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pot luck

“Got Avero? If you want your restaurant to make more money than last year, you should. ”

While this space is usually used to report on where (and what) to eat, I know that there are a lot of you out there reading The Strong Buzz who are actually working in the restaurant industry as owners, chefs, and managers. You’re the ones busting your hump every night to make sure Bruni likes his Bolognese, and Platt’s friend the steak loon doesn’t choke on a tough rib eye. So I wanted to take a moment to write a piece that might be useful to you, the Strong Buzz restaurateur/chef/operator.

I think we can all agree that a lot more goes into the success of a restaurant than a good review. It may make the phones ring now, and you may turn the tables three times for a few weeks, but months later, no one’s gonna remember that luscious halibut if the quality of the food has fallen off or if the service has turned smug or indifferent. Day-after-day there’s the continuous job of running a restaurant—keeping service consistent, monitoring the bottom line, motivating your staff, and paying attention to all the other incidentals that pile up every night. That’s a lot for a manager to keep track of. And if they're spending time in the office running spreadsheets to try to figure out where they’re losing money, which waiters are having trouble with wine sales, and which are too aggressive with pushing bottled water (and pissing off customers while they’re at it), they won’t have the time to get out on the floor and train staff to keep everyone current and inspired. As much as they’d like to be they cannot be in ten places at one time.

Eight years ago, a guy named Damian Mogavero was noticing that very problem. He was a Harvard MBA who let his passion for the restaurant business get the better of him, and he took a gig as a CFO at a restaurant company in Manhattan (it has since closed and shall remain nameless). He was astonished at how much the operators and chefs were doing wrong and by the basic information that they lacked about their operations. “I’d say, Who’s your top server and who’s your bottom server? Why do your food costs and labor costs keep going up?" Mogavero recalls. "And I got blank stares. I was frustrated.”

Mogavero decided to do something about those blank stares. He started out with some research to figure out if it was just that particular restaurant or the industry as a whole that was lacking in this sort of vital data. He realized it was a little of both. And in 1999, out of his studio apartment and financed by credit cards, he started a company that he hoped would replace that deer-in-the-headlights look with something known as information. By 2001, he launched Avero and created a company that he describes as a “a web-based business intelligence provider.” Indeed, that’s really what it does. It actually delivers intelligence. (I need one of those.)

Avero’s software gets you the 411 by downloading POS reports and morphing that raw data into valuable information you can use to improve and act on every aspect of the operation of a restaurant from menu planning—like how many lobster rolls did you sell for the last four years on Thursday nights when it was over 90 degrees out, what did Moms order most on Mother’s Day, or how many vegans are eating out on Friday nights in winter—to server performance and pinpointing the server who’s, say, strongest in cocktail sales but weakest in wine sales.

Today, Mogavero’s out of that tiny studio and he’s no longer financed by credit cards. He’s the guy Fast Company called a “right-brain foodie coexisting happily with the left-brain MBA.” From his first client (Tom Colicchio at Gramercy Tavern), he’s grown the company by hiring a passionate mix of hospitality veterans and serious techno geeks, so that at last count, 10,000 food and beverage professionals in 1100+ restaurants—guys like Danny Meyer and Steve Hanson—use his software. And thanks to Avero, his clients have realized an incremental $100 million in profits. Not too shabby.

So how can Avero help you the restaurateur, and you the chef? I wanted to know. And so I sat down with Damian and we had a little chat. Read on to find out why servers are like baseball players and why being a bus boy started it all.

STRONG BUZZ: You made a major career change in starting Avero. Do you have any regrets?
DAMIAN MOGAVERO: It’s gonna be eight years now, and I don’t have regrets but there have been trade offs. When I was at Dillon Read (before he got his MBA) I enjoyed it. It’s lucrative and there’s the deal making which is a lot of fun and doing mergers and acquisitions.It was a lot of fun, and I enjoyed myself there but the thing is being able to change an industry and create something from nothing in an industry that you love. There’s nothing better.

SB: Why do restaurants need something like Avero with POS systems like Micros?
DM: Avero’s core belief is that guest experience is won or lost in the four walls of a restaurant. Decisions made on the floor affect profitability. With that in mind there’s a disconnect because restaurateurs are not techies. So what we do is very different than POS. POS is a glorified cash register that makes sure an order goes in and a table gets a check. It’s a critical platform to have. What we do is take the data inside the POS and use it. That data is far more important than anything else. It’s the DNA of the restaurant. We repackage the data in a way that makes it obvious so chefs and managers can make better business decisions. You can coach someone who doesn’t sell a lot of wine and identify your top and bottom servers. If you have a POS you can probably find that information out, but it will take hours. It’s now instant information. When you go to call someone you go to your Blackberry not the yellow pages. Avero makes it simple to use.

There’s also a very strong service component to it as well. The service package for a POS system is that they set it up and when it goes down they get you back up. With Avero we have teams of former restaurateurs who were GMs, chefs, F&B directors and sommeliers, and we make sure the people in the restaurant are using the software right and getting the best return on investment from it. Our software is only as good as it’s utilized.

SB: You’ve used a baseball card analogy before to describe how Avero works.
DM: Yes, it’s just like baseball cards. Instead of stats like RBIs, you’ve got percentage of times you sold wine. It’s like you’re flying blind without those numbers. It’s hard to know what your servers’ strengths and weaknesses are unless you have an objective way of evaluating them. Someone who has the biggest smile on their face may not be your strongest server.

SB: You’ve mentioned a lot of the advantages to using Avero but is there a restaurant that would not benefit from Avero?
DM: If you don’t have a POS system, we can’t aggregate your data. We can’t aggregate paper.

SB: You run your office very much like a host runs a restaurant. There’s an open kitchen with a stocked fridge and a wine bar in house. You clearly believe in hospitality. Who did you learn that from?
DM: The office is a hospitality office. We have a kitchen and a wine bar and it’s that foodie culture that we have here. Hospitality comes from my parents. Being an Italian American, the whole cooking thing is instilled from a very early age. I saw how they entertained and made great food from scratch. And my first restaurant job was as a busboy at Hyatt Hotels. It’s not the most glamorous job but that had a huge effect on me as a teenager. The GM said to me, and I’ll never forget this, he said, “You only need to know one thing to succeed in this business. It’s all about exceeding guest expectations and if you can do that you’ll be successful.”

SB: What’s the last book you read?
DM: When I was in India I read Jay McInerney's, A Hedonist in the Cellar. It’s just fun.

SB: I know that you’re really into wine. Are you sommelier?
DM: No, but I am taking the Wine & Spirits Education Trust Advanced Certificate, and I do love it. It’s taking up a lot of time. I have my final exam next month, and I have been studying very hard. I have just started to collect wine. It’s like baseball cards for adults but this is much more pleasurable.

SB: What’s on your iPod?
I am a huge U2 fan. If you’ve ever been on hold at Avero, the hold music is U2. My staff always wants to change the hold music and I say okay, just pick another U2 song.

SB: I know you must eat out a lot. Where are you dying to go?
DM: I would say it’s actually a place as opposed to a restaurant. It’s San Sebastian. I love Spanish wine and it would be great to try the restaurants there because it’s such an emerging culinary center. But here in this country, I’ve never been to Chef Trotter's restaurants. I’m going to Restaurant Charlie this Friday out in Vegas and I’m speaking at the NRA Conference next month and I’ll be dining at Charlie Trottter's in Chicago.

SB: What’s your morning routine?
DM: Now that the weather’s nice I try to go running in the morning along the Hudson River ‘cause I need to figure out a way to work off all the food and wine I am consuming. I am just not doing it enough. It’s hard. It’s why I ran the marathon a few years ago. That was a good way to burn off calories faster.

SB: What restaurant in the city have you visited lately that’s impressed you, or conversely, depressed you?
DM: In terms of one that’s impressed me, I’d say Degustation. I love that place. It’s one of my favorites. I love the fact that every time I have been there the chef is there and I can see him cook. It’s sort of like theater. And he’s got a fantastic Spanish wine list. My wife and I went there not too long ago and he just rolled out the red carpet and he is just so hospitable. I don’t know how he does that and he cooks at the same time. He’s sort of Front-of-House and Back-of-House at the same time. He’s very talented.

SB: What about restaurants that have depressed you?
I will say that in general I am not wowed by service. There’s a lack of wine education in many restaurants. You can really tell a difference between people who care about wine and those who don’t. In California there’s a huge love of wine and it seems that’s not inspired here. So the thing I am disappointed in is wine education.

SB: What’s the one thing every restaurateur can do to improve their bottom line?
DM: Educate their staff. That’s probably the biggest thing to do.

SB: Would you open a restaurant in Manhattan?
DM: That’s a tough one. Well, if I did it would have great pizza and great wine. Why can’t I just get unbelievable pizza with great ingredients, and not wait forever, and be comfortable with great wine. I am a HUGE fan of Franny’s, but there’s a huge void in this area in Manhattan, so if I were to do something I would definitely consider that.

For more information about Avero, visit www.averoinc.com, 212-391-6210.

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Posted: May 14, 2008

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