Live Episode! Luke's Lobster: Luke Holden and Ben Conniff

Why did you feel like you had to open it within thirty days of Getting into that. I mean that's a You're doing drywall, you're Building it out, you're like, but why

Why the rush? We needed to get open. We were at that point in time. Things were tight. You needed cash flow, yes.

I'll give you one specific example. Ben text and said, Hey, can I go down to the bowery to buy some trash cans? And I said no. Yeah.

There's no money in the bank account. From MPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. Guy Rise and on today's show А химсикнес і на ад он Крагз.

Led two guys to build a single lobster shack in New York. and turn it into an international brand. Luke's lobster. If starting a business is supposed to be about solving a problem, then many of you probably deal with a version of this problem almost every day.

You happen to live in a place far from where you grew up. Maybe you're there for a job or a partner or school. And every time you go out for food, let's say fried chicken or barbecue or a bagel. Maybe you are that annoying person who always asks Why can't they make barbecue or fried chicken or bagels like they do where I come from? And just to be clear.

I can be that annoying person. I grew up in Los Angeles. And for most of my adult life. I lived on the east coast. And no one ever wanted to go for tacos with me because I would always complain how they are better in LA.

I have friends who will not eat smoked meat outside of Montreal or Barbecue outside of South Carolina. And for Luke Holden. It was lobster. Or more specifically.

Lobster rolls. Luke grew up in Cape Elizabeth, Maine, in a family of lobstermen. And after college he ended up working a job in finance in New York, where he became incredibly homesick. And he started to think maybe he could solve that problem in New York by opening an authentic Maine style lobster shack. Luke knew about lobsters, how to catch them, how to process them, and source them.

But he didn't know anything about how to run a restaurant. And so that's when he turned to Craigslist to find a partner who could help. And the person he found was Ben Conif. A recent college graduate who also had zero knowledge about restaurants. In fact, Ben's degree was in history. But somehow these two guys decided to see if

They couldn't make it work. They started with one tiny lobster shack in New York, and today More than a decade later Luke's lobster has grown to more than 40 stores in the US and Asia. A few weeks ago, I sat down with Luke and Ben on stage at the Back Bay Event Center in Boston for a live How I Built This.

Luke described how he grew up around the lobster business. His dad ran a lobster processing facility. Which can be an incredibly unpredictable business. to be in. Commercial fishing in processing seafood is it you've got to have a passion.

for the business. I think any industry that is dependent on a natural resource is unstable. Ultimately there's a lot of highs and lows. And it takes passion and and ultimately a dedication to your trade. In order to persevere. And by the way, did you eat a lot of lobster as a kid?

Every time. Times were hard at home, we had more lobster. So as a kid, I mean, you knew how to I mean, you were sort of around lobstermen. Did you in your mind think You know, eventually I'm gonna get outta here. Like I'm not gonna do this lobster thing. I'm gonna go out into the world and find something to do, or did you think

Yeah, this this could be good. This could be my thing. When I was sixteen years old, I got my first job as a Sternman. I had worked in production facilities, my dad's facilities I worked on. Pierce on loading boats, but I really wanted to work on a boat. So I got a job as a sternman. I can remember one day where

The fog was really low. The bait was really old and the waves were Very roly. And I got sick at Four thirty in the morning.

And the captain thought I was out drinking the night before. I mean I was sixteen years old. I didn't touch booze till I was twenty two. And I was sick. All day.

But the The excitement of going out and and setting a trap and hauling it back and not knowing what was in that trap is an excitement that I still have today when I go out lobstering with my family. And it propelled me to go out and build a boat in high school. And ultimately when I was seventeen, eighteen, nineteen, I was hauling hand hauling a hundred and fifty traps a day and

It's exactly what I wanted to do. You wanted to be in the lobster business when you were a kid? I did, and my parents made me get out of it. Your parents did not want you to do it. Why didn't they want you to be in it in it? So I think because of some of the unpredictability and and the lack of stability in the industry at the time, my my parents worked very, very hard to send me and my two brothers to four year colleges. Yeah. In my sophomore year, my parents basically said to me,

Forget Georgetown unless you go pursue some other interest, or not. We're not dealing with this financial burden. If you wanted you to go to Georgetown to pursue something stable like law or or you know or like investment banking in two thousand and seven. Ha ha ha Yeah. All right.

So you all right. You go out to Georgetown. Let's put this on hold for a sec. Um I wanna to you, Ben. You grew up Also New England.

In Connecticut. I did, yeah. I grew up in coastal Connecticut. Um my dad was a writer, so uh He also had been his own boss since before I was born, but uh very different industry. And you went off to college, also to a good university into Yale, you studied history What did you think? I mean, did you think maybe I'll do something around history or writing, like your dad, what was that where where your sort of head was?

I was very bad at thinking about the future uh at that point in my life But Eventually I graduated and I had to find a job.

So at that point I thought I seem to be pretty okay at this. Maybe I can find a job writing or in an editorial position. And did you move to New York after college? I did. Okay. So you moved to New York thinking, I'll get into writing. And what you start to do is food writing, right? Yeah, I w I worked my way and started freelance writing about food. I had

struggled to find a focus, but I found that what I really love to do is cook and eat. So it made sense that That's what I would start writing about. Did you like it? Was this did you think okay, this has legs. I think I can do this. I can be the next, I don't know, Craig Claiborne or something. The longer I did it, the less I liked it.

And it wasn't just that it was Extremely hard to Pay my rent. It was I felt always alone.

You know, I was sitting at my computer sending pitches out into the ether, waiting to hear something back. Shut my laptop and just Go cook something. Are you a big like a home cook?

I am a big home cook. I've cooked my whole life. Yeah, my parents. Gotta say. Little Teddy Bear cookbook when I was old enough to stand and but

From what people had told me, being in the restaurant business was too stressful for a career. So what did you want to do? Well at that point I decided No matter how stressful it was, it made sense for me to go find a job. in the restaurant business because that was clearly my passion and you know, I was done kinda sitting on my butt at a computer. Yeah. So I

Apply to Basically every job I could find in the rest of the side. What kind of jobs like I'm gonna do. You know, anything that would put me in a kitchen in a position to learn something that could eventually get me. And did you get any offers? No, I didn't get interviews. So that you didn't get interviews. So they're looking at your resume and they're like, This Yale graduate is not qualified to wash dishes. In our restaurant.

Yeah, that' and that's exactly right. Totally get it. I kinda wasn't. Yeah. Alright, let's pause for a second, I'm gonna go back to you, Luke. So you are You graduate from Georgetown and you do exactly what you are meant to do. You go work in finance in New York City.

Your parents are happy, they're really excited, you got health insurance, some stability, is that More or less the scenario. Yes. My parents were happy with it. Uh so was I. It was a it was a really neat experience to

to go explore right out of graduation. And where were you living? In in Brooklyn? No, so I was terrified of the subway system. So I worked at Forty Ninth and Park. And I lived at fifty second and second. So I like it.

And my desk. That was it. Got it. Yeah. You're doing this for a couple of years.

Did you was there a point where you just start to get unhappy doing it or bored? 'Cause it it can be uh a grind, right? It was definitely a grind. I was with a great team. Um I just didn't have any passion for it. It was just a job. And and and really nothing more. And

The the honest to God story is that I was at my desk on a summer Sunday afternoon. I was missing home. And so I went online, yeah look just looking for an affordable Class Main style obstin. And there was all these great restaurants serving their interpretation of Lobstrol, but it was not a quintessential

Affordable. Uh experience. I'm curious about what was a good lobster roll to you? It to be. An unadulterated product. A good lobster roll is a

It's a New England topswood bond. Shave sides, get a nice buttery toast. Little slick of mayonnaise. quarter pound of Of fresh lobster meat.

And then you're not going to be able Particular part of the lobster. Right. Knuckles and claws is the most tender part of a lobster. Then a little bit of lemon butter and a little bit of secret seasoning.

So you start to the gears in your head start to turn and you're thinking There might be a lobster opportunity here,'cause there There was nothing like a main lobster shack anywhere near where you lived. That's right. I wanna I just want to pause for a moment because

I mean I I know a lot of times we talk about these business stories it's just a sort you require a moment, but it's really more complicated than that, because I have to imagine. That over those two y that two year period or whatever it was where you're working at the finance firm, in the back of your mind. you knew that you were going to start something or or no that was that was that the case I so I grew up in a family between my uncle and

uh my dad who were partners and they were great role models. Both entrepreneurs were always there for their family and I had it in my mind that and owning your own business ultimately gave you the lifestyle that that I thought My dad and my uncle were living. I mean the reality is that now that we're doing it, like You realize that They were just burning the clock when I wasn't.

Paying attention. Yeah. Right. Like the arrow is there? Yeah. Um so I had definitely had it in my mind that investment banking was a stepping stone to ultimately start my own business someday. But I had no idea it was gonna be back in the lobster industry.

And what was the first thing you did? Did you like Call your dad up and say, Hey Dad, I have this idea. I kinda save that. So I Okay, I I wrote this business plan and my network of of friends and mentors ultimately reviewed this As you guys might be able to tell, I'm someone who thinks a little bit more clearly in writing.

So I shared my thoughts through this business plan. And were people encouraging or was anyone like This is dumb. Stay in investment banking. Yeah. Most people are honestly encouraging. That concept of like

You're three years into investment banking, you've got that notch on your belt, you're positioning this so you can keep your daytime job and and pursue a a side hustle. Oh, this was gonna be a side hustle? Absolutely. Alright, so when you told your dad w how did he react? Yes. He he didn't say We sent you to George Town, so you wouldn't get into this crazy бізнес.

He didn't, and especially because it was initially positioned as a side project. My mom, on the other hand, even dipping my toes in the water of the lobster industry made her cry. She was upset about this. Because Gateway drug ultimately Got it. Okay. So dad's on board, mom's not.

And Did you have any cash? Did you have any m money to to do this? We had a little bit of cash, so I had about fifteen thousand dollars in savings. My dad I I said, Could you match this and be fifty fifty partners with me? He says yes.

couple years later he told me he literally borrowed the money against his four O and K. Well. Let's get back to I want You decide at a certain point.

Can't do this alone. So first of all, why did you decide that you needed A partner. I was pretty risk adverse. Yeah, no real passion in investment banking, but

It was paying the bills and I ultimately You needed somebody to help you run it. A hundred percent. Okay. So how are you gonna find your business partner? Through Chrysler's.

And I got like five hundred responses in a matter of a couple of days. I'm gonna turn back to you, Ben. What were you doing trolling Craigslist one night? What were you really looking for? Yeah.

We always say we met in the men seeking men section, but Um it was men seeking men for help. Yeah, to start a lobster business. Wait what you were like on Craigslist just looking for some opportunities and what did what did the ads say? So it was it's in the restaurant section, and you know, I'm there applying to dishwasher jobs and and counter jobs and getting no response. And I see this ad. It says

I'm a guy from Maine. I have a good job, but what I really want to do is Start a lobster shack that is Similar to what I know from my main childhood. And while I wasn't lucky enough to grow up in Maine, I was lucky enough to go visit a bunch of times as a kid.

And we would rent a little house in Five Islands, Maine, and I would go down to the Five Islands lobster co op. And hang out at the lobster dock there and watch the Guys steam in and out and unload and And you know eat at the lobster shack there. So the ad basically says hey, I'm opening a lobster shack, I'm looking for somebody to help me out.

I just need somebody you can raise their hand. Because I really don't exactly know what this job description is at this point in time. But so you get five hundred applications and what what stood out about Benz. He wrote a really nice cover letter kinda bringing back like his his fond memories at these lobster shacks. Like he understood kind of the essence of what I was looking to create here in the city.

He was clearly smarter. Than I was. Right. But but you get this letter and did you email him right away and say, Hey, let's meet. Yeah, I said I gotta be at my desk at like eight thirty. Why don't you come buy Starbucks underneath my building at seven thirty and Let's talk for half an hour. This is in August of two thousand nine.

Yeah. Okay. So one morning You guys meet at Starbucks and how'd it go? I it was great. It was a two way interview, which I appreciated. I shared the business plan with him, asked him to follow up, give me his thoughts on it.

And then my next move was all right. Go up to Maine and Me and my family. Wait, that's really fast. You're moving really fast.

Yeah. It was weird how that came out. Or family. But uh so okay, and Ben, what was it about his business plan, his idea that a PLT was it? that you know Luke was so interesting and smart and and enthusiastic about this, or were you really just desperate to get a job in the food industry at this point? It's a Careful.

When I when I initially wrote the email I I I had said yes to a lot of um Worst ideas in the past. And I think in our email exchange before we met, he mentioned that he was in finance and uh I kinda went into that interview thinking a finance guy who's got a pet project and ultimately you know it involves lobster, so I'm excited about it. And and before I met Luke that morning, that's kind of what I expected.

And Walking out of that conversation it was completely different'cause You know, this was somebody who actually had such a deep Personal. history in the lobster industry and such a clear understanding of how sourcing worked and how sustainability worked and

All the different pieces that would actually Make Yeah. Yeah, walking out of that meeting it just Seem like something that's not.

I wasn't just gonna You bring Ben home to meet your family. No, he didn't even come with me. Oh he didn't? Oh you sent him up alone? To meet the parents?

And and did you want that to happen? To get their take on him before you decided he was gonna be the right partner? Absolutely. It was it was it had like Seems real smart, he seems honest, he seems hardworking, he's interested. And it was clear that we had complimentary skills.

So As a business leader, there's all sorts of areas where I've got deficits and there's areas where I've got strengths and have always been pretty good at recognizing And reading people. Fairly truly. So Ben just read very truly.

And Everything about it just sort of felt right. Alright, so You guys decide to partner up. This is the part's even crazier. It's September.

Of two thousand nine. And you decide. We're gonna open this thing in October. First of all, how did you even f find a place and get a lease? And why were you in such a rush?

So we were looking at Down in the East Village and we looked on uh East Seventh Street. It was a great food street. There was a handful of brands that did one or two things really well. But really no complete menus. You could go get an Arepa here, you get a Porchetta sandwich here, you get a cupcake here. Get a smoothie over there. And so I felt like our brand

our concept which is selling lobster rolls would do well here because it was a small footprint and and if somebody wanted to go on a mini food crawl we'd participate well in that And I mean thirty thousand dollars Okay, it's a working capital, but Rent in New York, you gotta sign a multi year lease. I mean How did you do that?

Well I had the guy from Yale review the lease. And Then I knew nothing about Leases. Uh but I

I could read. Yeah. Yeah. I had You know, a a really strong sense of what was fair and not fair and most of the things I asked for were flatly rejected.

Okay. And what what was the size of the space that you located? It was like two hundred square feet. It was an old consignment shop that was just It was called Sosa's Closet and it was painted brown, so it resembled like a big walk in closet. Wow. And what was the rent gonna be per month? It was thirty one hundred dollars a month. Okay. So

You'd get this place. And you decide that you have a month to get it in shape and to open up in one month. So it was three months security deposit. Okay. We had to upgrade the electric, which we did not anticipate, and that was like a ten thousand dollar bill.

And then everything else we fit within that the remaining ten thousand dollars. Like Ben had to go figure out how to pull the building permits that we needed. My

Uncle and and brothers were in there doing Construction work and painting. Um You guys were doing all this, you were remodeling it yourselves? Anything you didn't need a license for, we were we were doing it. And so what did you have to build in this space? Like you had to make it look like it was gonna be a takeout place? We basically Rolled refrigerators.

in there. We put griddles on top of them. Built a little half wall to show where the kitchen was and where the seating area was. And then yeah, the rest was really I mean uh A little uh bar top.

Some stools we bought at Kmart. And then actual decor when we went, we got Luke's old buoys from his old lobster boat. And we had uh a good friend of Luke's brother Brian, you know, stepped up to paint a mural for us and we tacked lobster in gear on the opposite wall and Yeah. Right. That's what we were gonna have and we were going to create a team that treated people The way that we like to be treated. Was there any doubt about the name? Were you

I mean Luke's Lobster it was gonna be Luke's Lobster from the beginning. At that time, uh, I had a friend who was A great marketer. And I gave him ten different names. Wha what were some of the other names? It's like overboard lobster, like lobster shack.

Yeah. Clamshack, even though we weren't gonna have clams. There is a a variety of just bad names in there. I was super gun shy about naming a restaurant after myself. I I

Kinda had still sort of do. Anybody who names a business after themselves is probably not a very humble person. У I got over that was the the significance and the story of of my family and and the The direct tie that

that we had to fishermen and Putting a person. behind the brand ultimately Ben. Helped me. Realize.

Getting into that. Location. You're doing drywall, you're building it out, you're like but why Why the rush is a little bit more. Two days before we open.

Ben text and said, Hey, can I go down to the bowery to buy some trash cans? And I said no. There's no money in the bank account. Things were tight. You needed cash flow. We needed cash flow. We needed to get open. We were

At that point in time there was no Wiggle room at all. Okay, you are still working at the finance job during the day, right? Yes. This was a side hustle. I I didn't really have any ambition to to make it what it is today. It was it was just something fun that was gonna bring a little bit of passion about

Alright, so we know that your dad had a lobster processing plant. He basically would process lobsters for Other people. In Maine, so he was gonna you were gonna buy the lobster from his processing facility. We were, and luckily he didn't Make us pay for the first ninety days.

So that really helped. Cash flow in the beginning. Alright, so October Two thousand nine. You open up.

How many lobster rolls were you expecting to sell that first day? We had probably planned initially on fifty to a hundred. Rolls. And you were not there for the opening. You were at your desk in the Financial firm, right?

At like nine AM I gave Ben and my dad a high five and said, Go get him guys. I I just didn't

It's the first day. We had a handwritten sign on the window. We had no press, like Not a lot of press. What what was gonna happen on the first day? Yeah. Two o'clock. Total crickets. Didn't hear from either one of the guys. So your dad was at the shop.

With Ben. And they did not Nothing. You heard nothing from them. Nothing. So I'm like What are they protecting me from the bad news? We haven't sold a lobster roll yet. This is horrible. What are we gonna do with a couple hundred lobster rolls that we've got on site?

Two o'clock Ben surfaces and says It was a line out the door before we opened. It's now around the corner. It's going great. People are happy. The team is crushing it, just wanted to give you a heads up and I just immediately wow. Did you run out of inventory of lobster? Okay. Not quite that day.

But So we had been just cranking away making lobster rolls, and Luke's dad was there on the line making lobster rolls. He'd driven down from Maine the day before and you know, everybody in the kitchen's gotta wear a hat. So Jeff had borrowed a hat from one of our other teammates who was a skateboarder, and he had this mesh antihero hat. So Jeff is there, he's got his he's got a big white mustache crushing lobster else. And at a certain point we looked up at each other and just said, Jeff

I need to go back to Maine. Wow. We we need more lobster. How many lobster bowls did you sell that first day? Five hundred the first day. Let me come back in just a moment, how Luke and Ben grew that one lobster shack into an international brand.

And how along the way They both wound up encountering the worst smell that either of them Had ever smelled, which by the way had nothing to do with lobster. Stay with us, I'm Guy Roz, and you're listening to How I Built This. From NPR.

Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2009 and Luke and Ben have opened the first Luke's Lobster in New York's East Village. And they realized pretty quickly that they are a lot better at making lobster rolls. than running the actual restaurant. We weren't using

what we now call a point of sale system we're using an old school register with numbers on it and a calculator. So pull up that strip and see how many lobster rolls it says we sold at the end of the night. And then we back into what we had and and It was you know I had never used Excel in my life at that point, so Uh I I would st I would do scratch work on paper and then every now and then I would sort of Uh

Somehow I got those numbers scratched on paper to Luke and at his desk he could have been a little bit more. Back to me. Yeah. In a way that made sense. And uh uh how I mean, how were you figuring out like logistics? Were you basically just kinda winging it?

Like how much do we need today? And and maybe we're not gonna have enough, and how many roles do we need and I actually think this is one of those areas where ex inexperience was our was our friend. All of the lobster came down from Maine in units. When you say units. Wrapped per lobster roll. Perfectly steam cooked.

Next day shipment. It is serve chilled. So for us, we create an inventory system. But We had sales.

based off of units that we used to just project what we needed for inventory. All in a very complicated Excel sheet. Yeah. And then we just use those historical sales to predict what we would need, and that's ultimately how we did all of our purchasing. So we were Never had lobster in the shack that was more than a couple of days old. Yeah, I mean th this is the thing, like lobster is not like uh I don't know Stacey's Pita Chips has been on the show, right? Once you bring a lobster for processing, like the clock is ticking, right, or it goes bad.

And then you gotta get it to your stores really quick. So how was it was it coming in refrigerated, frozen, like how how was it coming in? So typical day you catch lobster on a Monday. It's cooked on a Monday. Shipped on a Tuesday. It's in our shack Wednesday morning. All three refrigerated trucks.

And then we'd use it Wednesday, Thursday and another shipmate would come. So You have really. ten to fourteen days of shelf life and we were always through it within four or five days. So tell me, I mean you were running the lobster shack.

And d at this point did you have somebody working there during the day helping you out as well? We had An amazing team. That started with us on day one. And that was I mean it was it was crazy, but in in all of that, like figuring out permitting and building out the restaurant and food license in thirty days too, right? Yeah, it turns out somebody needs to be on site with a New York City food handler's license at all times. So luckily I was able to get that

before opening day, but nobody else did. So in that thirty day process there was also Obviously a lot of Craigslist posting. Yeah.

And then and then reading responses from people on Craigslist. And we ended up with just extraordinary people, maybe partly because it was at the height of the recession and there were a lot of people looking for jobs, but Amazing support team. There from day one. Your price point. was fourteen dollars

Initially for lobster roll. Presumably a lot cheaper than a restaurant in New York, right? More affordable. Right. More affordable. Right. It is not a cheap product. More affordable. Yeah. Yeah, so we

Certainly. Working directly with a processor. Working directly with fishermen, there was no middlemen from day one. Right. So we had access to the best quality product at the best price.

And our economic model was was We needed volume in order to be successful. So We got that from day one and and tried to price the roll accordingly.

Mien you hire all these people from Craigslist. To work with you I don't know, were you nervous that you wouldn't be able to pay people?'Cause you were at this point thirty thousand you burned through it, you're dependent on the cash flow. It's on you. All these people are like, All right, Luke, I believe in you, I'm gonna come work here. Were you nervous about that? I was terrified out of the gate. I think I asked Ben not to process his own payroll for the first week.

But sales were so good. The first week. And deferring paying for seafood for ninety days capitalized the business very, very quickly. I mean I understand you are making like a premium product or really high quality lobster roll, but Like this is really now the r financial crisis is like in full swing, right? But fourteen bucks, even though the price is great for laps through like people can get a burrito for five bucks. So

Why do you think it's a People I think You know, lobster is a celebratory food.

And at a time when people aren't necessarily going out to the fanciest steak dinner or getting the most expensive bottle of wine. Yeah, they could come and they could spend Fourteen dollars. For this You know.

The surroundings may not have been luxurious. But the prime wrong with that. But they could go in and have kind of all a luxurious Yeah. And there was no question that the recession

The opportunity. Without a recession, there's no way a landlord would have taken a chance on us. Wow. There's no chance that I would have found Smart, motivated people.

uh that needed jobs were We're we're out there and available. So all right, so you've got the store going, you're gaining momentum. Making money. So

What what was the conversation between you guys? Were you starting to say, All right Let's open another one. I remember talking about what's next. Wh I would put together a Snapshot of the financials and And said.

What do you think about about scaling this thing. And this is we got a real opportunity here. We're having fun, we're making money. Let's go try a second one and I'll put all my chips in the middle. I'm willing to take the same thirty five thousand dollar salary that that Ben signed up for. You were gonna quit. You wanna pause there? Yeah. No, you're gonna quit your job. Yeah. No, but you you decide I'm gonna throw I'm gonna jump into this two feet. This side hustle is now my full time hustle. I'm willing to I'm willing to do that if you guys are in this with me.

And Everybody said. Yeah, let's let's go ahead and give it a shot. And your mom was like, Yes, go for it. Now she was on board? No. Yeah.

No, Mom was not on board. She was not on board with you quitting your stable job with health insurance and all that stuff. To do this not for six months of Success. Right. She's a little more practical than that. Alright, so you uh find a second location. Where where was this? What was this place?

It was On the Upper East Side in Manhattan. It had been a high end French restaurant. But when we started kind of It it was a nightmare. I mean layers and lay of grease.

On the walls, on the floor. The original owners had sold it. And the interim owners had really just run it into the ground and then just walked away. I mean to the extent that There w they left food.

in the walk in refrigerator. And it was six months ago. Restaurants I think a lot of people don't know this, but restaurants have something called a grease trap. Restaurants have to

Trap and then dispose of their grease, right? So there was a grease trap there? There was a grease strap there. And Probably in the two years that the interim owner had owned it, it had never

B Cleaned. Yeah. So Yeah, that that was about The worst smelling thing.

Yeah. Yeah, so So there are professional companies that do this. Okay. They come and they have, you know, this great pump system. And you they open it up and they But we

We we really didn't know about those companies. Um yeah we we would Saw the tops off of milk jugs and You know, kinda Scoop it into a into a bucket or like Double bag trash bag and then just kinda

Run around to try to find a dumpster. So I mean well, you open the s you eventually open the second store, and how long does it take you? Again, thirty days or something? It was fast. We opened May twenty sixth and I think we took possession of the of the shack May first. Wow. And Now you've got two stores.

Which is double the work and double the Stress. Yeah, absolutely. And our first general manager who who now runs our HR department, we left her there in the East Village during the throes of the build out process in the Upper East Side. And uh You know, thank God she she didn't leave us, she didn't walk away, she

She held strong and um But yeah, it it was a it was a stress that was shared by the entire team. Alright, twenty twelve. You're buying your lobster from your dad's processing plant. H

decides he's just Fed up with it. There are bunch of regulatory challenges. he's dealing with he doesn't want to do it anymore. And so he kinda

Comes he gets rid of it. You guys don't have a processor anymore. So what did you do? I mean what did you who who who who did you turn to? We actually spent a year actually buying from other producers. thinking hey, this is a way that we can scale the business. At this point in time we are thinking growth.

I think we had six or seven shacks. It only took about a year for us to realize that we needed to r invest back. into the production business in order for us to scale from a a a quality and and price standpoint, we needed to have that You decide to start your own production facility. We are going to bring in the lobsters, steam them, or cook them.

Break them apart. Sell the you know, do something with the tails'cause you don't need'em. and the n get the knuckle meat and ship it out to the restaurants. You guys were gonna do all of that. That's right. So once we decided to go into the processing business, I mean it wasn't just sort of like ah

We're gonna do this now. It was a We're going to take Every penny of earnings That we've accumulated from Six

plus locations over a couple of years. We're gonna put that next to some debt that we're gonna raise. And we're going to push All of those chips in On

An extremely Difficult to manage. Technically intensive and capital intensive. Endeavor here. We're we're not in control of supply or demand of all the products that come out of it.

And in this business a a lot of our vendors, folks that were selling lobster tails and lobster mints and lobster bodies and lobster leg meat things that we're not using at the restaurant group. They all want to pay in thirty or forty five days. But the fishermen need to get paid and Two to seven days. So we had to accumulate

Enough. Earnings in order to go to a bank. And get a proper line of Working. Capital or lo work and credit.

So that we could ultimately bridge that gap. When your dad had his processing facility, it was hard for him to make significant income from that. But you guys are in a better position because you've got the restaurants, your because you own the restaurants, and you can just take that meat and supply your restaurants. And then even if you're not making a whole lot of money off lobster tails and what what el what else do you sell that you don't use? Like the lobster we've got this neat machine that rolls all the meat out of the lobster legs.

We've got another machine that Takes the bodies of the lobster. And Debones it. So we sell that to soup and chatter companies. To make lobster bisque and

So there's We're we're finding value in lobster shells. So we're we're now getting into that business as well. But it makes more sense for you guys to have a processing facility because of the restaurant. A hundred percent. So you guys were expanding

Got your production facility and in super impressive business. Twenty sixstine you went to private equity group and you took in outside investment for minority stake in the business. You know, w I've had found we've had founders on the show who say I'm so glad I never took outside capital because I control it, you know, Gary Erickson of Cliff Bar.

Um and others. And then there are others who say, Oh, it was so great, you know, this enabled us to do X, Y, and Z. Then there are others who say it was a mistake that I took it,'cause now they all these private equity people just screwed up my company. You guys are Doing really well with your own cash flow. Why did you decide to take outside money? Did you need it to scale the business? We got to the point where we're going to be able to do it

We had been operating in cities that we had Lived in New York, Boston, D C Philly was in the middle. General level of comfort.

At this point in time we're writing five hundred checks a week, feel great responsibility for those checks. And it just it felt like at this point in time it made sense to bring in a seasoned partner. That could ultimately just help us avoid. that trip wire that we weren't going to see.

So what What do you imagine? I mean what will Luke's like I mean, you've got now, I think what Almost forty locations in the United States and even in Asia. It's amazing. I mean this was like a side hustle in two thousand nine, there are forty of them. What's the vision? Like uh I mean

Thousands? Not thousands. I mean our our brand mission is to be the world's most respected seafood brand. Because we're we're not a group that is motivated by store count or revenue. Right. You know, honestly we had We had some moments in in twenty seventeen, twenty eighteen where we felt like

We may have actually grown our store account. Too quickly? And we also looked at our business as a whole and said, what is that What is that mission that's going to drive us not just the restaurants, but

the you know the processing company and and everything we've built up around this and Uh Luke throughout the The most respected seafood brand in the world. We talk through and we said well what does respected mean to us.

Respectment. Stakeholder theory that working directly with lobstermen, transparency, only serving sustainable products. And then, you know, above all being committed to quality at all costs. I'm curious about

Sustainability, right? You know about this. There has there was a report in Maine. from uh a group of scientists and they basically predict that by twenty fifty the lobster yields in Maine are dramatically gonna be reduced, like maybe by fifty percent.

Do you guys think Think about this? Do you lose sleep over it? This is your product. Our brand has a great opportunity to To be playing a leading role in

In helping to work to understand what that change is a great example. Is the cow business that we've been investing in. So Kel sequesters carbon. And we've been putting funds through the Ocean Foundation To go out and do the research to understand how

That type of aquaculture can Positively affect. the environment that our fishermen are working in. We we have this great opportunity as a brand. To educate.

And and to put dollars into research that that ultimately allows us to understand what the change is going to do before it actually affects change and And how to get in front of it. Yeah. I I'm curious, uh uh when it comes to your personal lives.

Luke, you're married, you've got a kid, you got another one on the way Mm. Ben just got married like four days ago? Um Are you guys able to kinda

You know, reel back a little bit and kinda relax, or are you working just as hard, just as crazy as you were in two thousand ten? Gotta be really careful about how we answer this one. Yeah.

I think we're working just as hard. But having kids just helped me prioritize my time a little bit better. My wife and my kid are are honestly the most important thing in my world right now. And that makes me uh Better business leader because

It enables me to figure out how to say no a little bit more frequently and that keeps the business a little bit more focused. Yeah. You guys did about sixty million dollars in revenue last year, you'll probably do more this year. Sounds like an incredible amount of money. You you've heard the show before, and we've had people on the show who are fabulously wealthy because of the businesses that they started. It's not sixty million dollars in your pockets, it's it's revenues you've got. A tiny fraction of that. Do you either of you guys feel rich or wealthy?

At all, personally. It's kind of a loaded question. There's nothing that I wouldn't be doing. I wouldn't choose any other life. So yeah, I feel rich, but monetarily Hey.

Things are okay. Yeah, I mean. You know, f from my perspective I wasn't I was never in finance, so when we started Luke's, I was uh

my last penny, so from that perspective I'm exceedingly rich. But um But no, I mean I I think we You know, n neither of us are are people that that need all that much and you know, we get

Joy out of uh the work that we do and the time we spend with our families. I understand the passion and the energy and the excitement, but you guys have now been doing this for closing in on ten years.

You could probably cash out, find uh private equity people who will buy it out and take Luke's Lobster, and you guys will have some money probably potentially that could sustain you for the rest of your lives. Is there anything about that attractive to you, jumping off the hamster wheel and and and Selling it? Yeah, I I think it's Yeah, the

This whole company kinda is our It is our family now. It's uh Yeah, it Wha what would we do? It's the same for me. The fishermen are my friends, the the teammates are my friends, the guests and suppliers, like all of our stakeholders are are my friends and part of my life. I I

Again, I can't imagine doing anything else. You've heard the show before, so you know I'm gonna ask you this question. How much of this success. Is because of the hard work you put in, your intelligence and skill, how much do you think is just'cause you were lucky. Ben.

I mean there there's no d denying that There was a lot of luck involved. I mean The fact that I happened to be trolling Craigslist that very particular night As we said, you know, the fact that there happened to be this recession that

gave us the ability to hire such wonderful people. to get that lease to get that first location to do it we did. There's so much. luck that that undergirds all of it, but Um

You know as a team it's what you do with kind of the the luck that you're given, I think. Like. I would completely echo that. The the good fortunes of the recession. We're we're lucky.

But I would take the smarts and hard work. And the the DNA of my team and stock'em up. Against any other team. If you were sitting in this audience You know, fifteen years ago.

Watching guys like you What do you wish you you knew then that you know now? What would have been helpful for you to know about The journey you guys took. For me it's always been the the strength of my of my peer network. When I was when I was in college and I was I was

Definitely not the guy who would go up and shake somebody's hand and say No, can I build a relationship with you? Yeah. Um And I can't tell you how important. That actually is. The strength of your network, especially when resources are are limited and times are challenging, is just so incredibly important. People that you meet along the way. Absolutely.

Then? What do you wish you knew? I think The most important thing that I've realised As I became

A manager of people. There's never a time when you're the smartest person in the room or the most right person in the room. The humility of of a manager just looking to Uh their team. And asking what they think is right and how they would approach a problem.

And September Thirtieth, two thousand nine. That was the conversation we had with our team when we were doing practice run the night before opening day. Yeah. We just looked him in the eye and said, We don't know what tomorrow's gonna look like. We've never done this before. So we need you to guide us. We need you to tell us when we're doing something wrong. We need you to tell us when you have ideas of what would be right.

And uh And listen. You know? Luke Holden, Ben Conif, co-founders of Luke Lobster. from my live interview with Luke and Ben at the Fac Bay Event Center in Boston.

Today, Luke's Lobster has well over 500 employees, and funnily enough, even though Luke's mom did her best to keep her children away from the lobster business, Luke's two brothers, Brian and Mike, and of course his dad, Jeff, are all equity partners and working at Luke's Lobster. And by the way, no one in the family has a commercial lobstering license anymore, but Luke and his brother Brian do have recreational licenses. When a family has a running competition every summer, to see who can catch the most lobster.

Hey, thanks so much for listening to this live episode of How I Built This. Our show is produced this week by Casey Herman with music composed by R teen Arab Louis. Our live events team includes Jessica Goldstein, Allie Prescott, Ellen Jorgensen, and Andy Heuther. Thanks also to Julia Carney, Neva Grant, Sanas Meshkantor, and Jeff Rogers. Our intern is Sequoia Carrillo. Guy Raz. You've been listening.

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