Recipe to Success – Noah Alper, founder of Noah’s Bagels

Recipe to Success – Noah Alper, founder of Noah’s Bagels

Transcript:

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Welcome to American Dreams keys to success with your host, Alan Olsen. Welcome

Alan
back. I’m here today with Noah Alper. He is the founder of Noah’s bagels, and also a serial entrepreneur. Noah, welcome to today’s show.

Noah
Thank you, Alan. It’s nice to be here.

Alan
No, I, can you give me some background of how did you get to into the bagel business. And then fast forward to where you are today.

Noah
I got into the bagel business because my brother gave me the idea to open a bagel shop in Berkeley, this was the late 80s. There weren’t a lot of great bagels in the Bay Area. And you know, as a younger brother, I just kind of did what I was told. And I said, I’ll at least look into it. I can’t tell you I’m going to do it. I took one year, I looked around at the the landscape. And I discovered that bagels not only was something that was desired in the San Francisco Bay region, but across the country, it was becoming a very large phenomenon. And so after looking at it for a period of roughly a year, I opened the first shop in Berkeley, California. Was this your first business? No, I had started four other businesses before this. So I guess you’d call me a serial entrepreneur. Just it’s just kind of in my DNA in a certain way.

Alan
So when you when you did the bagel shop, you got to shop up in Berkeley, what do you feel helped make no as a success?

Noah
Well, I think it was a lot of things. I think that we assembled a great team of employees, we created a fantastic atmosphere for those employees, we had a wonderful product. We executed it Well, every day, which in the food business is not easy. And the product itself was delicious. So I think we had, you know, just sort of the whole package, not to mention the fact that we chose very carefully, where we would locate and and our locations also turned out to be, for the most part. Very, very good.

Alan
How quickly did you expand locations,

Noah
we started with one store in 1989. And by the time we sold the business in 1996, we had 38 stores. But we started very, very slowly. I’m originally from New England. So I understand building a business brick by brick, which is a really not very popular notion these days. But that’s kind of how the way I was accustomed to, to doing things. And so we started off very slow and really didn’t start to pull the trigger on on rapid expansion until we had a really good team in place. And so that wasn’t until really 9192. So that was about three years into it. And then we pretty much doubled our from our base each year after that. And we were told by really experts in quick serve retailing, rollouts, that you go but much beyond that formula, and you can get yourself into trouble. So a lot of what we did, frankly, Alan was we listened to people who had been there and done that, and we hired them. And then we you know, we kept track of them. We we didn’t abdicate responsibility. We, but we allowed them a lot of rope to do what they did best. And we sort of acted my brother and I, as sort of the rudder of the business, not the steering wheel.

Alan
You know, the food industry is a little different than other industries. And so how does building a business in the food industry differ when you’re trying to scale?

Noah
Well, it’s a very, very good question. Especially in the bagel business, which is every every bagel every minute, every store, they’re all different. It’s a living yeasted bread product. And I think that in general in the food business, customers don’t have a lot of tolerance for mistakes, you know, for yourself, you go into a restaurant, you have a bad experience or even a soy soy experience, you’re more than likely not going to go back because there’s a whole lot of alternatives. And we understood that very well. My dad was in the food business and he was very obsessive about quality and cleanliness and things like that. So we made sure that the the details were attended to on a in a very, very vigilant fashion. And I and and grew at a pace that we could that we could manage that. That excellent supervision and I think that was really one of the key things to building our brand as successfully as we did.

Alan
How did you come up with the recipe for the for the bagel?

Noah
Well, that was a very serendipitous I in that I mentioned that I that I spent a year researching the bagel industry and in cost of that exploration. I was able to go to a bagel shop in Western Massachusetts had a it’s a very long story, but it turns out, it was a customer from another business who I unearthed, if you will, and went into her shop. She had a great product. And I said, Susan, I gotta get hold on this recipe. This is unbelievable. Can I buy it from you? At which point she said, Well, it’s not my recipe, but I’ll send you the information on whose recipe it is. I went to see him this this other gentleman, we worked out a deal and he became what they call an Yiddish, a Maven. So he was the one that knew everything about everything. And he became known as bagels Maven and we would open up you know, new facilities or expand our plant or whatever we’d bring in Danny, he’d take take a look advise us and suggest what changes and what equipment we needed every step along the way, and he ensured that his recipe maintained its excellence is as we grow.

Alan
Amazing here today with no output, the founder of Noah’s bagels know we need to take a quick break. And we’ll be right back after these messages and I want to get more into talking about your journey as an entrepreneur.

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apple pie baseball. And now here’s all American, Alan Olsen. Welcome

Alan
back in business today with Noah Alpert. He is the founder of Noah’s bagels. And also serial entrepreneur. And I want to clarify for the listeners that, that Noah has sold the business many years ago, they continue to maintain his name. But you were listening to the story about Noah’s journey as an entrepreneur. And so I want to I want to go back to your early days of how you first wanted to know that you wanted to be an entrepreneur since I don’t think no, this was your first venture.

Noah
Right? No, it wasn’t my first venture. And I think it was interesting the way you phrased it. How did I know that I was going to be an entrepreneur. I would say more like it was in the blood. I had lemonade stands when I was nine years old. I’d I got a grew up in New England and would put my sign in the snow, you know, in March because I was ready to go and get into business. And it just was I think I would say in the blood, if you will. I know with some folks that say it’s a journey, but for me it I knew. I know without knowing I was going to go into business. I just knew that I loved it. Well, let’s

Alan
talk about your early days and some of the businesses that you started and had success and I’m sure there’s others that didn’t go as well,

Noah
right? Yes, I have started a number of businesses. The first business was called bread and circus and it was in in Massachusetts. It was way back in 1973 at the very beginning of the natural foods craze, if you will or trend and had a retail store and had that store for three years and developed an a nice little clientele. It was it was starting to burgeon. But I decided that I wasn’t the one that wanted to move it into the supermarket phase which is where it needed to go. And I recognize that but being confined in a retail space like that was something I didn’t they sort of to freeform if you’re well I kind of need it need to move around a little bit more. And I vowed at the time and I thought this is ironic that I would never go into the retail business again only to have 38 stores with no as bagels. So I think the notion of Never Say Never is very important for for your listeners. But that business went well. But we sold it to a another entrepreneur from Ireland, who eventually built that business up to the bay, the largest natural foods chain in the Northeast. And it eventually, about the same time we sold. Noah’s got sold to a Whole Foods Market and it’s now part of Whole Foods Market in New England. So that was the first business the second business was a gourmet housewares business, chopping boards and salad bowls and all artisan made things from around the world. And that also tied in with another trend which was gourmet cooking, which was coming from Europe and Julia Child was on TV and French cooking and Americans understood they could do this in their own kitchens. They were Getting away from the Chef Boyardee canned ravioli and into higher class of food. And we sold all kinds of materials to accompany that that cooking and serving experience at home, sold that business after eight years. And then a trip to Israel changed my life. And I decided that I wanted to do something significant to help the economy of Israel. And I knew I had gift, gift experience and knowledge of, of housewares business and decided to bring in gifts for the fundamentalist Christian community in the United States, gifts made from Israel, and thought it was a fabulous idea, it turns out, it wasn’t such a great idea. And if it was, I certainly wasn’t the one that was able to execute it properly. And so after about three years of experimenting with different products, with food products, with, with gifts, and with religious articles, as a mail order catalog towards the end a lot of different permutations to try to make this concept work. I realized it wasn’t going to make it and I had to close the business. And it was a very tough time for me. Not only had I basically lost whatever resources I had, except for a very small reserve. But it was it was a blow to my self esteem. And I wondered whether I was capable of doing it again. And I had a I had had a couple of successes, couple of singles and doubles, if you will. But thought maybe it was time that I would have to go to work for someone, which is something I really didn’t know about. Then my brother gave me the idea, the bagels, the bagel business, and I should do the bagel business. And as I mentioned earlier, I started it and it became a tremendous success.

Alan
And let me catch up right there. We got to take a quick break. Sure. But I want to I want to when we get back, I want to go back into this bagel business story and talk about what you learned from the failures and what motivated you to start up again. We’ll be right back after these messages.

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apple pie baseball. And now here’s all American Alan Olsen

Alan
Welcome back and visiting here today with Noah Alpert. He’s the founder of Noah’s bagels, as well as a serial entrepreneur. Before the break, we were talking about your your segue into a multitude of businesses. And I want to I want to go back to you just had a business failure, nearly wiped it out. You had a little bit of cash reserve, but you were you’re down and out. First of all, whatever inspired you to want to do it again after suffering a failure. And And then second, what did you learn from your mistakes?

Noah
It’s great question. Well, I looked around at alternatives. And I think that’s one thing I’ve learned over the years is is successful entrepreneurs, successful business people try to look over out over the universe of options before making a move. And I looked at a bunch of businesses to buy. And nothing in the small business field was you know, it was overpriced, it was not for me. So it didn’t really find anything out there to buy. And then I decided, You know what, I better look for a job. So I went to a career counselor Headhunter guy. And he looked at me said to you too old and you too entrepreneurial. And I don’t have anything for you. So I was a little between a rock and a hard place when my brother suggested that I go into the bagel business and and I questioned it for a while, you know, I had been knocked down that other business could I really couldn’t pull myself back up. There was some resilience there. I can’t exactly explain where it came from. I think it was probably a competitiveness. That that came to me as a child, we were very sports oriented. And I always wanted to win the game and and I think I can do it again. And I but before I did it, I wanted to make sure that this bagel thing made sense. And I think that there’s a misconception that that entrepreneurs go out there and they just you know the devil may care risk takers and at that real it’s really not true from my experience the successful ones, you know, a kind of obsessive compulsive types and at the same type at same time, risk takers. So it’s, I have to have a little bit of both, I think to, you know, to really succeed. And so I didn’t decide to go into the bagel business until I was pretty rock solid sure that it was going to make it.

Alan
You know, a lot of entrepreneurs are out there and they’re, they’re, they’re good at running their own SHOP, in a bet, bet it comes time to decide should I open a second store? Right? Was that a hard decision for you?

Noah
Well, the way it worked out, Alan was the same brother who gave me the idea to do the bagel business, showed up a year later, surprise, surprise and wanted in. And what I, you know, took me some time to figure it out, because he was the older brother, and who’s going to be the boss, and so forth and so on. But what I realized was, this business had tremendous potential, the one store I had was a grand slam home run. And it I felt it would be a shame to eliminate at that. And he had an MBA from Stanford, and he had a lot of pieces that I didn’t have the administration and finance piece, the real estate piece, I was more than marketing and brand guy and quote, unquote, in quality control. And so I started to realize that together, we could really make this thing fly. And that’s why I decided that I would not try to go and open, you know, incremental one store to time, a type of thing, but rather develop a team, that we could really take this thing much, much further than I could on my own.

Alan
And it’s interesting, because over the years, as I’ve been in the industry and seen businesses come up the formula of it, it always takes more than one to really have a business. And there you found it with your brother, who could you trust more than than your own blood? Right? That but that second story? How did you do it? Did you say you’re in charge of the second story?

Noah
Well, yeah, no, we had. And I think this is also very important. We had our roles very clearly defined. When we started out, he was licensing the name. So it wasn’t all one entity at that point, I was a license or he was the licensee, he would the idea was he was going to open up retail stores, I was going to create a commissary that would service these retail stores. So I would take care of the production and the distribution and the marketing. And he would take care of the retail operations. And that’s how it went for a couple years. He developed his own team, I had my team and then we came to realize that we will be much better served Joining Forces, in terms of being able to attract talent in terms of being attract, able to attract capital, and so forth, toke do to operate as one entity. And that’s what we did we rolled it all together

Alan
in the early years. Were you bootstrap, self financed? Or did you? How did you how’d you do the expanse?

Noah
I mean, we were bootstrapped. And then it was debt financing. And then, you know, slowly, but surely, we added, added partners and told it to sort of towards the end, we had, Starbucks was a 25%, owner of Noah’s bagels, towards the end, we had venture capital money, we had debt financing, we, you know, was a really layers of of a financing

Alan
when you finally made the decision for your exit. Was it planned? Was it in the works to say, I’m gonna go up to this point, and then you

Noah
know, what actually wasn’t, we were growing very nicely and had virtually no competition. And I just wanted to make the point that while we’re on the subject, that it was very important for me, I guess, because I’m a little paranoid to begin with, was always to look over my shoulder and see who was coming behind and make sure that we were at our tip top shape, even though we own the market, if you will. And and so it served me well, because the competition didn’t come until the very end. And then the Einstein Brothers bagel company out of golden Colorado, we’re rolling up bagel chains across the country. And they gave us basically two options. The first was to sell to them. The second was to see an Einstein Brothers across the street from every no as bagel store. So it came to it, it came to a point where it was good that we had maintained our quality because we decided at first that we would take them on and that we would go national, and accelerate the pace that we were that we were embarking upon. We later decided after a year and frankly a sweeter offer to sell the business but we were very well positioned either in either direction, but our intention was to grow incrementally like we had been doing all along.

Alan
Yeah, and ironically, so even though you joined forces with Einstein’s it’s known as no is today

Noah
right and I think That’s a testimony to the strength of the brand that we had developed.

Alan
Can I get you to stare for one segment more? Absolutely. Okay, we’ll be right back after these messages we’re visiting today with Noah Alper, the founder of Noah’s bagels.

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Alan
Welcome back and visiting here today with no output. He is a founder of Noah’s bagels and a serial entrepreneur, know it. How do you build a brand?

Noah
Well, I think you build a brick by brick Allen, that at least that’s my sense of it. I think there’s needs to be a sense of authenticity. I think there needs to be a sense of consistency. And everything that that the business entails has to support that brand and has to be consistent and not degress. From the core message that the brand is trying to transmit.

Alan
How does ethics influence the way you have built your businesses?

Noah
I think the success of no was beyond having a fabulous product was largely due to the fact that we treated our employees, our customers and the community. Like partners in the business, we made sure that our people were paid above out above the going wage of quick serve retailers that we took care of them. If they had to go and study for a test. We gave him the afternoon off to do that. Things that you Golden Rule type things was very, very important to us. Regarding the community, we had a slew of different community service projects that were front and center in our in our company’s ethos, we had the employees participate in those in those community service projects. And that built a tremendous cohesiveness amongst our employees. And customers reap the benefits of those, those perspectives. The metric on on our success was that we had the turnover rate half of industry average for quick serve retailers. And we had name recognition in the San Francisco Bay region just slightly below McDonald’s number two, in that marketing research that we did towards the end of our tenure at NOAA. So I I think we were doing it right,

Alan
what is the most vital part to building the business then

Noah
I think that making sure that the product is fabulous, making sure that you can execute it every day, and that the team that you’ve developed to do the development and the execution is first rate and has a tremendous rapport one with another. Why

Alan
is it important for entrepreneurs to maintain a balanced life?

Noah
I write about this in my book, which is called Business mench. timeless wisdom for today’s entrepreneur. And a mention Yiddish means a human being of what a human being should be, not just a human being. And I write it I write a lot in the book about balance and about how taking time off to look out over your business to enjoy the fruits of your labor is not only important in terms of developing and maintaining a healthy home life and happy home life, but it’s actually good for your business.

Alan
I love that, that balanced life it’s not meaningful and to have a successful business without applying the balance light behind it. So your book is again called Business mench. And they can find it off Amazon. And and you wrote this basically to to give back in terms of helping people understand the wisdom from your your learning experience. Right. Visiting here today with Noah Alper add no as a serial entrepreneur, also the founder of Noah’s bagels, Noah, in terms of finding you, you do some business consulting, don’t you? I do I do. And again, how does it person contact so

Noah
people could contact me by email at NOAA, at NOAA Alper consulting all one word.com

Alan
And NOAA Alper consulting.com Alp er is no alpha. Appreciate you joining today’s show.

Noah
Thank you very much. Alan was my pleasure to be here.

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About Noah Alper

Noah Alper is a consultant to aspiring entrepreneurs and a dynamic motivational speaker. His experience includes concept creation, marketing, retailing, food service and sales management. In his new book, he weaves together Jewish ethical teachings and over 35 years of business and non-profit management experience.

Six and a half years after founding Noah’s New York Bagels, he sold the business for $100 million. At that time, it was the largest Kosher retailer in the United States. He is also the founder of six other ventures, including the grocery store company, Bread & Circus, once the Northeast’s largest natural foods chain and now part of Whole Foods Market.

Noah has been a guest speaker at Haas School of Business at the University of California, Berkeley; Kellogg School of Management at Northwestern University; University of Wisconsin School of Business; as well as many national and local business and community groups. He is also a student advisor at the Graduate School of Business at Stanford University.

Noah has been very involved in the Jewish community in the Bay Area. He was the founding president of the Jewish Community High School of the Bay, which is now in its ninth year, and he is still a member of that Board. He is vice-president of Congregation Beth Israel in Berkeley, CA, and has been a member of the board of the Jewish Community Foundation. He graduated from the University of Wisconsin with a BA in Economics, and in 1997, he fulfilled a dream of living in Israel and attended the Pardes Institute in Jerusalem. He grew up in Brookline, Massachusetts, and currently lives in Berkeley, California.