Anyone who’s ever watched the great Stan TV programme Billions might understand what kind of drive to succeed should have been injected into Steven Marks, who, along with his business partner, Robert Hazan, were able to build one of the fastest-growing unconventional fast food operations in Australia.
And this Speedy Gonzalez business is now taking its fare to the world, including the home of fast food — the USA — making this ex-Yank, Marks, another ‘Aussie’ business success story!
Successful people leave clues for others to learn from and the tearaway success of the Mexican food business called Guzman y Gomez (GyG) is a case in point. What Steven and Rob have achieved gives the blueprint for winning in business to anyone who’s aspirational.
The starting point for this business story was Steven’s addiction to Mexican food, which was part of his life forever in his homeland, and our seeming indifference to this hot stuff that historically hailed south of the US border down Mexico way.
His unstated goal was to change our attitude to Mexican food and that’s exactly what he’s done.
Before coming to Australia to flex his entrepreneurial muscle, Steven had work with highly successful but controversial hedge fund manager, Stevie Cohen, who some say was used to create the character of Bobby Axelrod for Billions. In my Switzer Show podcast, Steven says there were similarities but Cohen wasn’t into the illegalities that Axelrod made into an artform in Billions.
Another ‘brush with fame’ story in Steven’s history was that he studied at the Wharton Business School at the University of Pennsylvania, which was the alma mater of one President Donald Trump. It’s clearly an entrepreneur-making machine.
Back to the business lesson that GyG’s founders have shown us, and the operation started 13 years ago in Sydney’s Newtown, which in its early days was recording a turnover of $11,000 a week. By 2009, there were six restaurants and that’s when a lucky break was taken as a golden opportunity. Three guys put their hands up to join the founders to grow the business.
But these weren’t any ordinary punters. One of them was Peter Ritchie, the first employee of McDonald’s in Oz and while CEO of Maccas grew over 500 stores and hired 50,000 employees. Joining the group was Guy Russo, who also was CEO of McDonald’s and CEO of Kmart for Wesfarmers before taking the chairman’s job at GyG.
Steve Jermyn was another ex-Macca’s executive who saw GyG’s potential. Together the three food experts gave not only money but expertise to help Steven and Rob grow their operation.
But wait, there’s more. Last year, TDM Growth Partners took a stake in the business for a cool, wait for it, $44 million! That figure shows what a success story I’m talking about, with that initial Newtown store now taking $64,000 a week in sales. That’s progress when one outlet goes from $11,000 a week to $64,000!
After 13 years, there are 116 restaurants, with 13 in Singapore and Japan and one in Chicago that was to open recently. The total operation now has an annual turnover of $300 million and growing. But what has powered this growth story?
Marks clearly learnt a lot of understanding of market trends from his old financial markets days reading social trends. In 2017, he made the business use only free range chickens. Noting the social success of people like Sarah Wilson who wrote I Quit Sugar, Marks cashed in (and respected) on the demands, especially of young people and fanatical foodies, for produce to be clean and I guess you could nearly call it ‘green’.
Here’s the AFR on what GyG committed to: “Clean to GyG means no added preservatives, artificial flavours, added colours or unacceptable additives in any food ingredients. The company hired a nutritionist to audit everything from the tacos to the salsas. In 2016, GyG removed a carcinogenic artificial colouring known as “sunset yellow” from its Dulce de Leche dipping sauce for churros. In 2017, they took the antioxidant BHA out of the Chipotle Mayo. Ingredients like cheese were trickier, but after reviewing more than 30 options they landed on an Australian supplier of preservative-free cheese in May.”
This is fanatical and it’s the kind of expensive innovation that might have frightened his board. But Marks and Hazan have shown themselves to understand their market. And in the modern era, these kind of stories are told on Facebook, Twitter, Instagram and so on.
The founders have made sacrifices and given up equity to others. Compared to so many other businesses that don’t have this kind of success, they have gone down a road not often travelled and that has made the difference!
I guess the lesson for all would-be entrepreneurs is this: if you genuinely know what consumers really care about, you can sell them just about anything!