The next steps for Virtual Kitchen Operator and Smash Brothers Sliders
Crickets 🦗 🦗 🦗
Thats all I’ve given you the last 5-6 weeks - nothing! That silence is a stark contrast to how loud I’ve been on Linkedin, on podcasts, through this newsletter, and on social media the last few months.
Read on to hear about why..
Virtual Kitchen Operator was conceptualized in October of last year. Recall that I walked away from a previous role at Boston Consulting Group because I lacked fulfillment in my work. I woke up with the feeling of “I just don’t feel like this is what I should be doing with my life.” Which was challenging, because BCG had so many great things to offer - career advancement, great pay and benefits, flexibility of my location ( I worked remotely and travelled and lived out of Airbnb’s for 12 months from late 2020 to end of 2021!), I was surrounded by brilliant people… But after years of client services work, I just didn’t wake up feeling excited or fulfilled in the things we provided for those clients.
Very quickly (less than a week later I think…) I got excited about a new opportunity to dive into that focused on creating a new digital-first restaurant brand and making a wave in Columbus, Ohio. I was excited because this opportunity gave me things that BCG couldn’t: ownership and control over everything we set out to build, opportunity to work with my brother and blend our expertise (me on business/creative/tech, him on food and small business operations), and it even had the potential for significant financial upside - a juicy little cherry on top.
And I wanted to write about it. Share the journey, build up hype and authenticity in our successes and failures, and generate some buzz and a network of followers and like-minded people. I thought it would be fun, and I also thought it would pay off in terms of growing this thing.
And for some reason, YOU FOLLOWED ALONG!
It’s been a hell of a journey. So now, let’s get real on “where do we go from here". Because there is finally some clarity.
Lets recall the good news…
After all-out insanity for about 6 months, we nailed everything we set out to do. Absolutely nailed it. We created a business and a brand that generated significant revenue for the minimal hours we were open. We:
Sold over Seven Thousand (!!!) Smashburger Sliders
Achieved a perfect 5 star rating on Google (52 reviews), 4.9 on Uber Eats (37 reviews) and 4.8 Doordash (26 reviews)
Created an apparel store and sold $2k in merchandise overnight
Raised $2,340 for cancer research that we gifted to Pelotonia - a cause that was important to us
Gained social virality from an anonymous post on reddit achieving 22.9k upvotes and top spot on r/food.
Everything we did WORKED. And it even turned a profit even though we were spending egregiously just to make things as POWERFUL as possible to generate demand. In a software sense - the business achieved “Product Market Fit.” And it is sitting, waiting for more investment. And that’s the fun part of the story to tell.
But there is another side to the story which has become increasingly clear the last few months.
And now lets talk about the honest, not so good news…
This business a huge investment, specifically in 3 major buckets:
Time
Money
Sanity
When it comes to the investment of time, what I mean is that pushing this forward will consume me and my brother for 60-80 hours a week for the next 3, 5, 10 years of my life. And thats not a M-F, 7am to 7pm schedule that at least leaves you with some normalcy of evening and weekend hours — its an almost daily schedule operating services during peak social times. Friday at 7 when your family/friends want to grab dinner. Saturday night during buckeye games. Thursday during Trivia night at your favorite dive bar. Thats the lifestyle for the better part of the next decade. Trading off “now” for a future that might work out.
Many business folks have said to me “just hire other people, and start to work on the business not in it”. But when you talk to almost anyone running a food operation, it becomes clear that its naive to think thats realistic in any kind of short or medium term. In food, the founders don’t pull away for a loooooong time. They do eventually, but thats just the reality for 98% of concepts. Thinking we could just hire someone and “get our life back” is unrealistic. It’s a grind of a business. And even if we did hire accountable GMs to run each location, the knife still hangs over our heads - its our business. WE are the brothers from the brand we’re running, Smash Brothers Sliders.
In terms of money - we initially saw potential in the upside of what are called “virtual kitchens”, which is a low capex, low overhead, highly scalable model - IN THEORY. After digging into that world a bit deeper, we became pretty pessimistic on the sustainability of the purely licensed virtual brand model.
Specialized takeout and delivery food - great. Brands licensed to hundreds of locations? Not great.
But as we were digging in more, we also found some clear whitespace in the idea of a homegrown burger brand, with an experience designed 100% for takeout and delivery, with authenticity, a wholesome narrative/story, and quality and intention in every decision.
(you don’t get authenticity or quality from a licensed, scaled up celebrity burger concept being cooked by the < insert sit-down chain restaurant name here *cough cough* > line cook in one of 300 locations across the US and sold out the back door on a 3rd party app.)
To grow into that whitespace, we latched onto this idea that we could be “The Dominos of Burgers”. I know thats an ambitious comparison, but still. The point is, we proved that theres absolutely traction for that market and for our concept, but that traction gets a lot closer to the territory of the traditional restaurant world.
AKA:
Slow-to-scale
High capital needs
Lengthy commitments on leases or buildings
Challenging ROI for an equity raise, thus leading to a reliance on impossible debt terms
Dependency on supply chains that are unpredictable
The tightest food-service labor market anyones ever seen (further evaporating margin and stacking the deck against little operators trying to get started)
And more, and more, and more. Every industry has challenges, but food service is a beast.
And finally, when I say “investment of sanity”, what I mean is stress and significant sacrifice on many different personal and social components of my life. On myself, both physically and mentally, and on friends, family, and relationships with those around me.
And beyond that, I’m just not finding passion in food, or takeout and delivery concepts, or anything in the restaurant and kitchens space right now. And that lack of passion is resulting in a lack of fulfillment for me in this business, too.
I was so excited to get rolling on something to call my own, and at the time it absolutely felt like the right decision! But if I’m being honest with myself, I didn’t stop and breathe and ask myself what I think I could find genuine excitement in, and what I might sacrifice along the way if I dove into the food/kitchens world.
Radical transparency has always been the theme, ever since the 50 in 50 started. Here it is, cards on the table.
I bet you can see where this is heading…
Can we keep growing this business? Absolutely. Do we want to, knowing the all-in cost of time, money, and sanity? Thats what we have wrestled with for a few months now.
And after a lot of personal reflection, we ultimately decided that we don’t want to do this anymore.
Fortunately, this is a decision that my brother / co-founder felt coming for a while, too. We had a lot of long, hard conversations about the tradeoffs we were both making, and what signs would trigger us to continue the business or to stop and let it go. And we finally came to a decision he and I are both comfortable with. We created a beast that will consume us. And we are ready to move on.
I gained so many things but I sacrificed a lot of my own happiness, attention, and focus. I genuinely believe we created something with a >$10m upside in 7-10 years. But even if you could guarantee me a $10m check right now, gifted to me in 1 decade, I would walk away from it 100 times out of 100 knowing what I’d have to give up to get there. The opportunity cost is too high.
There are so many feelings that come with walking away from this. It’s easy to let pride get in the way - “I said I was going to build this business, and now I’m not”. Ego can be a hard thing to overcome. Theres also fear of what’s next, and fear of the unknown. Theres sadness that we gave up a lot of time for what now feels wasted.
But then there’s good things, too. We gained clarity on what we value. We learned a ton about sacrifice. We got a chance to work on something that is an unbelievable piece of our life story. We succeeded in what we set out to do - not only succeeded but shattered even our own expectations when it comes to the “upside”.
And we also learned that we’re just ready to do something else, and devote our energy elsewhere. And maybe get a beer on a Friday night instead of serving a burger.
What comes next? I have no idea. Some more time to myself first, I think. We came to this decision on the business a few weeks ago, but only now did I finally feel like sitting down and sharing an update. I’ve been pretty coy, kicking the can down the road for the many of you who have emailed, texted, DM’ed on instagram, or asked for updates in other ways…
I thought about just giving you all an Irish goodbye and disappearing into the abyss of the internet. But I didn’t have it in me. I thought it would be nice to wrap up this story with a neat little bow.
Will our core brand Smash Brothers Sliders ever make another appearance someday? I guess you can never rule it out. Its a 5-star product, a 5-star concept, and theres very high quality IP and social proof that is not easy to create out of thin air… but in the way that we were operating it, or the way it was headed, no - it is done.
Thank you for following along on this journey. I enjoyed sharing it with you all - really. Writing is fun for me.
And so we come to the end of the story of Virtual Kitchen Operator.
Peace out,
Sam