Honoring Solomon Choi: Lessons from the 16 Handles Founder

Speaker 1: 0:00

Hey listeners of Give an Ovation, this episode is a pretty special episode. I recorded this episode a couple of weeks before the passing of Solomon Choi and today I was supposed to record part two of this podcast and, as many of you know, he has passed away. He was a dear friend, a great person, and while we are all completely shocked and immensely saddened by what happened, I'm so grateful I got to have this last conversation with him, and so this episode is dedicated to him and dedicated to his family, who are in our thoughts and prayers, and to you, solomon. I guess we'll wait for episode two. Might just be a little bit longer. Thank you for all that you've done for this industry, thank you for being a friend, thank you for being a leader, till we meet again.

Speaker 1: 1:13

Welcome to another edition of Give an Ovation, the restaurant guest experience podcast, where I talk to industry experts to get their strategies and tactics you can use to create a five-star guest experience. This podcast is sponsored by Ovation, an operations and guest recovery platform for multi-unit restaurants that gives all the answers without annoying guests with all the questions. Learn more at OvationUpcom. And today we have someone who's not just a legend in the industry, someone who has built and sold a brand, someone who has done incredible things from the time he was growing up, has been in this industry from a kid on but someone who's just a really cool guy, someone who's a great, someone that's awesome to sit next to at dinner. Good friend of mine, solomon Choi, the founder of 16 Handles, the CEO of Java Brands. Welcome to the podcast again, solomon. How are you?

Speaker 2: 2:02

Very good, zach. So good to see you. You are certainly one of the smiles I look forward to at every industry conference and event I go to, as well as the ones I don't go to, because you go to a lot more than I do Well you do the circuit man.

Speaker 1: 2:17

I see you at a lot of these shows. What do you get out of these shows? When you're looking at this, what would you say to a restaurant operator who is thinking should I go to trade shows or not? What would be your recommendations to them?

Speaker 2: 2:30

The short answer is absolutely. You know, in thinking about my own journey and for those who don't know, as Zach mentioned, I founded 16 Handles, which is New York City's first self-serve frozen yogurt shop, franchised that to several dozen units and ended up selling the company in August of 2022 to my largest franchisee, along with YouTuber Danny Duncan. They kind of teamed up and said, hey, we like this brand that you built, but we want to come in, put some money into this and scale it nationally. And so I bring that up to say that I think the reason why all that happened and how I was able to continue down that journey and not only build and scale this concept during very difficult times I mean, we're talking about bookmarks of 2008, you know, heading right into the subprime mortgage crisis and the great recession as we know it now to selling it in 22, where you know I would actually argue, being here in New York that New York city is still recovering from the effects of the pandemic and how that's impacted the workplace as well as restaurants, and so I think I'm very blessed and fortunate to be able to make it all the way through that journey of starting the brand, scaling it, exiting, but along the way, some of the lessons learned has really come from the simple desire to stay customer obsessed, so I'll talk a lot more about that. And really, so what does that even mean, right, customer obsessed? Well, that also means that I'm constantly learning, and the learning doesn't come from working in my business as much as it does from being able to work on my business. All right, so what does that mean? So, the working on my business and understanding at scale what's best for the customer and how the customer is responding to products, communication tools, marketing these things come from again like learning from industry experts.

Speaker 2: 4:14

Zach introduced me very kindly, saying that I think he used the word expert and to some degree I'd like to consider myself one, but really that's come over a decade-plus long journey of being in this great industry, in the restaurant industry, and understanding really what drives brand loyalty, which then leads to increased sales and being able to scale the brand.

Speaker 2: 4:36

And, along the way, some of the solution providers that I've met, both on the product side as well as on the technology side, have come from attending a lot of these industry trade shows, and so something that hasn't changed for me in the last 15 plus years has been attending these types of events and, you know, now I'm on the side with Java brands, on the consulting side and working with emerging concepts that want to also do the same thing, kind of you know, grow and scale their brands. And the thing that I've noticed time and time again is they are never at these events. And so even me, when I'm, you know, meeting with some of my clients on a weekly basis, whether that be virtually or in person, I have to kind of take some passes or rearrange my schedule and they're just kind of like wow, you travel quite a bit, and it comes with some negative connotation, I feel like, because they think that I'm just going to Vegas for this conference going to Chicago for that conference, but really it's a sacrifice.

Speaker 2: 5:27

I mean I myself am no longer running a restaurant business but I'm traveling more now than I did before and I have a wife and kids at home and Zach. I mean I'm preaching the choir here in terms of how tough that is on yourself and the family unit, but really the sacrifices that I'm making to me are investments that I'm making to me are investments that I'm making not only for myself but for all the entrepreneurs and brands that I get to then work with and that kind of like knowledge stacking. And that expertise stacking comes over time from learning from others and seeing what's working, what's not working, what's around the corner. You know some of these even more technology specific conferences. I mean having some of these sidebar. You know meetings with stealth companies that are being built. These aren't things that you're. By the time, I'm reading the same trade publications that maybe other entrepreneurs read. You already know it's old news.

Speaker 1: 6:17

You know I like to get the forefront while it's being built, you know, and so, and people like conferences. I'm sure you've seen this, but I found that people really let their hair down at conferences. They're okay sharing the real secrets, because it's not recorded With a podcast. There's always some level of hey, this is what I say is going to get out there on the internet and someone can pick that up. But at a conference, people will just tell you exactly what's going on, which is pretty cool. And the other thing that I find is at conferences it's, you know, every other industry has CE, right, there's always continuing education. And in the restaurant industry, you know, it's not standard to have CE but, like the, the, the trade shows are that opportunity, um, and you get to hear from people.

Speaker 1: 7:06

And yes, if I didn't say it in the, the intro, I wouldn't just call you an expert, solomon, I'd call you a luminary, you know, like you're someone because because when you get up there on stage, you're not just, you know, spouting out theories, but you're being like, hey, this is how I'm seeing it in the industry, this is what we're doing right now, this is what these brands are doing, this is what we should be thinking about, like, you want to get those. You're very good at giving the strategies and the tactics, which I think is super important. And one thing that I want to chat about with the you know talking about the guest experience. I want to chat about the guest experience and I want to go through your, your strategic mindset about the Oatly partnership with 16 Handles, because that was something that's something that's very unique.

Speaker 1: 7:55

I go to a lot of frozen yogurt shops, frozen dessert shops. I love them. I'm not I can't really eat ice cream, but I can have frozen yogurt and but it still kind of like doesn't make me feel great. But the Oatly was something that was so unique because I've never had a great vegan frozen dessert. So, anyway, I want to ask you about what do you think is the most important aspect of guest experience? And then, using the concept of using that as like a microcosm and the whole Amazon principle of working backwards, I'd love to understand what was your thought process in the Oatly partnership.

Speaker 2: 8:32

Yeah. So just a recap there for those who don't know the Oatly partnership was really what I would say saved 16 handles, you know, going into 2020, 2021, really, you know, our business was based in New York City. The majority of our locations, both corporate owned and franchise, were in the tri-state market. So you're talking about New York, new Jersey, connecticut really the hardest hit when it came to legislation. And then you know, it seems like it was an attorney ago, and then it also seems like it's yesterday, depending on which memory calendar I'm going through but our stores were physically closed off. The majority of our stores all but our one loan store in Florida at the time was physically closed off to our guests. And if we didn't have an off-premise strategy, then we probably would have ended up like a lot of our competitors did, which was it was kind of too late by March 2020 to figure out how to have an online strategy and be on the online marketplace. And so for us, I'm glad that A we've been on the delivery platforms since 2010. So I'd say we were pretty early, especially with the form factor that we're in frozen yogurt delivery since 2010. So, yes, we were early there, but it's really that right.

Speaker 2: 9:43

I think that's also a good microcosm of the overall strategy, which is how were you early, how were you one of the first, or if not the first one, to actually do X, y and Z? And that goes all the way back to, if you remember, snapchat and social media platform Google it 16 Handles was the first brand in the world to use Snapchat for a marketing campaign and working directly with the founder, you know who at the time was very young, still much younger than I am, but was building again something new and different to really be able to connect with that younger generation right, that millennial customer back then, kind of this new concept in 16 handles that would relate to the millennial consumer. You know I as a late, you know late Gen Xer, I grew up with 31 Flavors, baskin Robbins you know, growing up in Southern California, I just saw a new logo getting put up on the building.

Speaker 2: 10:34

They're doing a facelift over there at Baskin Robbins, speaking of which, but yeah, they're certainly doing some stuff and again, I think it's really about that. You have a legacy brand that's still, you know, very relevant internationally. Maybe lost some of that, you know, domestically.

Speaker 2: 10:48

And they're again, they're rebranding, they're revamping and you know, look, ice cream, frozen yogurt, these are all frozen desserts. That won't go away, you know, but in terms of like leaning into at the time when Froyo was a fad and yes, I'm on record saying it, I've said it many times Froyo was a fad. Does that mean that it's extinct and gone? No, but come 2008, when I started in New York City, there's a reason I moved from LA to New York City where it snows, where there was a lot of competition already, and that was because I really wanted to come in and figure out can I build a brand in the number one consumer market in the world? And that was really the challenge.

Speaker 2: 11:22

And coming from LA where I'd operated restaurants, I'd actually franchised a gelato concept, and so LA was my home, my backyard really, where I learned the restaurant industry. I knew nothing about New York City other than what I learned in school and on media, and here I was. But one thing I did know as a marketer, which is what I studied, is that that is the consumer capital when it comes to brands, food, fashion, finance you know these big industries, and so when it came to food, I was like you know what? I got one shot at this. I've got nothing to lose. Well, except for my family's investment right, which was enough to open up one location.

Speaker 2: 11:59

But I wanted to go for it. I wanted to go for the gold, and so that's why I chose New York City. So that's a very material point because, again, if I wanted to build a consumer brand in arguably the most consumer-centric market, well, I really needed to focus on that guest and guest experience, right, if I wasn't, it wasn't going to happen. It's not like I had a secret sauce where my product was from the future and nothing else tasted like it. I think when it comes to taste, those things are very opinionated, right.

Speaker 2: 12:27

But at the end of the day, when you're talking about especially a franchise, you know, in a QSR format, the number one is the one who holds the highest AUV and I'm proud to say, in frozen yogurt franchising, 16 handles held that for 10 out of the 10 years that I held the reign as the franchise CEO, and so then it becomes okay well, how did you do that? And so these are all now I feel like the tactics you know, kind of like, and I appreciate you saying that. That is one of my biggest frustrations. Also, a huge shout out to Rev Ciancio, who's another marketing consultant in the industry, a good friend of both of ours, who also says the same thing, which is please, if you go up on stage, please share tactics. People are there. They made the sacrifice they're apart from their family, loved ones and their companies to come and learn and extract information and value.

Speaker 2: 13:13

And the value is really going to come from, tell me what worked and didn't work, so that way I can take those notes, whether they're physically or digitally imprinted, and I can take it back and make good decisions. And so, to me, I do like to talk tactics as well, and you know, as I started attending more of these conferences and they would range from franchise conferences to restaurant, food and beverage, health and wellness, omni-channel marketing. Another shout out Nabil from Lunchbox founder, who you know was an early advisor and, I think, the first paying customer with 16 handles we met at an omni-channel retail marketing conference in Mexico.

Speaker 1: 13:46

So yes, not a restaurant conference, not even a restaurant tech conference.

Speaker 2: 13:51

And so, for me, again, my MBA, which is still ongoing I haven't graduated, I don't think I ever will, but is really attending to me. How do I get closer and closer to what the consumer actually wants? Well, again, it's going to come from all of these types of educational scenarios and I don't think it's just one vertical. And so I say that because, now, going back to your original question, zach, how did the Oatly partnership happen? Well, one of the last, I believe, actually, yeah, one of the last food conferences that I actually went to was called Natural Expo East, and this was held in Baltimore, maryland, I believe, around October, september of 2019. So kind of one of the last big food shows prior to March of 2020.

Speaker 2: 14:36

And I remember seeing and, by the way, this is not a restaurant trade show, this is actually a trade show mainly for grocery store and big box retailer buyers. Restaurant trade show this is actually a trade show mainly for grocery store and big box retailer buyers. So you have buyers from like Whole Foods and Target and Walmart and HEB and Kroger's, and it's really CPG right, consumer packaged goods, food and beverage, along with health and wellness products, and so very rarely are you going to run into restaurant buyers because typically we're not buying those types of products. But why I've been attending them is because I feel like, if I'm trying to understand my customer base and I'm going to refer to her as she because at 16 Handles, 70% of our customer base was female, so I'm going to kind of resort to the majority there, not to alienate Zach I know you're a huge fan of 16 Handles so not to alienate my male audience here but knowing that she's evolving and changing, right. So it's starting in 2008. And here I am at a show in 2018, 10 years later.

Speaker 2: 15:27

Right, that customer has evolved. She may be married with kids, she may be, you know, leveled up professionally or in grad school. She may have changed her dietary preference, right. And so when I really started seeing the shift, even in terms of food and beverage trends, that's what I would take back to my team, take back to my team, take back to my co-packers after attending these types of shows and be like, okay, as we now think about next year's product development.

Speaker 2: 15:51

Here's some of the things that I've picked up as I attend a lot of these shows around the country. Right, and learning really from hey, I remember Innovation Hall, you know, back in 2010, and there was kind of this movement on plant-based dairy products, okay, and then seeing these boots now raise a ton of money you know some of these companies and go off and become much larger companies. And now it's really to me the evolution of a lot of those trends that I saw in real time year over year around the country that allowed me to have those insights. Now you could argue that's a very expensive way to get those insights, but guess what? No one's handing me those insights.

Speaker 2: 16:23

And if I'm reading it in a trade publication already too late, right? So, again, if I need to be, if I want to be early and I want to be that committed to her, I need to know real time how that's happening, evolving and growing. And so, as I saw more of the plant-based, you know alternatives, you know like the likes of Beyond, you know Beyond Burger and possible Like when I would see them at these shows just really making this huge splash, I noticed those things. And when I also noticed that, uh, fro-yo in in as a category of frozen yogurt, was starting to lose its luster, I was like, hey, we need to be able to kind of like revamp the brand. Um, so that way we're not just a one trick pony, right. And I didn't want to just be like, okay, cool, During the five-year Froyo boom, we were there.

Speaker 2: 17:05

We were the first ones in New York City to offer the self-serve format, and that's the story. There's that case study from 2008 to 13, during the real big boom growth years of Froyo, 16 Handles was one of the brands in New York City that did something. That's not why I moved to New York City and that's certainly not why I decided to become a CEO and start my own brand. And so, knowing that I wanted to build a brand that people would love for generations right, I wanted to be like a Carvel or a Baskin Robbins or one of these brands that again would become a legacy brand itself. I don't think being a legacy brand is a bad thing. I think now if your customer base ends with kind of your former customers, then I think that may be an issue, but I wanted to create a platform and a brand that people and then future generations would come to love. And so, knowing that again, froyo in and of itself was just one subcategory within frozen dessert, I realized and really had to put my hat on.

Speaker 2: 17:59

So after the show in 2019, I went back to my team and my co-packers and said, guys, we need to do plant-based soft serve in a meaningful way. And guess what? I picked up on something and they're like what was that? And at the time, oatly was really the darling challenger brand in the industry. They were the ones that put oat milk on the map, really through baristas, in the third wave coffee shops and being a dairy alternative in lattes. I mean, that's really how the brand was birthed in the US S, in the U S. Meanwhile, there are 30 plus year old Swedish brand that's been around forever. You know back home, but that's really how they transitioned stateside.

Speaker 2: 18:36

Yeah, it's a, it's a, it's a, it's a fun fact and their brand ambassadors were actually coffee baristas, not salespeople. And so in seeing all this, I was like hey, I noticed that they were launching Oatly frozen pints, and this was also at the time, if you remember, starbucks had partnered with Oatly and there was a huge national shortage where you couldn't find Oatly inside of Starbucks. It goes sold out and on back order. Oh wow, good problem to have when you're growing in an emerging brand, but also bad if you have this huge pent up demand where consumers are now seeking your brand and there's limitations and hurdles and outages for them.

Speaker 1: 19:11

It creates a vacuum right.

Speaker 2: 19:13

Yeah, it creates a vacuum. So I saw that as a huge window. And here we are where they're trying to launch frozen. So now they're speaking our love language, right, which is a frozen dessert. So I thought, you know why don't we launch an oat milk-based soft serve, right, and be the first ones to do that? And so I mean that process. It took months.

Speaker 2: 19:31

We were able to go to market with a commercial product in the first week of February of 2020. And let me tell you, as a Northeast-based frozen dessert brand, february being, you know, one of the coldest months it's certainly the shortest month of the year when we saw sales spike. We knew that we hit something right. We knew that we hit the consumer's heartstring and I was like I may have just found the fountain of youth for the Froyo curse of being in the Northeast, which is like how do we sell frozen dessert when it's the dead of winter? And it was short-lived right. February was an amazing February. All we did was just kind of market this new product line that we had, which was, you know, oat milk soft serve.

Speaker 2: 20:15

And then March hit and the world changed. Certainly, in the 16 handles ecosystem, I'll never forget the first reported case where they had to quarantine. A US city was New Rochelle, new York. Us city was New Rochelle, new York, and we had a franchisee who had a location there and I remember every month we would have a franchise webinar, and the April webinar was the most grim, the most disheartening and really the most depressing webinar we ever had as a system rightfully so April of 2020. And I'll never forget the franchisee at the time. He was like we're done, he goes. I can't even get out to go grocery shopping. Forget it. They're telling us we have to socially distance, we can't touch anything someone else has touched and, mind you, our business was self-serve. Right, you go to our busy stores, you're there, but right next up to the next person ready to touch the handle they just touched, to then go to the toppings bar and touch the ladle that they just touched. So you talk about having an unfair disadvantage. Uh, there you go.

Speaker 2: 21:14

Any kind of buffet setting was probably the worst type of food service operation to run during the, during the height of the pandemic and covid, and so you know, fortunately for us again, like being early into technology, having, you know, worked with lunchbox, where we had a native ordering application already ready to go that summer of 2020, we had launched the mobile app where people could also order ahead. So again, fortunately, we were prepared by being early and again, I learned all that how, through the technology shows, through the marketing shows. But then, from a product standpoint, I realized that, hey, online is very different than in-store and for us it's a very submersive experiential retail environment. Exactly, you would know, but we have 16 rotating flavors, 50 plus toppings. You make it yourself and there's no right or wrong way to do it. So if that gets eliminated from the guest experience and it's now limited to, I'm now messaging to the store, whether it's through my smartphone or on the website, telling them exactly what I want, and then it's not the self-serve experience.

Speaker 2: 22:12

We really had to bridge that gap where this wow experience from discovery and, you know, self-expression that comes in store had to be done online. Yeah, so with that, you know, it really came. What we learned very early on was that it really comes down to the flavors and the products. That's really all we're able to promote, you know, because it was, at least for a short window of time, a hundred percent of digital experience, whereas prior to that we really relied on that in-store brick and mortar experience and when it came to product knowing that, again, we have now some data points that show people really resonated well with this oat milk soft serve and that was great. But we can't lean on that in and of itself, because 16 Handles was a place of discovery, but we're not the brand of oat milk soft serve.

Speaker 2: 23:05

So in thinking about that, that's where I said, hey, what if we became the brand that launched it with the brand of the category, which at that time was Oatly? And so I remember reaching out to my graphic designer, crystal, and telling us, crystal, what if we created an agency pitch deck and sent it to the president of Oatly US, who, fortunately, I was connected to on LinkedIn and he was the former VP of marketing from Chobani, again another New York City-based challenger brand, created and dominated the Greek yogurt category. So I was like this guy's going to get it and he's a marketer and he's a brand guy and also understands the space right Between dairy, non-dairy yogurt, and so I was like I think that's our best shot. And what do we do we have?

Speaker 2: 23:50

At the time, what I saw Oatly doing was in 2020. I mean, they were gearing up for their IPO the following year and you know that was kind of known if you did any sort of research. And so, knowing that they were doing a ton of advertising, I did a deep dive research on Oatly as a company, found out that, coming from the homeland in Sweden, they believed in outdoor advertising only they didn't do digital, they didn't do any direct-to-consumer and they did outdoor and so, unfortunately for them, they had spent all this money in marketing and advertising the side of buildings in New York City. Almost every single bus you would see at this time and for those New Yorkers who remember this time, you would see Oatly ads on every single New York City. Almost every single bus you would see at this time.

Speaker 2: 24:31

And for those New Yorkers who remember, this time you would see Oatly ads on every single New York City bus bus stop, in some of the train stations, the subway stations. So again, they were doing all print and outdoor and I knew that that was their advertising love language from corporate. And so I was like well, what do we have? At the time we had 30 locations in the Northeast, northeast DMA this direct we have.

Speaker 2: 24:50

At the time we had 30 locations in the Northeast, northeast DMA right, this direct marketing area we have outdoor, we've got windows, we've got storefront signs and we said, look, we will plaster our stores, our cups, our lids, our spoons, our machines. We'll do an Oatly machine and launch Oatly soft serve. And we were able to actually get $250,000 to be able to launch this partnership, which more than made up for the lack of marketing resource dollars that we had because our sales were down across our system, and so that was really how we were able to save the company and have this resurgence during a time where most of our orders, for a while, were purely digital orders. But we had this trophy product and this brand that carried a ton of relevance to really become this SaaS platform soft serve as a service for a company like Oatly.

Speaker 1: 25:34

Love that and you guys just nailed that, and I love how creative you thought about it. Thank you for sharing that story of Oatly, because it's phenomenal. So, solomon, for not only starting my favorite dessert shop, but for going to all the shows that your clients don't have to. Today's ovation goes to you. Thank you for joining us and give an ovation and stoked for part two my pleasure.

Speaker 2: 25:56

Thanks so much, Zach. Looking forward to it.