STARR Restaurants: Stephen Starr. How a Non-Foodie Built Thriving Restaurants on Gut Instinct

**Guy Raz** (0:00)
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I saw something that you talked about in this business, and it would just stress me out so much, which is somebody might go to your restaurant five times, love it, and then the sixth time, something might happen that is big enough that they'll never go back, and they're really mad.

**Stephen Starr** (3:03)
Yeah. You know, the more you say what you just said, the more I realize what a stupid business this is to be in.
One of our landlords, Seymour Rubin, said to me, he goes, why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation?

**Guy Raz** (3:19)
Yeah.

**Stephen Starr** (3:19)
One guy could decide, that's it, I'm leaving, and the whole restaurant falls apart that night.

**Guy Raz** (3:33)
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Raz, and on the show today, how Stephen Starr built one of the most beloved and lucrative restaurant groups in the country, one hit at a time.
Compared to almost any other small business, owning a restaurant makes almost no sense. The startup costs are high, you have to take out a long-term lease, your inventory is perishable, finding staff is a nightmare, the hours are crushing, the customers can be demanding and annoying, and if you execute well, at the end of the month, your net margins are around 5%, 10 if you're lucky. If you really wanna make money in the restaurant business, you're better off trying to buy a Taco Bell franchise where margins are closer to 20%.
Or you can do what today's guest, Stephen Starr, has done. Build really awesome restaurants that serve lots of guests, do it consistently and replicate the model multiple times. Right now, Stephen Starr owns nine of the 100 highest grossing independent restaurants in the United States. These include places like Pastis and Buddakan in New York, Le Diplomate in Washington DC and Makoto in Miami. In each one of Starr's 40 restaurants, you'll find a unique dazzling design in addition to great food. Together, these restaurants pull in nearly half a billion dollars a year in revenue. Now, you may have heard the statistic that around half of all restaurants in the US don't make it past year five. Even Stephen Starr has had to shut a few restaurants down over the years. But his incredible track record at building restaurants that even 10 or 15 years in are still hard to get a reservation at has a lot to do with so many things that most of us don't even notice. The lighting, the temperature inside, the music in the background, the way you're greeted when you walk in. These are things Stephen's been obsessed with ever since he opened his first restaurant, The Continental, back in 1995 And here's the other thing. He's not a foodie. He doesn't really know much about cooking at all. In fact, before he even got into restaurants, he had a whole first chapter as a comedy and music promoter. And as you'll hear, for a guy who's launched such forward-facing, crowd-pleasing businesses, he kind of prefers to stay in the background, which makes sense when you consider his childhood. Stephen Starr grew up in the mid 1950s and 60s in New Jersey, just outside of Philadelphia.