry candy was the hottest thing for six months and then it wasn't, right? And like, sours might be trending super high, but they see dates are around the corner and people are starting to have a lot of, dates could be a great thing to incorporate into your brain. It doesn't matter. It's just like they have that data.

25:28David Grutman:I love that. That's a key part of kind of your portfolio, understanding and knowing the data side of what's doing good and what's not. And you took an early bet on them too, right? And you bet on them.

25:36Open Residency Host:Yeah, of course. I mean, these guys are animals. Anyone that's willing to make the deliveries themselves, you're going to bet on.

25:42David Grutman:I like that. There's a great story in the book on that. Highly recommend that one. What are some of those red flags that you walk away when people are looking for an investment from you?

25:49Open Residency Host:I mean, the most red flag thing I look for is when people keep coming to me and saying, hey, I'm doing this. I'm going to do a new round. And it's like a 20X or 30. It's like in bizarro land. But listen, Dave, we got people that want to give us money at a crazy, crazy valuation. And I'm always like, you just sink our company, man. Like if you're going to get that money, can I exit at that number now so I could be out of this company? Because you're going to have to raise again. And people should take the financial ride with you if they're investing with you. They shouldn't just act like everything was perfect and everything's great as you make that investment.

26:25Open Residency Host:And then what's going to happen is there's going to be a down round because you've valued your company so high and yet you need to raise money again. And if you can't raise money again at this crazy valuation, you're going to lose your company.

26:36David Grutman:This episode is brought to you by Indeed. Stop waiting around for the perfect candidate.

26:42Open Residency Host:Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, Sponsored Jobs have four times more applicants

26:54David Grutman:than non-sponsored jobs. So go build your dream team today with Indeed. Get a$75 sponsored job credit at indeed.com slash podcast.

27:02Open Residency Host:Terms and conditions apply.

27:04David Grutman:For people out there listening, guys, down round is a bad, bad plateau or down run. You're done. You have to be up and to the right in perpetuity until exit, or it's just a huge red flag.

27:14Open Residency Host:It's a huge red flag.

27:15David Grutman:Yeah, I feel like not enough people look and put themselves in the seat of the investor. And it's like, is there a realistic 7 to 10x outcome on this. And I feel like people don't look at it that way. And it's like, how do you get a win-win out of this?

27:28Open Residency Host:Well, first of all, especially with consumer brand goods, it's so hard for a consumer brand good to sell for over a billion dollars. Let's start there. So if you don't get in early enough, you kind of missed it. So it's important that you're getting into a CBG early, early on and making sure that the valuation's correct because consumer brand goods need a lot of money to grow.

27:49David Grutman:Yeah, they're losing money for years on years until they turn the corner on distribution. Of all the investments that you've made, it was a long list. What is one that you're most proud of as far as maybe the individual founder and or the decision?

28:03Open Residency Host:That's, you know, and of course I love all my investments. It's not like having kids, but some, you know, more than others. But one very one that's very dear to my heart is Skinny Dipped because it was the first round I ever led and to get people to all come in on a big round with me. And it was a round where she's like, I'm the biggest brand that nobody knows. and it's just, they're great founders. And we rebranded the company together and we did activations together. And it's been a huge success story for Skinny Dipped and for myself. And it's something I'm really, really proud of.

28:34David Grutman:Big round too. It was over 10 million.

28:36Open Residency Host:Yeah, it was 12 and a half million. Yeah, pretty big. And this is when everyone said, don't do this, don't do this. Skinny Dipped's not going to make it. I go, I don't, I think you're wrong. And I thought they were so wrong that I brought 12 and a half million dollars of friends' money into the deal.

28:50David Grutman:Why did you think they were right? What was it?

28:52Open Residency Host:The fact, it's so, it's funny to say, my wife is so health conscious. And if I see her eating something like that in bed, I know it's something that's going to be great. And my wife was such a good gauge. Then I try the brand. And I trust my wife's intuition way more than I trust my own. And her taste level way better than mine. And she co-invested too. So I invested, then she came on with her own check separately invested in as well.

29:17David Grutman:Love that. That's a win-win there. What about failed investments? What's a painful lesson you learned from failed investments?

29:24Open Residency Host:Gloss Lab was the worst. It was the one, again, that it was a great idea. Gloss Lab, where she was like, oh, I'm going to raise it at this big valuation. I'm like, okay, but you don't have all these stores open yet. And she's like, yeah, yeah, yeah, but don't worry. They're all opening. And I go, so when they all open, why don't you raise at that valuation? And of course, she got stuck and the whole company plummeted. And I just saw it so ahead of time, like you are ruining this company.

29:52David Grutman:What was it? What did you do wrong? Did you not look deep enough into the numbers?

29:55Open Residency Host:No, she just, I thought she was a better founder than she was. And she's a nice person, great. And she has great ideas and she's very creative, but she was so anxious to get these crazy valuations and not really be smart and go, go long with the brand that she was just trying to get these, these numbers up there to just try and keep feeding it. And that's telling me that the business is not working. And you're also afraid to dilute if you're trying to do these big numbers, because as a founder, as you raise money, you dilute. And the higher you raise money at, the better you dilute. So instead of being inclusive and a team player to try to make the brand grow, you're trying to keep as much equity as possible.

30:35David Grutman:I never understood why people, and I said this so much, like, what's the difference between$37 million and$41 million? What's the difference between$148 million and$116 million?

30:46Open Residency Host:So I hear you on that. But some people have a real issue with it. And I understand. Like me, I'm always like a rounding curve kind of guy. Just round it up, round it, whatever. It doesn't matter. Like it's just not enough time in the day. I'm just happy that we're winning. Some people really get fixated on every little penny.

31:01David Grutman:And that's good for inside your business with keeping checks and balances. But I think externally, keeping people incentivized.

31:06Open Residency Host:I just don't have, like, I'm not splitting a check with you. Let's be honest. Like either I'm buying, taking the check, you're taking the check. We're not, it's not what we're doing here. Like, just keep going guys. Like, don't worry. Don't worry about the pennies. Worry about the millions and millions of dollars.

31:21David Grutman:I agree. What's the most unconventional or surprising company that you've invested in?

31:25Open Residency Host:Liquid Death by far. I was like, come on, man. What are we talking about here? It's a can that looks like a beer. Every celebrity kid, when I did the deal, every celebrity kid came to me begging for it. Everybody freaked out over it. I see everyone taking Instagram pictures of liquid death in my venues. I had to call Mike, the founder, and apologize. I go, listen, I did this investment. I wasn't sure about it, Mike, and I kind of gave you a hard time. I'm sorry. What an amazing company.

31:50David Grutman:What about Colossal? Colossus.

31:53Open Residency Host:Colossal's the greatest, by the way.

31:54David Grutman:This is an interesting one. Did you call him? I texted him too late last night. You're fucked up. I know I did fuck up on that, man.

32:00Open Residency Host:This guy is changing the world, man. This guy brought the dire wolves to us. This guy has Tom Brady's dog cloned him from a drop of blood. That dog's been running around for two years now.

32:09David Grutman:Simplest terms, tell us what they do. I mean, his Wikipedia page goes absolutely crazy, by the way. A couple of things.

32:14Open Residency Host:He's de-extincting animals that got extinct and bringing them back. He is rewilding animals on, you know, giving his technology out for free to this, but he's also helping bring animals that are about to be extinct for good. He's bringing them back and rewilding them. And he has some other little tricks up his sleeve that hopefully will be coming. But can I tell you, Ben Lamb, to me, It's one of these great guys that you invest in and you just see that he's just one of those guys that's changing the world. Seems like a brainiac. And I'm like, listen, man, if you could bring the woolly mammoth back, why can't you just fix my hair?

32:50David Grutman:I know what you can do. We talked about this off camera. You could do a hair transplant, baby.

32:54Open Residency Host:I've done two hair transplants. You've done two hair transplants? It's a good thing I'm Jewish because I get to wear yarmulkes sometimes and I get to cover the spot, but I'm taking all the supplements now for hair. Hopefully it gets thicker.

33:06David Grutman:I've done one hair transplant. I got two left. You know, you have a finite amount of graphs in the back. Of course. I got two. I'm being strategic. The yarmulke spot in the back, it's starting to get a little light. I ask my barber all the time. I'm like, how much time do I have left?

33:17Open Residency Host:You go to a barber?

33:18David Grutman:You're a barber guy? One time a week. I'm a big barber guy. Okay.

33:21Open Residency Host:Because I'm in every two weeks. Just because my eyebrows grow like Einstein, I get the longest growing eyebrows. So if I don't get them trimmed every two weeks, it looks crazy.

33:31David Grutman:Eyebrow thread? You don't do eyebrow threading?

33:32Open Residency Host:No, no, no, no.

33:33David Grutman:That's the greatest$9 you ever spent. I do that every two, three weeks. I never heard about this. Great manscape, yeah. They take this like little thread. It's great. It kind of hurts if you don't do it often. You got to do it. What are you doing here? You're plucking it?

33:43Open Residency Host:No, no, no. They come and put the comb with the shaver and they just trim it down. That's it. But I get that one straggler too that starts going crazy.

33:53David Grutman:You're going to get your eyebrows threaded and I do a little manscaping session. That's like a key part of my manscaping session. Wow, okay. Yeah, you got to go barber then that, yeah. I got you on that. We're here to teach each other on the manscape. Let's go around to some failures, some failures, a little bit about ego and lessons. Quite frankly, when I think about you, I had never heard of any failures. I think that's a great job by you and your team because I had never heard of any failures.

34:15Open Residency Host:Oh, no, no. They can't wait to write about when I fail.

34:18David Grutman:Let's talk about it. I guess let's kind of go one by one. What's the hardest lesson that you learned from Winkers?

34:23Open Residency Host:I mean, I think you have to learn what your audience wants out of you. And every time I try to go mid or low, they don't want it from me. They want that fun, shiny, glamorous experience.

34:36David Grutman:Mid-low price point.

34:38Open Residency Host:Mid-low price point. You just, it's not what my people expect out of me. And as I get older, I want to be more luxury. I don't, I want to try to even raise the bar even higher. But anytime I try to go mid-level or low, it doesn't work for me.

34:52David Grutman:Was it a function of the average order value or did you do it? Did you try a premium diner or like what would you try?

34:58Open Residency Host:Yeah, I try to do a diner that, that I'm a Jewish boy, so I love diners. I love like deli and all that. And my wife's matzo ball soup was on the menu. I was very proud of it. And I just realized that either I was too expensive for the price I was charging for that sandwich or roasted chicken, but also people weren't drinking at my spot. And either I was too expensive or they wouldn't want to have a cocktail or whatever. And I could never get the check average over$30,$40. I can't make money with all my infrastructure at a price that I never saw jumping over to. 90 or 80 or$125 or$250 like my other places.

35:36Open Residency Host:What am I doing wasting my time with this?

35:38David Grutman:You gave me a mind-blowing number when we chatted. How much money do you have to make per year for it to make sense on a restaurant or venue?

35:45Open Residency Host:A restaurant has to make, I think on the low side,$14,$15 million for it to really make sense for me.

35:52David Grutman:You pay your team well. That's nice overhead. Across the whole entire portfolio, 14 or 15? You can't have a little like 6 million guy? Eight million guy? No, no.

35:58Open Residency Host:I can't make, I don't know how people make money. I can't, I lose, I'll lose a lot of money at that level. And people that are able to make money at a six or $7 million gross revenue, it's very impressive to me because I can't do it. My rents are too high. My infrastructure is too high. My payroll is too high. I can't do it.

36:19David Grutman:Something with Winkers that you've said it, but you haven't said it, said it. And it's actually the same mistake that I made about three or four years ago is from an art company. Our art is based off like motivation and inspiration. And we had a pivotal moment where I'm like, okay, can we double down on brand or should we use our moat of like printing art for other people? And I went the art route because I'm like, hey, we do art as opposed to doubling down on brand. And I feel like that's the same mistake you make where you're like, you're all about destination and high end and you went mid low.

36:49David Grutman:And that's just not what anybody wants.

36:50Open Residency Host:It's not what they want from me. People want it. They just don't want it for me. I don't know why, but it's okay.

36:56David Grutman:Yeah.

36:56Open Residency Host:What about Story? I would say Story and Key Club are the other two. So Story, unfortunately, was doing well. The problem is the city closed Story. All these condos went up around Story. And they did a thing where if you have 150 seats, you have to close at 2 a.m. and Miami's a 5 a.m. town. Key Club, I opened it up in Coconut Grove. I thought, for sure, this is a new area of Miami. I'm going to be able to do great. And I did a grand opening there. It It was like the Planet Hollywood opening. I had like Lenny Kravitz and this one and Beckham and everybody. And I did great for a year. And after a year, it just didn't keep hitting.

37:31Open Residency Host:And I think for me, knowing that, again, it's a mid-level restaurant. And it being in Coconut Grove, I maybe couldn't have given it the attention that it probably really needed for me to be there constantly every, you know, to keep it going. But also, I know that I need some transient business too. Transit means people on vacation. And as being just a neighborhood place, I wasn't able to make that work and I was able to sell the restaurant. So it wasn't such a big loss for me, but listen, it's the time, it's the energy, it's everything that you wait. It's like a major project opening a restaurant from the ground up.

38:06David Grutman:So it needs to be in Miami, Miami so that you can ping pong on the ecosystem.

38:10Open Residency Host:I mean, it helps with me, but also I like when people are coming and going and not just worrying about the people that live there.

38:16David Grutman:Any of those kind of like warning signs that you think you ignored, I would imagine that as you matured, you probably exited earlier than you did on the first one.

38:24Open Residency Host:I definitely know it now.

38:25David Grutman:Yeah.

38:26Open Residency Host:So I probably won't get into a situation again where it's mid or low. My specialty is experience. My specialty is people going out at night and kind of like letting loose and giving you a vibe and energy of like, that's your night out. Winkers was never that.

38:42David Grutman:I mean, I would argue that ego in some sense allowed you to do mono. So you can, because it was, it was a new foray.

38:50Open Residency Host:By the way, again, talking about commode, this is not a small little restaurant that's in some strip mall, man. This is a 19 ,000 massive restaurant. Only my ego could push you to do something like that.

39:03David Grutman:Worked out. Would you say, and I know you don't want to pick one, would you say that's your most successful venture?

39:08Open Residency Host:That and poppy steak for sure.

39:10David Grutman:Because those are on the ownership side versus live, which is a management deal. Although that was kind of the first trial that you had.

39:15Open Residency Host:And yeah, I mean, listen, I can't do a live without Jeff Sofer and he can't do one without me. And it's been a great partnership that way. But, you know, more than that, we've really, Jeff's given me such a great platform to be able to shine. And to his credit, he's built resorts that stand the test of time. And I'm just so lucky to have a nightclub in one of his resorts, you know?

39:36David Grutman:What do you think is the most counterintuitive lesson you've learned kind of about bouncing back from your losses?

39:42Open Residency Host:You know what it is? You think you're going to, you're so embarrassed. you're like, oh, people are going to think so bad of me. I'm like, they thought nothing of me. People don't even think about me. You know what I mean? Like, yeah, you think you have this golden touch and all this, but it's not like that, man. That's not real life. And yes, you're going to have some great successes. And to be on my level, I have a lot of big wins, but you don't get to my level without having big losses too, man. You think I learned and I became so good at my trade is because of all the painful lessons I learned along the way.

40:16Open Residency Host:I talk about it all the time to people now when I negotiate even venture deals. I only do good investment deals now because of all the bad investment deals I did when I started. But by doing those bad deals, it set me up to make sure I do only great deals now.

40:32David Grutman:Yeah, I feel like I say it all the time in this podcast. I think one of the most underestimated elements of any and all entrepreneurs is experience. I think it's so, it's just not spoken out.

40:42Open Residency Host:And I would love to tell you, I learn from my lessons every time. No, no, I have to make that same mistake two or three or 10 times to really learn that lesson.

40:49David Grutman:Yeah, but you now versus David Grubman at 40, you would mop the floor on him right now. You'd crush him.

40:54Open Residency Host:Oh, man, if I had the weapons of mass destruction I have now, then it would be unbelievable. We got a long run by left.

41:00David Grutman:You're going to deploy. There's going to be a lot of weapons that are going to be deployed.

41:03Open Residency Host:I hope so. I hope so.

41:04David Grutman:I want to round the corner and we're going to fire off tons of random quick strike questions. Is all press good press?

41:10Open Residency Host:No. No. I don't believe that. No, listen, I hate bad press. And if anyone who tells you, oh, bad press is great press, it's not. I don't think so. I mean, especially when you write a book called Take It Personal and everything really you take personal, it's not great.

41:28David Grutman:What is the best thing you learned as a bartender?

41:30Open Residency Host:Being able to engage with people one-on-one. And, of course, servicing others. You know, listen, everyone thinks the hospitality business is so shiny and beautiful. And at the end of the day, we're really just serving others. And I love that part. I love being able to serve up experience for people.

41:47David Grutman:For context, what are all of the jobs that you've had in the hospitality space?

41:51Open Residency Host:Man, I've done it. I've done dishwasher. I've done host. I've done manager. I've done server. I've done bartender. I've done bar back. Hit the toilet bowls. I have not been a bathroom attendant, but I've done some nasty shit in my life in the restaurant, I mean, in the nightclub and restaurant business for sure.

42:08David Grutman:And that obviously serves you well that you've done everything so you can ask anyone to do

42:12Open Residency Host:Yeah, and by the way, you could come to my restaurant. You'll see me picking up trash non-stop

42:18David Grutman:Love that. All right, we're going to pop up a screen right here. The old Dave I'm going to pop up the the sexiest picture of Dave on the internet It'll probably be like sub 10 % body fat. I did some I did some googling when we do your name and image You're looking real good. You were thank you. Thank you 10 % Yeah, I saw the obliques and the side cuts. Wow. What was the biggest change?

42:35Open Residency Host:You know, during COVID, I want to take my health seriously. I met Gary Brecka. He helped biohack with me. And just becoming on a routine of being passionate about tennis in the morning, doing heavy weights, and then, of course, all the peptides. And staying healthy. That helps. Food?

42:51David Grutman:On the food side of your time?

42:52Open Residency Host:Food, not drinking, this, that, everything. The name of your book coming out is Take It Personal. Right.

42:58David Grutman:What does that mean to you? And why'd you write the book?

43:01Open Residency Host:To how much I care, man. And I think, you know, when you care so much about the details, about the experience, about the business, it's why I'm successful. It's because I take it so personal. And I really hate it my whole life. And people were like, oh, when something bad would happen, they'd be like, don't take it personal. I'm like, yeah, I don't know about that. I think you better fucking take it personal.

43:22David Grutman:Obsessive.

43:23Open Residency Host:If you would.

43:25David Grutman:Beautiful book, beautiful cover. The same person that designed the iPhone, designed your book. How'd that happen?

43:30Open Residency Host:Sir Johnny Ive.

43:31David Grutman:Sir Johnny Ive.

43:32Open Residency Host:yeah, I was getting the publisher, no events, was sending me book covers that literally didn't resonate with me at all. And it got to the point where I was like, I'm going to use one of my coupons with Johnny. Johnny, I need, I really need this. Goes, oh, I'm so honored to be part of this. And the next day, Palatone colors, the whole thing. It's crazy. And he did that super quick and he's been around for the whole process now to make sure the sleeve's good. It all fits in, everything is cohesive. And the publisher was like, are you paying Johnny? Because I go, well, Chachi PG just paid him$6 billion to design some devices.

44:09So it's either$6 billion

44:11Open Residency Host:or free. I'm going to go with the free. It's crunch time at work and you need to bring wings to your workday. Visit redbull.com slash getting it done and answer a couple questions about your work style to get a Spotify customized playlist tuned to your productivity. Plus, score a can of Red Bull on us while you go from to do to done. And remember, Red Bull gives you wings. Supplies are limited.

44:34David Grutman:Terms apply. Visit the website for more information. K-pop Demon Hunters, Saja Boys Breakfast Meal and Huntrix Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi?

44:48Open Residency Host:It's not a battle. So glad the Saja Boys could take breakfast and give our meal the rest of the day.

44:53David Grutman:It is an honor to share.

44:55Open Residency Host:No, it's our honor.

44:57David Grutman:It is our larger honor. No, really stop.

45:00Open Residency Host:You can really feel the respect in this battle. Pick a meal to pick a side.

45:07David Grutman:Participate in McDonald's while supplies last. There you go. What's up guys? Hope you guys are enjoying the episode. This interview is a small glimpse into David's new book. Take it personal. I read it this past weekend. It is a great read. If you guys want to check it out, link below in the description. Enjoy the rest of the episode.

45:26Open Residency Host:Biggest learning lesson from Jeff Sofer. Jeff Sofer has taught me to swing for the fences. He makes such big bets. It's what's inspired me to open a restaurant that was 19 ,000 square feet. This guy has opened two massive resorts in areas that people said, nah, nah, nah. And he's done it and done it really well. He inspired me to go for the fences. I mean, it's just, if you're going to do it, you might as well go as big as possible. And Jeff Sofer really is that guy that takes it to another level.

45:56David Grutman:You can't have enough people like that in your life that just make you go bigger.

45:59Open Residency Host:And he keeps me humble because he tortures the living shit out of me. Jeff Sofer will tell me exactly whatever I'm insecure about, we'll find it. And he'll just nail me on it every time.

46:10David Grutman:Love that. What was Isabella Grutman's best business move?

46:15Open Residency Host:Isabella Gretman's best business move was starting her jewelry line that's for sure she's just so good at it she's able to layer she's able to make jewelry that really resonates with people that love her and follow her and she's a girl's girl

46:29David Grutman:good taste

46:30Open Residency Host:she has the best my wife has the best taste of anyone I've ever met it's the Brazilian I don't know if it's the Brazilian I'm just gonna say I'm just gonna say this is Brazilian I don't know if it's the Brazilian I mean Brazilians have great taste but she's just there's something special. I mean, obviously, she's my wife. I can't say anything. She's just the best.

46:50David Grutman:Last couple questions we got here. One word to describe Ari Emanuel.

46:55Open Residency Host:He's really Ari from Entourage. And Ari Emanuel, yeah, he really is. I mean, this guy shows you that you need to talk about an example of someone that takes it personal. This man takes it really personal.

47:09David Grutman:He seems hyper aggressive and focused on attack mode 24-7. One music act or appearance in the last 20 years that sold way more tickets than you would ever guess. I want you to go like weird and random, like a Nelly Furtado or like a Soldier Boy or like the Housewives of a show. Something random. I mean, something random.

47:32Open Residency Host:I mean, I think John Summit has kind of blown me away. I mean, I knew his engagement was very, very off the charts. But John Summit, what he's done, what he's been able to accomplish in such a short amount of time as really capturing the Gen Z audience is something I could never see. I mean, of course, I invested in him early and I knew he was very special. But at this level, it's something you see every 10 years.

47:57David Grutman:And that's someone that you brought on to kind of like the live roster early you invested in him?

48:01Open Residency Host:Yeah, I mean, listen, with all due respect, yes, I was early on seeing how successful he would be. I never thought he'd be at the level he's at today in the short amount of time he is today.

48:12David Grutman:Yeah, I do feel like it's come out of no, I feel like it's been like three years, three, four years.

48:16Open Residency Host:Not even two years. It's been like crazy. Three years. Yeah.

48:19David Grutman:Insane. Good piggyback off that. One word to describe Steve Aoki.

48:23Open Residency Host:I mean, Steve's the best. He's a great investor. He's a great DJ. He's a great fun guy. And he knows his lane. He knows what his brand is and he knows like what brands to invest in and how to really add his superpowers to those brands. He's, you think I'm a good investor? He's a very good investor.

48:40David Grutman:Great documentary on Netflix of him. I had no idea how hard he works. He works like 20 hours a day.

48:44Open Residency Host:No, no, this guy does more shows than anybody. He moved to Las Vegas just to be able to do as many shows as possible in Las Vegas.

48:50David Grutman:Did not know that.

48:51Open Residency Host:Yeah, it's crazy.

48:53David Grutman:That's amazing. Entrepreneur or brand that you want to give flowers to and why?

48:58Open Residency Host:I mean, so many good, I mean, Goodles and now Coconut Colt and Symbiotica and I'm looking at instant hydration and it's just so many great brands out there. I'm just like, what you've done is incredible.

49:11David Grutman:I'm going to pop up any and all the logos that you've invested in up over our head on the final production so we can - Okay, great. Shout out the whole team. What about a creator that you want to give flowers to and why?

49:22Open Residency Host:Ben Gorham, the founder of Byredo and creator of Byredo who sold his brand a couple of years ago has been such an impactful guy with me. Also, Mark Barocca. from Shark Ninja to see what the brand he's built from Shark, you know, beauty and Ninja appliances. Having him around me has been really impactful. And Raf and Yak from GoPuff. They, you know, through good times and bad times. Let me tell you, there's bad times too. And these guys keep raising the bar over and over and over again. How big is GoPuff now? They just did around at a billion. Wow, that's insane.

50:00David Grutman:how big can Groot Hospitality be?

50:04Open Residency Host:Thank God I have a great team around me that's wanting to grow. So I think as the next generation of people that come to the company really are hungry to grow this brand as I am, I think the star's the limit.

50:17David Grutman:I had a great time, man. Thank you so much for having me. Love the book. We're going to put down below a link in the description for the book. Where can they find you everywhere on social? What's the one place they should go? Outside of Instagram. Very entertaining, especially on the story.

50:28Open Residency Host:David Grutman. on Instagram.

50:30David Grutman:And what about the book? Where's the best place to get the book?

50:33Open Residency Host:Amazon.

50:34David Grutman:Done deal. I appreciate you, man. Or your local bookstore. Appreciate you. What's up, guys? If you guys got this far in the episode, I would assume that you enjoyed it. If you got any value, it would mean the world if you hit the subscribe button, give it a like, post a comment, tell a friend. We could keep going bigger. Bigger guests, bigger locations, more value. See you in the next episode.