The Come Up highlights successful business owners’ & operators ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews.
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For this issue - an interview with Brasa Peruvian Kitchen founder Michel Falcon!
Brasa Quick Stats:
🚀Launched: July 2021
💰Revenue: $4M+
🏠Locations: 4
⭐Google and Uber Eats reviews: 4.8 out of 5
🤝Employee YoY Turnover: 17% in 2023
(industry average: 75%+)
What you did before Brasa…
Yeah, I'll rewind to 2006.
I was in business school in Vancouver and realized I'm not all that academic - something I should've probably figured out in high school. laughs
Coming from a traditional South American family, my parents believed university was the path for a secure future - they are quite risk-averse. So, there I was in business school, realizing I was an awful student, thinking there must be another way to learn about business, which was something I wanted to pursue.
So, I set out to find a company that would hire me, under one condition: I had to learn and earn at the same time. The prerequisite was it had to be a great entrepreneurial story I could learn from. The two companies I found in Vancouver were Lululemon, pre-IPO, and 1-800-GOT-JUNK - at that time, they were about a $100 million company.
I interviewed with both and got offers from both but chose 1-800-GOT-JUNK - I thought I could be closer to the CEO there; he seemed more accessible.
Working there turned out to be my own MBA.
Over those five years I got promoted 5 times - and gained expertise in company culture, employee engagement, and customer experience. Things that became my calling card, and since then, I've had the opportunity to delve into various companies when I was consulting to help implement systems around those three things. The team there talked about it a lot, but I saw company culture wasn't just about nice words or free beer; it was a real growth strategy that impacted the bottom line and top line significantly.
I would argue 1-800-GOT-JUNK had more sophisticated operating systems than many of the massive billion-dollar organizations even to this day. It provided education without the academics, and was a true entrepreneurial success story - at that time, it was considered THE company to work for in Canada.
On starting a consulting business…
Yeah, this might sound like something out of a movie, but it's the truth…It was 2012, and one day I just woke up and decided that was the day to hand in my notice. I had been toying with the idea for a while, knowing I wanted to move into consulting, but I didn't have any clients lined up yet.
There wasn't any particularly bad day that pushed me; it just felt right to do it then.
I'm okay with being uncomfortable…
My risk tolerance is high—not recklessly so, but I have a strong belief in myself.
But I also believe, if it's been done before, it can be done by someone else.
And I wanted the freedom to be able to do what I wanted, when I wanted, where I wanted - and the consulting life checked all those boxes. So I left and started my own consulting agency, focusing on the three areas I had grown to know well:
company culture,
employee engagement,
and customer experience.
I began working solo, trying to help companies develop strategies in these areas.
Essentially, my pitch was simple: if your employees or your customers aren't happy doing business with you, come to me, and I'll figure it out and help you improve.
When that started, I moved back home with my parents - and being in your mid 20s, moving back home is not baller…but it kept expenses low and I started working from their kitchen table.
I learned one thing though - don't hand in your notice in Q4 to start a consulting business, because guess what? Everybody's budgets are figured out for next year already, for the most part, at least for all of Q1.
So I was without an income for months.
My first client was Ferguson Moving and Storage, a $3 million company in North Van. I'm still in touch with the owner, Lorne MacInnes—a truly great guy. He was the one who wrote my first check for $3,000.
Then came my second client, Verizon Wireless - I was contacted by Troy Fairchild through my website.
I was blogging 2 or 3 times a week because I had a lot of time on my hands, with only one client. I figured I should focus on blogging to maybe boost my SEO. They discovered me because of my consistent blogging on those three topics, and it paid off with strong SEO results.
At that time, I was in my mid-twenties. When Troy contacted me, I thought it was a prank.
He asked for a price, and I just threw out $20,000, not really knowing what to expect. When he accepted, I was shocked.
My first thought was, "How do I send an invoice?"
With Lorne, I don't think there was an invoice; it was just a handshake agreement. Things grew organically from there. I was still on my own but moved out of my parents house, which felt like a victory.
The main challenge was being taken seriously.
In meetings, someone from these large organizations would introduce me as the solution to their problems, yet there I was, a young guy in his mid-twenties, looking exactly my age.
You can imagine, you're in this room, your boss introduces this guy saying he's here to do your job. Obviously, I wasn't the favorite person there, but I had my role. And initially the travel was great - those first few trips, having a cocktail alone in the hotel, getting paid well for short work periods - it felt good.
But then, it started to feel lonely.
At first, you feel important, but I missed being part of a team, building something together. Instead, I was just an extension, trading time for money, which got old. Being a road warrior wasn't for me.
During my consulting days though, I got a call from Brandon, someone I met who lived in Toronto. He shared they were setting up a big restaurant in Toronto, later named Baro.
He asked if I could consult for them, estimating about three months of work and a budget around $60,000 to $65,000. So, I decided to move to Toronto, packed up and left.
Eventually, they offered me a partnership - I'm truly thankful to Brandon for this.
We partnered up to launch Baro, and Petty Cash - both in Toronto's King Street West district. So, remember that summer when Drake released his album?
That was my first summer in Toronto, opening restaurants, at 30 - I felt on top of the world.
But as time passed, I realized I wasn't into alcohol or late nights anymore. My preferences just started to change. It might sound cliché, but you need to enjoy what you're selling, and gradually, I lost my passion for selling alcohol. It's not that I wasn't proud of our restaurants; I just wanted something else.
I started thinking about what my next step should be. We were approaching 2019, and I told my partners I was considering moving on to something new.
I was walking down Front Street, passing a Chipotle which is when it struck me. Being Canadian-Peruvian, I've always known how extraordinary our cuisine and country are. I might be biased, but the proof is there: just last year, in 2023, the top 50 list, ranked two Peruvian restaurants as the number one and number six in the world. Food tourism in Peru is booming and that thought kind of sparked my next idea.
I envisioned creating a North American-friendly brand that would be the bridge to authentic Peruvian cuisine, akin to how Chipotle popularized Mexican food or how Starbucks brought Italian coffee culture to the mainstream.
My goal was to develop the Chipotle or Starbucks of Peruvian food.
Throughout 2019, I started to bring this idea to life, involving my cousin and his then-wife to help build the brand. While I'm not the creative type myself, I knew what vibe I wanted - I just said if we were to open a restaurant near a Lululemon, we should fit right in.
And sure enough, we have one now, right across the street from their flagship store, and right next door to a Chipotle. laughs
On raising money…
I needed to raise money, something I had no experience with…
I created an investor deck and emailed people I had good relationships with. I was expecting a bunch of nos, but to my surprise, most people I reached out to agreed to attend the call. I hosted the presentation and Q&A virtually and was trying to raise $350k.
In my presentation deck, I didn't have a signed lease, but I was in negotiations with Brookfield Properties and had my reputation on King Street to back me up, saying, 'Hey, I'm the guy from this place' - that worked well.
It all came back to having a proven track record; people are more likely to believe in you once you've established a solid reputation. It doesn't happen overnight, but it certainly opens doors.
Within an hour after the call, I had verbal commitments for the full amount.
I was with my neighbour, Jordan Lopez, who assisted with the presentation and questions, and my girlfriend (now wife), Sophia. I started receiving text messages from attendees confirming their interest to invest, with each minimum commitment being $35,000. I needed just ten people to agree, and there they were, saying, "I'm in." I was amazed and thought, "It's done."
Harry Lundin, my friend, was the first to text me, saying he was in. I'll never forget that moment—I feel forever indebted to these people.
It reinforced a vital lesson for me: if you treat people well and work hard, positive outcomes will follow. And again, I know it sounds fluffy, but it's just true.
Will you get screwed along the way?
Probably…
But have I been screwed over more than I've been served?
Probably not, right?
I want to keep my guard up, but those ten yeses I got were probably because of ten years of work before then, trying to be an honest person.
The (second) raise…
The second time I raised capital for Brasa - again during the pandemic, I was doing pop up tastings for a few people to come taste the menu while we were still conceptualizing things.
The full COVID restrictions were in effect so we could really only have 2 people at Baro for a tasting at a time. But 15 minutes before the start time of the tasting, my friend Dave messaged me, and asked if he could invite his friend Steve. And this was during social distancing, so it was pretty dicey, but I just said, fine whatever - bring him.
And Steve loves the food and lifts his head and looks at me and says, "You're raising money?"
And I was raising another $375k…
I had no prospects, had already signed the second lease - and he asked me to send him a deck.
Turns out, he was the CEO of a company called MedReleaf, and sold his company for 2 or 3 billion - the first billion-dollar cannabis exit in Canada.
Later on in the week, he was hammering me on emails, asking question after question, and despite me trying to get him on calls to present like I did for the others, he wouldn’t respond to that, just kept asking me questions. And finally, he said “I’m in.”
I asked for how much, and he said “the whole thing.”
I was like, what the hell just happened?"
Imagine if I said no to him coming to the tasting.
So I learned a few things - disobey Ontario social distancing. laughs
No really, I just learned the importance of knowing your stuff - he peppered me with dozens of questions, and I had an answer for everything. And anything I didn’t I would go get the answer.
On playing to strengths and supplementing the rest…
I really believe every person on this planet knows two or three things - that’s it…but it’s enough.
Company culture, customer experience, employment engagement - those are what I’m best in the world at…and I say that humbly, but I have the scar tissue and experience to prove it.
Everything else - I maybe know an ounce or two.
I know a little bit of this, a bit of that, but by no means am I an expert. So I have really tried to find people to figure out who can cover my blind spots. Steve has been great for me in this regard with financial structure and so forth.
It also has been great to lower my vulnerability to the unknowns.
I get a bit of anxiousness being like, why don't I know this?
But then I remind myself, "Hey, jerk, you're not supposed to know everything."
And if you think you know everything, you know nothing.
I'd rather know 100% of 3 things than 25% of 30 things.
On being a solo founder vs. having partners…
With the King West restaurants I had partners whose strengths complemented the things I didn’t know.
I didn’t know how to build restaurants…
I didn’t know what IfC documents were…
I didn’t know what the heck an engineer did versus an architect versus a designer…
I knew nothing.
I'm not a chef - my wife knows I’d starve to death with a fridge full of uncooked food, because I don’t cook that well.
There were times when I thought, 'there are many learning curves here for me,' but guess what?
I know it now.
I don't necessarily do it all…
Today at Brasa, I have a team member named Guillermo, who is God sent and allows me to focus on my area of expertise while he focuses on his. We have almost polar opposite strengths, which complement each other well.
In the early days, people always advised to surround yourself with skilled individuals, but that's easier said than done when you're starting alone. It wasn't until we grew that I could afford to bring Guillermo onto the team. Before then, it was just me.
And then I had to figure out who was going to make the menu…or who is going to build the store? It was just like a huge laundry list of to dos and one person, and I would be lying to you if I didn't say, "Wow, I wish I had partners right now."
Being a solo founder is very challenging - yes, you control more upside, but you gotta be ready to get kicked in the face a few times.
It reminds me of The Simpsons - how Sideshow Bob always steps on a rake and it hits him in the face every time - that’s life as a solo founder.
Lessons from raising money…
One thing I’m proud of, is I was very particular on who invested - I didn’t just take money from anybody - I've seen it go sideways for many people to this day.
I raised money in 2020, and I have never had one investor ask me, "How's my investment going?"
Part of that comes from just overcommunicating - on the 15th of every month, I send them an investor report, and try to over communicate, so I don't give them a reason to need to ask me anything.
That said, one of the biggest things I learned about raising money is when you go for your investor presentation, have your term sheet ready. laughs
Remember when I said February 2020, I was like, "All right, I have ten people - let me go to my lawyer and get a term sheet ready." And then, as we know what happened, the pandemic hits - and none of my investors have signed any actual commitments.
So sheepishly, I go back to them being like, "Hey, yeah, you're still in?"
Seven of the ten said yes.
Silvia Cappucitti - she and her son collectively put in $70k - emailed me and said something like,
"Airbnb was built during a recession, and Brasa will be built during a pandemic."
And if I told you, I almost cried when I read that - I was like, "Let's go."
If that's not going to energize you, you're in a coma, right?
On expanding to more locations…
The pandemic definitely set things back - for starters, we went down to Peru for a trip to create content and get some ideas and ended up getting stuck down there for over a month because of travel restrictions…that’s a whole story in itself.
But finally, I just said, screw it. I'm doing a pop-up - let me find a little piece of property.
And I found 297 Campbell Avenue in the Junction.
There was this basement available for rent, in the basement of a Hale Coffee. And serendipitously, they roasted Peruvian coffee there, too.
And it was just a month-to-month lease, but we did a pop up and proved product-market fit.
Then I signed three leases immediately after. Brookfield was already signed, but it was paused until there's a little more clarity with the pandemic. And we opened one in the Bloor West area, on Queen Street West, and now we've signed our first lease in Manhattan - one Water Street in Manhattan.
Construction started last week, and my wife and my dog Maggie will be moving there in May.
On scaling thoughtfully…
Howard Schultz is the former CEO of Starbucks who is really recognized for growing it - and I heard him say on a podcast that "only the paranoid survive…"
That was paradigm shifting for me. And paranoid - the word has a negative connotation to it - but I'm driven by paranoia. I'm very worried about tomorrow. Yesterday was a good day, but I’m worried about tomorrow.
Nobody has ever called me a chill guy. Like, "Hey, oh, that guy, he's really chill."
Nobody has ever called me a tall man either, because I'm not - but it's just who I am. laughs
I'm pretty intense with my stuff.
But corporate stores have always been my vision because I can control the guest and employee experience so much more than franchising. We are already getting franchising inquiries today and I could probably get us up to 300 locations in a few years with that model, but in my opinion, if you want to be the biggest in the fastest period of time, franchise…if you want to be the best over a longer period of time, open corporate stores.
That said, systems and processes have been super important…
Making sure there's guardrails in place to protect the culture, protect the customer experience, protect the product experience. We have so many systems and processes under the hood.
As we scale, I'm really concerned with two core things:
Our team members saying they USED to be a good company to work for,
Our customers saying their product USED to be good.
I don’t want the experience for either to suffer as a result of scaling. Panda Express is a perfect example of how you can make money in restaurants - it's a great example of entrepreneurship that I really revere.
And going back to the growth and scale - why do I want a company with hundreds of locations?
For one, I have a fiduciary responsibility to return a handsome investment to my investors, but on top of this, I have a mission to share the flavors of Peru with millions of people.
I'm going into New York with experience and earned confidence, but nothing that would catch me guarded or off guard. I'm not going in there cocky - I’m going in with both hands up, expecting something to bludgeon me over the head. And I'm excited for it.
I'm really confident in the product and the brand and the team - but I'm worried about tomorrow.
We'll see how New York treats us.
We're opening up a location at the bottom of one of Morgan Stanley's head offices, and maybe I'll shake the hands of the right people there.
Personal business philosophies…
The two things that come to mind immediately have to do with money…Pay your people more and earn more profit - I'm a case study of that happening. I read a book called "No Rules” during the pandemic before Brasa opened.
And amongst other lessons, there was something called talent density…
Pay people more, attract a lot of people (because you're paying the most) and you’re going to get the best people. And the best employee should be equal to one and a half headcount.
Often, leaders will kind of avoid having the compensation conversation, but I review the compensation of every single person on our payroll once a month. I am going to my director of operations and our district manager saying, "who needs a raise? I don't want to lose anybody over an extra dollar or two per hour because we know it's going to cost us a lot more to replace them. So who needs raises, right?"
So that's one thing: the idea of talent density in companies will make you more profitable. And it's a good feeling to know you pay your people more than your competitors.
And two, I'm getting a little sick and tired of this tipping culture. I refuse to accept tips at Brasa. I've had team members ask us why we don't, and it's my job to pay a living wage - not the customer's burden.
I have a really strong opinion about our conversation around money.
And a year ago, I got a lot of media attention online, because I revealed something called "people-first pay transparency." Basically, I revealed everybody's pay in our company, and I said, "Hey, everybody, this is what everyone earns to the dollar, including myself," because there's this taboo about pay.
But how isn't it any dissimilar to actors and actresses?
How is it dissimilar to professional athletes?
If you're going to build a performance-driven company, let people know how you can earn the most.
I was told by my entrepreneurial friends saying, "This is going to hurt your company,” but it's made us stronger. Having a conversation around compensation is a growth strategy, and I would do it a million times over.
I will never, ever in my life pay minimum wage - I don't need the government to tell me what to pay people. And others may disagree, but I remember this one guy was talking to me saying, 'Oh, nobody wants to work anymore, blah, blah, blah.'
Well, nobody wants to work for bad leaders.
And I'm sorry to say, but bad leaders are the ones that pay minimum wage.
And I asked him - well, would you want your son or daughter to work in the position you were complaining about not finding anyone for?
He didn't say anything.
Alright…isn't that the problem?
That’s it for issue this issue!
To learn more about Michel, check him out on LinkedIn or on his website!
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