Podcast

Scaling Up [S1.E1]: Taking on McDonald’s with Guzman y Gomez’s Steven Marks

There are few people as electrifying or ambitious as Steven. In this episode, you'll hear Steven's incredible journey founding and leading Guzman y Gomez; one filled with hustle and obsession.

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Ed (00:51)
My guest today is Guzman y Gomez’s founder and global CEO. Steven Marks GYG as it’s known as a Mexican quicker restaurant that was founded by Steven in 2006 when he opened up his first store in Newtown, Sydney. Since then, the business has grown rapidly to over 130 locations in Australia, Singapore, and Japan. And later this year GYG will open its first store in Chicago to help him scale. Steve has assembled a crack team of executives, a who’s who of Australian consumer business. I’m really interested to find out more about how his role as a founder has transitioned over time. With over 250 million in network sales growing at 30% year on year, this really is a phenomenal Australian growth story. Just a quick language warning. There is some spicy words used throughout this podcast, so if there are little ears around, it might be best to listen to this another time. Also, a quick disclaimer, it is worth noting that Guzman y Gomez is a current portfolio company of TDM growth partners. Steven Marks, welcome to Scaling Up. I’m super excited about this chat to be able to a pin you down. I know you’re a busy man, but B, to have you one-on-one is somewhat exciting, so thanks for coming in.

Steven (02:12)
Thanks for having me, I appreciate it. Thanks Ed.

Ed (02:13)
Now one of the missions of this podcast is to inspire founders to have them think that they can do it and really drive that inspirational piece. I’ve heard you talk about your childhood before and for me that was a really emotive story and I’d love to hear it again.

Steven (2:33)
Yeah, I guess when you look at anybody that’s entrepreneurial, it comes from passion. And for me, I think one of the things that really drives me is besides winning, I talk about winning all the time, is sometimes I look at things and it’s black, white, it’s either winning or failure. So in my life I’ve only seen incredible success and incredible failure and probably that’s why I’m in therapy right now trying to figure out the middle ground. But I’ve seen such on the spectrum just really two distinct spots. And my childhood was kind of part of the stuff that I saw negative. My dad was a pool hustler from Miami Beach and my mother grew up in the projects of Brooklyn and South Brooklyn and Coney Island and my mom. And I think you draw on your family a lot, right? I mean, cause it’s in your early years of your life, it’s kind of what sort of instills values into you and drive and determination.

And I think with anybody’s life, I think a key that you never can change it so you make it positive. So my mom grew up in the projects, wanted to have one kid met my dad. I think she was like his secretary. He already was married, had two kids and was a pool hustler for Miami, so that probably wasn’t a good move and not that I blame her, we kid about it now. But so anyway, so they wanted to have one kid. And I had my older brother who unfortunately passed away this year, but he was born with hydrocephalus, which is amount of water on your brain. And these neurosurgeons from Harvard figured out how to install shunts and they alleviated and they thought he was going to die. So my mom wanted to have one kid and she had had identical twin boys. So I have an identical twin brother named Evan who I’m super close to.

And she had three boys and she used to always kid around and call my mom, my brother and I, her investments she used to run. I never wanted to have you two. I only wanted to have one. I think that’s like the Brooklyn humor. And then my mother raised three boys and we had to work and she was an amazing mother. She worked her ass off. But I think from that time on, man, I had a dad, you know what I mean. Eventually he was an alcoholic, became a drug addict was homeless in New York City, was married five times, had had seven, eight children. And I think at a young age, I grew up really quickly and I think I’m trying to now enjoy parts of my life now, but I had a sense of responsibility. I really wanted to, even though it wasn’t pinpointed on me, that I had to take care of my family, but I had that inherently built into me that I had to basically look after everybody.

And so from an early age, I think it was so important for us to work hard, man. We had our first jobs at eight/ten, hustling, being an entrepreneur from shoveling driveways to selling t-shirts. We did everything we could and I realized that I needed a strong education. So we always did extremely well in school, which I think having an education early on is key, no matter what you do with it. And my brother and I were the first ones really to go to college in our family. Went to University of Pennsylvania in Philly, which is an Ivy League school, played sport there, did well in school. And as a kid growing up, I think what’s super important for any founder is you’re good at certain things. I was really good at numbers, but I love people. And I think growing up with a brother that was disabled and growing up with a dad that obviously had huge amount of issues, man, a guy was bipolar, alcoholic, crack addict, you know, developed perspective. And I realized what really grew my was empathy. I was super competitive, but I had empathy. And I think empathy usually turns into ethics and values

Ed (05:46)
Well said. Just to dig a bit deeper here, you’ve said that growing up instilled that value of looking after people. And to me a sense that has carried you through into growing GYG into the business today. Is that something that you feel certainly came from that time of your life?

Steven (06:07)
Yeah, definitely. And it’s still with me today. When you go through something like that and you see failure or you see people’s lives just deteriorate and you see my older brother man had to wear helmets on, had 150 surgeries, my twin brother had juvenile cataracts. I would look at myself and be so grateful. Evan everything around me looked bad, but I was just so grateful that I could do whatever I wanted to do. I was healthy, you know what I mean? And I always had that in me. But I think the whole part of for me is about winning, is to making sure that what you think you can achieve. But when I say I got to win, I got to win. You know what I mean? I always come last. And I think from growing up I knew I was strong and even when I didn’t feel strong, I just was so grateful for what I had that I put myself always last. I wanted my family to win and I didn’t care if I came last. And I think I’ve built a couple businesses and obviously GYG’S my baby, I have to win with GYG because I have people that I’m accountable for and have to take care of and I’ll always come last. I think that’s just a natural skill maybe of a leader. I mean, I don’t really care how I feel or what’s happening to me as long as everybody that’s part of the journey is thinks. I think it’s memorable.

Ed (07:18)
I think that servant leadership is really key in lots of successful teams and it’s been proven to be such a successful formula. And I I’m interested in your views on winning and losing. What does winning look like? How do you define winning for yourself, for your teammates, so to speak, and for the company?

Steven (07:39)
Yeah, I think when I say winning, I was talking to somebody the other day, you always talk about winning, you know, got to fail to win. I’m like, no shit. You got to fail to win. The only way you can win is if you fail continuously, but your failures are quick and you analyze it and you keep moving. So to me, winning could be realizing what your vision is. The way my mind works, I’m a year, two years out, we’re about to in the us I already know what that’s going to look like. And as a leader, to me, winning is surrounding yourself with the most talented people. I know what I’m not good at and that’s a lot of things, but I know what it looks like. And then my job is to find the people that can execute that. So to me, winning is for us in Australia, we have to be the number one Mexican player.

Then we have to reinvent fast food, then we have to take over food, then we have to invade the US. It never stops. And I think the winning part of for me is that I always know there’s somebody chasing me at all times. So how do you live with that healthy paranoia? Maybe that’s a New York thing that somebody’s always going to catch you. And as you build something, you can’t freak your team out either. But these guys have to know that we always need to be uncomfortable and you always need to evolve to win. So winning never ends. If you want to be number one from athletics, it never ends. You can’t just chill out and rest on your morals because then you lose. And to me, like I said earlier, there’s only winning and losing in my opinion.

Ed (08:56)
I think that search for continual improvement is again a really common trait that you see from successful people. When we’re talking at the very top of their game, sportsmen business leaders, that uncomfortable aspect of consistently looking for that next step is so key to driving them towards that success, that vision. And I am interested in what you did touch on GYG in two years time, three years. what does it look like in 10 years time?

Steven (09:27)
What do entrepreneurs or founders really believe? They believe they can do something better. That’s what drives us. So when I move to Australia and I came from a hedge fund background, I mean Mexican food here sucked. And I went to every single restaurant and it sucked. And I was like, you know what? I think I can do this better. I think I can reintroduce a cuisine to a country and do it better. I mean, I think there’s a reason why a lot of these stores didn’t do well because there was no Latins running around here. So nobody knew what it was. But what happened when we opened up Guzman y Gomez, we were doing so poorly that it pushed me right, to innovate. This goes back to winning and losing for me. I can’t lose, it’s my money. I have to take care of my family.

I have people along the journey. So in my mind it was I’m only going out of business if people just truly do not like Mexican food. So what happened along the way, you have these two parallel thoughts, right? All right, I got to keep getting people to eat this thing cause I know the people that are eating it love it. And what happened was, because we were doing so poorly, we started to develop better and better systems, which led us to that building probably the fastest and best food operating platform in the world. So that’s where, as a founder, when you have this vision, people always say, when you started, did you think you’d have now 130 stores, which one day will be a thousand stores? Yeah, I really did. And people look at me goes, why would I believe so passionately about something and want to have one of them or two of them or three of them?

So I think along the way the vision was I know where I want to be, but you still have to do all the work. Like somebody said to me and went, you wish you can close your eyes for a year and wake up and see where it is. I’m like, no fucking way. Because as an entrepreneur you like the pain. I mean you’re not addicted to pain, but that people usually stop when it’s painful as an athlete, right? It’s hard man, it’s hard to stay on top. So if you don’t enjoy pain or enjoy that constant pressure of having to prove yourself through bad times, then this may not be for you.

Ed (11:18)
Pressure creates diamonds no doubt.

Steven (11:20)
Oh and my twin brother always says, pressure’s a privilege

Ed (11:22)
You touched on one of GYG’s key competitive advantages is this operational efficiency and you had no operating background in quicker restaurants. How did that evolve? I’m really curious as to how a hedge fund manager has an idea for a brand executes on the brand, but then really if you dig beneath the surface, this brand is built around operational efficiencies.

Steven (11:47)
Yes. So what happens, I worked in restaurants when I was a kid and I worked in bars and everything, but I don’t think that was really where it was from. I remember seeing Chipotle in the US and they had a linear setup. So a linear means it’s kind of like that subway style, you know, wait in line and then eventually you get to the front. I want this, I want that, I want that. So when I set up GYG and Chipotle was just taken off in the US when I set up GYG, first of all, I knew Australia didn’t have a lot of people and I knew they only ate between 12pm and 2pm and 6pm to 9pm. So I had to build a system that was faster. And I knew they didn’t know anything about Mexican food.

So what Chipotle called fast casual, if I said to the Aussies, you want black beans, they thought they were olives, they didn’t know what any of this stuff was. So slow, fast, casual became slow casual. But in my mind, right, because I think that no matter what business you’re successful in or what sport you’re successful in, you’re obsessed in detail. And I am obsessed in detail before we open up GYG. Like I said earlier, I went to every Mexican restaurant, I think 24 hours about GYG and 24 hours about operation from the day that we open or a year even before we open till last night. And my whole thing was, I know they’re going to like the food because they have to. Cause I won’t stop until they do. And that’s not, that’s one thing I always say, we never compromise on the quality, but I got to figure out to serve more and more people so when they do like it that I have revenue that’ll support the business.

And that’s what happened, man. We developed our own sticker systems. I remember we had guys writing stickers and I would say to my business partner who’s co-founder Robert, “Dude, I need to develop these sticker systems”. And I got to have burritos down one side and nachos and tacos down on the other side. And he would say to me, but they don’t exist. And I’d be like, great man, let’s go build it. And that’s my thing all the time. If something doesn’t exist then we should have a competitor advantage. And that’s what we did. We built our own sticker systems, we built our own kitchen delivery systems. Instead of having a linear, I had a double line behind, which in theory makes you go twice as fast. So I was like, instead of a linear where there’s no engagement, when you, the crew and the customer, all of a sudden I have these gorgeous Latin people and Australian people just fully engaging with our guests. Everything’s customizable and I can go twice as fast. So when you’re an entrepreneur and you want to make something better, I’m like, well that’s a huge tick to competitors. Yeah, absolutely huge tick. And I can offer more things. Not that you know, want to simplify your menus to increase better through put and better execution of your food. But it was so clear to me what had to be done.

Ed (14:10)
It’s amazing when you talk of innovation, people are so quickly to point to software businesses or fast growing non-consumer businesses. But in a consumer business it’s just as important. I think that’s a huge point that you’ve just highlighted around the innovation simply in operational efficiencies has given you a massive boost in relation to your competitors.

Steven (14:35)
Because if you think about it, you know Ed, my whole thing is if we’re the same as everybody, I always say this at GYG, if you took GYG’S logo off and put somebody else’s logo on, we lose. And this is kind of with competition, I don’t give a fuck about competition, right? Because we should be paving the way where they’re copying us because there’s always, they always say there’s a science and an art and a brand. The science anybody can analyze and sort of copy. But the art’s, the culture and the soul of the brand, right? Nobody, I mean of course there’s people working as hard as me in GYG, but they don’t have our soul. And I think that’s what creates great brands from average brands and especially in Australia, man, if you have an average brand, you go out of business, nobody lives here. The cost of doing business is high, occupancy is high. Now you go to the us I think there’s lots of average brands, but you also have 400 million people that can support mediocrity. That’s why I’m so in love with Australia. Australia pushes you so hard to be successful here cause it’s so hard.

Ed (15:31)
I think it’s worth before we get into leadership, which is obviously a massive topic and something that dominates your life, you did touch on the brand and it’s worth going into it here. You’ve built a brand from scratch. I am interested, was that an iterative process or did you really think deeply about what you wanted GYG’s brand to look like from the start and then execute that strategy? How was that pieced together and then top tips for people that are looking to build a brand?

Steven (16:28)
I think everything goes back to emotion and passion. There’s brands around here, Mad Max, Zambrero Salsas. To me it means nothing, right? Guzman y Gomez is named after friends of mine I grew up with right there. The story begins, right it it’s, it’s mine. I mean it’s GYG you mean Let alone, obviously we knew there the Aussies were going to shorten everything, the GYG, but that means something like when I see that yellow circle and I see those faces of the faces of the fathers of friends of mine, nobody else can do that, right? Because that’s not their story. And I think when you see great founders, I mean the reason why the brands work, cause it’s their story like GYG means so much to me. And I think the people that join for this journey mean there’s an intensity I roll with.

I like to think I have a big heart as well. It’s like this thing is my life and it starts from the brand. I see that yellow circle now we have 130 restaurants just in Australia. I see a drive-through where you see McDonald’s, which stands with McDonald’s brothers have that M you see GYG and that yellow circle where Guzman and Gomez, I see that yellow circle on my kids. Well the guys that are in a restaurants wearing their hoodies and everything, nobody else can take that brand that’s ours. And I think that that forms into your values and the ethics of who you are. It’s respect for this brand that we’ve all worked so hard to build. So yes, so the question, yeah, I could have named it Iguana cafe or something else, but it was part of something that I grew up with that I knew I had to execute and I had to make sure that all the drive and the insight was going to do something that was going to be powerful for what that story meant to me.

Ed (18:05)
And you obviously took a lot of time to piece that together or was it always in your head the moment you knew Mexican in Australia you had a

Steven (18:13)
No, I wasn’t sure. I had all these people in my ear and it’s funny for, so it’s Guzman, the letter y, Spanish for “e” Gomez. You got to remember in Australia there is no Guzman’s or Gomez nothing, let alone the letter Y. So everybody’s like, Guzman, y Gomez. I’m like, it’s not a question dude. I mean what the fuck? You know, think about it man, where I grew up, you know had Latins and everybody running in Australia, but it’s white with some Asians sprinkled in. So I had a lot of pushback and this is kind of where as a founder/entrepreneur, one thing I can swear I trust my gut I have even throughout the years, I’m 47 now, my intuition, my intuition’s been spot on I think since I was born and maybe all the experience I had when I was six and eight and seen the street.

Yeah, I’ve seen a lot of street, seen a lot of bad stuff. I’ve seen a lot of great stuff too. So intuitively I see people building business, what do you think? I never asked anybody what they thought. I knew it as you grow bigger and we have smart people around them, you take opinions in but intuitively of a founder. So for Guzman y Gomez, even though nobody could pronounce it, people you can’t start a brand. People can’t say it. I’m like, I don’t care if they say it or not, as long as they come there and eat.

Ed (19:20)
Brilliant. I am interested in leadership and I’ve seen a whole variety of leaders in my former life as a sportsman and there are so many different styles that can work. Your style I’d probably describe, and correct me if I’m wrong, is pure people. You see yourself as a leader of people. I’ve seen some of your staff and team members at restaurants high five, you hug everyone’s name almost in this sort of disciple fashion. Is that, I mean that’s an outsider looking in, is that how you see your job?

Steven (19:57)
Yeah, I mean dunno if I see my job that way, but I know I need them, right? And they need me. I mean I think when you’re in a beautiful relationship you need each other and you make each other better. I mean that’s life. And I look at right at this point in time, we have 4,000 people in the restaurants. There is no GYG without them. And it’s funny, I remember with our CEO and CFO when I said I remember the I’m talking about Mark Hawthorne who was ran McDonald’s, New Zealand and United Kingdom. Now he’s my CEO here. I mean McDonald’s who I think also has a great culture, but when I walk into the restaurant, they don’t give a fuck if I’m the founder, CEO, man, we’re one family and we’re one team. And that’s a genuine way I look at it.

The kids that are working at the front counter rowing burritos, they are more important than anybody else. I have in my head office and it’s funny, as we build a business, all I care about is hot, fresh food. And our people have to be trained to engage with people. But you have to find people that love to be there. So for me, I run our cultural groups, man, I’ll run any group I can to be next to these people because I know the more they feel me and they understand the love I have for this brand, the more I think it rubs off onto them. And obviously, which rubs off onto our guests. But I think with GYG I think what’s really important is when we were starting as well and people were like, so what are your values? I mean values, I thought there was some sort of bullshit thing you have in the back of a door. But I realized that we really have values. And my business partner would say, me, dude, this is what you talk about all day long.

Ed (21:21)
Were they organic or so that they evolved from

Steven (21:24)
It’s who we are as people. Yeah. You know what I mean? I look at business very simple is that once again you have to be competitive. Why would you build some if you didn’t think you’re going to be best? What a waste of time. And that’s the way I look at it. When we started GYG, I said, we will build the best wrestler company in the world how you’re going to do it. Because we have to because people are going to buy a part of this journey and it’s our job to make sure that our vision becomes comes into fruition. And that’s what it is. So my whole thing is that, and people always ask me as you grow, aren’t you worried that your culture’s going to get diluted? I think it’s such bullshit as you grow, you get better talent, you get stronger, more people understand what your vision or so your culture should get even stronger.

And that’s really the only way I look at it is as GYG grows, more people get to feel us to realize that. For me, when you talk about people, I’m a brutally honest person, brutally honest, brutally transparent. Which I think catches people off guard sometimes. But I believe in honesty, clear communication, pure transparency and everything and love man. And then you got to love your people. I genuinely, if there’s any problem with my kids in the store, I’m the first one there. They got to go see the family. I’m the first one there. And as I said to you earlier, man, I love people. I genuinely love people and I love people when they connect with other people and give that experience.

Ed (22:42)
And how do you view tough love when you talk of honesty and transparency and love? Sometimes that means delivering a message that they might not want to hear.

Steven (22:53)
A good question. I did it yesterday. All of a sudden I’m sitting in one of my scruff groups and we’re talking about fries and it’s still and to serve a great french fry, which took us 18 months to perfect cause our food’s clean. So I just want potato and with great oil and great seasoning and to serve a great fry, it has to be frozen the whole way through. So sometimes we’re selling more and more fries and sometimes a box of fries end up in the cool room cause not enough space in the freezer that’s not acceptable. So I’m trying to show these guys the urgency that if there’s one box out of a thousand that somebody gets a GYG fry and it’s not, it’s crispy. You should we lose and that’s not acceptable. We know how good this thing should be, so we need to execute a hundred percent of the time.

So I had my ops people in my marketing people and I was so direct with them and so firm with them because we’re all banking, you know what I mean? And working so hard to make this dream come true. And it’s my job to make sure that we don’t take it high off the ball. So I can be hard with you people, I can be firm, I can be direct, and I can be respectful and kind. You know what I mean? But there comes a point sometimes where I think as a founder man, I just step in and tell like it is. And I like people to understand, and I know it’s coming sometimes, but I think they understand the culture of this business is that I carry that pain and nobody else carries. And if I was gone and there’s tons of amazing people at GYG, but I have a different level of pain than everybody else has.

Ed (24:17)
Well said.

How do you motivate people? You spend a lot of time in stores. I spend a lot of time in stores eating your products and I’m there a lot

Steven (24:49)
Every time you come there, I panic. I’m like, how was your meal every meal? I’m like, how was your meal? How was your meal? How was your meal? I mean, it’s a fucking sickness

Ed (24:55)
So how do you motivate those team members on the floor?

Steven (25:00)
I think you motivate then by what you say you deliver. I think mean the people that work for GYG look at GYG as a place that they’re really proud to work at. And I think that’s the way we see food. I mean our whole thing now is, as we talked earlier about developing this super fast, fresh food operating platform, what happened was, and all of a sudden we have these amazing guys with us have built McDonald’s who are with GYG. The light bulb went off. I’m like, whoa, whoa. McDonald’s is getting away with selling food that I think differently mean I’m a huge fan of how McDonald’s was built, but I’m just talking about food. I think food companies should have a social responsibility in what they sell. So all of a sudden GYG got so fast, he opened up a drive-through and I’m like all of a sudden everything, all the lights went off.

I’m like, I got these amazing McDonald’s guys who are amazing what process and actually culture and real estate and GYG’s got this energy and food philosophy and marketing and culture. If I combine those two, that’s what fast food should be. My whole thing is one, when did fast food become bad for you? And I think the kids that are involved with us are like, wow, these guys have a social purpose. I want to serve clean food to the masses and then eventually I want everything composted. I want nothing go to landfills. But what they see is I have more people that are restaurant managers, are now franchisees. And that’s the click of approval or confirmation that I need is that these people now are dedicating their lives. They start to work at GYG, they believe in what we are building. I think they believe in the people that are leading this family and now they want to dedicate their lives to it. And that’s phenomenal.

Ed (26:32)
It’s interesting. It’s almost as though you, you’ve found some tailwinds in the generation of the staff, which is let’s say 18 to 30. They care about the environment, they care about clean eating and all of a sudden you had this vision and they’re the people that get to execute for you. So I’m sure it’s not by mistake, but it does feel like there are some tailwinds to make it easier for you to motivate these people

Steven (26:59)
Without it doubt. I mean you look at our university stores in Australia, they’re number one, they’re killing it. And now all of a sudden, cause I do spend a lot of time in the restaurants watching. I now I see kids in elementary school, whatever year seven as they go on, all starting to come to GYG. That’s a huge tick also that the millennials are loving it. And my kids won’t go to traditional fast food just because they’re more conscious of food. But then again, that’s where the pressure starts coming in.

Ed (27:26)
They know what food looks like

Steven (27:27)
Yeah, they know how they feel if they eat something. You know what I mean? You can’t fake that man. You may fake. And for GYG we want to have value, we want to make sure that everybody can eat and can afford it. But I think the key thing to that is that all of a sudden you see all this, the younger demographics starting to come to GYG who never grew up with Mexican food. These guys aren’t from the states or from Mexico. And that adds more fuel to the fire. For me now it’s kind of like now we’re on it. Now we definitely have to push it. And that’s where it comes from. Is every piece of chicken cook? I mean are these kids where are our hard shell tacos right now? You can’t miss the boat also, I mean you work so hard to have these power lines sort of grow and as they start to converge, you better be ready to hit it.

And I think that’s where have an amazing team. Besides we talk about the kids in the restaurant. My senior management team is probably best in the country. My board is without a doubt, the best in the country. But the senior management team is just, these guys are ready. So when I walk in the room, they’re not like, here comes this fucking lunatic. They’re like, they go, oh, we’re ready now. All right, this is where you go. Let’s be tight now as a team and let’s go execute. And that’s the fun part when you have all those lanes kind of converge and into domination.

Ed (28:32)
And how have you managed that talent and how do you identify a great talent and what in your mind makes an exceptional staff member? We were talking about, as you say, young millennials or on the floor, you’re obviously there, but what makes them great or can be great in your eyes?

Steven (28:51)
I think there’s two. Let’s talk about restaurant level, right? It’s amazing when you see a hospitality, many people don’t like people. That’s a negative, right? I mean GYG, you got to like people and you want to deliver an experience. I’ll walk down a street, they make fun. I was walking down the street last year and some guy had a GYG bag and I knew it was a burrito bowl and the burrito bowl’s built a certain way and the guy’s swinging it. I thought I was going to have a heart attack. I’m like, oh my God, I just imagine the rice and the guacamole and the meats. So he walked by me and then he came back and walked by me and I stopped him. And I wasn’t even wearing GYG stuff and I don’t look Mexican. I’m like, buddy, do you know what goes into that bowl? Can you stop swinging it? And he goes, first of all, don’t touch me.

And then he called up marketing. They’re like, dude, some guys stopped me. I mean there, there’s so much that goes into GYG, but I love people and I want to make sure that experience is nailed. So the key thing for me is that the people that work in the restaurants who GYG are amazing people. They like being a part of a team because you can’t build this thing by yourself. I mean GYG be nothing unless I had these amazing people around. I’m just the crazy guy with the vision that’s sort of at the front of it. And also in our head office and the people in Sydney and our Queensland offices all over, they like the challenge of trying to build something that’s world class. And they understand that there’s a lot of pressure that comes with it, but they rise to that challenge.

And I think that’s very important to me. Like my CEO Mark, man, he’s been with me for four years, wasn’t easy in the beginning. You know what I mean? I’ve see things. I mean I’ve built this thing from scratch with Robert Hazan. All of a sudden you have somebody coming in. This is how a 5 billion company runs. You’re like, well, we’re not really who we are. But one thing about him and I, which think is a good example, is that we have a ton of respect for each other. We have two different histories. They’ve both been very successful and we realize that it can’t just be my way or his way because we’ve both need each other. And I think that goes down to the relationships. Once you realize that you both need each other, then you figure out a way to make it successful. And we’ve had a very successful relationship, especially now

Ed (30:50)
I think it’s worth exploring this. As you say, you’ve touched on a phenomenal executive team, a great board, maybe the best board in Australia for a business of your size. You’ve got the two people that built McDonald’s in Australia, in Guy Russo, oh sorry, three and Steve Jermyn and then Mark Hawthorne, as you said, who’s the ANZ CEO of the business. But your relationship with them would’ve changed for you. Were a founder with fingers in pies everywhere, knowing what’s going on in every part of the business. All of a sudden these professional executives come in. How did you manage that transition as a founder?

Steven (31:34)
It sucked for a long time, to be honest with you. I mean actually I had major problems with it because they were basing their decisions on their experience. Now, let alone why it’s worked so well. You know what I mean? Besides that we have a ton of respect for each other, is that their journey was kind of similar with McDonald’s. Even though they had a rich brother in the US, it was painful for a while. My pain was different cause it was all my money and Robert’s money. But I think what happened is they’re smart guys and they know food very well. So they looked at me, I remember Pete Richie saying, I’ve never been more excited since they opened up my first McDonald’s because they knew how dedicated we were to this thing and how much this thing meant to us. And we had all the key priorities were right.

It’s all about hot, fresh food. It’s all about having an amazing culture. It’s all about making sure you take care of your suppliers. And it’s all about building a product that people love and there’s value and accessibility for it. So everything that these guys looked for that was important to building McDonald’s in their time was very similar to GYG. So there wasn’t besides the hiccups, and these guys gave us a lot of room to breathe and to grow cause they understood the journey. So even though they were so corporate, they actually were very entrepreneurial in their own way because Pete Ritchie set up the first McDonald’s outside the United States. Now it’s in 80 countries. He was the first one guy. Guy Russo started with Charlie Bell when they were 15. Charlie Bell became the first globally guy, was the CEO of Australia at 40. So even though they came from this corporate back background, Mark probably more than these guys did. They got it, they got us. And I think they knew that we weren’t lazy and we were passionate. And as always, as a founder, it’s always good to make sure a founder has all his money into it because then he has to make it work.

Ed (33:11)
Well said. And how would you describe their impact on the business from a business that is growing so quickly, 30% plus a year? As I said, you’ve had to be across everything and all of a sudden these high powered executives come in. The importance of getting good people around you.

Steven (33:30)
I think it’s critically important, but I also think as a founder, you need to let go, right? And that’s one thing when people look at me, if you look at me right now, there’s no way this motherfucker will let go, no way. I’m intense. You know what I mean? And that’s who I am. But I also know who’s really good at what they do. And once it kind of tick that box in my head, I’m ready to give complete autonomy in any division if it’s construction or it’s finance. I think what’s happened now with GYG today with our board and senior management team, I mean on a finance side or a tech side, I mean they are phenomenal. Take it. And that’s who these guys do. Because I still know what I’m good at. Yeah, I’m great with food, I’m great with people and I’m great with culture and the energy of this brand. So the less I have to think about everything else. Cause I know at the end of the day, regardless of where you put your EBITDA or what this is, at the end of the day you have to build a brand that people want to come see. They want to eat my food and they got to be, and then we have to deliver an experience. So that’s what I’m more in charge of because I realize that that’s the business as well.

Ed (34:32)
And Rob, your co-founder, I’ve heard you say is a little brother to you, your relationship and how this whole experience has bonded you together or I’m sure there’s been moments where you probably wanted to strangle each other as well.

Steven (34:48)
He probably wanted to strangle me.

Ed (34:50)
I am interested in that co-founder relationship and how it evolves.

Steven (34:56)
Well, I think, yeah. Well, he’s not a little brother man. He’s the same age as me. We grew up together since we’re four in New York. GYG was my vision. And I think when you build something together, you have to have your roles clearly defined. And it’s funny as GYG grows right now, that’s constantly, I’m saying to people, let’s be clear on our communication, let’s be clear. And when Mark Hawthorne, it’s all about divide and conquer. I mean, if you got a great team and you have great talent in anywhere, you divide and you conquer because I don’t care if I’m the founder and global CEO or he’s the CEO or Robert’s the co this, it doesn’t matter as long as you get there. And I think that’s a huge part, and I’ll go back into Robert, is that there are no egos at GYG, even with TDMs are our new partners that are coming in and Guy Russo and Bruce Buchanan, we are all here to win and to make GYG very special.

And that’s my same relationship with Robert. Robert, you have a front facing guy, which sometimes he says I’m a little bit more needy than he is. Then you have a back guy who’s got to take care of everything. Robert’s taking care of so much shit that I don’t want to do. And that’s integral to this business today, Robert’s in the US right now, we’re about to open up Chicago and he’s doing everything over there. We’re about to move a team over there, but he is doing construction and supply chain even though we have some of our chefs over there. And I know when he gets antsy with me, so I literally had this conversation with him today. First of all, I call, Hey, how are you? I love you, right? He’s like, yes, yes, I know you love me now I don’t want you to get upset with me because as we sign things off, I’m going to change things here and there because all I care about is that when people walk into GYG Chicago, we deliver an experience that’s second to none. I understand that. He’s like, but you understand also that I’m doing everything my power to make sure that happens. So all of a sudden if a cup’s not there when you show up, I don’t want you to kill me because I’m taking care of gutters and sewers and cups. I’m like, I gotcha. I said, I, I understand and there’s a beautiful connection we have. And I said, all right. Hey, I got to go make sure all the cups are there. No, that’s it.

Ed (36:52)
And your conviction on the US is massive. You are massive a believer that GYG can go to the states, sell ice to the Eskimos essentially, and the opportunity is there and you guys are ready for the taking. Is there ever any doubt in your mind that you guys can be the brand that you want to be in the states?

Steven(37:13)
Well, I think it’s a really good question, and I speak to Tom about this all the time, is that you need to have a competitive advantage. I think sometimes entrepreneurs start, I’m like, this is great. What is your competitive advantage? I know clearly what my competitive advantage is, and I play to that. There’s nobody in the US that can do what we do through a drive-through at the speed and convenience and value that we have. Nobody, there’s nobody in the US that has breakfast, lunch, dinner at the quality of food that we have, at the value that we serve with the energy that we have. Nobody. So when people are like, I can’t believe you’re taking this thing back home, I’m like, do you know how hard this to do business in Australia? No, we have drive through. So everything we do in Australia is obviously, I mean we’re in Australian business, is to get ready for the US as well.

I have no doubt that this is going to be a success. And as we always say, why? Because it has to be. My dream is I see McDonald’s is almost like a 200 billion business. Chipotle is a 20 billion business. Why can’t I get there? These are humans doing this stuff. I mean, Elon, I went to school with Elon Musk, he’s a year older than me at Penn. The guy’s transformed three industries space. I mean, he’s building tunnels out of the LA food. I’m just doing food. I’m just selling burritos. You know what I mean? Really good burritos and nachos and fries. But you know what I mean tell me as a cricketer, right? This we’re all humans. You can’t, and I look at my team, you can’t tell me that we’re not going to be better than Chipotle. You can’t tell me that we’re not going to be the McDonald’s.

Like how come you tell me not? And that’s how I live. I don’t care about the money. I care about winning and building something that’s so impressive because for me as a founder, and I have these two gorgeous daughters who are Australians, well, they’re half all these half New Yorkers. I said, when we built, they go, why are you so driven? I said, I’m driven because I know we can do it and then we can change the world. We can change education, we can change the people, the way people eat. We can donate whatever we make and change education in Mexico. You know? I mean, that’s the rush. If you have the ability to do it, you have to do it.

Ed (39:10)
Sometimes drive, people are driven by fear though. And drive can’t mask fear. And I’ve been lucky to see some of the best sportsmen over generations. They still suffer from fear. It doesn’t cripple them, it does other people. But there must be a moment when there’s that niggle of fear. And I want to know how you deal with it.

Steven(39:32)
Well, I remember mean there, there’s fear when you start and you’re basically, I mean that there’s always that fine line between stupidity and genius. And I remember I was at that fine line of pure stupidity when I was losing all my money building Guzman y Gomez. I remember we opened up our third restaurant and my mom came in from New York, I was living in, this is King’s Cross in Sydney. And my mom was like, can I want to go check out one of the stores? And at that point, we’re working a hundred hour weeks just trying to convince people that our food is good and it’s fresh, and building systems mean. It was so much work. So she goes up to the store and King’s Cross and she ordered, at that point, we had something called a DF Steak and Onion Burrito. And DF, which is like Mexico City. So the fat cats could eat steak. So she orders this burrito. We go back to my apartment. At that point, I got two little kids, my wife’s postnatal, all hell’s breaking loose through losing all my money. I was sitting in the backyard burning cash. So she’s eating this burrito. It was awesome. I was like, I’m so happy. I left Wall Street and moved to Australia.

So she’s eating this burrito and she’s looking up with these really sincere eyes and she opens up and she goes, there’s no steak in here. I’m like, what are you talking about? You know what I mean? I open up the burrito and it’s just onion and whatever, rice and beans. And she looked at me and she sincerely said, you sure you know what you’re doing here?

Hey, for a moment I’m like, what am I doing? But even now as we go, the fear that I have now is that we don’t execute the way we should execute. I think I’ve got all the right ingredients, it’s never good enough. But I know when GYG’s done well, it’s phenomenal. When it’s not done well, it’s average. So how do you make sure a hundred percent of those experiences done well? And that’s the panic I live with. And it scares that Somebody walks into GYG and they get a fry that’s bag was in the cool room, not in the freezer. And they’d be like, you know what? This place ain’t that good. Or they eat a piece of chicken that wasn’t cut well, or the tortilla wasn’t warmed well, or they don’t toss the rice well. So the heat’s not there. I mean, I live with all these fears continuously, and I don’t think it’ll ever stop

Ed (41:26)
Your obsession for food is amazing. Well, obsession for your product and owning that is incredible. I guess just a couple of questions to round this off. This has been such a fun hour of my life. I do want to know, how do you personally grow? What influences you? Do you have mentors, your own mentor models? How do they get put together? You’re a busy person, but are you a reader? Do you consume podcasts just for just a bit more of a generalist question to finish off,

Steven (41:59)
It sounds, I mean, listen, I do like to read. I don’t read any motivational books, to be honest with you. I have a twin brother who’s into coaching and performance and he throws me books a week, which I hardly ever read. I give back, I tell him I read them, but I look at a couple of them. But I like a podcast here too. But to be honest, man, I believe in therapy. I actually go see a therapist every week. And for me is, I raised two daughters on my own. I want to build a billion dollar business. I want to stay healthy. My whole thing is how can I stay healthy? I want to stay mentally healthy because I never want to stop. So I believe in therapy. I see a guy once a week and he just keeps my mind not thinking on things that aren’t important.

Ed (42:35)
Like a performance psychologist almost. Yes. It’s not therapy is, but lying on a couch talking about your childhood, I imagine it’s more

Steven (42:41)
No, no, no. But part of it’s that too part of it, it’s like my problem is sometimes I’m such a feelings guy and I’m such a communicator. I can’t sometimes articulate how exactly I feel in words. So this guy helps me articulate things. So it makes me become a better leader. So if I’m able to communicate more clearly, that helps me execute what I need to get done. So I’m a huge believer in therapy and I’m also a huge believer in family. You know what I mean? I kid around, I call my kids rehab. So every other week I get my daughters and it actually grounds me. I pick them up from school, I take them to school. Even at GYGs, growing and growing, I need that part of my life, I didn’t have that as a kid my dad wasn’t around, so my kids don’t give a shit who I am or what I’m doing. And my relationship with them is so strong that it’s just, it balances me so incredibly well. So I think being a great dad is super important to me and making sure my head is nice and clear so I can really envision where I want to be in my life and get it done. Of course, I love podcasts and love reading interesting books, but I think staying mentally healthy is so key.

Ed (43:42)
And lastly if you could give your 20 year old self one piece of advice, what would it be?

Steven(43:49)
Go one piece of advice. Go into business with your best friend or something that really cares about you. I think people that try to do this thing on their own are crazy. It’s so hard, man. I look at TDM, man, they got three buddies together and family here. I believe in doing stuff with your family, with your friends, because if you have respect for one another, the team’s already there, man, you’re already tight. So that was it, man, A 20 year old, and go for it, man. Just keep going. It has to be hard. Like I say to Robert sometimes, aren’t you glad we went through all this pain? He’s like, no, I am.

Ed (44:22)
Steven Marks, thanks for your time, mate. That was fantastic fun.

Steven (44:26)
Thanks, Ed, I appreciate it.

Ed (44:28)
Our disclaimer, TDM Growth Partners is a shareholder of GYG

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