 Hi and welcome to School of Hustle. I'm your host Sarah and this is a show where we chat with everyday entrepreneurs about everything that goes into starting a new venture. The restaurant industry employs 15.6 million jobs and they had 863 billion dollars in U.S. sales in 2019, the majority of which being small family-owned businesses with less than 50 employees. And our next guest is the co-founder of one of my favorite New York restaurants, Dave Ethan of The Grey Dog. The Grey Dog was started on a quiet West Village street in 1996 by two brothers Dave and Pete who decided to open a restaurant with no prior business experience. Their mission was simple to create a place where people wanted to be and guess what it worked. Today they have five locations and are known for their delicious locally produced food and welcoming atmosphere. Dave it's an absolute pleasure having you on the show and being in your new location here in the Flatiron. Well thanks for inviting me I appreciate it. Well I've been a big fan of The Grey Dog since college and I love your vibe, I love the food here. So tell me about this, tell me about how you started The Grey Dog. Where did the idea come from? You and your brother had never started a business so why why decide let's start a restaurant together? Right so Pete and I were working in New York City at the time doing you know basically restaurant work and I was working for this guy who he wasn't terribly bright but he was really good at what he did in a cafe and it gave me the confidence to be like oh man if this guy can make this work I could definitely do this too. So I got together with Pete and we were both we were both feeling like it's sort of confident and we had a little bit of money saved up like maybe maybe I had 25,000 bucks and he probably had like closer to 40 but back in those days you could do some right you can actually do something with that money. Yeah and so you know he he went around walked around tried to find an area that didn't have a Starbucks or any other coffee shops and said hey Dave I think I found the spot there's nothing around here and without really knowing the neighborhood at all we called the number on the store there was a landlord's number called them up set up an appointment and like I don't know like a week later we had a lease and and you know no game plan. How do you decide on what type of restaurant to actually bring into this location that you found in such a laid-back way? Well you got to go with what you know. Right right and so we were just a coffee shop back then. Oh okay did you serve like little things to go with the coffee like biscuits and cookies and things like that? Right we ordered in baked goods muffins and stuff but we didn't really have much of a menu it was really it was predominantly going to be a coffee shop. Oh we take this space and it's got a kitchen right but but you didn't need a kitchen but we didn't need a kitchen so we were just storing stuff in the kitchen because it was like put all that stuff back there you know we don't we don't need it so customers would come in with groceries and say hey you mind if I use the kitchen and I'm just going to make myself an omelet. See this is what I mean the restaurant is so laid-back the customer would come in. They'd clean up after themselves they were just looking for a home they were looking to hang out and so our menu started to develop in a way where like well if this guy wants a burger let's put a burger on the menu if this guy wants an omelet let's do that and pretty soon we had a fairly expansive menu that you know had basically everything that our customers wanted. So you really just kind of chose the items on the menu based off of what customers asked for or made in your kitchen. It's I mean it's not totally the case but yeah pretty much. So it's called the gray dog can you talk about why it's called the gray dog because I always was curious myself. Yeah which version do I give you. Back when Pete and I were dreaming up this idea we're sitting on our law in this law department that you know I think it was probably a legal rent at the time and we don't really have we don't have kids we don't have wives we don't I don't even think we have we don't even have girlfriends at the time we're or friends two bachelors living in an illegal apartment sounds like New York. But we had our dogs he had a black lab named Goose and I had a yellow lab named Moose. We were sitting on the couch and I don't know if anybody was smoking or we were drinking but you know I'm like hey you know it's just us why don't we combine their colors and you know you take a yellow dog that's really kind of white and a black dog you put them together and you got a gray dog. Yeah and that's that's the gray dog. So it was a morphed dog between your two dogs. A morphed dog between our two dogs because it was you know two brothers morphing an idea. Yeah it made sense at the time. I would have never guessed that was the story. People spend a lot of money these days coming up with you know concepts. But you know your testament to just keep it simple and deliver what customers want because that's working perfectly. Yeah. Don't overthink it. Right. It's like back to basics and basics never fail. Right. Basics never fail. Yeah. In our prison like interview. Yeah everything's basic today. You mentioned that you had some savings to fund the restaurant but I know restaurants in New York it's very expensive real estate often very low margins. So how did you go about funding this and making sure that it will work long term. We we were pretty careful. I mean it took us 24 years to get to this many restaurants but it took it took us 10 years to go from one to two. Wow. And back then we weren't making a lot of money we were doing it because we were we were having fun. Yeah. And that it always it always had to stay fun. And then we saved and when it got to the point where we could afford number two and it wasn't going to sink number one if it didn't do well we we took a shot and that one did better than number one. Really. Why do you think that did better than number one. I hit the right crowd. Oh was it a different it was a different location that maybe was like more appropriate for it was University Place. So it was NYU. It was this was your union square location. That's the first one I ever went to. That's the first one most people go to because we we get there I guess there's a migration where we get you know all the college kids and then as they expand throughout the city we get them all the way up through having their own kids now. Yes this is accurate because I'm literally that person. That's it yeah. So you know very well. That was that was the homerun location that was. And then after that so it took 10 years to get to two you got to two and it sounds like that did very well quickly so how long until you got to number three. Well this is where this is where like things got taken out of our hands a little bit right because there wasn't and Pete and I didn't really have these plans to expand and make it a you know multi-chain restaurant. So in in the process of the 10 years Pete had established a killer catering business that we were running out of the basement of the Carmine location. So 10 years probably 12 years in the landlord gets frisky with the rent and he starts causing trouble and saying I'm going to take away your basement space I want this I want that. Because he heard you're being successful so he wants a part of it. He wanted to be a partner. Was that legal with your contract that you had? It's just I mean none of it's legal it's just business that's the way New York works. And if you have a good good relationship with the landlord you could you could work it out. For sure. We had trouble so he took away our catering space. We looked for another space that would have a huge basement. So that's how we wound up in the Chelsea location it wasn't at a let's get bigger and bigger it was out of man we got to save the catering business let's find a space that isn't too expensive and has a huge basement. And then a year later Google opened up across the street. Wow. And it was just like oh man this this is pretty lucky and that's a really cool location. Yes. So here we are growing growing and and you know it's working out but it's not planned it's still not planned. Nothing's planned yet. You say it's not planned but you can't ignore that you guys are really good at what you do. You know like I feel like you're being very modest right now because the food is great and what I've always been impressed with is no matter which gray dog I go into I feel like I'm family. It worked out because we never stopped having fun. Yeah and we never we never treated it like a business where it was we treated it we treated it like hey you know a lot of restaurants would say this is our family the staff is you know family of a my team really feels that way they really felt that way and they've always you know it became about the staff yeah where they made the customers feel so damn good that the customers were able to you know come in and they didn't focus on some of the things that weren't so restaurant quality. I don't know what things you're talking about but I think I think everything's restaurant quality. Speaking of the food you guys focus on locally sourced ingredients most of your food comes from New York and Connecticut within 200 miles within reason obviously you can't get an avocado grown here. Right. Why did you decide to do that? When we when we decided that we were going to actually go for it we got a game plan in place where okay now we're going to now we're going to grow. Yeah. Now we're going to take on some investment money. How many years did that take for you to say okay now let's let's really take on investment money and grow. 23 years. So last year great. So we brought in investment money we brought in a team of really talented people. Alan is our is our chef and he's but he's the type of guy where he knew the he knew the food we were doing was not you know a lot of chefs don't want to spend their time making you know avocado toast you know they want to thrill the world with stuff but he was all about let's let's pay people livable wages and let's bring in everything locally that we can. He partnered up with a bunch of farms around here and started creating a menu that would be you know really responsible. Are there any local farms you work with that you're particularly excited about? Yeah we love working with Rock Steady Farm it's a local farm again one of those partnerships that they could be super proud of. Yeah. We even have a cocktail named after them Rock Steady. Oh Rock Steady nice. Whatever they grow we figure out a way to put into our menu. So is it is it mainly vegetables or do you get fruits from them too? Whatever they have they have great flowers too. Oh nice. I went up there that oh this is a cool story right so we go up to this farm as a group whenever we get the opportunity and they put us to work so I think I spent one day eight hours weeding their flower beds like filled with bugs and dirt and it was one of our most satisfying days I had in the last year and just knowing like seeing the field where we're getting all our food I never had that experience you know it was back in those days when it wasn't really a focus you know where the tomatoes were coming from but now like oh damn those are our tomatoes. You see it direct from the source so you know how good it really is. Yeah and they're like hey can we bum a ride to the city with this for you you know. Now I heard that there's a very interesting story involving bread and a motorcycle can you please share this story with me. Yeah we gotta go back okay we gotta go back to the beginning so okay so the guy who was bringing all the bread that we were making the sandwiches with his name was Rick Sticky Rick he had a bakery in the East Village Sticky Fingers. Sticky Rick in the East Village doesn't get more New York than that name. Oh he was great he was he was in the Hells Angels and had a beard down to here. Wow. Tats everywhere gigantic guy bullet holes like everywhere. Bullet holes? Yeah he'd been shot several times. Oh like actual bullet scars. Okay. He would deliver our bread on the back of his chopper. Wow. But we had these French doors that would open up and he would drive the chopper right into the store. Oh my god. Hey Dave all right he called me boy boy here's your bread. Oh my goodness. I miss that guy. That's amazing. So how did the investment help your business expand? Well it gave us the capital we needed to turn a mom and pop shop into a real business. I was contacted by this guy Johnny Hill who you know has become our partner but he he reached out and said asked if we had a interest in expanding and so he and I went for a walk around Chinatown and after about three hours we realized oh man there's a connection here. He was in the investment world but he wanted to do good investments for a lack of a better word. So he created a company called Lanyap that would be focusing entirely on investing into companies that are going to make the planet better. Companies that would focus on being green. Companies that would focus on living wages. It's what he wants to. So he made a promise to all his investors. He's like okay I'm going to set this up. Our first investment is going to be Gray Dog and we're going to turn them into a B Corp. We're going to... What are the benefits of a B Corp? The benefits of B Corp there's really none for the business. It's just you feel you feel good. Because a B Corp means that you're socially responsible and you're doing all these things to help the environment. Correct? Is that what it means? You're socially responsible. You're doing all these things for the environment. You know like Patagonia and Ben and Jerry's. They're companies that you can feel really good about supporting. Business as a force for God. B Corp is a framework for using business as a force for good. B Corp. What changes are you guys doing in your business today? Well starting with the reboot of Gray Dog which this is Gray Dog 2.0. This location the Flatiron which is where we're shooting from. So we have this amazing dude Sam who he's probably in my head right now. He created this as we're getting to be a B Corp. We're close for this location but now we're a green restaurant space here and with Allen our food is just going towards more and more local and our staff now everybody you know with Melissa at the helm of HR you know everybody gets a living wage now. This is all stuff that doesn't really happen in the restaurant world. So now we're in your new location it's coming together beautifully. What does it take to get something like this started because me looking around I mean there's a lot going on here. It takes a pandemic ending. Great. That's the first thing. Still working on that. Right this one was the first time that Pete and I had to collaborate with other people. You know now we had now we had a lot of people who are significant players in the company who would be like well I think the beam should be lower or the sandwich selection needs to be this so it took us it took us quite a while just to get comfortable in making decisions together. Right because before it was just you and Pete. It was just us and it was like I'd be like there was a lot of trust. Right. And I was like you got this man you know what you're doing and I had never bothered I had never bothered to question anything Pete would do. He was you know he was brilliant in my mind he's still brilliant in my mind but we're just having fun and then he'd be like all right you got this I don't have to think about it. So you guys kind of you would do certain aspects and he would do certain aspects and you always did that for all other locations. Yeah absolutely. But now this one because you have an investor you have to clear everything by them. We right we had to we had a new set of standards we had to work with. You mentioned the pandemic obviously that was a devastating thing to happen to many restaurants worldwide. What have you done to try to move forward after something like that happening and having to close down your restaurants for multiple months and only having outdoor dining. Yeah we're staying positive. That's that's all we can do we've been dealt dealt a hand that I mean it sucks it but it sucks for a lot of people. We're trying to make a go at it. We've actually you know we had to do everything on the fly. We've never done table service right but we learned in the first two weeks you know we still set up a kiosk outside. My brother made these incredible you know incredible stands like a lemonade stand for everybody and we were doing like 60 bucks a day and we're like oh boy this isn't going to work and so we we got permission to go out into the street like everybody else and we built these pretty cool spaces but we were still using this kiosk style and we weren't doing well and it was like a quick pivot. All right table service well Grey Dog's never done table service and it's it's difficult to you know create the illusion for customers when you know I know hi you know I got gloves on protective gear and they can't see smiles I know right so um but you do it and we're actually we're actually we're kicking ass at it. I'm super proud of our team they're like the whole setup's nuts you gotta bring a whole stage out like when we set this thing up today it was like two hours and it's just you know umbrellas and cameras and stuff. Imagine that you know every day you have to put your dining room outside. I can't imagine you have to show up to work earlier than before because everything has to be set up pretty much it takes a while whatever whatever it is the city feels it feels kind of special. Yeah it feels like it's just for the locals. Yeah yeah which is cool because Grey Dog is my like the local spot. We've been lucky to become that. How are you handling your marketing right now since it's such a different vibe that it's just such a different atmosphere at the Grey Dog and trying to keep those customers happy and what are you guys doing? We do a moderate amount of social media but it's it's not it's not something that we've ever gotten really strong at. Is it mainly word of mouth would you say? We've always been word of mouth. Yeah so for you it seems like and I think this is what any successful business owner would do you hire people for skills that you're not good at? That would be everything. No it's not please. You're good at the interaction and that's why you have repeat customers because they come for you they come for the food they come for the atmosphere. I think learning what you're not good at and knowing that you could trust other people to do it that's been one of my biggest learning curves instead of trying to do everything which for years I was under every sync fixing every leak and on the roof fixing AC's and like literally I did it all and now we're in a place where I have an amazing team that you know I trust you know they know what they're talking about yeah they know what they're doing. And that's the natural expansion of any business you know you have people that help you with these things. So here's my final question for you. As a successful restaurateur with five restaurants in New York City which is arguably the most competitive city in the world do you have any advice for aspiring restaurateurs? This one's pretty easy because I think I probably sit down with two or three people a month who have reached out and asked me that question and so I kind of have a standard a standard line where I tell them hey get a job in the industry you know start that way don't just start out everybody has this fantasy I want to open up a cafe with my significant other and we're going to have this wonderful lifestyle and it's like you got to learn the language of the restaurant you got you know it's not you're not dealing with the Boy Scouts it's you know there's a lot of there's a lot of stuff out there that it takes some grit to get through and what you walk in when you walk into per se that's that's heaven but they're behind the scenes I imagine there's some there's some significant changes you know and so get a job in the industry and then you can take the next learn if you like it you know and if and then you know figure out the language figure out how to talk to the people and you know develop a relationship with the people who are really going to make things happen for you and if you get that if you want to get there then yeah take the dive the second one which has been really the secret to our success is do everything for your staff right give them the schedule that they need give that create create the environment that they're going to succeed in once you've done that they're going to want to come to work because they are going to know it's a special place yeah and if you open up a company that you know doesn't put them first it's going to show at least I think so I mean that's what we've done and it wasn't a game plan it was just you know that's treating people with respect yeah that's who we that's who we were from day one right we we never we never altered from that because we didn't even know we were doing it it was just natural it was which is good yeah that's how you do it like how can you not you know in this city everybody's an actor everybody's are performing you know everybody's performing in some degree so work around their stuff let them dream and if if their dream could coincide with you know this dream I think you got something so that's wow well that is incredible advice it's been so amazing having you in the show and also so hilarious you're such an interesting guy so thanks so much for joining us and thank you everyone who tuned in today and if you want to learn more about the gray dog visit the graydog.com follow them on instagram at the gray dog nyc but better yet why don't you step into one of their five Manhattan locations and try some of their delicious food and I promise you your taste buds will thank you it's that good so that's all for this edition of school apostle keep up with all of our episodes on youtube apple podcast google podcast or wherever you stream and download podcast and if you like what you heard please leave a review share with your friends and subscribe to our show and we'll see you next time thanks for watching bye