Alan: Welcome back, I’m here today with Noah Alper. He is the founder of Noah's Bagels and also a serial entrepreneur. Noah, welcome to today's show.
Noah: Thank you Alan. It’s nice to be here.
Alan: Noah, can you give me some background of how did you get to into the bagel business and, then fast-forward to where you are today?
Noah: I got into the bagel business because my brother gave me the idea that, open a bagel shop in Berkeley. This was the late 80s, there weren’t a lot of great bagels in the Bay Area. And you know, as a younger brother I just kind of did what I was told. And I set up, I’ll at least look into it, I can’t tell you that I’ll do it. I took one year, I looked around at the, at the landscape and I discovered that bagels, not only was something that was desired in the San Francisco Bay region, but across the country it was becoming a very large phenomenon. And so after looking at it for a period of roughly a year I open the first shop in Berkeley California.
Alan: Was this your first business?
Noah: No, I had started four other businesses before this so I guess you'd call me a serial entrepreneur just, it’s just kind of in my DNA in a certain way.
Alan: So when you did the bagel shop you got a shop opened up in Berkeley, what do you feel helped make Noah's a success?
Noah: Well, I think it was a lot of things. I think that we assembled a great team of the, of employees. We created a fantastic atmosphere for those employees; we had a wonderful product, we executed it well every day, which in the food business is not easy, and the product itself was delicious. So I think we had, you know just sort of the whole package, not to mention the fact that we chose very carefully where we would locate. And, and our locations also turned out to be a, for most part, very, very good.
Alan: How quickly did you expand locations?
Noah: We started with one store in 1989 and by the time we sold the business in 1996 we had 38 stores. But we started very, very slowly. I'm originally from New England so I understand building a business brick by brick which is a really not very popular notion these days but that's kind of how the way I was accustomed to doing things. And so we, we started off very slow and really didn't start to, to pull the trigger on, on the rapid expansion until we had a really good team in place. And so that wasn't until really 91, 92, so that was three years into it. And then we pretty much doubled our, from our base each year after that. And we were told by really experts in, in quick serve retailing rollouts that you go much more beyond that formula and you can get yourself into trouble. So a lot of what we did, frankly Allen, was we listened to people who’d been there and done that, and we hired them and then we, you know, we kept track of them. We didn't abdicate responsibility, we, but we allowed them a lot of rope to do what they did best and we sort of acted, my brother and I, as sort of the rudder of the business, not the steering wheel.
Alan: You know, the food industries a little different than other industries. And so, how does building a business in the food industry differ when you’re trying to scale?
Noah: Well, it’s a very, very good question especially in the bagel business which is, every bagel, every minute, every store, they’re all different. It's a living yeasted bread product and I think that, in general, in the food business customers don't have a lot of tolerance for mistakes. You know for yourself, you go in a restaurant, you have a bad experience or even a so-so experience, you’re more than likely not going to go back because there’s a whole lot of alternatives. And we understood that very well. My dad was in the food business and he was very obsessive about quality and cleanliness and things like that. So we made sure that the details were attended to on a, in a very, very vigilant fashion and I and, and, and grew at a pace that we could that we could manage that excellent supervision. And I think that was really one of the key things to the building our brand as successfully as we did.
Alan: How did you come up with a recipe for the bagel?
Noah: Well, that was a very serendipitous. I, in that I mentioned that I that I spent a year researching the bagel industry and in course of that exploration I was able to go to a bagel shop in Western Massachusetts that, it’s a very long story, but it turns out it was a customer from another business. Who, I unearthed if you will, and went into her shop she had a great product and I said Susan I got to get hold of this recipe this is unbelievable can I buy it from you? At which point she said well it’s not my recipe but I'll send you the information on whose recipe it is. I went to see him, this other gentlemen, we worked out a deal and he became what they call in Yiddish, a Maven. That he was the one that knew everything about everything. And he became Noah's Bagel’s Maven. And when we would open up, you know, new facilities or expand our plant or whatever, we’d bring in Danny he’d take a look, advise us and suggest what changes and what equipment we needed at every step along the way. And he ensured that his recipe maintained its excellence as we grew the enterprise.
Alan: I'm visiting here today with Noah Alper the founder of Noah's Bagels. Noah, we need to take a quick break. And we’ll be right back after these messages, and I want to get more into talking about your journey as an entrepreneur.
Alan: Welcome back, I’m visiting here today with Noah Alper. He is the Founder of Noah's Bagels and also a serial entrepreneur. And I want to clarify for the listeners that Noah has sold the business many years ago they continue to maintain his name. But we’re listening to the story about Noah's journey as an entrepreneur. And so, I want to go back to your early days of how you first wanted to know that you wanted to be an entrepreneur since I don't think Noah’s was your first venture.
Noah: Right, no it wasn’t my first venture and I think it was interesting the way you phrased it, how did I know that I was going to be an entrepreneur? I would say it was more like it was in the blood. I had lemonade stands when I was nine years old. I grew up in New England and would put my sign in the snow you know in in March, cause I was ready to go and get into business. And it just was I, I think I would say in the blood if you will. I know with some folks it's a journey but for me it I knew, without knowing, I was going to go into business, I just knew that I loved it.
Alan: So let’s talk about your early days and some of the businesses that you started and had success and I’m sure there were others that didn’t go as well.
Noah: Right, yes I have started a number of business, the first business was called Bread and Circus. And it was in Massachusetts, it was way back in 1973 at the very beginning of the natural foods craze if you will. Or trend, and had a retail store and had that store for three years and developed a nice little clientele. It was, it was starting to burgeon but I decided that I wasn't the one that wanted to move it into the supermarket phase which is where it needed to go. And I recognized that but being confined in a retail space like that was something I didn't, I sort of, too freeform if you well I kind of need to move around a little bit more. I vowed at the time, I thought this ironic, that I would never go into the retail business again only to have 38 stores with Noah's bagels. So, I think the notion of never say never is very important for your listeners but that business went well but we sold it to a another entrepreneur from Ireland who eventually built that business up to be the largest natural food chain in the Northeast and it eventually about the same time we sold Noah's got sold to a Whole Foods Market and it's now part of Whole Foods Market in New England. So, that was the first business the second business was a gourmet housewares business chopping boards and salad bowls and all artisan made things from around the world. And that also tied in with another trend which was gourmet cooking which was coming from Europe and Julia Child was on TV and French cooking. And Americans understood they could do this in their own kitchens, it was getting away from the Chef Boyardee canned ravioli and into a higher class of food. And we sold all kinds of materials to a company that cooking and serving experience at home. Sold that business after eight years and then a trip to Israel change my life. And I decided that I wanted to do something significant to help the economy of Israel and I knew I had gift experience and knowledge of housewares business. And decided to bring in gifts for the fundamentalist Christian community in the United States, gifts made from Israel. And thought it was a fabulous idea, it turns out it wasn't such a great idea and if it was I certainly wasn't the one that was able to execute it properly. And so after about three years of experimenting with different products with food products with gifts and with religious articles, it was a mail-order catalog towards the end. Lot of different permutations try to make this concept work, I realized it wasn't going to make it and I had to close the business. It was a very tough time for me, not only had I basically lost whatever resources I had except for very small reserve, but it was a blow to my self-esteem and I wondered whether I was capable of doing it again. I had it, I had a couple of successes, couple of singles and doubles if you will, but thought maybe it was time that I would have to go to work for someone which is something I really didn't know about. Then my brother gave me the idea, the bagels, the bagel business and I should do the bagel business and as I mentioned earlier I started it and became a tremendous success.
Alan: Let me catch up right there. We’ve got to take a quick break.
Alan: But I want to, when we get back, I want to go back into this bagel business story and talk about what you learned from the failures of what motivated you to start up again. We’ll be right back after these messages.
Alan: Welcome back I’m visiting here today with Noah Alper. He’s the Founder of Noah's Bagels as well as a serial entrepreneur. Before the break we were talking about your segue into a multitude of businesses and I want to go back to, you just had a business failure nearly wiped you out, you had a little bit of a cash reserve but you were down and out. First of all, whatever inspired you to want to do it again after suffering a failure and then second, what did you learn from your mistakes?
Noah: Great question. Well I looked around at alternatives, and I think that's one thing I've learned over the years is successful entrepreneurs, successful business people, try to look over, out over the universe of options before making a move. And I looked at bunch of businesses to buy and nothing in the small business field was you know, it was overpriced, it was not for me. So I didn’t really find anything out there to buy, and then I decided you know, I better look for job. So I went to a career counselor headhunter guy, and he looked at me said you’re too old and you’re too entrepreneurial and I don't have anything for you. So, I was a little between a rock and a hard place when my brother suggested that I go into the bagel business. And I questioned it for a while you know, I had been knocked down in that other business. Could I really pull myself back up? There was some resilience there I can’t exactly explain where it came from, I think it was probably a competitiveness that came to me as a child. We were very sports oriented and always wanted to win the game. And I think I can do it again and I, but before I did it, I wanted to make sure that this bagel thing made sense. And I think that there’s a misconception that entrepreneurs go out there and they just, you know, devil may care risk takers. And that’s really not true in my experience, the successful ones you know, are kind of obsessive-compulsive types and at the same type, same time, risk takers. So it's, they have to have a little bit of both I think to you know, to really succeed and so I didn't decide to go into the bagel business until I was pretty rocksolid sure that it was going make it.
Alan: You know a lot of entrepreneurs are out there, and they’re good at running their own shop you know, but when it comes time to decide should I open a second store?
Alan: Was that a hard decision for you?
Noah: Well the way it worked out Alan, was the same brother who gave me the idea to do the bagel business showed up a year later, surprise, surprise, and wanted in. And what I, you know, took me some time to figure it out because he was the older brother who's going to be the boss? So forth, and so on, but what I realized was this business had tremendous potential. The one store I had was a grand slam home run and it, I felt it would be a shame to limit it at that. And he had an MBA from Stanford and he had a lot of pieces that I didn't have, the administration and finance piece, real estate piece, I was more the marketing and brand guy and quality control. And so I started to realize that together, we could really make this thing fly. And that's why I decided that I would not try to go and open you know, incremental one store at a time type of thing but rather develop a team that we could really take this thing much, much further than I could on my own.
Alan: You know, that’s interesting because over the years as I been in the industry and seen businesses come up, the formula of it, it always takes more than one to really have a business.
Noah: Oh yes.
Alan: And there you found it with your brother, who could you trust more than your own blood?
Alan: But that second store how did you do it, did you say you're in charge of the second store?
Noah: Well yea, we had it, and I think this is also very important. We had our roles very clearly defined when we started out, he was licensing the name so it wasn't all one entity at that point I was a licensor, he was a licensee. He would be, the idea was he was going to open up retail stores I was going to create a commissary that would service these retail stores. I would take care the production and the distribution and the marketing and he would take care of the retail operations and that's how it went for a couple years. He developed his own team I had my team. And then we came to realize that we’d be much better served joining forces in terms of being able to attract talent, in terms of being able to attract capital and so forth to operate as one entity. And that's what we did, we rolled it altogether.
Alan: In the early years were you bootstrapped, self-financed or did you, how did you do the expansion?
Noah: I mean we were bootstrapped and then it was debt financing and then you know slowly but surely, we added partners and until, sort of towards the end we had Starbucks was a 25% owner of Noah's bagels towards the end, we had venture capital money, we had debt financing we, you know, it was really layers of financing.
Alan: When you finally made the decision for your exit, was it planned, was it in the works to say I'm going to go up to this point and then you know?
Noah: No it actually wasn’t, we were growing very nicely and had virtually no competition. And I just wanted to make the point while we’re on the subject, that it was very important for me, I guess because I'm a little paranoid to begin with was always to look over my shoulder and see who was coming behind, and make sure that we were at a tiptop shape even though we owned the market if you will. And so it serve me well because the competition didn't come until the very end. And then the Einstein Brothers Bagel Company out of Golden Colorado were rolling up bagel chains across the country. And they gave us basically two options, the first was to sell to them. Second, was to see an Einstein Brothers across the street from every Noah's Bagel store. So it came to it, came to a point where it was good that we had maintained our quality because we decided at first that we would take them on and that we would go national and accelerate the pace that we were embarking upon. We later decided after a year, and frankly a sweeter offer, to sell the business. But we were very well positioned in either direction, but our intention was to grow incrementally like we had been doing all along.
Alan: You know ironically, so even though you join forces with Einstein's, it's known as Noah’s today.
Noah: Right, and I think that's a testimony to the strength of the brand that we had developed.
Alan: Can I get you to stay for just one segment more?
Alan: Okay, we’ll be right back after these messages. We’re visiting today with Noah Alper, the founder of Noah's Bagels.
Alan: Welcome back, I’m visiting here today with Noah Alper, he is the founder of Noah's Bagels and he’s a serial entrepreneur. Noah, how do you build a brand?
Noah: Well, I think you build it brick by brick Alan. At least that's my sense of it. I think there needs to be a sense of authenticity, I think there needs to be a sense of consistency. And everything that the business entails has to support that brand and has to be consistent and not digress from the core message that the brand is trying to transmit.
Alan: How does ethics influence the way you have built your businesses?
Noah: I think the success of Noah's, beyond having a fabulous product, was largely due to the fact that we treated our employees, our customers and the community like partners in the business. We made sure that our people were paid above the going wage of quick serve retailers; that we took care of them if they had to go and study for a test, we gave them the afternoon off. To do the things that you, golden rule type things was very, very important to us. Regarding the community, we had a slew of different community service projects that were front and center in our company’s ethos. We had the employees participate in those community service projects. And that built a tremendous cohesiveness amongst our employees. And our customers reap the benefits of those perspectives. The metric on our success was that we had the turnover rate half of industry average for quick serve retailers and we had name recognition in the San Francisco Bay region just slightly below McDonald's, number two in our marketing research that we did towards the end of our tenure at Noah’s. So, I think we were doing it right.
Alan: What is the most vital part to building the business then?
Noah: I think that making sure that the product is fabulous, making sure that you can execute it every day. And that the team that you’d developed to do the development and execution is first rate and has a tremendous rapport one with another.
Alan: Why is it important for entrepreneurs to maintain a balanced life?
Noah: I write about this in my book, which is called “Business Mensch, Timeless Wisdom for Today's Entrepreneur”. And a Mensch in Yiddish means a human being or what a human being should be, not just a human being. And I write it, I write a lot in the book about balance. And about how taking time off to look out over your business to enjoy the fruits of your your labor is not only important in terms of developing and maintaining a healthy home life and happy home life, but it's actually good for your business.
Alan: I love that, that a balanced life it’s not meaningful to have a successful business without applying the balanced life behind it. So, your book is again called Business Mensch, and they can find it on Amazon? And you wrote this basically to give back in terms of helping people understand the wisdom from your learning experience?
Alan: I’m visiting here today with Noah Alper, Noah’s a serial entrepreneur, also the Founder of Noah's Bagels. Noah, in terms of finding you, you do some business consulting don't you?
Noah: I do, I do.
Alan: And again, how does a person contact you?
Noah: So, people could contact me by email at Noah@NoahAlperconsulting.com
Alan: Appreciate you joining today’ show.
Noah: Thank you very much, it was my pleasure to be here
About Noah Alper:
Noah Alper is a consultant to aspiring entrepreneurs and a dynamic motivational speaker. His experience includes concept creation, marketing, retailing, food service and sales management. In his new book, he weaves together Jewish ethical teachings and over 35 years of business and non-profit management experience.
Six and a half years after founding Noah’s New York Bagels, he sold the business for $100 million. At that time, it was the largest Kosher retailer in the United States. He is also the founder of six other ventures, including the grocery store company, Bread & Circus, once the Northeast’s largest natural foods chain and now part of Whole Foods Market.
Noah has been a guest speaker at Haas School of Business at the University of California, Berkeley; Kellogg School of Management at Northwestern University; University of Wisconsin School of Business; as well as many national and local business and community groups. He is also a student advisor at the Graduate School of Business at Stanford University.
Noah has been very involved in the Jewish community in the Bay Area. He was the founding president of the Jewish Community High School of the Bay, which is now in its ninth year, and he is still a member of that Board. He is vice-president of Congregation Beth Israel in Berkeley, CA, and has been a member of the board of the Jewish Community Foundation. He graduated from the University of Wisconsin with a BA in Economics, and in 1997, he fulfilled a dream of living in Israel and attended the Pardes Institute in Jerusalem. He grew up in Brookline, Massachusetts, and currently lives in Berkeley, California.