Is It a Crime to Keep Your Business Small? (NYT)

By KERMIT PATTISON

Nick Lessins and Lydia Esparza pride themselves on meeting high standards for quality, but not necessarily for catering to the demands of their customers. They are co-owners of Great Lake, a small Chicago pizza shop that has seen the mixed blessing of great reviews.
The couple wanted to start a business that reflected their values: a neighborhood shop that purchases top-quality ingredients directly from farmers, makes every pizza by hand and serves great food at affordable prices. They also wanted to make sure their business did not take over their lives. The 14-seat shop is open only four days a week and does not take reservations. Deliveries? Yeah, right.
Mr. Lessins makes every pizza by hand. “No man is slower,” wrote GQ’s food critic, Alan Richman. “He makes each as though it is his first, manipulating the dough until it appears flawless, putting on toppings one small bit after another. In the time he takes to create a pie, civilizations could rise and fall, not just crusts.” Mr. Richman declared the Great Lake Mortadella pie one of the best pizzas in America — and that is when the trouble started. The shop was mobbed, with lines stretching down the block and long waits. A condensed version of a conversation with Mr. Lessins and Ms. Esparza follows:
Q. You got a great review from GQ and your business went crazy. Are you glad you got this attention?
Mr. Lessins: Yes and no. It’s nice that we got recognized for doing something we feel is good. The problem is GQ deals on a whole other scale than what our business is capable of handling. Everyone forgot we were this small operation and couldn’t serve everyone. We never intended to serve mass quantities and have our product available 24 hours a day, seven days a week. We wanted to start a business so we could get some control in our lives.
Q. Do people get frustrated by the waits?
Mr. Lessins: We’ve had a few people get pretty flustered — “What do you mean we can’t be seated? We have to wait a couple of hours?” Like somehow we’ve violated their human rights. Why is it a crime that we’re not open seven days and we’re not seating 100 people?
Q. Many business owners would look at your sudden success with envy and say, “Seize the day, expand, add new locations, franchise.” Why not you?
Ms. Esparza: It would change our values. That is the American way — to expand without really thinking.
Mr. Lessins: We really enjoy the work that we’re doing and we don’t want to cheapen it. Consciously or unconsciously — probably both — we’re trying to create a manageable way to earn a living and still maintain our sanity. We value time as much, if not more so, than money.
Q. Are you making the kind of money you had hoped to?
Ms. Esparza: We just met with our accountant and we’re very happy, given the hours we have.
Q. People have compared you to the Soup Nazi on “Seinfeld.” Where do you think that comes from?
Ms. Esparza: That comes from American culture. The customer really isn’t always right. We believe we have the expertise to bring the best product. We don’t randomly put these ingredients together. We spend the time to test these and try them.
Q. So no substitutions? No extra anchovies?
Ms. Esparza: Substitutions are specifically for people who might have a dairy issue. Our goal is to have a very edited menu, and therefore there really are no extras. We don’t offer crushed pepper. When we put options together, they’re put together for a reason. We have such an edited menu, and it’s shocking how much people still want to manipulate it.
Q. In online reviews, some customers have complained about rudeness or arrogance. Where do you think that perception comes from?
Mr. Lessins: I think that perception of arrogance has to do with the sense of entitlement and a lack of respect for someone wanting to do their job. We’re just trying to do the job the best we can. We’re trying to provide a quality experience for everyone who comes in. In the food service business, it’s assumed that the customers have a set of God-given birthrights when they come into an establishment. It’s like they’ve been wronged in a lot of parts of their lives, and this is their chance to even the score.
Q. What does customer service mean to you?
Ms. Esparza: Great service for us is the quality of food we bring to the table.
Q. One of our “You’re the Boss” bloggers suggested that if you raised prices, you would make more money and have fewer but happier customers.
Ms. Esparza: That goes to an elite crowd and we’re not after that.
Mr. Lessins: That’s kind of using an economic tool to force an end result. We would just never do that. We want to offer things at a price we think is fair. Ultimately, we want to have it accessible to a broad range of people.
Q. Why not hire more help? Does Nick really have to make every single pizza?
Mr. Lessins: At this time, I’m the only one making the pizzas — I make the dough. I make my own mozzarella. I grind my own sausage. I order most of the products from farmers and our local suppliers, assemble it and all that. It took several years for me to come up with what I have now. It’s something that could definitely be communicated and delegated in a careful way. I haven’t yet thought seriously about doing that because I enjoy doing pretty much every step of the process myself. It’s not an ego thing — I just enjoy working with my hands and putting this whole puzzle together and creating something.
Q. What do you think of review sites like Yelp?
Mr. Lessins: Unfortunately, those sites are just being used for people to anonymously vent their own frustrations. They’re not accountable to anything or anyone. I wonder what they’re getting out of that to make the effort to sit down and write a paragraph or two trashing someone. Maybe they get some sadistic joy out of it. Our sense is that most of the people who do come into our place are fairly satisfied.
Q. Is this what you expected business ownership to be?
Mr. Lessins: I knew this was sort of a wild card — the public service component. We focused on the logistics and details of production, quality, execution and all the boring details of renting space, utilities, construction, permits and all this kind of stuff. But public service was definitely an unknown thing. We know we can’t make everyone happy.
Ms. Esparza: From my experience being a designer, once you know in your gut what you’re doing is really good, you just have to go with it. You can’t hold back because there’s going to be one person saying, “I don’t like that purple or that pink.” People are going to be people.

Detroit Entrepreneurs Opt to Look Up (NYT)

By SUSAN SAULNY

DETROIT — With $6,000 and some Hollywood-style spunk, four friends opened this city’s only independent foreign movie house three months ago in an abandoned school auditorium on an unlighted stretch of the Cass Corridor near downtown.
After the unlikely hoopla of an opening night, red-carpet-style event in an area known for drugs and prostitution, exactly four customers showed up to see a film.
Since then, the Burton Theater has had a few profitable nights. But, the owners say, this adventure in entrepreneurship was never completely about making money. It was also about creating a more livable community.
“Nobody could comprehend why we’d start a theater,” said an investor, Nathan Faustyn, 25. “But when you live in Detroit, you ask, ‘What can I do for the city?’ We needed this. And we had nothing to lose. When you’re at the bottom of the economic ladder, you have nowhere to look but up.”
Despite the recession — and in some cases because of it — small businesses are budding around Detroit in one of the more surprising twists of the downturn. Some new businesses like the Burton are scratching by. Others have already grown beyond the initial scope of their business plans, juggling hundreds of customers and expanding into new sites.
Across from the Burton, for instance, Jennifer Willemsen just celebrated the first anniversary of her shop, Curl Up and Dye, a retro-themed hair salon serving 1,500 clients. Not far away, Torya Blanchard, a former French teacher, recently opened the second location of Good Girls Go to Paris, a creperie. Next door, Greg Lenhoff, also a former teacher, opened a bookstore in August called Leopold’s.
And just down the street from Leopold’s, on Woodward Avenue, Victor Both runs Breezecab, a company he started with a severance package after a layoff from Wayne State University. He uses rickshaws to ferry workers and conventioneers around downtown. “This filled a transportation void,” said Mr. Both, 34, who picked up the pedicab idea while touring Las Vegas before his layoff. “I haven’t made much money, but the experience has been priceless. I had no idea Detroit had so much love.”
It is not an uncommon instinct to start an enterprise in bad times and seize on weakened competition, lower overhead costs and perhaps more free time. Nor is it limited to Detroit. But the trend is particularly striking here, in a city that was suffering long before the rest of the nation fell into recession and where hard times, business closings and abandonment became routine generations ago.
Experts say the zeal for entrepreneurship these days in Detroit and elsewhere has precedent: according to research by Dane Stangler, a senior analyst at the Kauffman Foundation, a center for economic research in Kansas City, Mo., half the companies on the Fortune 500 list this year were founded in recession or bear markets. Further, Mr. Stangler said in an interview, company survival rates going back to 1977 show a negligible difference between companies founded in expansions and recessions.
For some of the new businesses, preparation was minimal.
“All I really needed was a garage, a cellphone and a Web site,” said Mr. Both, who started Breezecab with two leased rickshaws.
Ms. Blanchard’s creperie was more complicated. The restaurant is in the first-floor retail space of what had been an unattractive apartment complex. When the site came under new management recently, the landlord offered to gut the retail space, spending about $70,000 on improvements, Ms. Blanchard said. She put in the rest: $15,000 in equipment, a coat of red paint, an oversize blackboard for the menu, and her own collection of vintage French movie posters.
Now, Ms. Blanchard pays what she calls a “ridiculously low” rent of $1,600 a month for a 1,000-square-foot space that accommodates 45 diners at Parisian-style cafe tables near the Detroit Institute of Arts.
“This was a place to watch your back just four years ago,” said Ms. Blanchard, who founded the business with a cashed-out 401(k).
“I just wanted to do something that I loved,” she said. “And everything worked its way out.”
Michigan, which has the highest unemployment rate of any state, has been aggressive in offering support for start-up companies, particularly in Detroit. The Michigan Small Business and Technology Development Center, which offers support and counseling, counts 20 small businesses, and 400 new jobs, created last year in the three-county area around Detroit, and the center expects that tally to grow as it completes its accounting in the coming weeks. That was down from 41 new businesses in 2008, but on par with the 23 such start-ups in 2007 and 24 in 2006.
At Wayne State University’s business incubator, TechTown, housed in a former auto plant, 150 companies jostle for space — up from one when the building opened five years ago.
“I find it inspiring,” Peter Bregman, the chief executive of Bregman Partners, a New York management consulting firm, said of what is happening in Detroit. “There’s something about that feeling — ‘Maybe America abandoned us, but we’re not going to abandon us.’ ”
Analysts say the entrepreneurs have tapped into buyers’ penchants for spending locally in a bad economy, along with a longstanding void in the service industry.
Some business owners are also capitalizing on a newly energized nostalgia for the vibrant Detroit that used to be, and the more general trend toward urban living.
“This is a passion project for most people,” said Claire Nelson, owner of the Bureau of Urban Living, an accessories boutique, and one of the organizers of a loose network of local entrepreneurs that functions like a support group.
“We’ve got all this empty space in Detroit,” said Ms. Nelson, 33. “If landlords are willing to work with us, we pour our hearts and souls into the place.”
Once the Burton Theater carved out its space in the schoolhouse that closed in 2002 — a 1920s-era building that had receded into the shadows like so many empty spaces in Detroit — the city, which had let the block go dark, turned the streetlights back on. The relighting was a victory felt far beyond the Burton.
“Our business ideas are about taking ownership of where you are and what you have,” said Ms. Willemsen, 29, of Curl Up and Dye. “We want to do right by our neighbors.”
And some customers are going out of their way to support the new city businesses.
“I live in the suburbs where I used to get my hair cut until Jen opened a store,” said Dessa Cosma, a client at Curl Up and Dye. “I’d rather spend my money here. It’s a conscious decision for someone who cares about the city.”