STARR Restaurants: Stephen Starr. How a Non-Foodie Built Thriving Restaurants on Gut Instinct

Summary

How I Built This with Guy Raz – Podcast Summary

Episode: STARR Restaurants: Stephen Starr. How a Non-Foodie Built Thriving Restaurants on Gut Instinct
Date: June 22, 2026
Host: Guy Raz
Guest: Stephen Starr, founder of STARR Restaurants

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Overview

This episode chronicles the remarkable journey of Stephen Starr from a shy, music-obsessed kid in New Jersey to one of America’s most successful and innovative restaurateurs. Despite having no background in food and self-identifying as “not a foodie,” Starr built a restaurant empire on atmosphere, creativity, and a knack for building the right teams—ultimately transforming the dining scene in Philadelphia, New York, and beyond. The conversation explores his early ventures in comedy and concert promotion, the founding of several iconic restaurants, and his candid reflections on the challenges, risks, and satisfactions of the hospitality industry.

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Key Discussion Points & Insights

Early Life, Ambition & Entertainment Beginnings

• Television and Music Obsession

  • Starr grew up surrounded by TVs—his father was a TV repairman—which sparked imagination and a love of performance and music.
  • Created mock radio shows, comparing Beatles vs. Elvis (06:30).
  • “I have my little fantasy imagination periods where I would do Beatles versus Elvis and I'd do that for three hours…” – Stephen Starr (06:30)

• First Promotions

  • At 18, became a concert promoter at his school, booking bands like Mott the Hoople (09:04).
  • Motivated by a desire to do “big things” beyond a conventional life in New Jersey.

• Family Tragedy and Drive

  • Lost his mother at 19; became driven to succeed and support his family (10:30).
  • “Even prior to that, [I wanted to] be rich...I wanted to take care of everybody.” – Stephen Starr (10:30)

Breaking Into Nightlife & Comedy

• Grandma Minnie's Comedy Club (Late 1970s)
  • Turned a local deli into a night-time comedy club; gained early business acumen and charisma (13:42).
  • “I do believe I must have had charisma. People liked me. You know, I remember one guy...he told me, says, you know what? You're very disarming.” – Stephen Starr (13:53)
  • Experience working on the Atlantic City boardwalk built his confidence and sales skills (14:34).
  • Forced out by the deli’s owner, Starr opened his own bankrupt building as STARZ comedy club (16:25).

Building and Losing Music Clubs

• STARZ and Ripley Music Hall

  • Opened with bank loans despite having zero collateral, leveraging personal connection and “disarming” nature in a more entrepreneurial era (18:18).

  • Booked early performances by Richard Belzer, Pat Benatar, a young Jerry Seinfeld, and Bob Saget (19:13).

  • Trouble collecting payments led to financial strain at first: “...65% of the audience walked out on the check that opening night. So they didn't pay. And I had no money. I remember crying that night. What did I do?” – Stephen Starr (19:49)

  • Transitioned the club from comedy to music, hosting jazz legends and punk pioneers (22:12).

• Ups and Downs of the Business

  • Clubs often struggled to make real profits; Starr admits, “if I had gone to business school, I never would have done it because none of it made sense” (25:50).

  • Personal motivation included heartbreak: “That may have been more of a catalyst for my success than my mother actually dying...to get [my ex] back or to, like, say, fuck you. Look, I made it.” (27:15)

• Promoting Concerts

  • Started promoting larger concerts with acts like Madonna, U2, Bruce Springsteen (24:35), but profit margins remained slim (~15%) due to industry structure (30:21).
  • Music promotion was often a “loss leader” to earn access to bigger acts through agency relationships (29:04).
  • Starr differentiated himself by being generous and respectful to artists and focusing on relationship-building (27:04, 31:04).

Transition from Music to Restaurants

• Exit from Music Biz
  • Sold his promotion business when industry margins worsened (36:14): “I sold my company to my competitor. I felt bad about it, but I felt it was time.”
  • Drifting after his exit, he discovered inspiration for his first restaurant from a Manhattan martini bar (37:01).

Launching a Restaurant Empire

The Continental (Philadelphia, 1995)

• Rented a 1960s diner, reimagined it as a martini bar with striking design for $90,000 (43:43)
• Innovative décor elements (giant olive lights, neon, martini displays) attracted crowds (44:39).
• Instant Hit: “It was packed from the day I opened it. There was a line around the block...this little restaurant that did $3,000 a week...ended up doing $100,000 a week.” – Stephen Starr (45:57)
• Not a food person at the time; initially wanted to outsource food until he learned from past failures (47:11, 48:21).
• Early failure: “Shake Burger and Roll” failed in 9 months due to operational chaos (48:21).

Expanding & Innovating

• Budokan (1998, Philadelphia):
  • Theatrical Pan-Asian concept, inspired by fusion pioneers; centerpiece Buddha and immersive design (51:17)
  • Self-taught in restaurant design, crediting “executive producer” skills from music (53:58).
  • “I want to blow people away, man. Shock and awe.” – Stephen Starr (55:51)
• Sustained Growth:
  • 6-7 Philadelphia restaurants by 2001, with exceptional margins (20–25%) before costs ballooned in later decades (62:51).

Approach to Business & Creativity

• Never the “host” but “throws the party.” Prefers to watch, not participate (34:24, 35:06).
• Technical focus on “ambiance”—lighting, temperature, sound, staff greeting, not just food (33:04, 65:00).
• Key to success: Building strong creative teams, not control over everything (56:37).
  • “I'm not enough by myself...that core of two to three other people made me stronger and better.” – Stephen Starr (57:11)

Expansion to New York and Beyond

• Big Leap to NYC (2006):

  • Opened Budokan and Morimoto in New York, upscaling design, hiring top talent (66:35).
  • “This is sergeant Pepper. I just did sergeant Pepper. How am I going to do better than this?” (66:50)
  • Confesses thrill lies in creation—not day-to-day operations. Once a project opens, “the thrill is gone” (67:33).

• High-Stakes Customer Experience:

  • One mistake can lose a loyal customer forever; operational consistency is a relentless challenge (68:13).
  • “Why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation?” – landlord Seymour Rubin (69:02)

• Advice for Entrepreneurs:

  • “I don't think anyone could replicate what I did without having some giant money behind them...” (70:12)
  • Now recommends smaller restaurants (85–95 seats) for sustainability (71:08).

Surviving COVID-19

• Sudden collapse of operations; owed $15M in payables with only $5-7M on hand (72:09).
• Loyalty program ("buy one, get one free" gift cards) generated $10M in a day and a half—“very emotional” (73:41).
• PPP (Paycheck Protection Program) funding was the ultimate lifesaver. “Without that, gone, we would have been gone.” – Stephen Starr (74:18)

The Modern Restaurant Landscape & Legacy

• Today, it costs $16–$17M to open a flagship restaurant; impossible without significant external financing (75:11).

• Costs have soared—labor, materials, and regulations—making his original path impossible now (75:55).

• As of 2026: 46 restaurants, annual revenue >$400M (79:14).

• Future Plans & Exit Strategy:

  • Considering a pivot to “fast casual” like Shake Shack, or an eventual sale to private equity or luxury group (77:17, 77:45).
  • “My fantasy...would be that LVMH come in and acquire Starr Restaurants...” – Stephen Starr (77:59)

• Luck vs. Skill Reflection:

  • “A lot of hard work...but there's a lot of luck...could never happen again. It was a different time...A lot of it's luck.” – Stephen Starr (79:49)

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Notable Quotes & Memorable Moments

• On His Introverted Role:
  • “We're always throwing the party, right? I've been throwing the party for years, but I'm never in the party.” (34:24)
• On His Business Ethos:
  • “I think it's insulting to be called a businessman. I'm a creative person that happens to end up being a businessman because I have to be.” (55:03)
• On Restaurant Operations:
  • “You know, when you send an army into battle...every so often, there's got to be something that's too salty. A waiter that was rude...I mean, I have a big staff of people now, but I'm still on the phone at 11:30 at night dealing with fires.” (69:23)
• On Luck and Timing:
  • “You talk to Bruce Springsteen about his career, he said it could never happen again. It was a different time...I couldn't do it.” (79:49)

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Important Timestamps

• Early life and radio obsession: 06:30–09:00
• Starting Grandma Minnie’s comedy club: 11:51–15:45
• Opening STARZ club and learning hard lessons: 16:25–23:00
• Concert promotion, breakups, motivation: 27:04–28:27
• Transition to restaurants, The Continental launch: 41:59–45:58
• First restaurant flop: 48:21
• Design and scale of Budokan: 51:17–54:38
• Approach to team-building: 56:37–57:11
• Jump to NYC, “Sgt. Pepper” analogy: 66:35
• Importance of consistent experience: 68:13–69:37
• COVID-19 shutdown and gift card pivot: 72:09–74:16
• Reflections on future plans and exit strategy: 75:11–78:59
• Reflections on luck, scale, and industry changes: 79:14–79:49

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Takeaways for Listeners

• Creativity and gut instinct, not formal “foodie” expertise, can build empire-defining brands in hospitality.
• Entrepreneurship in restaurants today often requires deep pockets, team-building skill, and the humility to know when the game has changed.
• Sustained success in an experience-based business comes from relentless focus on atmosphere, detail, and adaptation to customer need, not just great food.
• Resilience and adaptability—illustrated during COVID—are critical to survival in volatile industries.
• Even icons like Stephen Starr wrestle with doubt, luck, and the changing tides of culture and business.

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Transcript

[Guy Raz]

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[Alex Blumberg]

Lake City branch terms and more at

[Guy Raz]

applecard.com before every interview I do, there's a mountain of material. Books, notes, transcripts, research and the difference between a good conversation and a great one usually comes down to how well I've absorbed all that stuff. Lately, I've been using the new Kindle Scribe to do some of that work. It lets me read and annotate everything in one place, especially PDFs, so if my team and I are going through a founder's memoir, I can highlight key passages or jot notes in the margins and then quickly pull those insights back up when I'm preparing for the interview. What I like is that it still feels like writing on paper, but it's a lot more powerful. You can search your handwritten notes, organize them instantly, even clean them up into readable text, which means less time digging through notebooks and more time actually thinking, what are you working on? I'm working on the new Kindle Scribe. Work can be a little weird. I've had plenty of those moments early in my career, and honestly, even later I remember stretches where I wasn't totally sure what the next step was supposed to be. And that's the thing. Work isn't always a straight line. And that's where LinkedIn comes in. LinkedIn helps you tap into ideas and insights from people who've been where you are, connect with others in your field, grow your network, and access tools that can actually help you find the right next step. Whether you're just getting started, thinking about a change or trying to accelerate where you are, LinkedIn is built to support you at every stage, because LinkedIn is the network that works for you. Visit LinkedIn.com Hibt to learn more.

[Alex Blumberg]

I saw something that you talked about in this business and it would just stress me out so much, which is somebody might go to your restaurant five times, love it. And then the sixth time, something might happen that is big enough that they'll never go back and they're really mad.

[Stephen Starr]

Yeah. You know, the more you say what you just said, the more I realized what a stupid business this is to be in. One of our landlords, Seymour Rubin, said to me, he goes, why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation? Yeah, one guy could decide, that's it, I'm leaving. And the whole restaurant falls apart that night.

[Guy Raz]

Welcome to How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz and on the show today, how Stephen Starr built one of the most beloved and lucrative restaurant groups in the country one hit at a time. Compared to almost any other small business, owning a restaurant makes almost no sense. The startup costs are high. You have to take out a long term lease. Your inventory is perishable. Finding staff is a nightmare. The hours are crushing, the customers can be demanding. And if you execute well, at the end of the month, your net margins are around 5%, 10% if you're lucky. If you really want to make money in the restaurant business, you're better off trying to buy a Taco Bell franchise where margins are closer to 20%. Or you can do what today's guest Stephen Starr has done. Build really awesome restaurants that serve lots of guests, do it consistently, and replicate the model multiple times. Right now, Steven Starr owns nine of the the 100 highest grossing independent restaurants in the United States. These include places like Pastis and Boudicon in New York, Le Diplomat in Washington, D.C. and Makoto in Miami. In each one of Star's 40 restaurants, you'll find a unique, dazzling design in addition to great food. And together, these restaurants pull in nearly half a billion dollars a year in revenue. Now, you may have heard the statistic that around half of all restaurants in the US don't make it past year five. Even Stephen Starr has had to shut a few restaurants down over the years. But his incredible track record at building restaurants that even 10 or 15 years in are still hard to get a reservation at has a lot to do with so many things that most of us don't even notice. The lighting, the temperature inside, the music in the background, the way you're greeted when you walk in. These are things Stephen's been obsessed with ever since he opened his first restaurant, the continental, back in 1995. And here's the Other thing, he's not a foodie. He doesn't really know much about cooking at all. In fact, before he even got into restaurants, he had a whole first chapter

[Alex Blumberg]

as a comedy and music promoter.

[Guy Raz]

And as you'll hear, for a guy who's launched such forward facing, crowd pleasing businesses, he kind of prefers to stay in the background, which makes sense when you consider his childhood. Stephen Starr grew up in the mid-1950s and 60s in New Jersey, just outside of Philadelphia. He says he didn't have many friends when he was young, so he had to create his own entertainment.

[Stephen Starr]

You know, I was surrounded by televisions because my father was the television repair guy. So the whole house had TVs everywhere. I watched every TV show in the world and very much fell in love with the Dick Van Dyke show back then. And I wanted to also be a comedy writer. You know, what I watched on TV was the shows. But you know what, I was more obsessed with the credits. Like, I knew the producers, I knew the writer. I remembered, hey, Sheldon, Leonard, he did that other show too. And I had a reel to reel tape recorder and I created my own little environment in this room. I know I was obsessed with music, mainly the Beatles and Elvis Presley. So I, I have my little fantasy imagination periods where I would do Beatles versus Elvis and I'd do that for three hours. I play one song versus another song and I rate them. So basically loved tv. I used to do my own skits and radio shows. And then I became sort of intrigued by being an announcer on the radio.

[Alex Blumberg]

So, like radio was a thing that you were really wanting and you actually got a license. I read like when you were a teenager, like to be on the radio?

[Stephen Starr]

Yes. I went to the federal courthouse in Philadelphia. I took my test and I passed. And what I used to do, I used to go in and sneak into a college radio station. And in one part of the station at night, the young college kid who seemed like an old guy to me was on the air. And I would kind of sneak in and go into the production studio. And then I learned how to do production by myself, just by trial and error. And I'd take the albums from the radio station and I would do my own audition tapes. One day, however, the guy that was on the air caught me and I thought, oh boy, I'm in big trouble. And he said, listen, you can't just sneak into a radio station. Like, it's not cool, you can get arrested or whatever he says, but listen, I'll help you. And then I came in like Twice a week. And he taught me how to edit, splice tape and all that. And I just made all my little audition tapes. I pretty much mimicked the FM DJs at the time, you know, by talking like this. This is Stephen Starr at wmmr. And then I wanted to be a concert promoter. And I promoted my first big concert in my high school which was a band called Mott the Hoople.

[Alex Blumberg]

Oh yeah.

[Stephen Starr]

Which has had a hit record called all the Young Dudes.

[Alex Blumberg]

All the Young Dudes.

[Guy Raz]

Right, right.

[Stephen Starr]

Written by David Bowie. I got that bug of wanting to be a concert promoter. I loved it. Became friends with the band, brought the band to my house, my mom cooked them dinner. So the entertainment bug was now really in me.

[Alex Blumberg]

I'm just wondering as an 18 year old or 17 year old high school kid, how did you become a concert promoter? I mean, who's going to like, how did that work? I don't understand. I'm imagining today an 18 year old saying, hey, I want to bring Motta Hoople. Or that's not just. You can't just snap your fingers. Now I'm a concert promoter.

[Stephen Starr]

I wanted to break out of the normal lifestyle that I was in in New Jersey. It was boring. It didn't satisfy me. I wanted to do big things. I became the student council president of the school and somehow they allowed us to have a concert once a year. Ah. So we had the opportunity to book Moby Grape, Alice Cooper, who wasn't big yet, or Motta Hoople. And we chose Motta Hoople.

[Alex Blumberg]

Stephen, when you're. I know that you went to temple to study communications, but I also know that your. You lost your mom at a pretty young age. You were just 19.

[Stephen Starr]

Yes.

[Alex Blumberg]

Which I can't imagine how. I mean, what that would have been like to be a kid. And for that to happen, I mean, it was awful.

[Stephen Starr]

I was 19, I had younger sisters, three younger sisters, six, seven, 13, something like that. No, it was horrible. And it definitely did something to me that made me want to work really hard and maybe try and forget. But even prior to that, when I went to college, my goal was to be. I wanted to be rich. Because we didn't. We had a middle class family, but we didn't have much and I wanted to take care of everybody. And I remember sending my. Typing a letter to my mother telling her that don't worry, by the time I'm 21, mom, I will be a millionaire.

[Alex Blumberg]

Okay. And there's conflicting, I've heard conflicting things, that you did graduate or that you left before you graduated first? Let's just clarify that. Did you finish or did you leave early?

[Stephen Starr]

I left early. I left, like, the third year because my sisters were young and I couldn't. I had to be there and help them. So I had no choice at that point.

[Alex Blumberg]

But I guess from what I gather, in 1977, right, so you are roughly 21 years old. You open a diner and a comedy club in Philadelphia called Grandma Minnie's. Tell me the story of how you. Of how that came about, because you were.

[Guy Raz]

What was the idea for that?

[Stephen Starr]

I just wanted to do something that could make some money for myself. And not that I thought it was beneath me, but it just wasn't in my DNA to, like, work in a restaurant or be a waiter. So I went to this deli, and the deli was called Grandma Minnie's. And I befriended the owner, and I said, you know what? At night here, what do you do? He goes, nothing. We closed. I said, I have an idea. What if you did comedy? Because I had been going to New York to see comedy shows that catch a rising star in New York City. And he said, sure. I mean, I'm open to it. So I started going back to Catch a Rising Star. And I'd watched the show, and the comedian would get off the stage, and you go over to the bar, and I'd say, hi, my name's Stephen Starr. I think I'm gonna open a comedy club in Philadelphia. Would you be interested? And they all go, yes, of course. And I get their phone numbers. And then we finally had our first show, and I start booking comedy there.

[Alex Blumberg]

All right, so just to wind back. So Grandma Minnie's was an existing diner. It existed.

[Stephen Starr]

It was a deli. It was a deli.

[Alex Blumberg]

It was a deli.

[Stephen Starr]

We put a stage up, like, after it was closed. There was enough room in there.

[Alex Blumberg]

How big was it?

[Stephen Starr]

It probably only hold around 80. That's it.

[Alex Blumberg]

And you. You just got to know the owner or you. And he said, yeah, you can use this place at night, and we'll just split the ticket sales or something. Like, how did that work?

[Stephen Starr]

No, basically, no, no. He said, you keep the door and I'll keep the bar and food.

[Alex Blumberg]

Got it. And how did you. Like, again? You're such a young guy. You know, sometimes you hear about, you know, young people in their 18, 19, 20 who are doing these things that you often hear people in their 40s doing. And then you find out that, well, maybe they looked older, they were taller, they were bigger, they had a presence that Kind of enabled them to kind of get away with it. Did you have any of those things?

[Stephen Starr]

No, I wasn't. I didn't look older. I wasn't, like, special in that way. You know what I think it is? This is why I heard you're a good interviewer. You're like Barbara Walters.

[Alex Blumberg]

I don't know about that.

[Stephen Starr]

I mean, my kids have asked me that question. My parents, my wife, a couple wives have asked me that question. I do believe I must have had charisma. People liked me. You know, I remember one guy in the very beginning, when I first opened my first real nightclub, he was the guy who owned that building, and he was a tough guy. And he told me, he says, you know what? You're very disarming. That was the word he used for me. He goes, you're very disarming. I just think I was. I had a thing. Yeah, there's another. There's another piece here. I also worked on the boardwalk in Atlantic City, which is a big piece of who I am and how I became who I am.

[Alex Blumberg]

You worked on the boardwalk?

[Stephen Starr]

When I was 16 and 15. 16, 17. Boardwalk in Atlantic City as a salesman in a store that sold everything. It sold watches, rings, stereos. And I learned so much from working on the boardwalk in Atlantic City. We learned about human nature. I learned how to talk to people. I learned how to sell. You know, we were paid on commission, and we got paid based upon how much profit we made on each item that we sold. In the beginning, we felt terrible. We didn't know how to do that. We, you know, a ring that was worth 20 bucks, we were being encouraged to try and sell for 200 bucks. And we thought that was wrong. But eventually, just like a Navy SEAL or a Marine, we got to be trained killers. And we learned how to sell and how to convince people. So I think the ability to feel confident, my confidence, was being a salesperson on the boardwalk in Atlantic City.

[Alex Blumberg]

Yeah. Okay, so you have this burgeoning comedy club at Grandma Minis, and you start to bring comics. And how does it do it Became very popular.

[Stephen Starr]

And then the gentleman who owned the place then all of a sudden one day goes, you know what? This doesn't make any sense for me. You're keeping the door. I could do it. I want you to leave. I'm doing this myself.

[Guy Raz]

Oh.

[Alex Blumberg]

He said he was gonna, why are you making all the money from booking these gigs? I'm gonna just book the comics myself.

[Stephen Starr]

And he threw me out. I was devastated. And I then said, you know, Kind of like Rocky. I said, you know what, I'm gonna. Can I curse on this thing?

[Alex Blumberg]

Yeah, yeah, sure, yeah.

[Stephen Starr]

I was gonna say, you know, fuck him. I'm gonna come back and I'll fucking put you out of business.

[Alex Blumberg]

Okay.

[Stephen Starr]

Because I was the one that knew these comics, you know, people I had befriended. So I started looking for a place to open another club. I found a bankrupt building that was a restaurant. Somehow convinced the bank I had no money to sell it to me.

[Alex Blumberg]

Where was it at?

[Stephen Starr]

Second and Bainbridge streets in Philadelphia. Price was $150,000.

[Alex Blumberg]

Okay, and how are you going to buy that with zero collateral and zero assets.

[Stephen Starr]

And I didn't even know what collateral was. I saw the sign on the building, somehow got the appointment with Continental bank at the time, met with a man and told him my idea.

[Alex Blumberg]

What was your idea? What was the pitch you gave him?

[Stephen Starr]

Pitch was to open a comedy club like I had opened for someone else.

[Alex Blumberg]

And how. Why would a banker even take you seriously as a 22 year old with no collateral and no cash?

[Stephen Starr]

I have no idea. Except that I think it was a time that wasn't like. I think people still believed in people. Like bankers still would go on an instinct or a feeling.

[Guy Raz]

Yeah.

[Stephen Starr]

So it was probably a sort of a dead building. Maybe he couldn't lease it or rent it or sell it for a long time. And this kid came in that sort of disarmed him to use that word. So he let us. He lent me $40,000. And then there was someone else. I forgot who it was. I either borrowed or whatever, 10 and for 50 or 60 grand I piecemealed this thing together.

[Alex Blumberg]

Yeah, it's so interesting because I've heard we've had stories like this on the show in the past. Like where people got a property or a lease in the 70s or early 80s. And it's so clear the contrast between that time and today. You know, the, the red tape today, the regulations, the corporate owned banks, like it's just a completely different.

[Stephen Starr]

It could never happen again. I could never do what I did back then.

[Alex Blumberg]

Yeah, I mean it's just a different story. So you. And what did you call this club by the way?

[Stephen Starr]

So there was Catch A Rising Star in New York, which is really the godfather of all comedy clubs. And I called it Stars S T

[Alex Blumberg]

A R S. And presumably you could get some of the comics from New York to come to Philly. Cause it's only an hour and a half, two hours by train.

[Stephen Starr]

Oh yeah. I mean I'd already known Them and lined them up.

[Alex Blumberg]

So tell me some of the people you brought in.

[Stephen Starr]

So I believe the first show was Richard Belzer.

[Alex Blumberg]

Wow.

[Stephen Starr]

Went on to be on Law and Order. Right, as the cop, Pat Benatar.

[Alex Blumberg]

Pat Benatar, the singer?

[Stephen Starr]

Yeah, but she was known as Patti Benatar back then.

[Alex Blumberg]

She was a comic.

[Stephen Starr]

No, no, no. She wasn't a comedian. Because the shows consisted of a comedian and a musical act ending with a headlining comedian.

[Alex Blumberg]

Okay.

[Stephen Starr]

And Patti Benatar back then was. She sang all cabaret songs. It wasn't like rock and roll then. So that was one of our first shows I booked. Jerry Seinfeld played there. He was the host of Amateur Night. I paid him $75. Bob Saget started in our club.

[Alex Blumberg]

Wow.

[Stephen Starr]

So I tried to run it seriously, but I had no idea what I was doing. Classic story is the opening night, it sold out. Put all the COVID charges, which I forgot what they were then, $5, $8, we put them on the check. As opposed to taking the cash at the window.

[Alex Blumberg]

Oh.

[Stephen Starr]

Put the COVID charge on the check. And the people drank and they ate on the check. Around 65% of the audience walked out on the check that opening night. So they didn't pay. And I had no money. I remember crying that night. What did I do? Because I didn't have the money to pay the comedians.

[Guy Raz]

And how did you do the food side of it?

[Alex Blumberg]

I mean, again, like, that's a different business.

[Guy Raz]

How did you even know what to do?

[Stephen Starr]

I didn't. I hired a chef. He was a young guy. I don't know how good he was, but we figured it out. This is why, like, even today, with all the restaurants I own, I see what we do to open a restaurant. The tens of thousands of dollars we spend on training and this and that and audio, visual and crazy stuff that we do. And I look back at how I did this, and I say to myself, what the fuck? I didn't. We never did any of this. Now all this training, it was just.

[Alex Blumberg]

You just say, come into the door. You have a young chef. But he would say, hey, we need a deep fryer. We need a grill. We need a prep space. And you would say, well, just do what you need to do. Just make it happen.

[Stephen Starr]

I mean, I learned as I was going along, and we kept the food light. I mean, we did burgers and fries and whatever we did. So it wasn't very complicated. I remember at one point, this is a sad story. You know how when you open a new business, the old days, you put the first dollar, like you hang it on the wall.

[Alex Blumberg]

Yeah, right.

[Stephen Starr]

You know that first buck. So at one point it got so bad we couldn't pay our bills. I had to take the money down off the wall to use it to pay for something that was like cod.

[Alex Blumberg]

Yeah, I mean, I imagine that a comedy club, even with a two drink minimum, you got staff, you've got rent, you've got to pay back the loan. I mean. And from what I've read about about it Stars, it just as awesome as it sounds like it was, I wish I was there.

[Guy Raz]

I wish I was there right now.

[Alex Blumberg]

But as a business, it doesn't sound like it. It was sustainable, that it was not. It was hemorrhaging money.

[Stephen Starr]

Yeah, it wasn't sustainable. I wasn't making any money. Maybe I. I was able to eke a couple hundred bucks a week for myself, but I was always getting behind the eight ball. And then eventually that comedy club evolved and morphed into a club that did mainly music.

[Alex Blumberg]

So you just kind of switched it over. The same venue, the same exact place. Same venue, same venue. And you still called it Stars.

[Stephen Starr]

Called it Stars and did some mind blowing shows, man. I mean, great jazz artists, Nina Simone, Buddy Rich and the Four Tops and Temptations. And then the punk thing started. So then we started doing the Ramones, the Clash and all kinds of punk bands. Just very, very memorable shows. And it's such an intimate environment.

[Alex Blumberg]

How many people could you fit in?

[Stephen Starr]

Not much. Like 120. 120 people.

[Alex Blumberg]

Okay, so this. So you switch over to music. And how did that do as a business?

[Stephen Starr]

It did. Okay. And it really was the thing that was the catalyst for me to become a real concert promoter. And that motivated me to look for something bigger, which I did. And Stars eventually went, you know, went away.

[Alex Blumberg]

Okay, so this was the transition to a new venue, I think called Ripley Music Hall, Right?

[Stephen Starr]

Yeah.

[Alex Blumberg]

And from what I read, it's 500 seat venue. So it's a bigger place also in center city in Philadelphia.

[Stephen Starr]

Yeah, a few blocks away was on South Street.

[Alex Blumberg]

Okay, going back just quickly to Stars, you got a loan from a bank in 77 to open it up. Did you were able to pay that back?

[Stephen Starr]

I don't think so. No, I didn't pay it back. I was too stupid to realize I just walked away from it because, I mean, the building was $150,000. I should have tried to sell it, but I didn't. I just walked away and nothing happened. There was nobody. I didn't get sued or.

[Alex Blumberg]

Right. The bank just repossessed it. And then they probably figured out. Okay. God, again, amazing. Different time. Right. Because today that could have ruined you for a while.

[Guy Raz]

Right.

[Alex Blumberg]

Like, it just.

[Stephen Starr]

It's. No, no, but it's true. When people ask me, hey, what's your advice? I feel so bad because the way things are constructed now, just very little room for entrepreneurship.

[Alex Blumberg]

Yeah.

[Stephen Starr]

Unless you have a lot of money or your family has money. I mean, just to have an idea and have virtually no money. It's hard, man. It's hard. It's not the same. It's not the same country.

[Alex Blumberg]

Yeah. Okay, so you go move to music. So now music really becomes your thing. Ripley Music Hall. And this is the early 80s you're bringing in. I've read U2 and Bruce Springsteen and Cyndi Lauper and Miles Davis and I mean, James Brown, Ray Charles, just incredible artists to a 500 seat club.

[Stephen Starr]

Yeah. I had this thing in my head that really carried on to the restaurant business that I never wanted to do the same thing every day or all the time. So every night my goal was to have something different. So one night you'd have Ray Charles, and the next night you'd have Eurythmics. It was like my own Ed Sullivan Show.

[Alex Blumberg]

And just to kind of go back on the business side, how were you able to finance the Ripley Music Hall? I'm assuming you didn't buy that building. Maybe you leased it, but how were you able to do that?

[Stephen Starr]

I did that one initially kind of on my own, similar to Starz, but eventually I got an investor who participated in transitioning to concerts. Because when you did concerts, you needed real money for deposits and stuff like that.

[Alex Blumberg]

And, Steven, here's what I'm wondering about. I mean, running a music venue, it's hard, right? And you were not a guy out of business school or, you know, you were really kind of learning as you were going along. But it sounds like, again, just figuring out how to make this sustainable was tough for you at that time. Like, you didn't. It was not easy to make a profit doing this.

[Stephen Starr]

No.

[Alex Blumberg]

Or actually you weren't making a profit.

[Stephen Starr]

No, very little. And if I had been, if I had gone to business school, I never would have done it because none of it made sense. You know, a little of this is you're almost an imposter. You know, you're pretending to be something that you're not. You know, I was this promoter bringing in this act, that act. We're doing great. Convincing somebody to play for me as opposed to my competitor. When at the end of the day, what was left over was very little. But a lot of the brand started developing. Right? People started knowing that I was this success, but I wasn't.

[Alex Blumberg]

What about you? I mean, this strikes me as a kind of a business which really depends on relationships. Like, I'm in San Francisco, so I think of Bill Graham, the legendary promoter here, who lived here. And, I mean, what gave you an advantage, do you think? I mean, did you have particularly good music taste? Were you, like, quote, unquote, cool? Were you just like, why do you think you were able to even successfully bring these artists into Philly?

[Stephen Starr]

Of course I was obsessed with music. I loved music. Many of the promoters back then were older than me, and they were not in it so much for the music as they were in it for the business of it.

[Guy Raz]

Right.

[Stephen Starr]

You know, I met Bill Graham a couple times, and I think he was the real deal. But a lot of these guys were just in it because it was a good business. And they can get chicks and, you know, do drugs.

[Alex Blumberg]

That's what I was getting at. Like, you don't strike me.

[Guy Raz]

Maybe I'm wrong.

[Alex Blumberg]

Like, you don't strike me as that kind of guy.

[Stephen Starr]

No, it wasn't me. Girls I always liked and tried to get. But not drugs and all that. No, that wasn't my motivation. And at the end of the day, I was always very, very good to the bands. I gave the bands not just what they asked for, but more. I always felt I had to perform better than my competition because I was younger, not as successful. So I just tried harder. And there's one other thing here that you may have read also, that a lot of my motivation. When I was in college, I had a girlfriend. You know, my mom had died. And around nine months after my mother died, the girlfriend who I was in love with left me, broke up, messed me up for a long time. That may have been more of a catalyst for my success than my mother actually dying. In the end, my motivation to open that club was two things. To get her back or to, like, say, fuck you. Look, I made it. So I have to tell you that, because that's such a big part of. Of what motivated me back then.

[Alex Blumberg]

It's like that Michael Jordan line in his hall of Fame speech where he talks about another log in the fire. Maybe you were motivated by proving yourself, maybe even being a little angry or having a little chip on your shoulder.

[Stephen Starr]

Yeah, for sure.

[Alex Blumberg]

All right. So from what I gather, the Ripley Music hall business side was just not sustainable. And that eventually closed, I think in the mid-80s. But you stayed with being a concert promoter. That really became your. From what I've read, your main thing. And it sounds like that was actually a much more sustainable, profitable business to do.

[Stephen Starr]

Yes, because the nightclub part of it, the Ripley Music hall, all that really was, was a way to get the big agencies to do business with you. So they have a new act and they say, listen, we have this new ban in excess or REM. We need you to book them for $3,000. You'll probably lose money, but stick with us because if you do us a solid when they get big, we're going to take care of you. And that's. So we ended up just losing money to hopefully make money later. It was like a loss leader thing.

[Alex Blumberg]

Right.

[Stephen Starr]

So the club didn't work out after a while. It was just too much. It was hard to make a living there. And then I continued with the concert promoting and did. Did fairly well with that.

[Alex Blumberg]

And for people who don't really know what that means. So if you had like a Madonna, because I know you did promote concerts for Madonna in Philly, like a huge act like that. Right. You know, there's a minimum guarantee for her and maybe a share of the profits. And then there's all the ticket sales and you gotta do the promotion. You're not paying for the venue. That's a different cost, right?

[Stephen Starr]

No, no, no, you pay for the venue.

[Alex Blumberg]

You pay for the venue. Okay. So basically they're saying, hey, you're like the contractor for my house. You are doing everything right, you're handling the whole thing and then whatever's left is yours. What would be a sort of a good margin you could make on that?

[Stephen Starr]

I think you make. After all the expenses are over, you're only making around 15%. So nowadays it's a whole different thing. Nowadays the act gets everything. And then the promoter, which is really basically one promoter, Live Nation now they own a lot of the venues, they get the parking lot and they. Because they own Ticketmaster, they get that ticket charges. Back then when I was doing this, we only got the ticket sales right. So it'd be a modest profit.

[Alex Blumberg]

But you probably were making more money than you were running comedy clubs.

[Stephen Starr]

Oh, absolutely, right, Absolutely. Much more.

[Guy Raz]

And did you.

[Alex Blumberg]

It seems like a very like sharp elbows business. Like you kind of have to be a son of a bitch a little bit to succeed. Is that true, do you think?

[Stephen Starr]

Hmm. No. For me it was different because I was David and there was a Goliath in town who had been there longer and more entrenched. I had to be the good guy. I had to be the schmoozer. Because in the end, the bands only cared about one thing. How much you gave them money and what the catering was. Backstage, it was pretty. A simple formula.

[Alex Blumberg]

And what about dealing with the egos of. You know, when you. I'm always amazed by, like, real estate agents. They have this ability because they're dealing with people who can be really petty and just petulant and difficult. And they're generally very calm and, you know, because they're in the client services business. Similarly, when you're dealing with artists, they can be jerks, right? They could just be. And their people around them can be worse.

[Stephen Starr]

It never bothered me, honestly. I looked at it like the acts themselves were so. They were bigger than life. They were not even real. They were almost like cartoons. And whatever it is they wanted that was overwhelming or overbearing. It was part of the game. I knew I was playing the game. I was enjoying. It was fun to be in the game and have an act. Tell us, don't look at us when we walk down the hallways on our way to the stage. The people that weren't fun were the people that worked behind the scenes. The agents, their booking agents. Those were the real assholes back then. Obnoxious. Because, you know, there was a food chain, and the concert promoter was the lowest on the food chain. We were at the bottom.

[Alex Blumberg]

I mean, I think there's also something just like a sort of intrinsic temperament that some people have. Like, I couldn't do that. I would lose my mind. You know, I mean, do you lose your temper? Are you just kind of even keeled all the time?

[Stephen Starr]

No, not even keeled. I lose my temper. The restaurant business is what brings out the temper in people. That's when you become like a dictator, like Saddam Hussein. But the music business, no, I didn't lose my temper. It was stressful, but it was fun. And when you're watching something that you love happen, music, comedy, it's so satisfying. And you could put up with the other stuff.

[Alex Blumberg]

Yeah.

[Stephen Starr]

But it was also. It was a challenge. How do I get this guy who is treating me like shit, who is not giving me the ax that I want? How can I convince him somehow, some way, that I'm better at this than my competitor? And I was young, so I love that challenge. And by sheer force of my will, I was able to turn people's minds around. I was able to take. I was to be a nobody in this Music business and convince the biggest agents in the world to take me seriously. And that to me was. I won.

[Alex Blumberg]

You know, it's interesting because you mentioned that as a kid, you would be in your room with a reel to reel and on your own a lot of the times, and maybe even a bit of an introvert. But you were doing a job that really required because you just. You'd mentioned this idea that I had to out schmooze these people. But you don't strike me as somebody who really likes to do that or feels comfortable doing that. So am I right about that?

[Stephen Starr]

You're right and you're wrong. You know, I don't like going to parties and hanging out and let's have dinner, let's go out for a drink. I hated that part. Yeah, yeah. But, you know, ever since I was a kid, and then the music, the nightclub business, the music business, and now the restaurant business, we're always throwing the party, right? I've been throwing the party for years, but I'm never in the party.

[Alex Blumberg]

I know exactly what you mean, by the way, because I love throwing parties. We throw parties all the time and I cook and I make sure one's glass is filled. And I'm just making sure that somebody has somebody to talk to. But I actually am not in the party. I totally. And I actually like that role a lot more.

[Stephen Starr]

I used to be sad about it because I remember going to. I owned nightclubs, I went to shows, and I'd be like in the back, my arms folded, watching everybody, just watching them. And I thought I was pathetic. You're not having fun. You're not part of the event. But eventually, like you just said, I kind of liked that role because I was like. I was watching over my little creation and everybody was happy. And that was my satisfaction.

[Alex Blumberg]

So I read.

[Guy Raz]

And I don't know if the year

[Alex Blumberg]

is exactly right, but around 1990, you sold this company, this promotion company and production company to a bigger or different

[Stephen Starr]

promoter, to the big guy, Electric Factory concerts.

[Alex Blumberg]

I imagine you did it because the offer was pretty good.

[Stephen Starr]

The offer was pretty good. Also. I saw the way the music business was going. The bands were getting more. They were sometimes getting 100% of the door. And if we didn't have some sort of Ticketmaster deal, which I didn't have, it was going to be harder and harder to compete. So, yeah, I sold my company to my competitor. I felt bad about it, but I felt it was time.

[Alex Blumberg]

Makes sense, because you could see where this industry was going. What were you Thinking about doing. I mean, did you think, all right, I'm done with the music business and I've got to find something new? Or did you already, when you sold the business, did you already have an idea in your mind?

[Stephen Starr]

No, I had no idea. I pretended I was still in the music business because I kept the office. I would go to work every day and look at my Rolodex and make some calls and then go out to deli and have coffee and go back to my office and look at my Rolodex. And then it became. It hit me, oh, shit, I'm not in this business anymore. So at that point, I had a child. So I spent a lot of time with my daughter Sarah. A lot of time going to the gym, A lot of time pretending I was still in business. And then eventually I said, I got to do something.

[Alex Blumberg]

Because you didn't have like money for the rest of your life right from that sale?

[Stephen Starr]

Rest of life money? No, no, no. So again, just through traveling and stuff, I was in New York one night and went to this restaurant called Global 33 on First Avenue. And I just was totally blown away by this place. It was so cool.

[Alex Blumberg]

But what's so cool about it, the walls were cool.

[Stephen Starr]

They were padded, like vinyl walls that were beige and there were greens. And the girls were extremely good, like martini glasses. And I didn't even know what a martini was really. Never drank martinis. And there was a DJ there. And I said to this dj, I said, what is this? He goes, it's a. It's a martini bar. And I went back again a couple times and it was packed line to get in. And then I said, this is something I gotta try and do something like this in Philly.

[Guy Raz]

When we come back in just a moment, Steven opens his first bar and restaurant.

[Alex Blumberg]

Even though the food part really scares him.

[Guy Raz]

Stay with us. I'm Guy Raz and you're listening to How I built this. Success is a journey, especially when it comes to your finances.

[Alex Blumberg]

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[Guy Raz]

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[Alex Blumberg]

Hey, welcome back to How I Built this. I'm Guy Raz.

[Guy Raz]

So it's the mid-1990s and Stephen is looking for something new to do. After selling his concert promotion company, he's inspired by a martini bar he visits in New York City, and he starts

[Alex Blumberg]

looking for a location in Philadelphia to do his own version.

[Stephen Starr]

I saw this diner at 2nd and Market street in Philadelphia. It was called the Continental. It was a Greek guy that owned it. His last name, I think, was Poulos. And I said, you know what? Would you ever think about renting this out to me? He goes, why? Why would I do that? I said, because I think I could do something here. He goes, what are you going to do? I'm doing 3,000 a week. What are you going to do? Five, six. Eventually, he gave in because he wasn't busy, and he leased it to me.

[Alex Blumberg]

And it had this. I don't want to jump ahead too much. It had this neon sign out front that said Continental.

[Stephen Starr]

Yes. And it was built in 1962, so it wasn't a 50s diner. 50s diner would not have been cool. This was a 60s diner, had a little different vibe to it.

[Alex Blumberg]

And I say that about the neon sign because anyone who's been to Philadelphia knows that restaurant now. But that sign was there. It was called the Continental Diner.

[Stephen Starr]

Right, exactly. So I went through several different ideas, talked to a few different designers, and came back to the idea of doing the martini bar. And I hired the guy that did global 33. His name was Miguel Calvo. He happened to be the dj. He was both the designer of the restaurant and the DJ back then.

[Alex Blumberg]

Okay.

[Stephen Starr]

And then a local friend of mine named Owen Kamahira, who was a artist in Philadelphia, and the three of us put together the idea and the concept for the design of the restaurant. So I did the whole thing for $90,000.

[Alex Blumberg]

Drywall. What was Home Depot?

[Stephen Starr]

So the diner was the diner. We took the existing booths and reupholstered them in green. Olive, right? Green with red piping. There's the pimento.

[Alex Blumberg]

Yeah.

[Stephen Starr]

So existing booths reupholstered the bar top, which was Formica. We encased it in concrete, kept the bar stools, and it reupholstered them in red and green. And then Owen Kamahira, the artist, brilliant idea. Brilliant idea. He created lighting fixtures that were big olives with giant toothpick through the lighting fixture. So from the street, it was this incredible postcard that you could see through the blinds. And Miguel came up with this. We had a drink rack, glass rack above the bar, and all the martini glasses, he filled them in, lose sight. So all the cocktail glasses were hanging above you, and they looked like they were full.

[Alex Blumberg]

90 grand to do all that.

[Stephen Starr]

90 grand. And I remember the heat. The heater would go out every 20 minutes I'd have to run down, light the pilot because I didn't have money to replace the heating system.

[Alex Blumberg]

You opened it in 1995 and what happened?

[Stephen Starr]

Opened in 95, had this a lot of incredible buildup. I put these full page ads and these sort of hipster local papers. It was like Studs Terkel, like these little quotes. And people were just, they were sort of intrigued by this thing. Martini bar. And it was packed from the day I opened it. There was a line around the block and just like the concert business, I always thought, you know, you knew when a show was a success, and the first five minutes you put the tickets on sale, hit that ticket machine, boom. You start seeing the tickets flying out, done. You knew you had a winner. I used to have the same theory about restaurants. If it wasn't packed from the day I opened the door, we're going to fail. So this place had lines around the block to get in. People loved the food. It was sort of global tapas food. And it just was this huge, huge success. And this little restaurant that did $3,000 a week being this previous owner, eventually ended up doing $100,000 a week.

[Guy Raz]

Wow.

[Alex Blumberg]

And I imagine, like, at the time there were places like this in New York City, which is two hours from Philly, but there was probably not that much like this in Philly. So, I mean, I lived in Washington D.C. around that time. So I remember if something like that opened in dc, everybody would be like, wow. You know, because New York was the center of gravity. Still is in a lot of ways. But I imagine it was so popular because it was so different from everything around. Around there.

[Stephen Starr]

Absolutely. You know, and then that movie came out, swingers.

[Alex Blumberg]

Swingers 96, it came out right afterwards.

[Stephen Starr]

And, man, I said, God is good to me.

[Alex Blumberg]

And then Sex in the City and the drinking cosmos and that whole.

[Stephen Starr]

And it was all young people coming out who never knew what a martini was. They were getting drunk on martinis because they didn't know how to handle them.

[Alex Blumberg]

Okay. In that bar, obviously, martinis were the star, but was food? I mean, actually, before I ask you about the food there. Are you a food person or like. And I say that as somebody who is. I love food. I'm gonna be a modest here. I'm a very good home cook. People listening to the show know I talk about it. I have dinners at my house all the time. I love to cook. I've worked in kitchens. It's a huge passion of mine. Is that who you are? Are you like a food Person?

[Stephen Starr]

No, I certainly wasn't. Then back, I was a rock and roll guy. I was a music guy. I was loved comedy and food was just something to do as part my social life. I sort of matured and grew into it. And now I know it very well, obviously, and I have great respect and reverence for it. Back then, going to a restaurant was just something to do. It was like going to the movies.

[Alex Blumberg]

Right. But when you opened the Continental, you knew you wanted the martinis to be great.

[Stephen Starr]

Yeah.

[Alex Blumberg]

And was food also important? Were you obsessive about food?

[Stephen Starr]

Yes. But there's another part of the story. I hate doing this to you. Cause I'm skipping something. But in between. When I was still in the music business, a friend of mine wanted to open a restaurant that was based upon a 50s concept, like Johnny Rockets or something like that. And I opened a place that was like a fast food restaurant. And it was called Shake Burger and Roll. Cool name and great little design. I came up with a guy from a good interior designer from New York. The place was packed. You couldn't get in. And it went out of business in nine months.

[Alex Blumberg]

Why is that?

[Stephen Starr]

I couldn't figure out how to run it. It was like Yogi Berra who said, nobody goes there anymore because it's too crowded. It was just so crowded, we couldn't get the food out. I mean, I remember one time the local police department came over to get like 40 burgers. Awesome. The burgers go out, the cop comes back. Twenty minutes later, he goes, what the hell is this? He opens up the thing, he opens the bun. All the. There's 40 buns, but no burgers inside the bun. So the reason I'm telling you this story, I was scared to death of food. I was afraid to do food. So when I did the Continental, I knew I had to have it. But I actually was so scared. I just wanted to hire a chef and give him or her a percentage of the business just to take care of it because I didn't know what I was doing.

[Alex Blumberg]

And is that what you did? You would do.

[Stephen Starr]

Oh, I tried. They all turned me down.

[Alex Blumberg]

They wanted a salary.

[Stephen Starr]

They just wanted a salary. Yeah, and thank God. I would have shot myself if I had given them like 30% of the business. Look, you know, you learn by making mistakes. And I knew all the mistakes I made. And, you know, I couldn't manage a restaurant. I remember at the Continental, Sunday nights, I was the manager and I hated it. I hated being there all night. I hated dealing with drunks. It was it was tough.

[Alex Blumberg]

Yeah. It's a tough business. I want to point something out because. And I think it's important to point out not everything you touch as a restaurateur was gold. Like, you have had things that didn't work out. And I think early on you tried a Soviet themed eatery that I'm assuming served Russian food or pierogies or maybe. And that didn't quite. I guess it didn't quite work out.

[Stephen Starr]

I hate using the word Soviet. Sounds very, very, I feel like treasonous. It was, right? It was called Cafe Republic. It served great cocktails, Russian vodka. We had the Siberian six pack, which was six little shot glasses of vodka, one of which was a brand name that I found called Karl Marx Vodka.

[Alex Blumberg]

I'm sure he would have been proud.

[Stephen Starr]

Yeah. And we had a statue of Lenin in the bar and we had Russian food, Beef stroganoff, pierogies, caviar. But it was in a weird neighborhood in Philly, had no parking, and it didn't work out.

[Alex Blumberg]

Meantime, the Continental was doing very well.

[Stephen Starr]

I mean, Continental became an iconic restaurant in Philadelphia. It was, I'd say, the most popular restaurant in Philly. And it created a renaissance in the old city section of Philadelphia. Really was the catalyst for that renaissance with restaurants and retail.

[Alex Blumberg]

All right, so on the strength of that, you, I guess, see the potential to really lean into restaurants. Right. And you then open Budokan also in Philadelphia, which describe it for people.

[Guy Raz]

I've been there.

[Alex Blumberg]

But describe for people who don't know what this restaurant is.

[Stephen Starr]

The original Budokan was a Pan Asian restaurant. So it was sort of fusion. It's very theatrical in its design. And a centerpiece of it is a like, you know, 12 foot golden Buddha. Again, I don't take credit for the culinary concept I did not create on my own. It started with Wolfgang Puck at a restaurant he had in California called Chinhua au Main. Then another gentleman opened a place called China Grill in New York and in Miami. And I had gone to all these places, loved the energy. And I went and spoke with different designers to ask if they would design my restaurant, one of which was Philippe Stark, who turned me down, but said, there's ways of buying my furniture. Call these people. So I ended up designing it myself with my friend. Owen Kamahira.

[Alex Blumberg]

Is the same guy who helped you redesign The Continental for 90,000?

[Stephen Starr]

Owen? Yeah.

[Alex Blumberg]

And Philippe Stark in the late 90s was. I mean, he was doing hotels around the world and he had a line with Target. Maybe not then, but he would. He was Already. I mean, I can't imagine you could have afforded him at that point.

[Stephen Starr]

I didn't even think about it. But he didn't want to do it because I think it was in Philadelphia. But Owen and I said, come on, let's do it. We bought his furniture. We made it look like his restaurant. Boom again. When Owen and I walked out of that restaurant, just got dark, and we looked through the windows and we saw this thing, and it was just like, we got choked up. It was so awesome.

[Alex Blumberg]

And the cash flow from the Continental could support opening Budokan, or did you

[Stephen Starr]

also know for Continental was all mine? Budokan. We got an investor. It was actually a friend of mine who had a venture capital fund, and one of his clients was willing to do this. So this particular client put up 1.9 million. Today, kitchens cost 1 million. Just the kitchen?

[Alex Blumberg]

Just the kitchen and the restaurant.

[Stephen Starr]

Okay. Yeah.

[Alex Blumberg]

So, all right. The interior, it was going to be like. That was going to be part of the experience, Right? It was dark wood and moody and.

[Stephen Starr]

Absolutely, I was very much a part of that.

[Alex Blumberg]

Where do you think that instinct came from? Because, again, like, if you were to do, I don't know, a profile, right? Like an AI profile of a guy or a woman, anybody who is going to design a restaurant like this, you wouldn't say, this was a concert promoter and comedy club manager. And, you know, like, you wouldn't naturally think, like, oh, that's the person who's going to have these amazing, interesting ideas. Where do you think that came from?

[Stephen Starr]

The design aesthetic is something that was just in me, that I unleashed once I started seeing things. You know, I wasn't the director. I was the executive producer in the movie business. So I was, you know, Samuel Goldwyn.

[Alex Blumberg]

Right.

[Stephen Starr]

But I kind of had an aesthetic of what? The right aesthetic to know the right director to hire the right lead actor and actress, and maybe what the soundtrack sounded like. It just was there. I don't know where it came from.

[Alex Blumberg]

And you knew what you liked?

[Stephen Starr]

I knew what I liked, but I also knew what people liked. And back then, restaurants were a little mundane. People wanted to feel sexy and escape. And that's what we did in the beginning. We took you to another place.

[Alex Blumberg]

So you were sort of like the guy who could unleash other people to kind of make it happen, focus on the big picture and then hire the right people. But they would still come to you with design schemes that you might suggest tweaks to, or say, well, let's think about maybe something a little darker or maybe, you know, teak wood instead of the light blonde. Whatever. Is that fair?

[Stephen Starr]

Yeah, but I. Again, if you talk to any of the designers that worked with me, they'll tell you that I'm a unique client in the sense that I respect what they do. Most business people. And I don't look at myself as a businessman. I think it's insulting to be called a businessman. I'm a creative person that happens to end up being a businessman because I have to be. But we're a business guy will go, those damn designers, they spend money because they don't give a shit what they spend. They just want to. And I don't look at it like that at all. I look at it like, give me the best that you can give me. If it's too much, I'll tell you. I want to blow people away, man. Shock and awe. And, you know, part of it is a bad thing because I have to be concerned with money, too, with budgets.

[Alex Blumberg]

Yeah.

[Stephen Starr]

When I saw that movie, the Aviator was with Leonardo DiCaprio about. What's his name? Howard Hughes.

[Alex Blumberg]

Howard Hughes, yeah.

[Stephen Starr]

It scared me because it felt. It felt like me because he. Coward. Hughes kept going. No more. Let's do it again. Shoot that scene again. I don't care. Let's bring in the. And it was frightening because I said, oh, shit. I do stuff like this, but on a much smaller level with these restaurants. You know, you gotta control yourself at a certain point, too.

[Alex Blumberg]

And I think it's just worth kind of noting. A quality of many successful entrepreneurs is not that they're the smartest or they have the best ideas or they got the top grades. It's that they're very good at building teams. That's really critical. And it sounds like that was just a talent you had.

[Stephen Starr]

I make all these connections to the music business, so it's like being an A and R guy, you know, you're out looking for new bands. I'm really good at recognizing talent. Also, last night when I was on Instagram, I saw this thing that Steve Jobs said that freaked me out because I say it all the time. He was being interviewed by Dan Rather. What's your business model? He went the Beatles. Because these guys collectively were the most brilliant people in the world. Individually, they did really good work, but nothing like they did when they were together.

[Alex Blumberg]

Yeah.

[Stephen Starr]

I'm not enough by myself to have that group, that core of two to three other people, made me stronger and made me better.

[Alex Blumberg]

Yeah.

[Guy Raz]

All right, so you are. You now have.

[Alex Blumberg]

Budokan has really Proven the concept. Right. And I mean, just to put this into perspective. And again, I love Philadelphia, an amazing city, but it's not New York and it's not Los Angeles. It's not the focus of the world. And yet this restaurant you were getting like major celebrities coming to Philadelphia to eat at Budokan. Like I read that at a certain point the wait to get a table on a Saturday night was like two months.

[Stephen Starr]

Yes, it was like a nightclub. It was like Studio 54 of restaurants. You know, back then people were still allowed to smoke in the restaurants. So we had a smoking section. But then there was like this whole singles thing at the bar and people. It was surreal how popular it was.

[Alex Blumberg]

Were you seeing profits pretty quickly from the get go from Continental on?

[Stephen Starr]

Yeah, you know, I was still old school, didn't have computers. I had a checkbook. And I remember I just figured it wouldn't be that profitable. I'd make some money out of it. I never thought I'd make a lot of money. And all of a sudden I remember telling my wife at the time, I'd say, you know, I just looked at the checkbook last week. She goes, yeah, how much was in there? I said 30,000. And then four weeks later I said, something's wrong. Why? I have $75,000 in the checkbook. Are you sure you paid everything? Yeah. So it just kept growing and growing.

[Guy Raz]

When we come back in just a

[Alex Blumberg]

moment, Stephen makes the big leap from Philadelphia to New York City.

[Guy Raz]

Stay with us.

[Alex Blumberg]

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[Guy Raz]

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[Alex Blumberg]

Hey, welcome back to How I Built this. I'm Guy Raz.

[Guy Raz]

So it's the late 1990s, and Stephen has another hit with Budokan in Philadelphia. And he's realizing just how great that city is as a launchpad for new restaurants.

[Stephen Starr]

With Philly. Here's the deal. It was like the Wild West. It was like opening. It was like the west coast when the New Yorkers all moved in and took over Hollywood and there was nothing here. It was all old school restaurants. They were boring. So you open Continental, people freak out. You open Budokan, they never saw anything like it.

[Alex Blumberg]

Yeah. All right, so you, you start to open a succession of restaurants. I think between 98 and 2001, after Budokan, you opened Tangerine Blue, Angel, Pod, Alma de Cuba in succession. And in terms of like, the. Is the formula for a successful restaurant kind of. I don't want to downplay it, but is it basically like get butts in the chair, keep costs low and keep tables turning over? Like, is it as simple as that?

[Stephen Starr]

I mean, no, that's not the formula. That's the goal. But the formula is a lot of. It's magic. I mean, it just happens. You gotta do, basically, you gotta do something that people really like when they walk in. There's gotta be something that touches them. Like, you have to hear that sound in their voice. Like. Like that you take your breath away a little bit. And it could be from a light, a lighting, it could be from a vibe, a smell, whatever. And it's not an easy form. There's no recipe for it.

[Alex Blumberg]

So by 2001, I think at that point, you had maybe six, maybe seven restaurants in Philadelphia operating. And you were, according to the reporting at the time, they were doing very well. $30 million in sales, 5.5 million in profit, which is pretty great for restaurants. I mean, a restaurant is lucky if it's doing 10%. Not lucky, but it's doing pretty good. That 10% is kind of standard, right?

[Stephen Starr]

Yes. We were doing way more than that in the beginning. And that's because again, the world didn't completely change yet. The same guy that was able to build a restaurant and open it for $90,000 was able to make a 20 or 25% profit today. Not possible today. Between the rent, labor, cost, this, cost that, cost that, regulation, this thing, that thing, whatever thing, you're lucky, like you said, to make 10%.

[Alex Blumberg]

And your restaurants were still, I mean, you still needed investors to help build the next restaurant, but did you have the same investors who helped you kind of finance the six or seven restaurants that you had in the city?

[Stephen Starr]

Yeah, it was only myself and one other, the venture capital guy who had his client. It was just me and them in the beginning for the first 10, 12 restaurants and a bank loan. So it was good. Most people you read about or you talk to in the restaurant business, they got like 15 people that invest money in them. And it's a nightmare because you don't want 15 different people who think they own the restaurant.

[Alex Blumberg]

How were you, what were you doing on a day to day basis, Were you going from one place to the next place because you weren't managing them? You admitted you hate that part of it. So on a day to day basis, were you just like jumping from one place to the next and checking in on them? Tell me what you were doing.

[Stephen Starr]

I had a staff of people under me, the directors that were basically, if you look back at old, they're checkers. I had a bunch of checkers. What does that mean? They go out and check stuff. Go check that, go check that restaurant. Now they have fancy names, but they're just checkers. And that's what I did. I just checked on things, but my emphasis was on the food. Even though I was not a chef, I was not a self proclaimed foodie, but I had a very good palate and good palate memory. So I remembered what things should taste like. And my obsession even to this day is to taste the food and make sure the food is consistent. I am the number one person doing that. But basically the ambiance, the people who will tell you that work for me. I'm obsessed with the air conditioning, the lights, the sound along with the food.

[Alex Blumberg]

Yeah, it's interesting because we don't always think of those things as diners when we're sitting in a restaurant.

[Guy Raz]

So at this point, I guess you decide that you want to expand out

[Alex Blumberg]

to New York City, which is the restaurant capital of the country. So again, it makes sense.

[Guy Raz]

And in 2006, indeed, you opened two

[Alex Blumberg]

restaurants in New York, Budokan and Morimoto, which you'd already created in Philly. So I assume you're thinking, like, if

[Guy Raz]

I'm gonna expand and build, I've gotta

[Alex Blumberg]

go to New York, like, where the action is.

[Stephen Starr]

Yeah. And I wanted to do it. I wanted. It was, you know, I guess part of it was ego. I had also been nominated for James Beard Award a few times when I was in Philly. And I would go there and I'd get nominated and I never would win because, you know, there was. I was. I don't think I was really taken seriously. And I didn't think the people in New York, the chef, chefs and the restaurant owners took me that seriously either. I wanted to, like, make it Big Apple, so I did it. We did it for Budokan and Morimoto. Budokan. I got scared with Budokan because Budokan basically wasn't that novel. I mean, really, it was like kind of a little bit of a knockoff, food wise from China Grill. So I knew I had to change the food, make it different, and come up with a design that. That was spectacular. So who did I go to? I went to Philippe Stark again, and it just didn't work out. And I went to plan B and went to Christian Liagre, which is another French architect designer who's a genius. He agreed to do it for a giant amount of money. And he put together probably the most spectacular restaurant that I've ever done.

[Alex Blumberg]

Boudicotta, New York.

[Stephen Starr]

It's just breathtaking. He said to people around me, I said, you know what? This is it. He said, what do you mean, this is it? I said, I can't do any better than this. This is sergeant Pepper. I just did sergeant Pepper. How am I going to do better than this?

[Alex Blumberg]

It seems like really what just gets you out of bed is working with teams to develop a concept and then, like, grinding and spending a year or two years just like, focused on bringing that concept to life. Like, that's what you. You actually love doing.

[Stephen Starr]

Absolutely. What gets me out of bed, other than having to go pee now as they get older, is. Is the excitement of creating. And after it comes to life, I'm not so excited anymore. But I love the process. I love the stress.

[Alex Blumberg]

You mean you love the process. And once it actually opens, like, then you're kind of.

[Stephen Starr]

I'm over it. No, no.

[Alex Blumberg]

You want to move a lot.

[Stephen Starr]

Move on. It's sad. That's my sad time when it opens. That's no longer. I mean, of course I Pay attention to it. I go to the restaurants all the time. I'm always eating the food, unfortunately. But the thrill is gone the day after it opens.

[Alex Blumberg]

You know, I saw something that you talked about in this business, and it would just stress me out so much, which is, you know, somebody might love you and love you, talk about. And then 30 seconds later, if something goes slightly wrong at the restaurant, they're going to hate you with all their passion. Like, you're in a business where somebody might go to your restaurant five times, love it, and then the sixth time, something might happen that is correctable, but is big enough that they'll never go back. And they're really mad.

[Stephen Starr]

Yeah. Of all of you, honest with yourselves, you've done that before. You've gone to a place, and then one time they kind of screw you. That's it. Fuck them.

[Alex Blumberg]

And you can't physically make it great. Like, you've got to rely on the waiter, the maitre d, every part of that working. How do you make sure? I guess you can't guarantee it, but are there things you can do to try and get close?

[Stephen Starr]

Yes, you can, and I'll tell you what they are. But the more you say what you just said, the more I realized what a stupid business this is to be in. You're right. Look, one of our landlords, Seymour Rubin, said to me, he goes, why would you want to be in a business where one guy, a dishwasher, could just stop the whole operation?

[Alex Blumberg]

Yeah.

[Stephen Starr]

One guy could decide, that's it, I'm leaving, and the whole restaurant falls apart. That night, I said, you know what, Seymour? You're right. Stupid business. You know, when you send an army into battle, the generals give you a statistic of how many casualties you're going to have. Like, every so often, there's got to be something that's too salty. A waiter that was rude, A host that didn't look up when you walked in. There's got to be a cook that walked out, a server that said that he or she were sexually harassed. I mean, it happens all the time. I mean, I have a big staff of people now, but I'm still on the phone at 11:30 at night dealing with fires.

[Alex Blumberg]

Yeah.

[Stephen Starr]

You know what? It's made me a smarter, wiser person dealing with all this and probably, hopefully will delay dementia quite a few years because my brain is constantly having to

[Alex Blumberg]

think as an upper. Yeah. And then customers. Right. Like in San Francisco, many restaurants add a fee for mandatory health care that they have to provide to their employees. And that is passed down to the customer who gets mad at the restaurant. It feels like there are so many challenges.

[Stephen Starr]

Yes, there is. And that's why I will say this, that I could never, ever, ever do this again. I don't think anyone could replicate what I did without having some giant money behind them from the beginning. By the way, when we open new restaurants, I'm not financing them myself anymore. We go in, landlord wants us to open. They have to put up a good, significant part of the money. Now, to open a restaurant that would cost 16, $17 million, it's impossible. So, you know, the best advice I have, if you want to go, I would say don't go into the restaurant business. But if you do, keep it smaller. There's a sweet spot of around, I think around 85 to 95 seats. Try and turn the tables two and a half, three times, and I think you're gonna. That's the best. The best model right now. And if. If I continue to do this, I'm gonna try and stay within that. That model.

[Alex Blumberg]

Okay. I wanted. I mean, we can't mention all your restaurants. There's 40 plus restaurants. And. And you've got Michelin stars now in some of these restaurants. And you've won a James Beard Award for restaurateur. And I mean, again, Michelin star is not something that I probably was even on your radar. Right.

[Stephen Starr]

No.

[Alex Blumberg]

Was that important to you to be. Yeah.

[Stephen Starr]

No, it wasn't important. It's still not important. I shouldn't say that because now they won't give it to me.

[Alex Blumberg]

No, they're gonna take your stars away.

[Stephen Starr]

Yeah. No, I mean, it's still. It's nice. Look, the James Beard Award, that was the thing, man. It was like the Academy Award or an Emmy. People could say it's not important. It was important. It felt good. It was emotional to be recognized like that. For sure.

[Alex Blumberg]

Yeah. Okay, let's talk about a low point here, Covid. You've got at that point, almost 40 restaurants. 37, I think. And then overnight, this entire industry, and it's still in recovery in many cities in the United States, collapses.

[Stephen Starr]

Yeah. So this thing happened. I was devastated, of course, like everyone else. And then I looked and I said, how much money do we have in the bank? A few million dollars? Five, seven? I said, okay, cool. We're cool. And he said, but what about the accounts payable? 15 million.

[Guy Raz]

Wow.

[Stephen Starr]

10 to 15 million. So I said, how could we possibly ever. What are we going to do? But what happened is that everybody was very. All the Vendors, except for maybe one, was very understanding, and we paid a little bit to everybody. So, you know, our intentions were good and we laid everyone off, but I couldn't lay everybody off because we were too big to do that.

[Alex Blumberg]

How many employees did you have at that point?

[Stephen Starr]

4 or 5,000.

[Alex Blumberg]

5,000?

[Stephen Starr]

Yeah. I mean, well, the servers managers couldn't pay them anymore, and we had to lay off most of the office, but I couldn't lay off all of the office because you couldn't lay off the controller. He had the books, and I didn't even know how to pay a bill. So there were millions of dollars of salaries we had to. To continue to pay. And then I said, you know what? We used to do these gift certificate things every holiday. Always sold star gift certificates. So I said, you know what? Let's. What the hell? We need to raise a few hundred thousand, maybe a couple hundred thousand bucks. So I said, let's do buy one, get one free.

[Alex Blumberg]

One meal, get one free.

[Stephen Starr]

Buy one. Yeah. One gift certificate, get one free. Well, in like 36 hours, we did, like, $10 million.

[Alex Blumberg]

Wow.

[Stephen Starr]

It was very emotional because we had our people, like, believed in, like, it was almost therapy for them, saying, you know what, It's a good deal. Let's take advantage of this star thing right now because, you know, we're going to come back from this thing. And then the thing that saved everyone was the PPP money, the government thing. Without that gone, we would have been gone.

[Alex Blumberg]

You think the starter group would have been gone?

[Stephen Starr]

Absolutely. No question. It saved us. No question, no question. Never could have survived it.

[Alex Blumberg]

Because your restaurant, I mean, your. Your main asset is your brand, right? It's your aesthetic, your brand. It's not. You don't physically own these buildings that you're in.

[Stephen Starr]

I own a couple of them. Not. I mean, it would be great to own a lot of them, but we only own two or three.

[Guy Raz]

Yeah.

[Alex Blumberg]

All right. I want to ask about opening a restaurant today because you still open restaurants, right? And you still have ambitions to open more. I imagine you probably are working on restaurants right now, right?

[Stephen Starr]

We're working on a few. I have some changes of mind here that I'll talk to you about.

[Alex Blumberg]

Yeah, tell me.

[Stephen Starr]

I think that again, I'm going to scale down the model. We still want to make it special and sort of take your breath away in a different kind of way. But I think opening restaurants that are 200 seats, the expense of those restaurants is just. It's too risky.

[Alex Blumberg]

And how many years does it take before you can Recover that money.

[Stephen Starr]

You can't. In other words, if you open it up on your own and you borrow $12 million, it's going to take you 10 years at least. Yeah, not worth it. So that's why to open the things that I do, you have to have landlords that want you for other reasons other than your rent. You're helping get tenants and build neighborhoods. That's what it boils down to. Otherwise, just open small restaurants, and you're better off doing something like that.

[Alex Blumberg]

Why did that happen? I'm just curious to get your take on why that happened and why you were able to do this 30 years ago, and now it's just. Even for you, it's so hard.

[Stephen Starr]

Well, affordability, the key word in the next election. Things are too expensive. Covid happened. Everything doubled. The air conditioning. What used to cost 600,000 is now 1.7, 1.8 million. They said, oh, it'll come down. It didn't come down. Kitchens, $500,000. Kitchen normally 1.5 million, 1.8 million. It's just off the charts. And, you know, minimum wage went up, and I think minimum wage should have gone up. I think it's the right thing to do. But I think at a certain point, especially with tipped employees, I don't know if it should keep going up, because, I mean, it's going to be impossible for restaurants to really keep. To stay in business.

[Alex Blumberg]

And, I mean, is there. I imagine that with 46 restaurants now.

[Stephen Starr]

Yes.

[Alex Blumberg]

Is there a point where it stops, or is it just you just naturally are always looking for new opportunities and new places and new concepts to open more restaurants up?

[Stephen Starr]

I think it naturally will stop. I mean, it's. I mean, I've done so much, and, you know, we'll see who. If we sell or if my daughter, Sarah, or my son, who's not old enough to do this yet. Julian, maybe they'd be interested. But the other thing I'd like to do is the opposite of what I've done. I'd like to do, like, a fast, casual thing like Shake Shack.

[Alex Blumberg]

Like what Danny Meyer did with Shake Shack.

[Stephen Starr]

Yeah. It's the sort of warrior in me. I'd love to compete with Shake Shack and do my own version or a different, you know, something else that's fast, casual.

[Alex Blumberg]

Yeah. You are not quite 70 yet, right?

[Stephen Starr]

Mm, not quite.

[Alex Blumberg]

Not quite. Okay. But approaching. And so you mentioned your daughter who's involved in the business. Is that your kind of hope, that maybe she will take over the star group?

[Stephen Starr]

No, I don't think she wants. I don't think she would. It's a brutal, brutal business. The best thing for everybody is to have an exit, right? Private equity, probably be the last thing you want to do, but I would do it. The perfect exit is to be acquired by a company that has some sort of a synergy and relationship to what you do. My fantasy, you know, we run the Louis Vuitton restaurant in New York City would be that LVMH come in and acquire star restaurants or part of us, a luxury brand, great taste, great design aesthetic. I'd be proud to have somebody like that come in and buy us or even like a Disney, you know, I don't know why they would buy it, but a Disney, somebody like that, somebody that I look up to, that I admire, you know, private equity, it's about money. Who knows if they'd take care of it the way that I would.

[Alex Blumberg]

Well, that's the thing. I mean, your name is on the. I mean, your name is associated with these restaurants. And there's a certain expectation. And so there's always a risk that whoever buys it, even if they write a big fat check, and then within three years, diners are saying, oh, it's not the same. It sucks. The quality's gone down.

[Stephen Starr]

I mean, that would hurt. But it's like when Bob Dylan and Bruce Springsteen sold their publishing, it hurt them, but there were a few hundred millions of dollars. So that kind of, at some point, you gotta take care of yourself and your family.

[Alex Blumberg]

So, you know, your restaurants generate over $400 million now a year. I mean, even though they're not in every city in America, a lot of people know these restaurants. It's a. You know, and for a guy who really came from a completely different world, had no experience in this business, you built something that's had impact certainly on the restaurant industry. How much of where you got to do, you think had to do with your hard work and your skills and how much you think had to do with being lucky, being at the right

[Stephen Starr]

place at the right time, percentage wise, I don't know. A lot of hard work. I could not stand being bored. They always had to have something to do. So part of it was that. But there's a lot of luck. A lot of luck. And again, back to the music analogy. You know, you talk to Bruce Springsteen about his career, he said it could never happen again. It was a different time. Radio was a certain way. People, you know, they toured bands, played clubs. It's a different time now. I couldn't do it. So A lot of it's luck. A lot of it.

[Guy Raz]

That's Stephen Starr, founder of Starr Restaurants. By the way, if you've seen Sex and the the movie, you might remember the rehearsal dinner scene. It was actually filmed at Budokan in New York, and after the movie came out for about six months, reservations there became almost impossible to get. Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you

[Alex Blumberg]

you never miss a new episode of the show.

[Guy Raz]

And as always, it's totally free.

[Alex Blumberg]

And if you're interested in insights, ideas

[Guy Raz]

and lessons from some of the world's greatest entrepreneurs, please sign up for my [e-mail] or on substack. This episode was produced by Alex Chung,

[Alex Blumberg]

with music composed by Ramtin Arablouei.

[Guy Raz]

It was edited by Neva Grant with

[Alex Blumberg]

research by Sam Paulson.

[Guy Raz]

Our audio engineers were Patrick Murray and Robert Rodriguez. Our production staff also includes Kerry Thompson, Carla estevez, Casey Herman, J.C. howard, Sam Paulson, Chris Masini, Kathryn Cipher, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built this.