Bourree Lam: How did you get into the restaurant business?
Damian Mogavero: I fell in love with the restaurant business as a teenager. I was a busboy at the Hyatt in New Jersey, and learned one very important lesson. The general manager said, “If you want to be successful in this business, all you need to do is exceed guests’ expectations.” It still drives me, that saying.
Lam: So 20 years ago, you started a software company, Avero, that allows restaurants to look at their own data. Who were your first clients?
Mogavero: Tom Colicchio and Danny Meyer were among my very first clients. That's when they were partners at Gramercy Tavern, and they've since gone on to build their own culinary empires. Shimon Bokovza of Sushi Samba, he was a very early customer as well. They were very open-minded and progressive, and they really understood the business problem that I understood, as a frustrated restaurateur. There was not accessible information to make really important business decisions.
Lam: Why is it that the restaurant business tends to be more instinct-driven than data-driven?
Mogavero: It is so creative, and it really attracts innovative and creative people who really enjoy the art and the design of the guest experience. When I was a frustrated restaurateur, I would ask my chefs and managers simple questions, such as: Who are your top and bottom servers? Why did your food costs go up? Why did your labor costs go up? And they would give me blank stares, wrong answers, or make up stuff. The thing that really killed me is why so much time gets spent in administrative B.S.
They were frustrated artists in their own way, because all those questions I was posing were buried in a bunch of Excel spreadsheets. What I like to say is, nothing good ever happens at the back office. You can't make customers happy and you can’t cook great food there. That was the business problem that I saw. I assembled a chef, a sommelier, a restaurant manager, and three techies as the founding team of the company. The message was: We’re going to create software, so you can get back to what you love to do with a more profitable operation.
Lam: You say throughout the book that it’s less about data and more about creativity, though.
Mogavero: The data is going to guide you to make the right decision. In the opening of the book, I just love the people at [the restaurant] Navy Beach in Montauk. One of the things they figured out from the data is that that their best days were cloudy days. With that insight, they realized they had to do something different on sunny days. So they got this boat, and it would go out to the bigger boats and bring customers physically to the restaurant.
Lam: I like that story in the book, because it points to the fact that it’s never enough just to collect data and look at it—you have to act on it. What have you learned from the billions of dollars’ worth of balance sheets that your clients have submitted for analysis?