Confessions of Two Successful Indian Restauranteurs
Anthony Bordain, the American chef and author, once said, “If anything is good for pounding humility into you permanently, it’s the restaurant business”.
It’s an industry notorious for long working hours, fierce competition and low margins.
Failure is common.
Success is rare.
Most that survive end up in that awkward middle place: surviving, but barely.
Running an Indian restaurant is especially tough.
Trade is typically late night, with most Indian restaurants empty at lunchtimes, if they open at all.
By this time many diners are either drunk or ready to drink, making for noisy and unpleasant guests.
Most try to compete on a rational basis — offering lower prices, faster cooking and larger portion sizes.
Go to Brick Lane, famous in east London for a high density of Indian restaurants, and you’ll witness this firsthand.
Waiters walk the streets trying to usher in passing groups.
Negotiation is purely based on price or quantity of dishes and drinks.
Little attention is paid to the decor or environment.
And for those that complain?
Well, fights have even known to break out between staff and customers.
Does that sound like a business?
Or a struggle?
How can an Indian restaurant survive, even thrive in London?
Another approach is possible.
And not just for Indian restaurants but for all restaurants (and all businesses for that matter).
It happens by competing on an irrational basis — offering higher prices, slower delivery, smaller portions — and still providing a better overall experience.
This is what the Austrian Economist Ludwin Von Mises was alluding to when he said, “If you run a restaurant there is no healthy distinction to be made between the value you create by cooking the food and the value you create by sweeping the floor”.
My friend Rory Sutherland, who introduced me to Von Mises, has taken this one step further by saying, “We can’t tell the difference between the quality of the food and the environment in which we consume it”.
And right now in London two Indian restauranteurs are providing a practical masterclass in doing just this.
Shamil and Kavi Thakrar are cousins and the co-founders of Dishoom, a hugely successful, and growing, chain of Indian restaurants.
But ask them and they’ll tell you that Dishoom isn’t a chain of Indian restaurants.
It’s a chain of Bombay cafes.
They know that this subtlety creates a point of differentiation.
That married with great branding shows they have a solid understanding of marketing.
And that’s not surprising — Shamil has an MBA from Harvard and used to work at Bain&Co as a management consultant.
But, with Dishoom, they’ve gone beyond the typical MBA playbook. In Shamil’s words:
“In fact, unlearning some of that finance and consulting and business school stuff has been really important. Sure, labour costs and food costs have to be under control, but it’s actually a business about people.”
Instead they’ve embraced behavioural design — designing the environment and the choices within that environment to achieve the desired behavioural outcome.
Behavioural design works like this:
On the one hand you have the customer.
The customer obtains the maximum pleasure, enjoyment and satisfaction from the experience.
And on the other you have the business.
The business creates the maximum value for providing this.
So both leave the transaction with what they want.
The outcome is win-win.
And the tools?
The context — the design of the restaurant.
And the choices — the design of the menu.
How have Dishoom used these tools so effectively?
First, the context.
The desired behaviour is first getting people to enter the restaurant.
Not getting people to eat at the restaurant — that comes next.
The focus is on each micro-behaviour: entering the restaurant, asking for a table, ordering etc.
(Much like a Ferrari salesperson sells the Ferrari by first selling the test-drive.)
So the front windows are large and clear, making the interior look welcoming.
There are seats outside, which reduces the stark divide between outside and in.
Plus one nice detail — the front door is open at all times, with a second door inside that’s closed to keep out the wind.
So walking in is easy.
And once you’re through the second door, turning back is less so.
But why would you want to?
A Dishoom restaurant is spectacularly decorated, which has an immediate and positive impact on your mood.
Plus the restaurants are open for breakfast.
That means there are people eating and drinking come lunchtime.
So the restaurant looks inviting, rather than empty and daunting, when footfall picks up.
Together this serves to make it easy to walk in and to want to stay and dine.
Next, the choices.
For many restaurants, the menu is simply used as a means of conveying information.
For example, they have 67 dishes all listed by section from starters to desserts.
The customer gets anxious trying to choose.
And the restaurant doesn’t sell the dishes they want, or the ones the chef enjoys cooking.
Instead, Dishoom has perfected the art and science of choice architecture — using the menu as a means of persuasion.
(If persuasion sounds nefarious, would you be willing to pay a little more to enjoy ordering and not have “food envy” at the end of it?)
First, they reinforce the impression that this isn’t an Indian restaurant, this is a Bombay cafe.
This is stated in the top left of the menu, making it the first thing the diner sees.
And they don’t serve popadoms, they serve Far Far, colourful small crisps.
So people don’t behave the way they would in an Indian restaurant.
Next, the chef’s special is stated clearly and in bold.
Now, I imagine the chef’s special is spectacular but it’s also markedly more expensive than your average dish.
And that’s for good reason — our brains don’t have an absolute store for value, we value things relative to other things depending on the context.
So this high price creates an anchor, making everything else look relatively cheap.
The same is true on the drinks menu, where restaurants make most of their money.
(Either because nobody really has a clue how much a bottle of wine should cost. Or because few people think about drinks when considering whether a restaurant is reasonably priced.)
The menu offers smaller, sharing options, so people order more dishes for sides or sharing.
Plus there is a reasonable, but not overwhelming selection.
So customers don’t run into the typical ordering anxieties that arise from having too much choice.
And, on top of all this, it’s clearly stated that a portion is given to charity.
Now, I don’t doubt their altruism. But this has the additional benefit of reducing the guilt of eating and creates a feeling of generosity in the diner’s mind.
The result of all this?
The diner wins — eating at Dishoom is a fantastic experience — and leaves happy.
The restaurants wins — the average bill is higher because of all this.
And the restauranteurs can live a more pleasant life.
Jeremy Bullmore, the former Chairman of J Walter Thompson, once said, “People differentiate instinctively and rarely on a rational basis.”
This doesn’t happen by accident.
By controlling the context and the choices, success happens by design.
So rather than out-working the competition, they’re out-thinking the competition.
Isn’t that the purpose of creativity?
Thomas Cornwall is the Director of Behave, London’s creative behavioural practice.
