The transcript from this week’s MIB: Ralph Scamardella, Head Chef at Tao Group, is below
You can stream/download the full conversation, including the podcast extras on iTunes, Bloomberg, Overcast, and Stitcher. Our earlier podcasts can all be found at iTunes, Stitcher, Overcast, and Bloomberg.
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This is Masters in Business with Barry Ritholtz on Bloomberg Radio,
BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest, his name is Ralph Scamardella, and he is the head chef and partner at TAO Group, which is one of the largest restaurant groups in the United States, they have some immense restaurants that are in the top 10 in terms of total revenue, we’ve previously spoken to several other restaurateurs but this is the first time we’ve had a conversation with someone who is in the restaurant business at this sort of level in terms of being not just national, but global, they have restaurants in Australia and Singapore and elsewhere.
If you are at all a foodie, if you are interested in the food service industry, if you’re interested in understanding what makes certain restaurants successful and others not so successful, you are going to really enjoy this conversation. With no further ado, my conversation with Ralph Scamardella.
My special guest this week is Ralph Scamardella, he is a chef and partner with the TAO Group, one of the most successful restaurant and nightclub companies in the United States, the TAO Group operates in New York City, Las Vegas, Los Angeles, Sydney, and they run three of the top 10 grossing restaurants in the United States including the single biggest grossing independent restaurant, TAO Asian Bistro in Las Vegas which in 2016 did over $42 1/2 million in revenue, Scamardella all the chefs and concepts in New York, Las Vegas, LA, pretty much you probably have eaten his food and not even known it.
And last year, Madison Square Garden purchased a controlling interest in TAO Group, Ralph Scamardella, welcome back to Bloomberg.
RALPH SCAMARDELLA, HEAD CHEF AND PARTNER, TAO GROUP: Thank you very much, Barry. A pleasure to be here.
RITHOLTZ: So I have been…
SCAMARDELLA: With that intro, I should ask for a raise…
(Crosstalk)
RITHOLTZ: You definitely should.
So I’ve been looking forward to this conversation, I’m a little bit of a foodie and have eaten in some of your restaurants, but I want to go back really to the beginning, how did you get interested in cooking, is this something that you are passionate when you were younger or did you just kind of develop it later in life?
SCAMARDELLA: I grew up in an Italian American home so my parents were always – my father worked, my mother was always home cooking, and I got a job working in a restaurant when I was very young and a chef in that restaurant took a liking to me and just would – let me help out in the kitchen. I was doing busboy work, I was doing waiter work and he encouraged me to go to school for it and really saw that I had a knack for and he really guided me to go to New York City Community College and then when I graduated high school, I went to Grady High School in Brooklyn, it’s a tech vocational school, I wanted to be an electrical, electrician, electrical engineer, wasn’t sure about – when he encouraged me to go to New York City Hotel and Restaurant and when I graduate high school and his good friend of his was the chef at the Plaza Hotel in Manhattan and he got me a job working at the Plaza Hotel, so was like from being in a small restaurant in Brooklyn to the biggest hotel pretty much in New York or anywhere in America was unbelievable.
RITHOLTZ: So do you find most of our modern chefs today, are they going to restaurant schools like Culinary Institute or elsewhere or are they a combination of self-taught or mentored along the way? Where are most of our…
SCAMARDELLA: I think most of them go to school, there’s no one – that’s the one thing that’s great about the restaurant business now, there is no one path to success, all right? When I was growing up and you want to be a chef and you wanted to be an accomplished chef, you had to do your internship and then you had to do, you had to be a commis in a French restaurant, you had to work for a big hotel, you had to work for a great chef and you had to go through this long arduous path.
Now you could develop the greatest hotdog, the greatest burger, and you can be recognized for so many different things not only as a chef but become a successful business person doing it. So I think that to be the most successful, school and education helps you not only with knowing how to roast a chicken and – I’m just using that but understanding the business, what to look for in the business, how to make the money, how to hold on to the money, how to spend the money correctly.
RITHOLTZ: So it’s more than just the base technicals of cooking, you really have to think like an entrepreneur not necessarily just the chef?
SCAMARDELLA: Yes, I mean when we went to school was you had to take hotel accounting, accounting, beverage and inventory control, why do I need this? Like my kids would say to me, like why do I need algebra in high school? You are never going to need it. But you do use it and learning those skills, those mathematical skills and understanding business is super important to be successful.
RITHOLTZ: So you have been working in the restaurant field in New York City for a long time, not too long ago, we spoke to Bobby Flay about opening a restaurant in Manhattan and he described it as the most difficult place in the world to open a restaurant.
SCAMARDELLA: He has never opened a restaurant in Singapore, that’s probably one of the…
RITHOLTZ: Is Singapore worse?
SCAMARDELLA: Yes, because the government is you know, on top of you, but New York is pretty very restrictive, it really comes from lots of people for years taking advantage of the system like people not following building permits correctly, these people that stole the gas downtown and like…
RITHOLTZ: Isn’t that – one of my favorites, Carnegie Restaurant, who steals gas? What are these people?
SCAMARDELLA: What for, it’s not like millions of dollars, I don’t get it, man. And the risk is definitely not worth the reward.
RITHOLTZ: Right, that’s totally asymmetric. Let’s talk about some of the technological advances that we see in modern kitchens, how has technology changed? Is it easier to run a big kitchen or is it just an additional complication using technology?
SCAMARDELLA: It’s a little bit easier to run it, you know, from the computer systems that help you control inventory, watch purchasing to just managing the kitchen, managing employees, payroll now used to be when I started at the Plaza Hotel my daily rate was $2.36 an hour, it’s like $15 an hour so you are really managing people on the half hour now so technology of punching in, punching out, managing those people but also the cooking techniques…
RITHOLTZ: That’s what I was going to ask, there are so many new technological gadgets that you could use from the sous vides to down the road, how does that help or does it just make it more challenging?
SCAMARDELLA: No, it does help out a lot especially the combi opens where they heat, they hold, you can use less employees and the product, you don’t really lose anything in a product, where years ago, you would have to have a whole crew prepping and then putting in an oven, taking it out, cooling it and reheating it, e there’s technology now where you make items you cook them to a certain temperature you hold them at that temperature and then you reheat them and serve them out. So specially for big banquets, we do a lot of banquets in Vegas, it’s been a big, a huge help for us.
Some of those like sous vide techniques, I think those some of that has come and gone, I think that in the beginning when it came in, it was a cool idea and a lot of chefs used it but I think it’s gone to the point where it’s overused, I don’t really like using it for red meats or heavy meats, for chicken and certain vegetables it makes them great but you got to use some of those techniques are you have to really understand how to use those and what the outcome is going to be not just to say sous vide and that’s going to make it great, that’s just not the – not the case.
RITHOLTZ: Let’s talk a little bit about the cooking aspect of being in a restaurant, what does it take to make a great chef?
SCAMARDELLA: First, you got to have passion for it, you know, you’re going to want to do it and struggle through learning, self learning, taking instruction, taking a lot of criticisms, but you also have to like any artist or artisan, I like to say, forget about artists, but you have to learn all the techniques of proper roasting, proper grilling, proper sautéing, proper cutting, and a lot of I think that some of the things that get lost is really understanding all the basic techniques and knowing how to use those techniques and combine them.
RITHOLTZ: How does that differ from someone who is passionate about food at home and is a pretty good chef on their own, what does it take to transition to actually being a head chef in a restaurant?
SCAMARDELLA: Cooking and being a chef to me are two completely different things. A chef has to be a good cook but a great cook can’t always be a great chef, there — it’s a chef is a person who runs the business, who runs the back of the house, runs the kitchen, has to know what all the other employees are doing in the kitchen, has to know like if you’re in a sauté station, everything that’s in that sauté station, what your mise en place is, what your recipes are, are you executing those recipes correctly over and over again, that’s at home here, you know when I cook at home, I make grilled chicken, I’m making it for me and the kids and the family and that’s it, and when you’re in a restaurant, you may be making hundreds of them so if you come in at 11:30 on Tuesday, you want to come back at 1130 on Friday, have the same exact experience, that takes a chef, someone with skill who knows how to teach, who knows how to set the kitchen up correctly and make the – teach those techniques and set up the mise en place correctly.
RITHOLTZ: So it’s really a matter of organization and running a team more than just being a skilled cook.
SCAMARDELLA: Correct.
RITHOLTZ: Very interesting. So when you’re – you run a number of restaurants, how do you spot talent? How do you identify who’s going to be a good chef either to hire or promote, it sounds like a really challenging thing to…
SCAMARDELLA: Talent, that is a tough one because there are people like I said who can cook, and then when you put them in a role of responsibility just the mere fact of the anxiety of having to watch over other people, be responsible for other people, takes a lot for employees and people to get over. One of the things is you will see somebody who’s working, he’s a hard working – they’re a hard-working person, they are consistent, they cook good day, they come up with specials, they come to you, they interact with you, you see how they move out and just you know there’s a lot like watching a great basketball player, a great baseball player they have a feel and a style and lots of moves and you and you pick up on that and a lot of these people can, once they get to the next level, just dealing with the anxiety stuffed on them,
And I think we try to teach them little by little of okay, you’re a great cook, you do a great job on you station, you really have done a lot of these things, now let’s teach you how to be a chef, because I always say to guys, you are a great whatever, sauté guy, or a great grill guy, you can only make so much money, you are not going to pay the sauté man the same way you would pay the sous chef or the executive chef.
So for you to grow into not only make more money for yourself but grow the business and educate yourself and maybe do whatever you want on your own, you have to overcome these challenges.
RITHOLTZ: What are the differences and responsibilities for the sous chef versus I assume the executive chef, the buck stops with them, they are in charge of everything. From ordering to food quality to what the recipes are, the next lieutenant, the sous chef, what do they do?
SCAMARDELLA: Sous chefs do everything. The chef does as little as possible and make sure that those guys are always working, and those — that used to be when I was a sous chef, I made sure the chef had very little to do. I mean the chef, the executive chef has final say over the menu, the food – he is the ultimate — they are the ultimate end of what the food quality is, what the dish looks like, taste like when it’s executed and the viability of running that business, they are responsible for food cost, they are responsible for labor costs, we also make all our chefs responsible for the facility, so it’s taking care of the equipment, managing that equipment because buying a blender, Vitamix is 1,200 bucks, 1,300, this oven is $40,000, $50,000 these days, it’s not like you buy an oven for $600 bucks, put it in, and it works, everything is so expensive.
RITHOLTZ: So you mentioned taste, how do you – two questions on taste, how do you make sure a dish is consistent not only from meal to meal but you have restaurants all over the country, how do you keep that consistent and when you’re designing a dish, are you trying to be as broadly focused as possible or are some dishes designed for a special niche audience and a special bunch of…
SCAMARDELLA: It’s definitely a little bit of both, only it’s the first question, when you get a recipe at home, you look at a recipe and it’s a cup of this, a teaspoon of that, one of the things we try to do is really measure everything out so someone’s on the line and it’s a spoon of this, a spoon of that, it will always be the 4 ounce ladle …
(Crosstalk)
RITHOLTZ: It’s never a pinch or season to taste…
SCAMARDELLA: It’s precise.
RITHOLTZ: Salt and pepper?
SCAMARDELLA: I think salt and pepper, and you really see it – you will go, we have restaurants in New York where the food is seasoned here and people go out to Las Vegas and have the same dish, it didn’t taste, the same it didn’t – the taste of that clientele in Vegas is totally different.
RITHOLTZ: Different age, different demographic.
SCAMARDELLA: Different demographic, different level of salt, different level of pepper, and then you go to Los Angeles and it’s different again, a everybody had — all their – McDonald’s does the same thing big corporations will see what people like to eat how they like dishes seasoned or levels of seasoning and they will play up to that.
RITHOLTZ: You have to adapt to the local taste.
SCAMARDELLA: Absolutely.
RITHOLTZ: That’s fascinating and I would’ve guessed that.
So you mentioned you cook at home for the kids, what do you eat at home? How different is it from what you are cooking in the restaurant?
SCAMARDELLA: first I have to do all the work myself, when I’m at the restaurant there’s always somebody who can say, get this, get that, clean this, do that.
RITHOLTZ: I picture you with like an assembly line with the kids peeling potatoes, nothing like that at all?
SCAMARDELLA: Not always. But you know, again, my wife and I will eat this, and then my son will only eat certain dishes, my daughter who is 13 will only eat certain dishes, so I try to make a little bit of everything for everybody, but now the summer, it’s great so it’s all about barbeque…
RITHOLTZ: Right.
SCAMARDELLA: It’s a salad, one vegetable and grilled meat and grilled fish, that’s why I like the summers.
RITHOLTZ: Makes life easy.
Let’s talk a little about life in the kitchen at a big shop like yours, what’s it like being a chef? I would imagine the hours are pretty brutal.
SCAMARDELLA: Hours are brutal but I think that anybody who’s in any profession has brutal hours, I don’t – talk to a lawyer or an electrician or somebody, they are always working lots of hours, they are working hard and the one thing about the restaurant is that you – it never closes, right? Even if the you close for dinner or service ends at 11 o’clock, there’s always somebody there who is cleaning, who is putting stuff away, getting ready for the next day, checking mise en place for the next stage.
A chef is always forecasting for tomorrow, looking at what he needs — what they need for tomorrow who’s coming in this day and age employees, employees calling out is always a big thing, so we’re always jumping in and helping out on a line and moving.
RITHOLTZ: How do you balance that with the personal life if it is that demanding?
SCAMARDELLA: It’s tough but one of the things that we do is that unless there’s some big circumstance where people have to work six days a week of work a double shift, we really focus and emphasize that everybody takes it two days off, everybody takes a vacation, when you take a vacation, you make sure you leave your phone home, don’t answer emails, don’t apply to email if you are answering those emails so that down time and off time is super important, I’m a strong believer in it and I make sure that the whole team follows that rule.
RITHOLTZ: So I – years – many years ago, I worked in the kitchen as a short order chef and a waiter and a bartender in college and I always notice that some kitchens were really well oiled machines, everybody knew what they had to do and it was pretty clear how things ran, how do you scale that up to an operation the size of yours? If you’re doing $45 million in sales in just one location, this is really a military type operation isn’t it?
SCAMARDELLA: It is a military type operation, but we definitely take that same focus that you said it’s a small mom-and-pop, and we take every station and we break it down so if there are seven stations in the kitchen, each station is responsible for nine dishes or eight dishes so you can really focus in a sous chef will walk around and make sure they taste and monitor those.
So as the food comes, up it’s a huge path, the line is about 25 feet and everyone is putting up the dishes that they’re responsible for that part of the menu. So if you compartmentalize all the food, is not like you’ll go there make a salad and run to the other side of make the noodles, then run to the other side make the fish, every single person has a set of responsibilities, the mise en place list and things that they have to be ready and we monitor and check those things before service and during service.
RITHOLTZ: Mise en place meaning?
SCAMARDELLA: Everything in its place, sliced, an order comes in for Pad Thai, you are not slicing the radishes, you’re not slicing the chicken, everything is ready to go and it’s assembled when the order comes in.
RITHOLTZ: You mentioned there are seven stations, what are the seven stations?
SCAMARDELLA: There’s garde manger, pastry, in TAO, it would be dimsum, grill, hot apps, sauté, and wok, in the kitchen and then there is a sushi station, which is a freestanding.
RITHOLTZ: And what do you think are the biggest misconceptions people have about how restaurants run and I ask this having as again a person who goes out to eat a lot, and was a waiter, I’m always surprised at the comments people have to waiters, and it’s like you’ve obviously never worked in the kitchen in other words, you have never asked…
(Crosstalk)
SCAMARDELLA: One of the big misconceptions is the chef is actually cooking every dish, that’s – and it is impossible especially in a restaurant of our size that the chef is cooking every dish but he is creating every dish, he is coming up with it and he is monitoring and working with the team as they produce it.
And for us someone came in one day and we had the lobster delivery came in and there were probably 400 pieces of lobster and somebody said, oh my god, I thought you use frozen, why would you think that we use frozen? We get it delivered twice a week from Maine and we take it, we break it down, we cook it and we get ready for that service and we do it fresh every single day. So there is a lot of misconceptions about how those things get done.
RITHOLTZ: What does it take to create a new dish? What is that process like?
SCAMARDELLA: So usually one of us will come up with an idea or I have an idea or the chef will have an idea and then we kind of collaborate on it – if it’s seasonal now, summer and spring, it’s great, lots of different products come in and we will test those out, and I’ll make something or the chef will make something and then we have a couple of corporate chefs who will come in and will everybody will collaborate on a dish and add a seasoning or take something away and really try to maximize not only the flavors but the execution of that dish, where are we going to pick it up from, how is it going to get – how is it going to look and taste exactly the same way we just made it? So that goes a lot into the thought of how to make a dish.
Like is it coming out of this station, where are we holding the mise en place? What do we have to make ahead of time, what we make at the moment and how can we get that same experience over and over again to each guest that orders it?
RITHOLTZ: How often do you change up the menu?
SCAMARDELLA: The bulk of the menu is kind of static because those hits, those big famous hits that everybody loves like going to a Def Leppard concert, you got to hear those ten songs, that’s all that people want to hear.
RITHOLTZ: Right.
SCAMARDELLA: And then there is about a certain percentage that we swap in and out every year but is always special so once a year, we change the menu and it’s probably 10 percent of it that goes on and goes off based on seasonality and some things work and some things don’t work but specials are always ever changing, and we run four or five specials a day.
RITHOLTZ: Let’s talk a little about the business of running a restaurant. You have some really big operations in New York, in Las Vegas, in Los Angeles, I think I saw a list that three of the 10 top grossing restaurants were TAO Group’s, how do you make sure that every customer experience hold the seasoning aside for regional differences.
SCAMARDELLA: We call them guests though.
RITHOLTZ: Every guest gets the same experience no matter where the restaurant is.
SCAMARDELLA: I think for us, it starts with finding the right employees, our people, and teaching them hospitality, I think that you can, you have to find good people, you can teach anybody how to cook, you can teach anybody how to do any of the basic skills that you need for the restaurant business but finding the right people, finding good people who are into the hospitality business who really want to give the best guest experience is the most important thing that we do, finding the right people.
RITHOLTZ: What does it cost to open up a new restaurant in a city like New York or Las Vegas these days?
SCAMARDELLA: Depends on a square foot, it’s probably $2,000 a square foot, $3,000 a square foot…
RITHOLTZ: So that is several million dollars.
SCAMARDELLA: Several million dollars.
RITHOLTZ: Right, why is the failure rate so high for restaurants, the I don’t know if this is anecdotal but I always hear 90 percent are gone within three years of some number like that?
SCAMARDELLA: One of the things that just because you make the greatest soufflé or the greatest steak, you have to me, for us anyway, the real estate is the most important part of the deal, right?
RITHOLTZ: Right.
SCAMARDELLA: You have to have the right space in the right location at the right rent and once all those — if you’re paying exorbitant rent and you have a snowstorm, something happens, business – so you have to plan for those things you have to plan for when the business ebbs and flows and the rent is constant.
RITHOLTZ: You pay the rent regardless of…
SCAMARDELLA: Regardless of what happens.
RITHOLTZ: If people wait in the Hamptons, doesn’t matter.
SCAMARDELLA: That’s it.
And I think one of the things — that’s one of the biggest misconceptions of someone that’s why going to school and understanding the business end of it is super important, understanding projecting out, hey I can do $40,000 a week in business, my rent factor is 6 percent, I can always make money, if I do 40,000 a week and I dip to 20 and my rent is 7 percent or 8 percent I can still make money but if my rent is double that and it is 9 percent to 10 percent and my rent factor goes up to 20 percent, you are going to have to make – you’re in trouble.
RITHOLTZ: So real estate cost in a big city is the most challenging thing.
SCAMARDELLA: I think so, yes.
RITHOLTZ: And what about overseas? I know you guys have places in Australia and you mentioned Singapore, more or less the same concept or you are not dealing like San Francisco and New York, the rents have to be pretty insane.
SCAMARDELLA: In Sydney and in Singapore, we are in a hotel, so we’re in the Star in Sydney and Marina Bay Sands, so we do have rent deals but the hotel are our partners, so it’s a base rent and a percentage rent, so it’s manageable.
RITHOLTZ: So it doesn’t matter, if you are someone…
SCAMARDELLA: It always matters.
RITHOLTZ: Is that true with most – so there is sort of odd thing here in New York that there are a lot of big hotels that have restaurants inside, some are fairly famous name brands, and some more lesser-known entities, is that financing structures similar where the hotel is subsidizing the rent because they want the space there for guests or how does that work…
SCAMARDELLA: Each one is individual but I think you find more and more now that the individual operator puts up very little of their own cash and the base build or the hotel will finance the whole project, they will be a partner, and you’ll get less of a percentage on the front end and less a percentage on the backend, but they will finance the whole project for you.
RITHOLTZ: So that becomes financially attractive, there is little risk when you’re…
SCAMARDELLA: A little risk.
Less risk, there is always risk of you know getting the employees, not making money, signing to a deal that may not be as lucrative as you want and doing all this work and then finding out 3 percent of the net is nothing.
RITHOLTZ: So why is it that so many people seem to be attracted to investing in restaurants? Is it just a hobbyist thing, an ego thing?
SCAMARDELLA: It’s like a movie or a Broadway show, right?
RITHOLTZ: Right. It’s like the worst investments in the world.
SCAMARDELLA: Don’t go that far, we are looking for…
(Crosstalk)
RITHOLTZ: I mean it is…
(Crosstalk)
RITHOLTZ: Broadway show is a movie…
(Crosstalk)
SCAMARDELLA: Well, I mean it’s super sexy, right?
RITHOLTZ: Right.
SCAMARDELLA: And it’s action and it’s people and it’s the aphrodisiac of opening a restaurant is great, people come in, they see you and people who understand it for the business are very – are smart about investing and I don’t know it looks easy to everybody, gets a restaurant, you make some…
(Crosstalk)
RITHOLTZ: How hard is it?
You cook some food, you throw it out…
(Crosstalk)
SCAMARDELLA: Put it on a plate.
RITHOLTZ: Right.
SCAMARDELLA: And it’s done.
RITHOLTZ: Profit machine.
SCAMARDELLA: That’s it, oh my god, they are charging $27 for a chicken, I go to a stores and it’s $5, how is that possible?
RITHOLTZ: The rest is all profit.
SCAMARDELLA: Yes, it’s so not true, but that’s what people think.
RITHOLTZ: So if you had to decide the most important job in the restaurant not counting the chef who do you sign that task to?
SCAMARDELLA: I always say that every single person in that restaurant matters from the person who sweeps outside, receives the delivery and puts it away, I think that every single person in that chain has a very important part to pay in the guest experience coming in, coming up to a restaurant that is dirty on the outside. You want it clean, you want it sharp, every single job in a restaurant is important.
RITHOLTZ: I have to totally agree with you, we had a very nice meal the other day at a very nice restaurant I won’t mention, and the busboys, I don’t know if they are trying to break the dishes but they were just …
SCAMARDELLA: Yes.
RITHOLTZ: And it was just one of those little things that I noticed that jeez, for a really nice restaurant, they should teach these guys not to slam everything down, it should be more gentle, because half the restaurants’ head whipped around every time and that happened throughout, I was shocked that…
(Crosstalk)
SCAMARDELLA: And it takes away from the experience like…
RITHOLTZ: Yes.
SCAMARDELLA: Is the busboy important? Yes sure that person is very important from the same way you walk in and the maître d’ of the host greets you and says hello and then the server comes over and takes your order and the chef and the person who received those goods, did they take care of them, did they put them away the right way so the food doesn’t spoil? Everything and it’s every single thing matters, everything.
RITHOLTZ: It does and it has a big impact on the experience. Do you have any thoughts on this tipping or not movement that seems to be gaining steam?
SCAMARDELLA: You know, it’s difficult because tipping in upstate New York or smaller counties where it’s super valuable to the employee when an employee or waiter gets surrogates stiffed in one of those, they are not making any money, New York it’s different, the scale of people coming in, the amount of business that we do so paying a server $13 $14 an hour is very tough on the restaurants in New York and I believe in the end it’s changing the face of the restaurant business in New York City and certain restaurants with servers, or the elite kind of high-end restaurant because most people won’t be able to afford it.
RITHOLTZ: Do you mean we are better off just keeping tipping as it is and not mess things up?
SCAMARDELLA: I do, yes.
RITHOLTZ: I could totally see that.
So when you want to go out for fun, what sort of what – are you looking in a restaurant when you’re dining out?
SCAMARDELLA: So I have different — if we go out to eat as a team we going to look to see and experience who doing something in Asian food, who’s doing something in Italian food or the dish is interesting or if I’m going out with my family, it’s some place where my kids can destroy and have a good time and I don’t have to worry about them and just have a nice glass of wine and relax, so it’s all about what we’re trying to do what we’re trying to accomplish. We will go out as a team and we went to that Korean Steakhouse, Cote, so ten of us went out, we ordered everything on the menu, we tried everything…
RITHOLTZ: Literally, literally on the menu.
SCAMARDELLA: Yes.
RITHOLTZ: How many – 10 people, just bring us two of each.
SCAMARDELLA: I will always go like, there is a green salad, we don’t want that, but bring everything else.
RITHOLTZ: Do people recognize you when you go out? Do other people in the restaurant industry say “Here comes Ralph”…
(Crosstalk)
SCAMARDELLA: Some people, no, nobody says that, I try to be as incognito as possible, not that anybody would know me but the restaurant business is very incestuous in the city so servers there was a bartender there and a server that worked for us in town so they know us automatically.
RITHOLTZ: Does it mean that you get better service or worse?
SCAMARDELLA: It depends on what that – depends on if they had a good time at TAO or not,, I don’t know.
RITHOLTZ: So when you are looking at a restaurant, what would it take to get you to invest in a restaurant that wasn’t part of your group, what would you be looking for? I know you probably are precluded from doing that but…
SCAMARDELLA: I am precluded.
RITHOLTZ: But if you were thinking about that, like what sort of things catch your eye as a potential investor?
SCAMARDELLA: One of the things, the concept, what the concept is and what it is driven by, is it driven by a steakhouse, is it a concept that goes across all different genres, is it a businessmen restaurant, or is it specific to a ethnic cuisine, what’s the location and what does the P&L say, what do the multiples say? Are they – do they have the right scale are you charging enough so if it’s only 60 seats and people say well we can do three million-a-year, three million-a-year at 60 seats, how much money are you going to make off that investment, if you leave you – if you took that half a million dollars and left it in the bank and made 2 percent on a CD, you would make more money and it’s safer, you have to have the right size restaurant with the right concept in a right location and enough scale to make that investment worth it.
RITHOLTZ: So most of what I see with the TAO group, there is this TAO the whole run of Asian restaurants, what you do in terms of steak and in terms of Italian.
SCAMARDELLA: We do Lavo which is an Italian steakhouse, we have one in New York, one in Las Vegas, one in Singapore, so it kind of encompasses the Italian-American kind of food from New York and New York neighborhood food with steak and we have Legasea which is a seafood restaurant in the Moxy Hotel, TAO, Beauty & Essex, Vandal, so it’s lots of different concepts but TAO is definitely our biggest concept that we have and it’s the most famous.
RITHOLTZ: And when you go out to restaurants in Manhattan is part of the back your head always running those numbers like …
SCAMARDELLA: I think what they are doing…
(Crosstalk)
SCAMARDELLA: First seeing what ideas I could steal and take it and make our own because you know always looking to improve yourself, anyone who says we do everything perfect and we do everything great and we do the best food, the best guest experiences is just fooling themselves, you’re always looking where — I’m always looking for that edge and seeing what people are doing, is there any innovation and see the kind of business they are doing in a location, is it sustainable? Is it going to be a threat, is it going to be something who or a part of that concept that maybe there is something there and they can make something of it.
You know you’re always thinking when you’re looking and seeing what’s going on.
RITHOLTZ: Interesting.
SCAMARDELLA: And see where they are investing the money and right, did they spend money on $500 in flowers and no money on linen ,is that really where you want to go? So I’m always…
(Crosstalk)
RITHOLTZ: Interesting.
Can you stick around a little bit?
SCAMARDELLA: Absolutely.
RITHOLTZ: I have some more questions for you. We have been speaking with Ralph Scamardella, he is chef and partner at the TAO Group, be sure and check out our podcast extras where we keep the tape rolling and continue discussing all things fine dining. We love your comments, feedback and suggestions, write to us at MIBPodcast@Bloomberg.net, you can check out my daily column on Bloomberg.com, follow me on Twitter @Rithotlz.
I’m Barry Ritholtz, you are listening to Masters in Business on Bloomberg Radio.
Welcome to the podcast. Ralph, thank you so much for doing this, I find this topic absolutely fascinating not only because I like to cook a little bit and I certainly like to eat, but wherever I go, I’m burdened with that mathematical knowledge looking around saying it’s a really good restaurant but how are they making any money if a Friday night, this place is half-empty, the food is great, where is everybody? Did you ever have experiences like that?
SCAMARDELLA: Absolutely, yes, having a great time doing this show also, and it’s great.
You know, when you not only look for the food experience but you always look for the business expense of like what’s going on, what are they doing, why aren’t they busy, why are they busy? It’s lots of — people will look at TAO, and my god, they are so busy, let’s open up right next door and they don’t, is it the business in the areas – I think TAO is a special…
(Crosstalk)
RITHOLTZ: It’s a destination, right?
SCAMARDELLA: It’s a destination, it’s a special experience.
RITHOLTZ: No one is walking by and saying, oh, let’s pop in for a snack.
SCAMARDELLA: No, everyone is going there and it’s a completely immersive experience, right? It’s – it looks great, the food is good, the service is great but the feel and the vibe of the place, it’s all about going out and having the experience.
RITHOLTZ: So there is a restaurant group on Long Island, I won’t mention their name and they just opened up this immerse restaurant, Mediterranean restaurant, of which there are a number of on Long Island, Kyma is one, Limani is another one, and so a third one, this giant place of – and P Taverna is a third one, but this giant place opened up and we walk in, and it’s just gorgeous, it’s spectacular, and we sit down for dinner after making reservations with family members in from out of town, and I’m shocked, everything is mediocre, and I know the restaurant group, the rest of the restaurants are actually really good, it looks like they put in $5 million building this place, so I’m leading up to the question when a restaurant opens, up how long does it have to kind of adjust the dials and trim the sales and get it right.
My wife is like we’re done with that, we don’t have to go back there….
(Crosstalk)
SCAMARDELLA: I think you got to give it a couple times, you know, people will say…
RITHOLTZ: Right, six months?
SCAMARDELLA: If the service is really, really good and the food is okay, people will give it a second chance, but if the service is really bad and the food is okay people, won’t give the restaurant a second chance.
RITHOLTZ: Really?
SCAMARDELLA: I think you got to…
RITHOLTZ: The food comes second to the service.
SCAMARDELLA: Food comes second to the service…
(Crosstalk)
RITHOLTZ: That is interesting.
SCAMARDELLA: And initial reactions to people coming in and saying, I think sometimes, it could take three months depending upon how far they are reaching, right? What kind of cuisine it is, is it real simple cuisine and they are executing it poorly or is it really simple cuisine and they are buying poor ingredients. I mean you could – if you go out a lot and you are – somebody like you who knows the difference, you can tell the difference between a really good steak and a real bad steak.
RITHOLTZ: For sure, and steak is the easiest to tell.
SCAMARDELLA: Or a piece of fish or the quality of the produce, and you are saying here, they build this restaurant, it’s great and they are using crummy tomatoes and they are using really poor fish, and the steak quality isn’t good you know that they’re cutting back on the most important thing. I think that’s one thing that we never do, you make like or not like but we buy the best ingredients and let them speak for themselves because people will always be able to tell that apart.
I will give a restaurant to a three times before I write it off.
RITHOLTZ: So I’m two x and you’re done.
And I always noticed a favorite restaurant, the food will be really at a high level for a long time and then it starts to falter and you always wonder, was this an aberrational meal or is the beginning of the end? Because all restaurants seem to have a natural lifespan with a hand you know you go to Smith & Wollensky any day the week and you know you are going to get a good steak and they been there for a million years, but that sort of longevity really seems to be the exception isn’t it?
SCAMARDELLA: In this day and age, yes. I think one of the things is not only the location of the rent which kind of squeezes things down but…
RITHOLTZ: I think they own their building so that would make them a little more unique.
SCAMARDELLA: Most places, when they’re in trouble instead of buying a prime steak that’s – I mean we pay $21 a pound for prime steak, we pay, so what does that translate to $50 a steak? I think people will buy lesser quality ingredients to make up the difference in payroll, make up the difference in profitability, and I think that once you start doing that, the guest will notice that…
RITHOLTZ: Right.
SCAMARDELLA: But if you go there three times a week or once a month and all of a sudden, you’re eating the same thing and you know it’s different…
RITHOLTZ: Right.
SCAMARDELLA: Let’s say maybe it’s an off night, the next time you go and it’s bad, that’s it.
Right? Everybody has an off night. So …
(Crosstalk)
RITHOLTZ: So there is one thing when it’s a one off and when it’s really that …
(Crosstalk)
SCAMARDELLA: That is the thing about reviewers, they will come in and that – if they do it over a two-week span or a month span, that’s different, coming in on one time when the places busy and maybe just getting a bad experience, how do you – how do you judge any business, you know, it’s not like it’s a movie where it’s been seen 150 times and everyone’s vetted it, you’re having somebody make the meal…
RITHOLTZ: Right.
SCAMARDELLA: You don’t know what happens in the kitchen, are there bad experiences?
RITHOLTZ: Sure.
SCAMARDELLA: Absolutely, but you have to that’s one of those things where you have to give it three or four tries before you actually or go to a couple dinners and say you know it really from beginning to end is a bad experience or from beginning to end, it’s a good experience.
RITHOLTZ: So let’s talk about reviews a little bit, I think…
(Crosstalk)
SCAMARDELLA: It’s Pandora’s box man.
(Crosstalk)
SCAMARDELLA: Setting myself up to get shot.
RITHOLTZ: In general, I think the better reviewers and let’s include the New York Times, Wall Street Journal, New York Magazine, Timeout will go at least two X, but here’s the bigger question, I remember back in the day a review in a major paper I would say the Times still has power, that is it, that restaurant is jammed for months and then it starts to attenuate, but it’s not the same sort of hammer it was 20 years ago know…
SCAMARDELLA: No, not when Mimi Sheridan or Brian Miller or one of those big reviewers and (John Marini) when they would come in, that would make or break it, now you take the subway and there are 500 reviewers, everybody is a Yelp guy, everybody’s is something…
(Crosstalk)
RITHOLTZ: Well, Yelp is terrible, forget Yelp reviews. And at one point in time, Zagat was great, I think Google kind of took the power out of them.
SCAMARDELLA: Google is looking to drive advertising sense, right?
RITHOLTZ: Right.
SCAMARDELLA: You can’t say something bad about somebody who could possibly advertise with you, and that’s what Yelp does, I guess – to me, a lot of those outrageous reviews, they are just trying to drive traffic to the site, so you get on either of those guys and they just have – they hammer us like to no end and isn’t it possible to get some bad meals, yes? Is it possible that everybody does a great job but us, impossible, we wouldn’t be where we are right and who we are with this reputation.
RITHOLTZ: Right, the success speaks for itself.
SCAMARDELLA: Right, the hammer us but they tried it – if you went and said something bad about some small Italian restaurant or some small Asian restaurant, would anybody care? No.
But if you say something bad about TAO or say something good about TAO, it drives traffic, that is all – what it’s about.
RITHOLTZ: What about – speaking of clicks, what about Instagram and people photographing dishes, does – how significant has that become does that affect presentation? Are people aware at of that subsector of diners who want to take photographs of…
SCAMARDELLA: Yes, everything is the Instagram moment, everything I mean a lot of some of what we do is geared towards he Instagram moment but always say if people would take pictures of something that’s great and Instagram it, that’s great, but a lot of the stuff you see on Instagram is almost inedible, right?
(Crosstalk)
RITHOLTZ: The giant towers of…
SCAMARDELLA: Yes, it makes no sense, are you going to eat like something that’s got 5,000 ingredients with cheese poured over it, who eats that? Nobody. Nobody.
RITHOLTZ: So we will put you as on the fence with Instagram.
SCAMARDELLA: No, I like Instagram, for me it saves me probably 5,000 to 6,000 calories a day, you don’t have to go and eat, you can look at a picture of it and kind of figure out what’s in it, you can pick up an idea in the description of the dishes there, I personally like Instagram, I just think that for it to what the average person likes on Instagram doesn’t really translate to what a good meal would be.
RITHOLTZ: Really? I was reading not too long ago that there are some specialty ice cream makers at Brooklyn who have redesigned their labels to make them more Instagram friendly, people are literally snapping photos in the frozen food aisle of your favorite supermarket.
SCAMARDELLA: That’s great.
RITHOLTZ: Smart.
SCAMARDELLA: But that is one thing about the restaurant business now, there is no one path to success, I can come up with something, Instagram it and Instagram like the Black Tap, I mean Instagram made them…
RITHOLTZ: Really?
SCAMARDELLA: Those shakes and Instagramming those shakes and they are great, I mean, it’s unbelievable, they do a great product, but they were struggling in the beginning and they hooked on to Instagram and Instagram helped promote their business.
RITHOLTZ: So when you go out to eat, tell us some restaurant you like, where do you go in New York, where do you go in – that are not TAO Group restaurants, where do you go in Los Angeles?
SCAMARDELLA: I try not to go anywhere, I try to conserve as many – you know, my favorite place in LA is Republique I don’t know if you have been there.
RITHOLTZ: No.
SCAMARDELLA: It’s the old La Brea bakery, the food is really good, the chef is great and it’s seasonal and it’s fresh and it’s nonthreatening, I like it where people don’t have to think so much when you’re eating and just order something and it’s the food is good, the service is good, and the ingredients are really fresh and well-made.
RITHOLTZ: Nonthreatening, tell us about some other memorable meals you’ve had anywhere in the country and anywhere in the world.
SCAMARDELLA: Well, Hong Kong is one — one of the dishes that we have on at TAO is a snapper in the sand and we had it in a place in Hong Kong and this guy with – the server was unbelievable, and he had like these big fishing boots on, white fishing boots, and we went over picked the fish out, he was like dancing in the food and the dish was like unbelievable so I went into the kitchen and there were three cooks on wok and I just was trying to talk to them about letting me watch them.
RITHOLTZ: You just walked yourself in to the kitchen.
SCAMARDELLA: I just walked in.
RITHOLTZ: Nobody said anything.
SCAMARDELLA: I don’t know, nobody ever stops you, I don’t know.
RITHOLTZ: You look like you belong in there …
(Crosstalk)
SCAMARDELLA: I look like I belong, right? You could put on a chef coat and pretty much go anywhere…
(Crosstalk)
RITHOLTZ: Nobody steps you.
SCAMARDELLA: Yes, nobody stops you. You can walk right into the White House if you want.
And so they weren’t really saying anything, I went down a block, I bought a case of beer, I brought into the kitchen, gave each guy like four or five beers and they taught me how to make this dish right there, it was like, that was a great experience.
RITHOLTZ: Cheapest acquisition cost out.
(Crosstalk)
SCAMARDELLA: Yes, that was it…
(Crosstalk)
RITHOLTZ: That’s amazing.
How about in the United States, what other meals have you had that are memorable? You don’t strike me as a gastronomic sort of…
SCAMARDELLA: No, you know, I look at food and I say to myself, what some of those long meals where you go to those tasting dinners, I don’t have the patience to sit through one of those.
I don’t knock anybody’s food, food in a restaurant business on any level, from the guy who sells the Halal Guy in the street outside to (Perse) it’s all hard-work, getting people to come in…
RITHOLTZ: Right.
SCAMARDELLA: Gets to buy the stuff but for me and don’t like sitting there for four hours and eating and drinking in this seven courses paired with a wine, if I get a good – one cocktail and a really good bottle of wine with dinner, I will always pick a wine that will go well with an appetizer and an entrée, seven different wines, by the time you’re on your seventh course with the seventh wine, you are either or drunk or tired, everything kind of taste the same and it doesn’t – to me, it doesn’t make any sense.
RITHOLTZ: I was in Barcelona in September we went to this one three Michelin star rated restaurant I’m not exaggerating when it was 20 courses, they’re all tiny little things, but even still, after the 10th, it’s like, all right, I’m good, wait, we’re only halfway and the wine just kept flowing, it was a lot.
SCAMARDELLA: Barcelona has some of the best food in the world.
RITHOLTZ: It was amazing.
SCAMARDELLA: Last time we went to Japan, we went to four three-star Michelin restaurant, each one was worse than the next…
RITHOLTZ: Just going on…
SCAMARDELLA: Just going on forever.
RITHOLTZ: So you go to a sushi place, are you picking food our or do you just Omakase and say to the chef…
SCAMARDELLA: Omakase.
(Crosstalk)
RITHOLTZ: Yes, just give me what you got.
SCAMARDELLA: Yes, give me what you got.
RITHOLTZ: And you are happy with that? What do you like for sushi here in New York?
SCAMARDELLA: We went to Neta, but you know, I like Sushi by Gary is always good, he always does a good job, simple, it’s fast, it’s clean, Sushi Seki on 23rd is very good also.
RITHOLTZ: Tell us what else, what about Italian what you do when you want to go out for Italian?
(Crosstalk)
SCAMARDELLA: I always cook at home…
(Crosstalk)
SCAMARDELLA: I cook at home, but there’s some really – I live on Staten Island, and there’s some really good restaurants on Staten Island…
RITHOLTZ: Really?
SCAMARDELLA: Just Italian, Italian American, there is a place on New Dorp Lane, Pizza Giove, that the pizza is great, the Italian food is great, two guys from Italy in a small place but they do a great job.
RITHOLTZ: What you think of concepts like quality meats quality Italian any of that run – there’s some pretty good steak…
(Crosstalk)
SCAMARDELLA: They do some good, yes, they do a good job, I don’t like knocking anybody because I get – we get knocked all the time but I know what it takes to get it done so I always go out for the experience and the…
RITHOLTZ: What about Chinatown, you ever go to Flushing and work your way through?
(Crosstalk)
SCAMARDELLA: So I’m born and raised in Brooklyn and when I do go back to Brooklyn in the 7th Avenue and 8th Ave., Brooklyn has a great Chinatown, so I used to go to Queens to see the Mets play but since they are so bad I don’t go out to Queens anymore.
RITHOLTZ: What are they? 0 for 18? It’s not terrible, they hardly won.
(Crosstalk)
SCAMARDELLA: Heartbreaking, but Brooklyn is great Chinese food and so does Staten Island, there are some really good Chinese restaurants so I will go to Brooklyn when I want to give my Chinese – Chinatown fix.
RITHOLTZ: And then the last restaurant question I want to ask is what you do when the dish comes out and you just don’t like it?
SCAMARDELLA: Send it back, if something is up in the past and it’s not right, it doesn’t look right, send it right back to the cook and send it – first thing, I will send it back and then turn around and yell at the sous chef and make them go back there and make it with them.
RITHOLTZ: So no hesitation…
SCAMARDELLA: No hesitation.
RITHOLTZ:L I know people who basically are very fearful maybe that’s right – I’m with you, if something is overcooked , back it goes, which part of rare was confusing to you on a steak, this is somebody else’s shoe, not that I ever say that to the …
(Crosstalk)
SCAMARDELLA: But everybody makes mistakes, right? So…
RITHOLTZ: Hey, I got the wrong steak, I ordered it rare, this is medium well, can I get a rare steak. But there are a lot of people that really seem to be hesitant to send stuff back.
SCAMARDELLA: You mean in the kitchen or as a diner.
RITHOLTZ: No, as a diner.
SCAMARDELLA: As a diner, unless it’s really, really, it depends on like if we were with a crew of people, we will send stuff back right if it is not right, if with my family it’s pretty you don’t order stuff that I know is safe like when you go out to eat, people say if you go — if you go somewhere, what do you order, my first instinct is always to order something safe especially with a big group of people because you don’t know and…
RITHOLTZ: Like what do you mean by safe like just a piece of grilled chicken or nothing to not on the fancy end of the menu?
SCAMARDELLA: Not on the fancier end of the menu.
RITHOLTZ: So simple and the bread and butter because you know it would be done well.
SCAMARDELLA: Correct. It will be a good meal, it will be a safe experience but if I’m going out for the dining experience, it’s totally different, I’m going out with friends and hanging out we’re partying, so it’s a safe experience.
RITHOLTZ: Does being in the business ruin that experience…
(Crosstalk)
SCAMARDELLA: People think a little bit, because when you eat with a bunch of people, everybody’s look at you like what does he say, it was like, no, I just try to eat. Yes, I just eat.
I really, really enjoy eating, so…
RITHOLTZ: And you are very trim, how do you manage to keep the calories off?
(Crosstalk)
SCAMARDELLA: First, you got to exercise, two, you got to make smart decisions about what to eat and when to eat and when we would work on dishes or work on our menus, we’re opening TAO Chicago very soon…
RITHOLTZ: Right.
SCAMARDELLA: So it’s coming in September and right now we’re working on dishes so we would – I would take four or five bytes, six bytes, seven bytes, eat half the dish, and now it’s one or two bites.
(Crosstalk)
RITHOLTZ: Just to get – test how it’s doing…
(Crosstalk)
SCAMARDELLA: Move on to the next one, it’s really about how many calories you consume in a day.
RITHOLTZ: Let’s — that’s really quite interesting let let’s jump to our favorite questions I want to see how you run down these relative to what is…
(Crosstalk)
SCAMARDELLA: Is this the speed round?
RITHOLTZ: This is the speed round, absolutely. So what do you think is the most important thing that people don’t know about your background?
SCAMARDELLA: An important thing that they don’t know about my background. It’s a loaded question, and you know, I am just a regular guy born and raised in Brooklyn and just worked my way up and worked hard that I think that when people see success or you are working in a restaurant, oh he’s got this, oh he does that, and no one gets anywhere without working hard and paying your dues and I definitely paid my dues over and over, overpaid my dues, I’m waiting for the check to come back, the refund check.
RITHOLTZ: Who are some of your early mentors, you mentioned the one chef that took a liking to you when you were young.
SCAMARDELLA: Yes, I don’t know if he is still alive, he is an old Sicilian guy but I worked in a restaurant called Leucine many years ago chef there was a chef named (Jean Lief Pique) an old French guy who was really, back in the day, there was one of few four-star restaurants in New York from the New York Times, and it really, really was something, and he was a strict disciplinarian, he was the guy really taught – made me understand what running the kitchen was and how everyone should look and behave and perform, it was all about dressing right, looking right, and you had to wear the white hat and the neckerchief and stand there and just those were the days when you got screamed at from the minute you open the door to the minute you went home, man, you were just like hammered every minute of every day.
RITHOLTZ: And what chefs influenced your approach to cooking who did you – who did you think about who affected this…
(Crosstalk)
SCAMARDELLA: In the early 80s, I worked with – there was a restaurant hotel on the west on the East Side, the Westbury Hotel, there was a restaurant called Apollo, and Roger Verge was the consulting chef, but Daniel Boulud and his crew came from Lyon and those guys – that team was one of the really first people who will expose me to a different world of how French food was and the seasonality of it and back then, French restaurants always like — this is it, these re the dishes, duck l’orange in the middle of the summer, in the middle of the winter, they were more seasonal food and really taking a farm approach way, way back when.
RITHOLTZ: Long before farm to table became…
(Crosstalk)
SCAMARDELLA: … in the 80s though, I was only two years old though.
RITHOLTZ: So you mentioned you don’t have time to read books, you’re so busy at the restaurant, so what you do for fun? What do you do to keep entertained?
SCAMARDELLA: So – now it’s summer, so I like to hang out in the backyard and have a nice glass of wine go in the pool, but it like enjoy playing with my kids, I do a lot of charity work in helping others, it really gives me a good sense and we TAO Group and TAO Cares, those – we’re involved in a lot of different charities.
RITHOLTZ: TAO Cares. That is the charity arm of…
(Crosstalk)
SCAMARDELLA: Yes.
RITHOLTZ: And what sort of groups you guys like to work with?
SCAMARDELLA: We begin the breast cancer research or breast cancer walks we do a lot of that, I’m actually — my charity and part of TAO Cares, I’m chairman of the board of Eden II which is a school and a facility for people on the autism spectrum. So I do that work and we have another charity called Pop.Earth that works with people on the autism spectrum, so I do a lot of that work.
RITHOLTZ: And since you joined the restaurant industry, what has changed and is this for the better or for the worse?
SCAMARDELLA: Every single thing has changed, like now getting rid of plastic straws, I think a lot of it is for the better, especially the way employees are treated , I think back in the day, you could get yelled at, smacked, hit, and all of it was wrong it’s almost like the trail of an abusive parent, you abuse a kid, the kid grows up to be an abusive parent, that was really what was learned yelling and screaming…
RITHOLTZ: The cycle had to be broken.
SCAMARDELLA: Yes, I think it definitely had to be broken.
RITHOLTZ: Is it better today? The restaurant industry has had a little bit of its own “Me too” movement as well.
SCAMARDELLA: Yes, I think it’s way, way better today, people respect each other and respect – I hate to use that term diversity but the women in the workplace and just different people in the workplace and the way you treat people and treat people with respect and treat yourself with respect so you can treat other people respect.
RITHOLTZ: Makes a lot of sense.
What is it that has you most excited about the industry today?
SCAMARDELLA: That it’s dynamic, it’s ever-changing, maybe we said it a couple of times but the way to make money and the way to get your point across, to get your dish across has changed so much and it’s just you could come up with something that’s the greatest bao bun and make a fortune in and people who have – the food truck revolution of the change the way a lot of people think about restaurant, so you can go to a truck and have a great meal, you can go down the road and it’s everywhere, you go to Madison Square Garden the food stands are great…
RITHOLTZ: Huge improvement from what it was.
SCAMARDELLA: Yankee Stadium or City Field, I don’t know if anybody goes to City Field, I love the Mets but…
(Crosstalk)
RITHOLTZ: And maybe the best food of all the major…
(Crosstalk)
SCAMARDELLA: And where we went to Fenway Park a couple of years ago and the steakhouse in there was great, it was a great experience and those are the different things where you can get great meals anywhere now.
RITHOLTZ: Not just the high end.
SCAMARDELLA: Not just the high-end restaurant.
RITHOLTZ: Tell us about a time you failed and what you learned from the experience?
SCAMARDELLA: I felt like – restaurants we learned, we had a restaurant up on the Upper East Side, Arlington club that the food was great but it was just bad location that was – we learned a lot to really be more careful about the locations that we pick and than just sometimes you have to know when to get out, we let that — that’s one of the most important things, if you – listen, any business is risk right? So some things work, some things don’t work, but if it’s not working, you’ve tried everything, let it go and move on.
RITHOLTZ: Why do you say it was a bad location?
(Crosstalk)
SCAMARDELLA: Yes.
RITHOLTZ: I’m just reminded – I’m reminded of the Seinfeld with the Blackhole Restaurant that always died and never seem …
SCAMARDELLA: For some reason it just happens that way, I don’t know why, that part of – it is in front of a bus stop, it’s like all crazy little things that was successful and we took it thinking that we can make it work and listen, we had great partners and great food it just…
RITHOLTZ: Didn’t go.
SCAMARDELLA: Didn’t go.
RITHOLTZ: So someone’s a millennial and wants to become a chef for or enter the restaurant business, what sort of advice would you give them?
SCAMARDELLA: It takes time.
RITHOLTZ: Yes.
SCAMARDELLA: They all think it’s, I mean everybody wants instant gratification, I went to school I worked for the chef a year, I worked for that chef a year, I’m ready to be a chef, that is just not the case, it’s a long process.
RITHOLTZ: And our final question, what is it that you know about the restaurant business today that you wish you knew 25 years ago?
SCAMARDELLA: It’s very difficult to make money, very difficult…
RITHOLTZ: Really?
SCAMARDELLA: Yes, I think that the perception of people that – I didn’t actually do it for the money, I did it because I just love it and wanted to do it, I didn’t take the approach of hey, I’m going to do this and I’m going to make $1 million and make $5 million and I’m going to make $10 million, I just did it because it’s what I wanted to do and I took that approach of going in and just working and working and working, figured that if you could just work hard, the opportunities will come.
And I don’t know, I would’ve studied harder in school, I would have paid more attention in college.
RITHOLTZ: Very good. This has been fascinating stuff. We have been speaking with Ralph Scamardella, he is chef and partner at the TAO Group which runs the most highest grossing restaurant in America as well as three of the 10 top grossing independent restaurants and a slew of other highly regarded and well-reviewed restaurants.
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I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.
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