Learning From Failure, Avoiding Regret, and Managing Risk with Restaurateur Henry Rich

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Welcome back to Risky Business, a show about making better decisions.

I'm Maria Kondakova.

My regular co-host, Nate Silver, is off this week, and instead, I'm joined by a dear friend, Henry Rich, whom I've known for too many years.

I don't want to age both of us, but we've known each other since our college days.

We're very excited to have Henry on today.

Henry is a serial entrepreneur.

He's the head of the Oberon Restaurant Group, which has some of my favorite restaurants in New York City.

And I can't wait to ask him about managing risk in one of the world's riskiest industries, learning from failure, and the motivating force of regret.

Henry, thanks so much for joining us.

Absolute pleasure.

Good to see you.

Good to see you too.

So a little bit of background.

We met at Harvard.

I was a freshman and you were a senior.

You are older than I am.

Marginally.

And I'd love to actually start before we get into everything that you're doing right now.

Your background at Harvard is one of the most unique that I know.

And it's something that I would not have thought that, you know, today you'd be a successful entrepreneur kind of doing what you're doing right now, because you majored, you created your own major and it was in aesthetics, if I remember correctly.

Yes.

How I got from that to

being an entrepreneur

was in part lack of other options, but also I think I just

I left with this really strong kind of individual, almost, you know, existential streak that left me working for myself.

And, you know, the default for working for yourself is to create these entities around me that I could, you know, manage and live my life.

So.

Yeah, so that makes sense.

It's a little bit different from, you know, most entrepreneurs who are like, you know, I majored in economics or I majored in business and this is what I want to do.

Your first company, I don't know if it was actually your first company, but your first company that I'm aware of was a mint company called Oral Fixation.

And I remember you graduated and you had come back and you gave, you know, me and other friends who were still in college these little boxes of mints.

The mojito flavors were my favorite.

So talk us through how you decided to create a mint company, how that went and what that taught you about risk and about kind of, and about the world of business, because obviously that is also quite different from the restaurant world, even though we're both both are consumables.

Yeah, you know, it's funny.

I rarely talk about this, this first company.

I would say I learned a lot about hedging and managing risk in terms of, you know, what not to do.

So I decided to start a small manufacturing company in a mature industry where most of our competitors were 19th century multi-billion dollar conglomerates like Wrigley, Mars,

you know, Cadbury, Hershey, Nestle, these kind of companies, thinking that through, I guess, just working hard and being smart and being tasteful, that we could somehow dislodge these competitors.

It was a terrible idea because we had to do our own manufacturing.

We were selling into 35 countries, so I had to figure out the trade piece of it, all the regulations, had to do the consumer marketing,

manage multiple territories and channels like gift

hotels, coffee shops, attend hundreds of trade shows.

I would say what I learned from that experience is not to do just one thing because I really did put all my eggs in the basket of this company, which even if it had been in a smarter category like yogurt or chocolate or somewhere where companies actually get acquired, it just was totally susceptible to the Great Recession in ways that I didn't appreciate because I was a hubristic 20-something year old.

75% of our sales dropped from September to October 2008.

We literally had a Lehman Brothers private label mint for their office in Japan.

We had warehouses ransacked in India in a food riot.

Our largest British distributor was acquired.

Their main customers were acquired by Icelandic banks.

We were selling in countries whose currencies dropped 20, 30% against a dollar.

I really realized that I just had no idea what I was doing at all and sort of deserved to fail catastrophically, which is what happened with that company.

But I did learn how to do things on my own.

I did learn a little bit about the food and beverage business and it sort of

set me up for wanting to do something related, but not

starting a manufacturing company with no money, which was just an insane thing to do.

But fun, fun in a way.

You know, it's very rare to talk to someone, and obviously you've had a lot of success since then, who takes responsibility and says, you know, I deserve to fail.

Can you just unpack that a little bit?

Yeah, it should never have got off.

It got off the ground through sheer willpower.

It should never have existed.

It should never have survived for whatever, six years.

I would say the most critical thing that I failed to understand is that what I thought I was contributing to this category, which was creating a product that actually had more personality, was significantly higher quality, wasn't cutting every corner to hit the masses.

These weren't things that were actually important for the success.

I thought by creating a better design and spending, you know, 50 cents instead of like two cents on the actual ingredients, we could, you know, charge $3 instead of $2.50 and pass all of this value on to consumers.

But this isn't a market segment where taste matters at all.

What matters is distribution and power.

I had this really interesting experience where, you know, we were doing the mojito mint and then Wrigley would come out with mint mojito and they would try to trademark it.

And we did this, you know, you know, fabulous fruit flavor.

They did fabulous fruitini tried to trademark it.

And they were sort of coming after us and I, and I didn't really understand.

I was like, have they no shame, no honor?

And one of these people came up to us at a show.

where they grabbed one of our tins and they didn't even bother turning their tag around.

And I was like, hey, like, I know what you guys do.

And the guy looked at me and he's like, yeah, well, who has 47,000 registers at Walmart?

And he walked away.

And I realized I was just, I was just in the wrong place where

nobody was asking for a better product in this category.

And it just simply didn't matter as opposed to a restaurant where, you know, you can have a restaurant that's been there for 50 years.

If you open a slightly better restaurant right next to it, your level of taste, your level of execution, your level of hard work actually does matter.

And people will just gravitate to the thing that is slightly better.

And it's much less gated.

And I just didn't know that I was entering a profoundly gated industry without any of the tools that I would have needed to succeed.

And the world didn't need it, right?

And I took a lesson that I shouldn't do stuff just to, because I think it's funny or to be independent.

If it doesn't have another reason to be, it's going to fail and it should fail, right?

The world doesn't need, didn't need another breathman company.

And that was a, you know strong lesson and maybe people would say like hey the last thing brooklyn needs is another wine bar but these are things that can be done you know on a scale from one to 100 more or less well so yeah yeah well let's talk about that transition so you had a business that failed right that as you say like epic failure something that did not

i i was holding debt that i didn't really have a plan to pay off so i had a timeline you know with like basically within two years that i had to figure it out so a lot of pressure 2008 2009 2010

You know, not a great environment, although many amazing companies were founded then.

But yeah,

so not a great environment.

You have debt, you had a failed business.

And so you decide of all things to go into the restaurant business.

Henry, what is the rate of failure in the restaurant business?

You know, I think something like 90%,

but I can't remember if it's like 90% within the first year or whatever.

But

yeah, that's right.

Yeah.

Yeah,

which makes sense because so obviously, like the obvious solution, right?

You have debt, you just had a failing business.

Let's go into a business where 90% of businesses fail.

Yeah, well, I think this is, this is, this is part of a problem.

I'm like attracted a little bit to difficulty in a way that feels kind of like exciting and glorious, but then, you know, the consequences can be overwhelming if you don't, you know, catch the wave.

But I don't know why.

I just, I

was extremely attracted to opening restaurants in Brooklyn in that window of time, you know, around like 2010, 2011, where there was this kind of farm to table thing happening.

And it just felt like an amazing opportunity to try to make some really nice additions to these, to these parts of the neighborhoods that would otherwise, you know, be chains or things that are not really serving the community.

So I never envisioned it as like, this is what I do now.

I'm a restaurateur.

I just, I went into restaurants, you know, to participate in that kind of Brooklyn moment, but also because as opposed to this manufacturing company, which totally defined me,

restaurants are also things where you can open one and it's sort of just open, right?

Whether you're actively managing or not, and then you can open a few.

And I didn't want to be kind of under the weight of one huge, crushing thing.

So I opened them all as, you know, separate businesses that could rise or fall separately and accumulate over time.

But I also really, I really liked that about it, that you could own a restaurant without it being like you're in there nine to five every day.

Yeah.

Well, some free publicity Rukeless still exists and it's amazing.

It's one of my favorite restaurants.

And

I think you did a wonderful job.

How do you get someone to believe in you and finance?

help you finance a restaurant, help that get off the ground after, you know, when you say, you know, I've had debt, you know, I've had a failed business.

How do you actually, how did you convince people to come on board?

How did you craft that vision?

And what are the pieces that kind of have to come together in order to open restaurant one?

Right.

Rukla was successful.

So I think that probably helped kind of restaurant two, three, four, et cetera.

But that first, that first step, how does that work?

It was hard.

It's a big risk for everyone, right?

For you and for your investors.

Yeah.

No, obviously in a restaurant, like the first thing you say is like, you can lose all of this money.

And statistically speaking, you will.

And if it works, there's no like IPO.

There's, there's no acquisition.

It's just that you'll receive dividends over time.

So on balance, the risk reward profile in the restaurant industry is poor, right?

It just so happens that, you know, almost all of our restaurants have paid back and people have made quite a bit of money off them and they're going to stay open for a long time.

But at the time of the first one,

yeah, I mean, it was friends and family.

And, you know, we really scrimped by.

It was, we raised $250,000 and

we did a lot of work ourselves.

We, you know, gave out sweat equity for people working for free.

I wasn't asking for favors

because I do think that people saw me and saw the location.

I basically had one $25,000 line of credit left that I had gotten in 2006 or something.

And I took $18,000 out of it and put the down payment on the lease without any money raised.

And so I could be like, hey, here's a space.

Look at this corner.

Look at this neighborhood.

We're in Brooklyn.

This is happening.

And I think

it's sort of,

it's difficult to raise money for because most of these things are not good investment.

But to have an investment that you can actually kind of have breakfast, lunch, and dinner in and like bring your friends and have that, I own this restaurant moment is actually.

an extraordinary social benefit as opposed to most kind of random high-risk investments that you would take,

which are impersonal and likely you'll never visit the business, let alone experience it and have it add to your life.

So in a way,

it's not the best financially, but I think I was able to truthfully explain all of these intangible social, emotional benefits of being a part of something that I think was very cool.

Yeah,

that's really interesting because, you know, Nate and I talk a lot about kind of expected value of decisions on the show, right?

And how you think about taking risks, right?

Positive expected value, negative expected value.

And usually you're thinking about it in monetary terms, but there are situations where there are these intangibles that might

kind of add to the expected value, right?

Even though it's not, even though the kind of monetary payout may not be as big.

So I think what you're saying here is that in the restaurant business, like you're actually trying to appeal to those other things.

You're not going to, it's not like you're going to pitch a meme coin or, or, or something like that, where you're like, okay, you'll, you'll double your money really quickly.

You're saying, yeah, you know, this is a risk, but the rewards are actually much more personal, much more meaningful.

It's much more of an investment kind of in

these.

I want to say intangibles, even though they're very tangible, right?

But, but it is.

They're just not financial.

They're just, they're just non-financial values.

And I mean, you've just actually nailed a through line on all of the work I do, including the climate stuff, which is like, there's a risk.

There's a risk that you don't do everything that you can

in the moments that you knew that you should, and that you might look back on that and feel a certain type of way about your entire life.

That's a risk.

It's not a financial risk.

I think this kind of talk made a lot more sense when people believed that they had souls and things.

But I think this is one area where maybe like the kind of the philosophical, like existentialist, you know, aesthetic training is is in all of the work which is i get scared about like not taking opportunities and not doing things and not bringing things into the world that i believe should exist and kind of carrying that emotional weight for the rest of my life and you know when it comes to people making decisions people make decisions for non-financial reasons you know mostly right like in their in their day-to-day life but we when you talk about it in a business it kind of gets uh written out for for some strange reason and people wonder why they, you know, are dissociated and unhappy.

There's this whole ledger that we should be thinking a lot more about.

So that's sort of, I mean, it's, that's why I think these are cool investments is because the idea that you could, you know, walk into one and, you know, experience it and let alone if it's like climate positive or mission aligned in some other way, nobody invests in a restaurant for financial reasons.

It's because like you live there or you believe in the chef or you want to, you know, flex to some group of people that you're like a restaurant owner.

Independent police raise money as well.

Yeah, I am the owner, right?

Yeah.

It's,

I mean, it's kind of a nice thing, which is why people, like a lot of whom have like unlimited means, like some of them are like randomly investing in restaurants.

Yeah.

Yeah, no, I think that that's really interesting.

And there's one more thing that you actually just mentioned, which we don't talk a lot about, but I think it's an important kind of decision heuristic, if you will,

that people don't think enough about, which is the the risk of regret, right?

The risk of kind of the path not taken and how much are you going to regret what you didn't do versus what you did do.

And it seems like in your case, when you weigh those two, what you didn't do, you know, is weighs on you much more heavily.

And so you are probably programmed kind of against the status quo bias, right?

So many people, they just have inertia and they're like, it's fine.

Like, I just, I don't want to, I don't want to act because I don't want to rock the boat.

And it seems like for you, what you're saying is, no, like the risk that I run by not rocking the boat is actually much higher.

Yeah.

I mean, it's, this is described in a lot of different ways, like, you know, writers that don't write things.

It goes from, you know, being this like heavenly gift to this like hellish burden.

Um, I, I certainly, you know, like wake up and fall asleep every day with the dread, not of like whatever I'm working on, emails that I haven't received, but things that I haven't finished or started 100%.

And I think, um,

you know, probably good that not everybody is programmed that that way.

But

I think I also, I also have to control myself because, you know, I make really bad investment decisions as well, just because I like these kind of heroic yellow

kind of

bets.

I tend to

invest in like, you know, pro-social things.

I apply non-financial criteria to things that should be strictly financial.

And I know that that's, you know, kind of dumb.

And I'm trying to get better at it and, you know, outsource the decisions that I continue to make poorly but um all of the work on effective forecasting the research says that no matter how many times uh we receive the information we always get it wrong um how happy or sad we're going to be about a particular thing like if you ask somebody like how happy will you be on a scale from one to 10 if your team wins a super bowl somebody says 10 then you ask them afterwards and they're like it's a seven and then you ask them again next year and they say it's a 10.

like there's certain things like this that we that we don't learn right so kind of trying to work within my own, you know, cognitive biases when it comes to investment decisions and or managing my business risk is something that I try to create rules around, but,

you know, with mixed success, which is why I try to start a lot of different things because I know I'm going to screw one of them up just like out of boredom one day.

So

well, that's that's a high level of self-awareness.

And I apologize for that.

But, you know, having rules is actually a really good way around these effective forecasting errors.

And that is a really, that is a really interesting, that's an interesting bias as well.

Yeah.

We are very bad at knowing what our future self is going to feel like, we'll want, you know, just we're bad at making decisions for our future self.

And very, we just, we take our current self and we project ourselves into the future, not realizing you're going to be a different person.

It's a different time.

It's incredibly difficult.

Yeah.

It's incredibly difficult to learn.

We're going to take a quick break and when we return, Henry's take on regret.

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So, after Rukula was a success, you opened a number of other restaurants that are still open to this day.

You did have some, actually, one of the things that I find really interesting is you're not afraid to pivot.

So, I remember when you opened Meta,

which is now Rhodora, right?

And so, the initial concept, you know, you were very good at saying this isn't working,

and we're going to pivot to this.

And as far as I could tell, that was also the moment where you pivoted to kind of a more environmentally conscious approach to the restaurant business.

Can you talk us through kind of that process of changing meta into what it is today and kind of your general approach now to actually marrying some of these goals of climate activism and kind of knowing what's happening to our world with a consumption business like the restaurant business?

Yeah.

I mean, the initial

twist was I was visited by this guy, Anthony Mien, who started Mission Chinese with Danny Bowyan.

And he was getting into his nonprofit called Zero Food Print.

And

he said to me, you know, Henry, did you know that food is responsible for 25, 30% of global emissions?

I was like, no, I did not realize I was running a coal power plant for fun, you know, because I, you know, like to hang out with friends and eat and drink.

That's not great news.

And he was like, yeah.

And did you know that like five of the top 10 most impactful policy changes that can be made to avert climate catastrophe have to do with food and beverage?

Like, isn't that awesome that we get to work on this?

And it really appealed to my sense of, you know, whatever agency, individualism.

The reason that I would assume everybody becomes an entrepreneur, right?

It's because you, it's not like the most straightforward way to make money.

So you have to kind of, again, have these like non-financial reasons for doing it, whether running toward or running from.

And I think that a big one for me was this was an opportunity for me to,

when you get the call in the middle of the night and then a pipe breaks and you call the plumber and you're just like, I hate my life, it's sort of a reason to actually tap into something deeper and just like like what you see in the mirror and put up with the petty indignities of running a restaurant and being an entrepreneur, which is why it's so shocking to me that so few restaurateurs have taken on this sustainability mantle.

It's because it's an opportunity to give your work meaning in a much broader kind of local community or global context.

It's an opportunity to give all the people that work for you

an exciting extra reason to come to work.

And then there are all these kind of narrow business reasons for doing it, like retaining people.

But yeah, he sort of, once he told me that, I couldn't look away from the fact that, you know, basically if you're working in food, you either need to be,

for me, it was like, we either need to work on this actively or we need to close because what we're doing is harmful.

And it's harmful in a way that is.

that weighed on me because, you know, we all have carbon footprints, but restaurants' carbon footprints are significant, right?

And if you if you kind of look at the data of, you know, the social cost of that into the future and you think about the harm that you can cause by doing nothing other than business as usual, it was too much for me to kind of bear psychologically.

Flip side, you know, actually kind of pivoting to being a bit more proactive about

creating a trash-free restaurant,

pivoting toward,

you know, scope three carbon neutral operations.

Suddenly, this is something that gave me energy and made me feel like,

you know, obviously we're a small restaurant group, but in our sphere of influence, we can show a way of doing something, not just like, you know, lying there helpless and saying like, oh, it's so difficult to be a restaurant owner

and doing nothing.

So that felt really good to me.

And, you know, I'm not saying it was exclusively for selfish reasons, but

I do think participating in this broader conversation has given me a lot of just like personal joy.

and satisfaction in the work that I do, which can be really annoying.

And I hoped it would be a template for more people kind of jumping on board, but it, but, you know, sustainability in restaurants is not really a thing, unfortunately, for the most part.

So talk us through a little bit about what that decision process looks like, right?

When you're opening a new restaurant or when you kind of pivoted to Rhodora for that first trial.

What does it look like when you're making those decisions?

Because obviously you're still looking to run a profitable business.

So you have so many, you now have so many different needs, right?

You need to, you need to make a profit, right, for you and for your investors.

You need people to enjoy the food and to enjoy the restaurant, and you need to kind of have that be on point.

And now you're also saying, okay, we're not going to have a carbon footprint.

We're going to be zero waste.

We're going to have all of these other things going on.

How does that decision calculus look like?

How do you go through that process?

How do you make it a reality and have people, have everyone be happy?

Well, it's very challenging because a restaurant is already a massive compromise between like the front front of house, the back of house, you know, the operations, the guest experience, the

return to investors,

how easy or difficult it is to work there.

You know, very few people get into the restaurant world in order to like work on sustainability, right?

So now we're saying, okay,

whereas, you know, 15 years ago, anybody who knows, was living in New York knows like you were just outside of restaurants, you'd see like hundreds of like black trash bags just like filled with mostly recycling and compost because if you think about what a restaurant buys it is like mostly comes in cardboard comes in you know plastic or whatever and it's mostly food it's not actually non-recyclable trash that people were putting in the trash so all these people that are kind of used to just having a trash bin it's like all right now you're gonna have three you know there's like trash and i don't really know what you need to put in there um in most of our restaurants because it is mostly recycling and compost recycling and compost and they look at me as this kind of like out of touch you know, business owner who's not like worked, you know, in a restaurant alongside them.

And they're like, all right, so you're going to take our jobs, which are extremely difficult

and you're going to make them more difficult.

And also in the world of restaurants, what's seen as quality is basically speed, right?

So if you order an espresso and it comes out in like 30 seconds, you're going to be like, wow, this place has this incredible service.

And

sustainable practices within the restaurant do slow things down.

You're washing, recycling, you know, you're like, which bin do I put this in?

And so you are operating, you know, either with more staff or staff who are more committed and operating more efficiently.

So it does, it does hurt profits and or you pass it on to the guest.

The problem is people don't really care on the consumer side.

They don't put a value on us being like scope three carbon neutral.

They're like, what does that even mean?

And then you explain it to them and they really don't know what it means.

And Rhodora being, you know, trash-free is so extreme.

There are only a few like trash-free restaurants in the world.

And we learned about how to do this from a few, you know, dear friends, chef Doug McMaster, who runs Silo in London and Lauren Singer, who's many things.

But when I met her, she was kind of a zero waste sustainability influencer and running this company, Trashes for Tossers, and then Package Free.

And they sort of showed us how to operate without a trash bin, but it's almost like, it really is almost like a performative level of sustainability that I think can be off-putting for people.

So, we do all these things, but

I think people come to Rhodora because it's cool and the wine is good and it's a nice design and it's in like an amazing location in Fort Greene, two blocks from the park.

You know, it's not because it's sustainable.

Yeah.

I think you're very, you know, every single restaurant that you open, you're very good at trying to figure out what's the identity of this restaurant.

Is, you know, like Anais, which is one of your more recent restaurants, restaurants, you have it as like a book bar, right?

And a book space and an event space.

So I think it's very interesting to see how you're trying to marry these things and how you are looking at risk.

And you are, in a way, you're mitigating the risk, right, by kind of

loading the dice on the other side and saying, yes, I'm taking all these risks with the climate stuff.

Yes, it's not going to be as profitable for those reasons, but I'm going to ensure that people like it more because there is a unique identifier that's going to kind of make people come here, even though it might be a little slower, even though we might have to jump through a few more hurdles.

Is that fair?

Yeah, I think, I think that's fair.

You know, we always try to have a concept for a particular community or a particular reason.

Meta was kind of bring the style of, you know, open fire cooking.

And Rhodora was like, okay, like first like trash-free restaurant in New York.

And then June was the first natural wine bar in Brooklyn, you know, quickly followed by the four horsemen.

And now there's like, again, like 5,000, you know, a nais

wine bar with candles and bookshelves of, you know, vintage feminist erotica for sale is like another vibe that I just like wanted to have

somewhere, you know, nearby that one could visit.

And, you know, lo and behold, we're having all of these amazing poetry readings where people are like matching like Catullus to like a particular wine and like Lorca and people are kind of having a lot of time.

I love it.

Your aesthetics is coming back.

Yeah,

squeezed in, you know, here and there.

But, but I think, like, from a management perspective, also,

I would say the way that I manage risk by kind of trying to constantly improve quality and make sure that we're being competitive is I focus on like the very, very macro.

Like, okay, like, does this location make sense?

Is the lease onerous?

Do people actually care about the screen concept at all?

And then the very, very micro, like, you know, what is, what is like the font on the menu, the thousand little details that actually create the guest experience because, you know, and people kind of sometimes don't understand.

They're like, I thought you were kind of like the finance, like big picture guy and you're kind of going in and, you know, you, you want to like switch the candles out.

Why are you so annoying?

But, but I think like focusing, like as an owner, focusing on, because I'm a guest in my own restaurants, right?

And I want to kind of like relentlessly bring the guest experience back to the center of what our priorities are and what we're trying to achieve, because there's a lot of other things that people are trying to achieve.

Like bartenders are trying to try out new exciting things,

you know, brought in by like liquor reps that they're friends with.

Chefs are trying to make their name.

There's a lot of incentives that kind of pull people away from guest experience in restaurants, which is why sometimes you'll go to a restaurant and it just won't be as good as like a home cooked meal, right?

Which Which is just, it's actually quite straightforward to do, but you constantly have to be refocusing on the guests and their enjoyment and their enjoyment with like, again, themselves, friends, family, versus the things that will happen when you take your eye off the ball that make a place increasingly not guest friendly.

When it comes to reservation policies or hours or like not seating partial parties,

these are things that kind of I have to regularly correct.

Yeah, no, that makes sense.

I do want to ask about kind of one other,

broader question when it comes to risk.

So obviously things can happen that no one could have foreseen, like COVID.

And I'm very curious, none of your restaurants closed during COVID, and you actually kind of continue, you were successful, right?

And this was a time where like restaurants were decimated.

How did you approach something which was a new kind of risk environment, new challenge?

How did you think about it?

And, you know, ultimately, how did you survive and thrive during a time that was so difficult for so many, for so many businesses?

Yeah.

That's,

well, I think this is where my failure

maybe came in handy.

I think a lot of people thought that, you know, the cavalry was coming and, you know, people just stopped paying rent.

And a lot of restaurant owners were like well they have to bail us out and you know having lived through the great recession having like my business destroyed and kind of like my livelihood destroyed i was just like no they don't like we're you know we're entrepreneurs like we're we're like out here swinging for the fences for like great riches and glory like we don't deserve a bailout guys and like so i behaved as though no one was coming.

So like, you know, Rukula, there was, you know, the mandate to close on Monday or whatever.

And by Monday night, we were, you know, doing takeout, which was allowed.

Rhodora, we pivoted to being, you know, a general goods store selling like, you know, paper towels, toilet paper, wine, you know, whatever, all of these things, trying to be like a local shop for the community.

We did the same thing at June.

I pivoted very, very quickly, I guess, is I'm used to slash operate well in a quickly changing environment.

I get excited by things,

by challenges.

And I think that, you know, it's just like, okay, what is what needs to be done in these situations?

And so then when the money came, right, like the P two rounds of PPP, EIDL loans,

restaurant revitalization fund, I was just like, what the,

it was so unexpected.

And so it was just kind of on top of

businesses that were operating at break-even or better.

I mean, Rhodora, we weren't eligible for RRF because we made more money in the pandemic than we made the year before.

So I was sort of, I saw a lot of like very close friends of mine be pretty overwhelmed by the extent of the change, the extent of the risk.

And,

you know, to another degree, I realized that I was, I had also, my thesis of like, don't put all your eggs in one basket had sort of once again been challenged by putting all of my eggs in one industry, which was, you know, highly susceptible.

And I just, I just didn't want to fail again.

I was too old.

And just,

and so we, we came out a lot stronger.

And I think that, I think a lot of people did.

I do think there's a massive debt overhang.

I think that a lot of a lot of things happened in the pandemic where if you fired your entire stuff, if you didn't pivot to figure out another thing for people to do, a lot of these people left New York and you had to rehire everybody on the same day that like thousands of other restaurants were rehiring.

And I don't think people realize how much debt was actually handed out that kind of fueled this resurgence.

That debt is still there, right?

Like these loans are still out there for a lot of these businesses.

And

I don't know, maybe some people think it's going to be forgiven, but I don't.

So

it's because you don't expect anything.

I don't know.

I know.

No, no one's,

you know, and you know, if just to use like a little bit of attachment theory, I'm definitely the kind of,

do you know this experiment where there's like the kid and the parent leaves and like the stranger comes back and like it can tell you if you're like anxious, avoidant, whatever.

Like, I'm definitely like the kid that just was like, okay, I guess this is what we're doing now, you know, and

that just, I guess, is a superpower in times where, you know, a lot is changing.

And I think it's, it's a massive liability in times where things are smooth and boring because, you know, I, I have a tendency, certainly in my own like personal investments, to like try to make things interesting.

And like, just, just doing dumb stuff, like buying options in like renewable companies when I should be buying stocks and

whatever.

Just, I, I, I have, I know this about myself.

And, and so I've, I've tried to, tried to make the restaurants interesting enough so that I can do like really, really boring investments.

After the break, Henry talks about managing risk in his personal life.

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I also wanted to tell you, like, when it comes to personal things, I'm incredibly risk averse.

Like, I just had another child, you know, five

days ago, and so a little, a little bit underslept.

But,

you know, my partner was on like antibiotics and this sleeping medication, Unisom throughout it.

And everything was, everything was saying, like, this is totally fine.

There's nothing wrong.

But I did like more research and I was like, okay, is dithromycin?

Like, there actually are these recent NIH papers where if you like have a boy, there is like this number of potential genetic defects.

And I'm like, great, I have a girl.

And there are these other things that could, you know, could potentially happen that like if you took it in the first or the third trimester, but she took it in the second.

And so I'm asking these, the nurses these questions and they're just like,

you are psychotic.

Like your baby is completely fine.

And I'm like, look, I'm just trying to gather information so that if like X, Y, or Z happens in two weeks, as it said it might in this study, you know, like if something went from a 0.1% chance to a 1% chance,

I want to know because like anything happening in the first month of life is existential.

And I think, I can't remember if this is anything that we've ever talked about, but just like on a personal level, I lost my mom to an accident at a very young age.

And so these kind of lowering existential risk

from like 5% to 1% 1% to 0.5%.

I also am constantly circling around my restaurants and people in my life trying to do this for like early screenings, like anything to remove like the worst outcomes of like total failure.

And so that's also why I think my businesses sort of

tend to survive is I don't let them die, like even when they should.

Yeah.

If that makes sense.

Yeah, I think that that's incredibly smart and something that has probably allowed you to survive in a very risky, very risky area because a lot of people and a lot of entrepreneurs don't have enough appreciation for the risk of ruin, right?

The risk of going to zero, the risk of not being able to continue.

And it seems like that's something that you are thinking about in just globally, right?

In every element of your life.

Yeah.

In connection to my to my children, in connection to my businesses, in connection to the climate.

That's global.

Yeah, no, I mean, definitely like the fat tail on all these things is problematic.

And I just try to, you know, winnow it down.

And I do that, you know, in any situation by just gathering information.

So if I see something, like my great-grandmother was a worse nurse in World War I, and

my grandmother was dying of a fever and being read her last rites.

And

they thought she had,

I don't know, the flu.

And my great grandmother was like, it's diphtheria.

I know the smell of diphtheria from just, you know, being like in the trenches.

You need to treat her for diphtheria or she's going to die in 10 minutes.

And they did.

And it saved her life.

So it's just like information like that that I find that it's very helpful to have in terms of, you know, risk mitigation, but also like from a business point of view, in terms of like team management, I'm also very early.

I try to be very early to catch things.

Like I'm not going to wait for some like major accident,

like somebody falling down the stairs, some like horrific, like harassment situation.

I try to look at like general conditions that could lead to a catastrophic outcome and eliminate the risk.

That's the other thing I do.

So what's next for you, Henry?

I'm working on a cool museum project in in the city that I'll be able to talk about in a couple months.

I am working on a

little kind of hotel bike shop restaurant project in the Caskills where I live most of the time.

A lot of the things I do are just like things that kind of I want.

I opened a little like grocery store in my town as well, just to have more access to local produce.

And then I'm kind of pivoting to more focus on just this book on, you know, individual action and kind of um building climate identity as a consumer um and the ways in which you know being of this generation whether we like it or not i i think a lot of the meaning of one's life as you look back in it um will be you know what individual part did i play in this like

massive success or you know catastrophic failure and and being able to look back at your whole life and um you know one won't be able to hide from yourself what you know when.

And just, again, the risk of looking back and not liking what I see is haunting for me.

And I also think that there's a lot of like low-grade anxiety that people feel about not the threat, but the paralysis.

So trying to create tools and, you know, heuristics for people to actually tap into someone to feel good about and not just feel, you know, low-key sleepwalking toward Armageddon.

Like that's, that's an odd, like there's a lot of issues in the world that I could name like nuclear proliferation.

I mean, there's many, many things where there's literally nothing you can do if you're just a normal person who's not like in top tier of government or a think tank.

But climate, you know, that, that's one where we all have an actual role.

I think people just need a bit of guidance and some tools to help them get there.

So

opening these, you know, whatever, climate positive restaurants, I've had thousands of interactions on a consumer level with people being like, what is this?

Like, I don't, I feel like you're lying to me.

Like, I, I, I don't feel better after coming here because like now the rest of my life feels like it's problematic.

Um, and just the ways in which trying to create this, this climate positive experience, it just didn't have anywhere to land for people emotionally.

Um, and just trying to work on that larger background issue of not

having a way to account for non-financial values, like doing

the right thing.

And to actually feel good about that, to feel joy, right?

And to have it like help cut down on that low-grade anxiety.

It's a rationally selfish thing to do if people only had a place to put that good feeling.

So kind of working on that.

I love that.

And I think that's a really beautiful place to end.

This was incredibly interesting and very inspiring.

So

I hope that your approach to risk and kind of your example will indeed help people.

So thank you so much for sharing.

Thank you for joining us.

And I, as a personal, selfish consumer, can't wait for your next restaurant to open.

Thanks, Maria.

Really great to see you.

Good to see you too.

Let us know what you think of the show.

Reach out to us at riskybusiness at pushkin.fm.

Risky Business is hosted by me, Maria Kondakova, and Nate Silver, who will be back next week.

The show is a co-production of Pushkin Industries and iHeartMedia.

This episode was produced by Isabel Carter.

Our associate producer is Gabrielle Hunter Chang.

Our executive producer is Jacob Goldstein.

Sarah Bouguer is our engineer.

If you like the show, please rate and review us so other people can find us too.

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