The Way I Heard It with Mike Rowe - 298: Dan McMurtrie—Out of the Frying Pan and into the Fryer

Episode Date: February 7, 2023

Dan McMurtrie, a venture capitalist and lifelong entrepreneur, discusses how a fluke injury ended his promising baseball career and sent him on a mission to save mom-and-pop restaurateurs. 

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This would be episode number 298 of the way I heard it. And when I say would, what I mean is is. Is. It's happening, Chuck. This is not some future prospect. It's actually happening in real time. Yes, indeed it is. And if it had a title, and it does, it would be, and it is.

Out of the frying pan and into the friar. Did you mean to say fire, Mike? No, no. I meant to be incredible. clever while quoting our guest directly, who is a friend of my name, Dan McMurtry. He says in the course of this fascinating interview, out of the frying pan and into the friar. And what he's referring to is the chasm in his life, the giant career shift that happened when he abandoned his dream to play Major League Baseball and decided instead to be an entrepreneur,

and then eventually created a tool, which I want to talk to him about, that he believes, and now I believe, can save the restaurant industry. When we changed the format of the podcast, I thought for a while I wanted to change the name and call it people you should know. Right. Because by and large, that's what most of our guests are. And this is a guy who I know, who I want to introduce the world to, because if he pulls this off, Chuck,

And you've met him. Chuck joined me for Thanksgiving dinner this year and a couple years, I guess, before that at this guy's place. He lives not too far from me here in Northern California. And you probably know people like this in the sense that you think you know them. They're sort of a friend and acquaintance. You get to know them a little better. And then you learn something about them that makes you go, really? Really?

You're into that? Right. Right. Right. And so what I learned about this guy, Dan, is that he was a really good baseball player. Played professionally, briefly for the Mets, was in the Mets farm team, was in a number of farm systems. He's a pitcher. And always very good. But then he met a guy who reminds me of our old friend, Fred King. Right. A teacher who became a mentor who in this case is really more like, you know, a sensei, right? like Pat, what's his name and the karate kid?

Wax on, wax off, Mr. Miyagi. Yeah. Dan McMurtry's Mr. Miyagi was a pro baseball player named Mike Marshall. And if you're a baseball fan, and even if you're not, he's worth a Google. Mike Marshall only stood five feet, eight inches tall, but he was one of the greatest longest relief pitchers ever. This guy could pitch six, seven innings a day, day after day after day after day after day. his work ethic and his skill on the mound was really remarkable.

He was a difficult guy, I think. People weren't quite sure how to react and relate to him because he just broke all the rules. He did everything differently. But Marshall had a way of thinking about pitching that was unique. And Dan really became enamored of him and moved down to Florida, spent months down there living in a trailer in a motel six, not far from where Mike Marshall lived and learned to pitch all over again.

And I don't want to give up the whole story, but Dan wound up with a 98-mile-an-hour fastball and a golden ticket to the Cy Young. But something happened to Dan, and that didn't work out. So he needed to reinvent his life, reinvent his purpose, and now this guy is on the verge of, completely transforming the restaurant industry. He's created a tool that's allowing restaurateurs to hopefully not go out of business.

And Chuck, we've talked about it, but how bad would you say the problem is right now? The existential perfect storm facing restaurateurs. Oh, it's hideous. With inflation, number one, and in the post-COVID days, it's really difficult. I mean, restaurants typically have a very, very small margin, about 5%. and when your prices go up, you can't just keep charging your customers more and more and more, which is what they kind of have to do. And so they need a way to find, they need to find a way to keep their prices the same so that they don't have to go out of business.

So they can live to fight another day. Look, I kind of got a, as my grandmother used to say, a bee in my bonnet over this thing. Because not enough people are talking about it. Restaurants are going out of business faster than in. in any point in my memory, I think maybe ever. It's not just inflation, crumbling supply chains. It's not just prices. It's workforce.

It's the ability to hire. So many people I know in this business are screwed and no one is coming to help them. And my friend Dan has created software that is in play right now in hundreds of restaurants and it's transforming things. I think. Thousands. Yeah. I think he could be on the verge of.

boiling the ocean and transforming a giant industry. And I think the way he's doing that, aside from being a really good businessman, he had a really good mentor who taught him how to throw differently and think differently and how to trust the process. So if you're a baseball fan who enjoys chewing and swallowing things, by God, this is the episode for you. Out of the frying pan and into the friar. Right after this.

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in a national advertising campaign. Do what my mom did. Get yourself unlimited high-speed data for just $3499 a month. At puretalk.com slash row. You can switch in as little as 10 minutes at puretalk.com slash row. Well, I'm going to assume this is a PG audience, so I will say that... 13. Yeah. A lot of what you might have seen in Bull Durham are all the great sports movies that Kevin Costner should only be allowed to do, although he's great in Western.

Yellowstone's amazing. Are true, right? You know, it is for the love of the game, right? You grow up wanting to play, you know, Little League. You want to make your high school team. You want to make your, you know, you want to try and play in college if you have the work ethic. and the talent and the will to persevere, right? And I think what sports teaches you, which, you know, other things can, I think the military has ways of teaching you these lessons,

but is the discipline of really enjoying the struggle and the perseverance when you get knocked down. And as you move up the ladder, what you realize is that talent starts to get equal, right? Everybody was an All-American, you know, if you're starting to play professional sports, getting signed, but would separate you is your ability to keep working, either when you get injured or keep working when you have slumps because the guys you're playing against are pretty good, right? And when sometimes that, you know, you have bad days, you need to have a very short memory, especially if you're a short reliever, because when you walk in the clubhouse, they're likely to have the videotape playing of the guy hitting a ball 500 feet off you on a loop, you know, yelling at you, giving you grief. right? It's gone. And you've got to just be like, who threw that pitch, right? You know,

because you're in the next night. But, um, and you learn every player's superstition, right? Every athletes are notoriously superstitious. So if somebody's on a role, you know, other players will must with them like, they'll cut up their socks or guys won't wash their underwear. I mean, some crazy gross stuff. But it's an interesting community. It's a perpetual childhood. But I had the good fortune to meet in a guy named Mike Marshall, who I consider the best. Sorry, Dan, but you can't gloss over grown men not washing their underwear. No, you can't. It's really offensive. Are there any examples of this? I'm not asking you to name names, but, you know, how long could this persist?

Well, at that point. As long as the streak goes on, right? Yeah, the street, but, you know, the players would usually do something to get in the locker and make sure that something happened so that the player didn't have the opportunity to extend that for a period where it became, outrageously offensive because we rode buses, right? We were not like flying around. It's a different kind of streak, Chuck. It's a different, it's a different type of streak. But it was a great study in human nature. And in that time, right, like I met a guy named Mike Marshall. And the best way to explain kind of his MO would be that is kind of like the karate kid. He was a guy that was five foot eight who played AAA baseball as a shortstop, heard his back, had to have distance. He had to have distance. surgery and have it fused and at the time was getting his PhD in biomechanics and kinesiology

from Michigan State and taught himself how to pitch and he literally took as he said Newton's laws applies to everything including throwing a baseball now this was crazy talk right when you're in baseball where most people like didn't understand anything about physics or about the true mechanics of force application right like force equals mass times excel so he would talk about all these formulas. I met him when I met a famous surgeon named Jim Andrews who did Bo Jackson's hip. And Jim is one of the top two or three orthopedics in the world. And I went to see him in Alabama and I had an elbow problem. And he said, you know, I have a ulnar problem. He goes, look, I'm a carpenter. You don't need me to work on your arm. You need to go see

Mike Marshall. He can help rehabilitate you. And I was, who's that guy? So I trucked down to Zephyr Hills, Florida. And he's living in a trailer. right and he'd made plenty of money and you know he had checks laying around from in his trailer he didn't care about the money he was he was still pitching baseball in his 50s so i fly down there meet him he's doing all these kind of crazy drills he's built like an human anvil and i'm watching him throw and all these contorted movements and he asked me to throw and i i had an elbow problem and it was bothering me and we finished me throwing we said down and he said, I think you can throw 100 miles an hour. And I looked at him like he had three heads, right? Like I threw, you know, high 80s, low 90s. I was kind of a sinker type pitcher control. And he said, no, you have like abnormal flexibility. You know, we can change you and show you how to do that. And I'm like, you know, okay. So I moved to Florida, I'm living in a motel six where they're renting rooms by the hour. And I'm driving up every day to train with this.

guy who literally is going to completely reshape my mechanics after I'd, you know, gone 28 and 1 in high school and lost very few games in 20 years of pitching. And he's like, well, we're going to start over. And I'm like, okay. Sorry, Dan, but you're in what farm system at this point? Was it the Mets? At this point, I was in college. It was my junior in college. I'd gotten hurt. Had torn up my knee, had my knee reconstructed, came back the next year and hurt my elbow. So I didn't pitch for two years and I, so I stepped out of school, went down to rehabilitate my arm because I wanted to see if I could play again. And so he basically rehabilitated me and would like walk up to me and give me a bucket of balls and he would say

step here and throw over there. And it was all completely different mechanics and I had to trust it and then we would be throwing 12 pound shot puts. And all of this was, you know, my arm hurt in place they didn't know exist. He just watched me throw for five minutes, say something, and then he just leave. And I'd say, Mike, I need some help. He goes, learning is an intensely personal experience. When you're pitching in the big leagues and there's 60,000 assholes out there yelling at you, I'm not going to be there holding your hands. So he said, step here and throw there. And then you just leave. And like wax on, wax off, right? And what I realized was I had to trust the process and that was really hard because I had to give up on everything that I'd had

what I thought was some success with. But he said, my job is to make you the best you can be. It's not to make you better than everybody else because you may not have the tools to be better than everybody else. And that was a big light bulb for me to go on. It was kind of an Eastern kind of Zen way. Like growing up, it'd always be, you have to be better than somebody else. And I get that, but it was self-defeating, right? It wasn't really a healthy mindset. And frankly, him teaching me to say, how good can I be, right, was really a shift for me mentally to really appreciate, like, when you throw the ball, whether it's a ball or strike, whether the guy hits it over the fence, whether he hits it to the infield or outfield, they drop it.

You can't control any of that, but you can control the quality of the pitch. And so I trained with him for four years and in the offseason. And every year he would keep kind of reinventing me, which would make me crazy because I kept getting better. And I got up to where I was thrown in the upper 90s. And... What did that feel like, Dan, to suddenly be able...

I mean, look, people need to understand the difference, right? The difference between an 88-mile-an-hour fastball and a 94-mile-an-hour fastball. It's not just six miles an hour. The difference, you know, people go to the, like, games, and they sit in, you know, like a stadium, and they'll sit in the box, and they'll throw him a pitch

and they'll try and hit it, and it might be 60, right? A pitch in the 80s, right, would be typically a fast college pitcher, a very fast college pitcher, right? And some pros, I mean, Greg Maddox, who have probably, I think, one of the greatest pitchers ever, right, wasn't overpowering, but he just would beat your brains in with how good a pitcher he was, not a thrower. But to go from 90 to 100, okay, is if you're sitting there looking at it, you go from saying, you know, I see the pitch coming into it sounded like a strike.

It looks like a grape seat. Like as soon as it comes out of the hand, it's like you just hear this, you just did this really quick sound. And you're like, thank God that ball didn't hit me. Like I was sitting in a box with a buddy of mine that threw a hundred guy named Rudy Ciennes. And I'm, he was a little wild. And so I would get it, I would get in the back right corner of the box, batter's box right handed when he would ask me, when he was warming up. Because I knew that if he let one loose,

there was no way I was getting out of the way of it, right? But it would come out of his hand and literally, you could barely, you could see a blur, right? You could see it, but it was like, and it was like, there's no way. Like, how do these guys hit that, right? And so anyway, I learned what it feel like

was the way Mike trained you to throw was he trained you with the physics of building up your decelerators, right, your ability to stop your arm. And, you know, he said all your power was in your landing leg, not your push-off leg. And all these things are true and make perfect sense. But if you're talking to traditional baseball people at the time, he was blackballed because he helped Kurt Flood during free agency, right? He was kind of the locker room lawyer. And Kurt was the first guy that got a free agent contract. And Mike was also the guy when Tommy John, you hear now the Tommy John surgery,

Tommy John was a famous pitcher for the Dodgers and tore his elbow up and Mike worked with the gentleman of famous orthopedic named Frank Job at the Curlin Job Clinic who's passed away, but he invented the Tommy John surgery and Mike worked with Frank Job on based on biomechanics how to create how to do the surgery on Tommy and then Mike rehabilitated Tommy and then Tommy pitched he wasn't the power picture he was for what he pitched I don't know 10 or 15 more years right and And so Mike, Mike was a monk, right? Like he used his own training and his own throwing in pursuit of the perfect way to apply force to a baseball. And I've never met anybody else like that in any other career.

It reminds me very much of what a Japanese swordsmith might be or the complete and utter relentless commitment to your craft, okay? Not for anybody else, right? not for who was watching, not for, but because it was singular in its purpose. And that clarity, right, when you're learning, you're training or you're doing that work, it's awfully hard to beat because everybody is so distracted, right, in today's world. And Mike said, if you're sick, go and throw. Your arm doesn't know you're sick.

We threw every day, right? But it was a routine. And by the end of it, I could get, I could literally, you know, get up. up in the bullpen because they moved me to short relief in three pitches and be at full speed because my arm was so well-conditioned. And I could throw, I mean, it wouldn't be optimal every day if they'd pitch me every day, but like he threw 13 games in a row in the big leagues. He threw 220 innings in relief.

Today, starters don't throw 200 innings. Is that a record, Dan? Yeah, he still holds like two or three records. Again, I can safely say that some of his will never be broken based on how the game's being managed. But he would say today, if he were alive, sadly, he just passed away several years ago with Alzheimer's. But he kept records of his work that I wish at some point some smart people at MIT or some people would get together that really understood physics and really look and deconstruct all of his work and his analysis for the game because so many people are getting hurt. But he would say, look, I was no physical marvel.

Like I look at these players that are far more gifted than me. He said, you're more gifted than me. but people get hurt and it ends careers. And ultimately, I got hurt through freak accidents, right? Which happened. It's part of it, which ended my career. But it didn't diminish what I learned from him about work and about singular focus and about respect for how hard it is to be good at something, right?

Whether it's pitching a baseball, whether it's, you know, being a writer, whether it's music, whether it's anything, the people that are the best in their field have talent, but they usually outwork people too. Very rarely. Like, the most talented athlete I ever played against and was with was Daryl Strawberry. But he didn't have the temperament. He should have broken every record. That's amazing, man.

That right there is the point of everything we've said so far. I remember talking to fans of the game at the same time who were more into it than I was. I was into baseball for a long time, and you're right. He was like from another planet, Strawberry was. Yeah, I mean, you see people in every field, right, where you feel like God touches them and say you're an athlete, right? Or you're... And they have every physical attribute that...

Like, he was on the cover Sports Illustrated at 18 or 19, and he was 6'5. He had probably a 30-inch waist. He had a back like a cobra. He could throw. He could run like a gazelle. He could hit for power. He was in New York.

at 20, you know, dominating with Dwight Gooden, who was another very gifted player and a really nice guy. And they both got caught up in drugs and other things that you get exposed to when you're in the major leagues and the world has a way of finding out and filing down your weaknesses, right? Or your proclivities, if you will. And for them, they didn't have handlers, right? And drugs and things destroyed their careers. But you have a piece of it. of mind when you know that you can look back and say, I did the best with what I was given. It doesn't mean that it's going to guarantee the outcome you want. Lots of things can go wrong, but you don't want to look back and BS yourself, which everybody can do and say, well, I could

have run harder. I could have done another push-up. I could have worked harder, right? Because you're only lying to yourself. At the end of the day, just accept either you are willing to do the work necessary to be excellent or to be able to compete at the level you wanted to compete at, regardless of whether you were 5-8 like Mike, you know, I'm no physical Marvel or I could throw a baseball. Then that's just what's required, right? And so I've seen it in these things. So Dan, four years with Marshall.

Yep. Right? Living in Motel Sixes, reinventing the whole thing. How did you put it? I love it. trusting the process, right? A new process is handed to you by this sensei in this very specific, very, very codified industry of Major League Baseball. And you take it to heart.

And how hard were you throwing at your peak? 97, 98. And the teams knew that I was training with Mike and didn't like it. And kind of like, you know, Guerrero, whatever. Brady's trainer, but like they saw the, you know, the improvement of me going like, well, what's going on? And at the end of the day, it's hard to look back and imagine how much I had to trust this guy who, you know, was clearly still teaching college, coaching college baseball, living, you know, very modestly, but that's all he cared about, right? Had plenty of means.

And he was so kind of like a monk. And he's telling me to do stuff, like step with my opposite foot and throw 45 degrees that way. way and throw a eight-pound shot. And I was pretty good. You know, I was good enough to get signed and good enough to, you know, get signed by the Mets who were the best pitching organization baseball. And he's still telling me, that's not the goal. You want to win the Sye Young? You want to be as good as you can be. Then we're going to deconstruct the machine and start over. And it's hard to be learning when you're having setbacks, right? Because you always, it's easy to go back to what you had a little success with, right? But that may not get you there. So in between that

transition is really where you're in the space where you've got to like commit and you've got to see it through and say, well, if it doesn't work, I'm at peace with it. If it does work, I'll be as good as I can be. But if I stay where I am, is that going to be sufficient to get me where I want to go? And that's really a weird kind of. of weird spot. I love stories like this. Seven years ago, a guy named Ben Still was a musician. He had zero interest in running a food company, but he was annoyed that so much

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But the reason I think you're an important guest for this podcast is because you did trust that process that Marshall taught you. But you also took it in the neck, right? I mean, it didn't work out. You got hurt. Had you not been hurt, you probably would be far too busy to be on this humble little podcast, you know, being a retired superstar at this point. But tell me how you got hurt when, what that felt like, and then just know that we're going to shift gears. And I'm going to talk to you about trusting a new process and applying all the stuff you learned from Marshall into a pretty remarkable second act.

Well, I get hurt multiple times. When I was born, I was a preemie. I died three times, right? So I was very sick. I wasn't supposed to be healthy. And so, you know, I had like bars from my legs like Forrest Gump. So my dad being a, you know, kind of sees the world as a hammer and a nail. And he didn't want me to be a sickly kid in the corner.

So he drove me pretty hard to not be a sickly kid. And I'm appreciative of most of those lessons. Although I think they could have been taught differently, he taught me a tremendous like to just work hard. And so then I tore both my knees up in freak accents. One was field in the bun and spring training, doing pitchers fielding practice in the morning when it was wet, grass was wet, and I was just running up first base and cutting,

going up the line. And when I cut my spike slipped lock, and I tore my ACL and my, medial collateral and meniscus. And before that in college, when I missed my sophomore year, I was just playing pickup basketball like I'd done my whole life to stay in shape and made a cut on one of those rubberized floors in my right knee locked in and completely blew the knee out. And that's kind of that whole thing of hyperflexibility being a reason I could throw a baseball

really fast, right? But like it also can put your joints in really vulnerable, dislocatable positions if you're getting an awkward one. So I had that surgery and then came back from, I don't know, six or so knee operations and then I hurt my elbow but didn't require surgery. And then I ended up getting to where I was at the pinnacle. I mean, I felt like I was really ready to put the show on the road. And I had a situation where I slipped and I dislocated my shoulder in the middle of a game in a pitch. And I remember, you know, throwing the pitch and my spike, it slipped on the ground and then I felt my shoulder just pop out. And I remember going, well, that's never, that was weird.

Like, what just happened? And, you know, I'm in a professional game and I'm like, oh, man, like, what do I do? Like, did that happen? I was just, so I walk around the mound, get on the mound, you know, look over, there's a runner on first base. And so I decided to get on and try and see if I and lob one over to first base, see if my arm's going to go with it, right? And so I lob one over it. It felt, you know, weird, but didn't come off. And so I decided to throw a pitch to the hitter. And, you know, I went in full speed and threw one, and it was like, wot, wong.

And it was, I don't know what it was. Maybe it was 85 instead of 98, right? And the hitter popped it up. It was the last out of the inning. And I realized, talked to the skipper. took me out. They sent me home because they said, look, you know, we got to figure out, like, what's up with your shoulder? I was on the path. Then I was with Cleveland to get called up to the big legs. And I rehabilitated my shoulder and came back the next year throwing as

harder, harder, and I was with the Yankees. But I had lost my motor control of my hand, my throwing. So I was, I could throw the strawberry through a brick wall, but it would go everywhere, like wild thing. like, you know, that movie. Charlie Sheen. Yeah. And so my previous four years professional, I had averaged like 1.2 walks per nine innings, which means I had great, you know, really good control.

That's amazing. I ended up going out and throwing and walking 13 guys in a row in time, right? And they left me out there in spring training because I was throwing so fast and like, well, what's going on? But I was wild up and down. I wasn't wild in and out. So when the ball would come out of my hand would go numb, right? because my shoulder would dislocate.

Funny story, Ron Guidry, you might know, who was a famous Yankee pitcher, was down as an instructor. And so they kept me after in spring training to try and figure out, like, what's going on with this arm? Because I had one of the best arms in the organization at the time in terms of velocity. And they brought him out to do a workout with me,

and a bunch of the players that always complained about extra hitting, they said, see, go out to feel. field four at 3.30 extra BP. So they go out there and they see me walking out and they're all like, no way. They had none of them wanted to hit off me. So they wheeled the cage up and they've got like five major league minor league pitching instructors and coaches there on the cage. Gidre's behind me and between the cage and the backstop's about 60 feet. And, you know, I'm getting loose and I throw my first pitch and it's like, you know, bounce it comes up, hits the catchery, he's on the ground, rolling around. And Gidre throws me to the ball. Hitter's nervous. Get back in there.

Throw the next pitch and it literally sails and goes above the cage and sticks in the fence 60 feet back. All the coaches are sitting there and they're like this and they all like turn like out of a movie. They turn around and look at me and I turn around to Gidre and he throws to me bow and he gets throw it in between those two. And so they, did exploratory surgery on my shoulder and found out that I'd put a lot of size on to protect the injury, but basically I had stripped the shoulder joint and that at a fine motor skill, that there was no way to repair it without doing a big shoulder reconstruction and limiting your rotation, which basically eliminates your ability to apply force and that ended my career.

So the one thing I always had for me, going for me, which was pinpoint control before I could throw hard, and even when I was throwing hard, was kind of taken away from me with the injury. And I remember sitting out there in the middle of a game, right, when they leave me out there walking 11, 12 guys in a row in a game. And how humiliating that was. But I never let up. I just kept throwing the hell out of it. but I just, I didn't know why I couldn't, you know, control it, right? And I learned a lot in that because it was just nothing I could have ever imagined, like all the work to get me to there and then have that happen was just like, it wasn't to be.

I'm sorry to ask you to relive that, but I really appreciate you doing it. I just think it's important as we shift gears to talk about, the businessman you've become and the initiative you're involved in now, I just really want people to understand that it's not about building on successes, right? It's about building on failure to a certain extent, but I think also trusting in these processes that you learn along the way. So, Chuck, unless you have any specific baseball questions, I want to get us to the real heart of this now.

And I know you're a baseball junkie, too. So last chance, if you want to pick his brain. I'm good, Mike. So then to sum up, you know, we've got a guy who a lot of skill, a lot of discipline, a bad break. And really, that's not unusual, Dan. I mean, how many athletes actually wind up in this situation? Usually all of them, right? At some point, it's Darwinian.

Right. So, yes, I'd say 99.9.9. percent, you know, the one percent that can leave under their own term, or one-tenth of a percent that leave on their own terms are the unicorns. Right. Maybe it's Daryl Strawberry, you know, a victim of his own excesses, and, you know, God knows there's a long list of that. But by and large, it's a twisted ankle.

It's a screwed up elbow. It's a blown out knee, right? And so here's where it gets interesting to me, because I was never a very good ball player. I was okay. What's interesting is, what do you do, right? when all of a sudden your world changes and you take all your passion and all your purpose and you funnel it into something new, you've created a tool that it sounds like could have a real impact and save a lot of businesses.

Well, thank you. And I appreciate the setup because, again, I think it is somewhat instructive. But when I finished baseball, I was living in Tampa and I had the good fortune to give just a quick ramp up. I met the founders of Outback Steakhouse who were, I think, the greatest restaurateurs of their generation. And they're big sports fans and they're still friends today. And I said, well, how hard can it be to start a restaurant chain? I'd done pretty well in my academics and famous last word. Oh, my God, like go out of the frying pan into the friar.

They helped teach me the restaurant business. I started a small restaurant chain and built about 70 stores in 17 states in four years. And I had the blessing of learning at the seat of masters. And so I learned all the systems, process of controls, you know, how to buy, how the supply chain worked. And I burned out, and we sold that. And I vowed to never, you know, be involved in restaurant operations anymore. Got out of that and pursued some other things.

And then a friend and former business partner was a founder of one of the founders of T-Mobile, and he bought a restaurant equipment company in 2010. And he didn't know anything about the business, but he was a big tech investor, an e-commerce investor. And he asked me to sit on his board, and it was a direct-to-consumer-sell. restaurant equipment. And I didn't know anything about that. I realized in the first board meeting, but I learned how Google made all their money. And I said, I love Google, but I hate our business. I said, I can't help you. And he said, well, stay for a while. Six months later, he was looking at a $25 million loss. And I said, well, I can't help you. I don't understand this business.

And he said, what would you do? And I said, well, if you don't want to shut it down, which I respect, I would build a B2B platform and I would take it to Cisco with an S, the largest contract grocer who I knew from a former life, and I would see if we could build a B2B platform for them. So I wrote the strategy and the plan for him and helped him recruit some people. And then he was nice enough to take the shot. And he went and I brought Cisco in and we rolled it out. And they ended up buying it in 2016. But in that process, he did okay.

And it got me back looking at the restaurant industry, which is pre-COVID. far harder than it was when I was running restaurants, and that I thought that it was fundamentally broken, primarily in the supply chain. And so I started to think about how you could change the industry. Tell me if I'm overstating it, but you're trying to save the restaurant industry. And so I guess my first question is save them from what?

From an outdated business model. I think we're trying to help the small business owner at the Corps survive today and hopefully thrive. because they're in a very difficult place, likes of which they've never been in. Well, I mean, help people understand the degree because business is business. It's a knife fight in a phone booth, right?

It's competitive. And the weak guys are supposed to go out of business. But it feels like here this is different all of a sudden, like a perfect storm of stuff. Because, Chuck, you tell me now in L.A., I don't know how many restaurants I've been with you to in the last year, but I can't think of one that doesn't have a sign that either says we're hiring or more often than not a bigger sign that says,

sorry for the crappy service you're about to receive, but half our staff didn't show up. Or sorry, we're closed, you know, or for lease. Those signs, listen, 50% of the restaurants in Santa Monica where our offices are gone, you know, or turned over and there's something new there. A lot of restaurants never recovered during COVID. after COVID. So, Dan, if it's that bad, I mean, it's catastrophic here in San Francisco. It's calamitous in Santa Monica. What's it like in the rest of the country where, look, the cost of living

is a lot lower, right? I mean, everything's lower, but is this different? Well, it may be slightly worse in California because it's a lot harder to run a business here, I think, but about 100,000 plus restaurants closed during COVID. And coming out of COVID, you know, You know, it's the second, the industry's second largest employer in the country, so it matters, right? A lot of jobs. And a lot of them are small businesses like we go to. So today the problem the restaurants have that survived COVID is that they, you know, a lot of people left the industry. They can't find people to work and they got to pay a lot of money for them.

And all their, you know, stuff they buy to make your food has gone up in prices tremendously since COVID. And they can't keep raising prices. because we all have seen it, you know, how expensive it can be, and the restaurants aren't making any more money. It's just that their two biggest expenses have gone up in ways they've never seen, 10, 20, 30 percent. In an industry where a restaurant makes five to 10, right? It's not like they make a lot of money. These people are working very hard for very thin margins. People should know.

My buddy Mike Gellert was on this podcast about a year ago, and he's been a restaurant supply delivery guy, not really a delivery guy, but he takes orders and sometimes he delivers. He does whatever he has to do to keep his clients happy. And he told me one time, he said, not a week goes by where multiple people won't pull me aside and say, hey, I'm thinking about opening a bar. I'm thinking about opening a restaurant. What's your advice? What do you think?

And he told me that never once in 60 years of being in this business, has he ever encouraged anyone. What he does is he looks him square in the face. And he says, listen to me, don't do it. It will break you. It will break your heart. You will fail. Statistically, there's not one ounce of good news on your side. Don't do it. Now, thank God people do, right? Because we have choices today. But it, you know, he's just walking around saying, I told you so right now. Because I can't think of a tougher time to run a restaurant than post-COVID. Yeah, I mean, I think that that's true. And restaurants don't really aren't armed.

They're doing anything about it, right? They haven't labor. They have to pay to get them to show up as best they can so they can run the kitchen or take care of the guests, right? And that costs continues to go up. And the supply costs keep going up. So restaurants don't really, you know, historically haven't had any tools to doing about that, right?

They don't have time to meet with all the vendors. they don't have a purchasing person. They don't have buying power. So the deck is stacked against them. So they've kind of accepted the price increases and hope that at the end of the day, there's money in the bank, right, to pay the bills, right? Yeah.

And it's scary that way, right? Dude, it's terrifying. I mean, when you say hope there's money in the bank, how much money does the average restaurant owner have in the bank at any given point in order to, remain operational? Well, before COVID, going into COVID, the average small restaurant will just say that as a mom and poppet had about 18 days of working capital in the bank, which is very thin, right, in terms of equipment breaks. Especially when it's two weeks to

flatten the curve, you know, like that turned into two years. 18 days is nothing. It's nothing. And the government didn't really have an effective way through the loan program to deal with restaurants. They didn't handle that well, complicated, but 18 days is nothing. A piece of equipment breaks, your register system goes down, these are many thousands of dollars of equipment you have to replace.

So it is really an act of passion, right? That most of these people that we know that are running these things are doing it because it's in their blood and they love it. Shameless plug. Long before she was Peggy Rowe, my mom was Peggy Noble.

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Soon may the noble men come to bring a bottle for everyone. One day when the waitin is done, we'll take a drink and go. Sidebar, a couple beers back, I think it was after the Freddie Gray riots in Baltimore. There was a lot of unrest, and then something else happened, but basically restaurants were shut down for about three weeks. I personally know of 14 that didn't. reopen. So that's what we're talking about. It's like there's so many different things that can screw you over if you're trying to run a restaurant, but the number that couldn't reopen after being

closed for three weeks kind of tells you everything you need to know. Think about how long the restaurants have been dealing with that kind of thing across the whole country. Slim margins and three weeks is longer than 18 days. So it would stand to. That's a lot. That's a I'm trying to say. I can't survive, yeah. Terrible pressure to live under, right? And it leads to all kind of stress and issues that people that work in the industry make it hard, right? A lot of mental health issues and things because it is so stressful, right? And a lot of these people are mortgaging their houses to open a restaurant.

And they don't have a lot of help, right? The bottom line is they don't really have the tools necessarily to help them, right? And that's where, you know, we're attempting to try and help in that regard and solve a problem for them. So you've said tool three times and you've said armed twice. So it's really, I mean, metaphors matter. And it's like, we've talked about this before. But David versus Goliath ends very differently if the little guy doesn't have a slingshot. That's how I think of the tool that you've made.

So just describe it as though Chuck is a small, simple child with no great capacity to track anything too complicated. And Chuck, as you listen to this explanation, if you hear anything that the reptilian part of your brain doesn't fully embrace and then send up to the medulla oblongata and then back into the cortex, raise your hand, and Dan will use simpler language. Copy that. So today, the number one expense of a restaurant is the food and supplies they buy, okay? They don't have buying power. They don't have a purchasing person, and they don't have time because they're busy running their restaurant 18 hours a day. So the only way that they can, you know, find better pricing or new products or new suppliers is they have to take meetings during their operating hours, right? And reps have to come knock on a door, which costs the sellers a lot of money.

And oftentimes that they show up, the restaurateur is busy. Like maybe serving lunch, maybe serving dinner, maybe being a restaurateur. Right, or calling them payroll. And these reps are the reps for the manufacturers, the people who provide the food. For the distributor. These are the distributor reps. that are going out saying, you know, I want to know what's in your pantry at your home, Chuck, because I want to go shopping for you at Costco, right?

But the rep is saying, I need to know what you buy, so I can figure out how I can sell you something, right? That's my job. And so the restaurateur, right, the only way they can do it is to try and take that meeting, and then they have to print off whatever they buy and give it to a rep, and then the rep has to go figure out what they can sell, and then call them up and say, can I come back and see you? And then they give them the stuff, and then the restaurateur has to look at it and see if they think the products are match

and figure out if there's any savings. I mean, it's hours and hours and hours of time. And you would need to do that on a fairly repetitive basis because prices change. So most restaurants would never even attempt to do the work. They just accept the pricing they have and with no way to really verify it, right? If I'm buying a trash bag, it's very different

than if I'm buying a truffle, right? I need to have money to pay for the truffle. So I need to try and buy the trash bag as cheap as I can. So basically, we just stripped that process out and said, hey, if you just put your pantry items in our secure cloud one time by sending us what you buy, and we load it in simple, then it allows the suppliers, the distributors, to see what you need, right, what your shopping list is. And if they come in store, by chance, they know what you're buying.

Or they can just sit there and say, here's the products I can sell you and here's the prices I can offer you. And I can do it from the comfort of my office, 12 or 4. 14 or 16 hours a day, or I can do it digitally, right, like price line and just publish a price. And then the software does all the analysis, right? And where it gets more interesting, so we can run that service for a restaurant that they could never do for themselves that they need to do periodically. So just so I'm caught up, the distributors, because I'm a small restaurant, I've put all my information into your software, and then the distributors go there,

they see what I need. So now they can offer me prices for the things that I need. And it's not just what I need. It's collectively a bunch of restaurants sort of pooled together to get that price lower and lower. Is that correct? Well, that's the second step. The first step is we can do it for you with one restaurant, something you can't do yourself,

right? And we could help you manage that, say, for some of the categories or however, what matter to your business, right? we know how to help you with that. But the second benefit is restaurateurs know each other and through our partnerships and like, we can help you, if you want, pull your buying volume with other restaurants in your area and consolidate that purchasing volume and then take it to qualified distributors, most of whom you may already be buying from or would, and help the distributor sell cheaper

because now they don't have to knock on doors as often, right, which costs them a lot of money. Right. So then what's taking so long for software to transform all of the inefficiencies in the restaurant business, the way it transformed the inefficiencies in the travel business? And I know there are going to be some consequences to this, right? I mean, travel agents don't really function anymore, at least not the way they used to 20 years ago. We're all travel agents. Sure.

Thanks to somebody. We can go on kayak. We go on price line. And at a glance, I can see exactly, I'm flying to New York tomorrow. And I'm on Alaska. And I don't fly Alaska much, but I'm just going to name names. United's flight was three times as expensive. Exact same route, exact same airports.

Now, why they haven't dropped their price to be more competitive? I have no idea. But man, do I appreciate an opportunity to look at one page and see, exactly who's charging what. But my head explodes when I think about the fact that even on Alaska, the odds are I'm going to be sitting next to people who paid something different for their seats. So it's a crazy, crazy industry that I sort of understand. But the restaurant industry is that times a gajillion. So, I mean, wow. Yeah, I mean, the average restaurants buying 450 different unique products, right, from 14 vendors, different people. How do you stay on top of that? And how do you

know how your price is compared to others, right? Everybody would like to know that. But the bigger thing, it's because it's so expensive for that information to get exchanged between the buyer and the seller, right? Yeah. And so by eliminating all that friction, it takes a lot of the selling costs out that right now the restaurants are paying for, right? The great question, part of that question is that restaurants are different. You have to eat the food. I want to parse out. Two different things, right? One is all products aren't equal. So when a restaurateur or chef is thinking about this,

they have menu items that are holy grails, right, that are critical to their dishes that they buy from certain suppliers and be damn the price, right? Because they think it's so important to what they do. But that's still a very small percentage of what they buy in dollars. 70 or 80% of what they buy that comes in the back of the door that isn't mission critical, like trash bags, cleaning supplies, dry goods. all of that, which is most of the dollars, okay, are all made by the same hundred or so

manufacturers in the world, right? Just put in different boxes. So you can't afford that really expensive stuff unless you can save money on this 70 or 80% where we're really focused, right? Yeah. Otherwise, you just got to keep raising your menu prices till, you know, patrons can't afford it. And if we can help you lower your cost, then it allows. the restaurant, the ability to pay more for their labor, something that they've got to figure out.

Something's got to give. Right now it's broken. They can't raise their price. Labor and food supplies are going out of sight. And the only way to solve that is to have somebody intercede on their behalf and help them managing their purchasing using technology, either for them individually or to bring them together to lower costs. So where is the National Restaurant Association? and all this. Where is the federal government? I know a lot of people in this industry, as you know, and none of them got the money they were promised.

It just didn't work out. I've spoken to the NRA before, again, the National Restaurant Association. Aren't they different NRA? But honestly, I'm not sure any less controversial right now because I don't understand what they're doing to help. Well, they're uniquely positioned to help, and to date have not chosen to embrace yet the opportunity.

You know, they're responsible to a lot of different stakeholders, but I do think that they're in position to help, as are others, that are the advocates of the restaurants, the state restaurant associations, and others, right? These small business owners are the lightblood of those, of most of these players, right? They're the most profitable customer to most every distributor. They're the most profitable customer to everybody.

I'm not trying to throw the NRA under the bus. I just know that a lot of people I know in the industry, they pay their dues. They're a part of this association. And it just seems like right now the threat is existential. You know, 100,000 restaurants going out of business that quickly. That was really before inflation really showed up. That's before the supply chain started to crumble. That's before 7 million otherwise able-bodied men just took themselves out of the workforce

and decided, no, I'm not, you know, I mean, it's, I just can't imagine a more terrifying time. I get worked up about it, Dan, because it's so easy for people who aren't in the industry to look straight through it and not see it. We're so used to being able to order in, thanks to Grubhub and DoorDash and Uber Eats, and we're so used to being able to walk down the street. You know, it's not, oh gosh, I hope the restaurant's open. It's, hmm, is it pizza? Is it sushi? Is it a steak? What am I going to have tonight? People have to understand that's all about to crap the bed if something doesn't happen. And Chuck, full disclosure, man, the reason I wanted Dan on here is because three years ago, before the lockdowns, I was over at his house and he told me what he was working on. And I didn't want to be rude because he's there with his lovely family and his wonderful mom.

and I'm just sitting there going, are you out of your freaking mind, dude? You're trying to boil the ocean. It's the biggest swing you could possibly take in the software space. And I just thought, whatever, nice idea, it'll never work. Go on his website now. Go on simple one, two, three. Restaurants are actually signing up for it in real time. It's happening, Dan.

I'm on right now, yeah. 4,600 plus restaurants. 2,600 plus distributors, annualized restaurant purchase volume, $5 billion, over $5 billion. That's a lot of money, a lot of people buying stuff through here. So the question buried in all of this hoopty-doodle is you did it. Like three years ago, you were like, yes, I'm going to push this enormous boulder up the hill. And then you used a bunch of words I didn't understand. But like, it's happening right now.

So credit Mike Marshall. credit your incredibly patient wife. Credit your own bullheadedness. But, I mean, it feels like you could actually pull this thing off. And so my question is, is this exciting, terrifying, or just something you always figured out, just assumed was going to happen? All the above.

Depending on the day, it's always terrifying. But all kidding aside, I think that the industry has to change this will happen. We've spent, you know, more time and resources and think we have a unique experience to solve it. So I think it's going to happen because it has to happen. Again, you're saying it's going to happen, but isn't it already happening? It is already happening. It's just not on the scale. I mean, on massive scale. Like, we're talking about a million right. So that everybody is going to do this. Yeah, I'm talking about like proof of concept and all that's and launching and rolling out is already done, right? Now it's like, okay,

there's a million restaurants. And we think, call it 600,000 of them, right, could benefit from our software. McDonald's isn't going to use it, companies like that, that have had tens of millions to build their own software, right? But shorter people that can spend tens of millions

as we have to build it, people can come in and get the benefit of it. And so now it's about how do we scale as many restaurants because by bringing the buyers together, we help the sellers lower their costs. And it's not, you know, any more complicated than that. Yeah. But let me say the same thing in a slightly different, less charitable way. I couldn't have you on the podcast three years ago because it sounded crazy.

It just sounded, I mean, with respect. I get it. Right? It just sounds like, you know, yeah, I like baseball, so I'm going to learn how to throw it 98 miles an hour. Oh, okay. Well, good luck. Check back when you do it. Well, you did it.

Okay. So you tell me this thing and I think, all right, well, that'll never happen. and then to watch it starting to happen, I haven't introduced you to my buddy, the human calculator. I've told you about Scott Flansberg, right? So this is the same thing to me. Like, Scott was on this podcast like a year ago and told me about his quest to get Lambert Will,

who he believes is the true inventor of basketball into the Basketball Hall of Fame and subsequently move the Basketball Hall of Fame from Springfield, Massachusetts to Herkimer, New York. Now, that's crazy. That's never going to happen. Crazy. Are you kidding me?

Right. But Chuck, I knew Scott from the old days, and I know what certain people can do, jagged little pills who wake up all agitated because the world's not exactly the way they want it. Well, guess what? Last week, the National Basketball Association agreed to put Lambert Will into the Hall of Fame.

Amazing. He did it. Yeah. And so I'm not trying to turn this into a, commercial for simple one, two, three, but you really should try it if you own a restaurant. I'm saying, if there are people in your life who are taking a big swing, every now and then somebody actually does it. So that's why I wanted John, just to kind of frame the totality of what you're trying to accomplish and to give me an update publicly so that if you actually

drag this thing across the finish line, I can take my share of the credit for putting you out before anybody else did. That's funny. I'm as serious as I can be. It is insane. Any idea that is outside status quo, I don't want to use the term disruptive because it's just cliche,

but like anything that is opposite of how something's being done will often be viewed with disdain or depending on who doesn't want, they'll want to kill it, right? Because if you have all the gold, you want to keep it. if you have a process that maybe benefits you, it's just change, right?

And change is happening and technology is changing every industry. And technology is going to change this. It already is, right? We're just attacking it in a very unique way to really attack the supply chain and purchasing and information to help the restaurants survive right now. And I think that that's not to be underestimated. People don't think about it because we see restaurants being busy going out. but their costs are continuing to go out of sight.

Most of them are not making any more money, even though they may be doing more sales. But if their sales fall off, they're more vulnerable than ever to go on out of business. Their fixed costs are out of control. Yes, but if you don't have any great sympathy for the plight of the restaurateur, if you don't have any real empathy, okay,

then you still have skin in the game. That's really the final point. I try to the extent I'm able to do this to make people relate and empathize with the farmer. And maybe I've focused too much on this end of the food chain because I really do believe that the fact that one and a half percent of our population is feeding 330 million people three times a day. It's a freaking miracle.

Yep. Right? And the problems that all farmers are surrounded by every day just strikes me as Herculian. But I don't know that I've thought fairly or indebted. enough about what it takes to open a restaurant and to stay open in this day and age. But you have, and so for the sake of the hundreds of millions of people who don't own a restaurant, tell me again why they should give a damn? Well, if you care about your local restaurant down the street and them staying in business,

right, because you enjoy eating there and you build a lot of great family memories, all the reasons we love our local, we love all restaurants. But then they're in a very difficult place, and it's going to get a lot more difficult, in my opinion, in the next 12 months. They're not out of the woods with COVID. Inflation is real and is impacting your favorite restaurants in a way that you see it when you go to the grocery store. And they can't afford to keep raising prices to us as consumers walking in. So if something doesn't give, there'll be a fundamental restructuring. Restaurants will close.

So if I own a restaurant, I should go to simple one, two, three.com and check it out. If I like to eat at a restaurant, and I know the manager of the restaurant that I like to eat at, I should tell them to go there. Is that right? Yeah. I mean, we're going to offer our software for free to help restaurants right now, and we know they're in a difficult time, and we know, frankly, the industry is in a difficult time. Everybody's struggling. So it'd be great to help us build the community of restaurants who can come together and help each other. I mean, this is the ultimate,

the restaurants coming together to help each other is a really great thing and doing it on their own without any assistance from the federal government or anybody else. It's them coming together

to help each other. That's it, man. No one is coming to save you guys. You know, I'm talking now to the local restaurant. No one is coming to save you. The feds are not going to save you. Your customers can't afford

to pay whatever you need to charge them. them, the workforce is not going to rise up and start working for you at whatever wage you can afford to pay. None of that's going to happen. The National Restaurant Association is not going to save you, right? If you're David, the business is Goliath, my friend Dan has made a slingshot, and, you know, I swore I wasn't going to make this a commercial, but let's call it a PSA.

If you're in the business and you want to arm yourself with a tool that just might work, take it from Dan McMurtry, a guy who said, no, no, step here, throw there, do it differently, trust the process, get your surgery, lick your wounds, reinvent yourself, and then crawl back in the ring, quit making excuses, and boil the freaking ocean. I don't know if it's going to work, Dan, but I swear to God, if anybody can do it, you can. We're pulling for you. Well, thank you. We can't do it alone, but we're here and we're having a lot of success, and we're looking forward to having more success of helping people be more profitable and keep the local restaurants open.

That's the thing. That's the thing, man. Chuck, you said it right. It's a hell of a thing, you know. It's one thing to see help wanted signs everywhere, but it's another thing to say closed. Just out of business, man. And I'm a big fan of anybody who's doing anything in any industry

to try and help people. in that situation. So keep at it, Dan McMurtry. I'm pulling for you. Thank you. Thanks, Chuck. Thank you. And I'm assuming I can get a free meal out of this

at some point in the future. Yeah, next Thanksgiving. Fair enough. All right, man. Adios. Bye. If you like what you heard, and even if you don't,

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