Masters Series Transcripts: Frunch Nazzari (Founder at Rooftop Cinema) and Thin Neu (Co-Director at Cupcake Central) — How I Built My Business

Camille Monce —  December 26, 2018 — Leave a comment

There’s a lot of nitty-gritty that doesn’t always come to mind when you think about building a business – technical, legal, marketing, and more. In this podcast, you’ll hear how two successful founders navigated some relatively uncharted waters.

Frunch Nazzari is the founder of Rooftop Cinema on the top of Curtin House in Melbourne’s CBD. Since 2003 Rooftop has been showing movies under the stars with the best views in town. Frunch shudders when he thinks about the moment in his mid-twenties that he called the city council to get a permit to show movies on the roof.

For Cupcake Central Co-Director Thin Neu, building a business is a bit like following a recipe. His advice is to have the right people in place to help you and never cheap out on getting good advice.

Disclaimer: Transcripts may contain a few typos. Similar sounding words can lead to them being deciphered wrongly and hence transcribed likewise.

Serpil Senelmis: For WeTeachMe this is the Masters Series where industry professionals share their secrets to business success. I’m Serpil Senelmis from Written and Recorded. Over the past few episodes of Masters Series, we’ve heard some amazing tales from founders who have worked with family, friends, and passion. In this episode, we’ll get into the nitty-gritty that doesn’t always come to mind when you think about building your business, technical, legal, marketing, and more. For Cupcake Central co-director Thin Neu it’s a bit like following a recipe.

Thin Neu: I think I attributed the first store opening to having all those good people around me. The CFO of the company, give me a hand in terms of determining my finances. The graphics designer next door gave us a hand developing our business and our lawyer, he’s one of my best friends to this very day. Looking out for us in the backgrounds I think a lot of people neglect to look at those key areas.

Serpil Senelmis: You might remember we heard from Thin’s co-director, Sheryl Thai in episode eight of season two. Yep. Here’s the ex-boyfriend, and we’ll get to hear his side of the story. But first, we’re going to go to the movies. Frunch Nazzari is the founder of Rooftop Cinema on the top of Curtain House in Melbourne CBD. Since 2003, Rooftop has been showing movies under the stars with the best views in town. In this fireside chat with WeTeachMe’s Wayne Lewis, Frunch says his greatest fears are his greatest motivators.

Frunch Nazzari: I’m very proud of Rooftop, it’s actually the jewel in my crown. It’s a really special business and how it started was a little bit serendipitous. I started off my first job was as a nightclub promoter when I was a teenager.

Wayne Lewis: Second one in the series.

Frunch Nazzari: There you go. Yeah, I started off in clubs, right? So as a little promoter hustling and getting people to come to my night and doing all that kind of stuff, and then at the same time, I was finishing up school and I ended up studying media, planning, and buying, whilst being a little hustler, doing events. And slowly I evolved in my career as a promoter and started touring and doing all that kind of stuff. And at the same time, while I was studying, it was a fantastic place for me to learn how to become my own kind of boss, effectively as a sole trader. You know, I got to the end of my studies and wondered what I was going to do. And I got approached by the guys of Moonlight Cinema, to join their sales team and, and work with them for three and a half years. And it was a really great experience. And I met my business partner that I started Rooftop Cinema with Barry Barton. He always spoke to me about the moonlight offering and we had these visions about what cinema should be and what the audience wanted and, and we often had a fantasy of creating a space for people like ourselves. And the idea of what a beautiful medium cinema was and beautiful environments that it could be within and we thought about doing a cinema on a rooftop and Barry was so obsessed with it, he actually would go to the Rialto observation taken and look for rooftops. Long behold, serendipitously one day, we were having a conversation at a local cafe, which was close to Barry’s office after he left to Moonlight and someone said, you should check out a roof and the rest is kind of history.

Wayne Lewis: You have a lot of focus on understanding your customer. So was that key to those initial stages of building the business?

Frunch Nazzari: Yes, I don’t really buy into a lot of the ethos around lean startups and all this kind of stuff that’s out there at the moment. And you know, you’re going to strap in and go hard and do all that kind of stuff. I think it’s very important that you really feel your business and you have an understanding of the community and the network and create your own network. For me. I’m a media person. I come from an events background and that’s why I talk about my promoting background. Coz’ I learned how to hustle doing events. And then whilst studying media, I learned the value of an audience and learned the value of the community and how to commercialize that. And that’s really important. That’s where we saw the gap for rooftop cinema. Obviously, I was out selling cinema for the Moonlight guys. And I had a firm understanding of that I’m what it took to actually create revenue for that business. But I was also understanding a community and we saw a gap in the operating profit because Moonlights a proposition for 2000 people rooftops a proposition for 200. So we understood the value of what we’re trying to create, but I’m one who believes in community and audience

Wayne Lewis: And how do you develop that community?

Frunch Nazzari: It’s a great question that takes many different shapes and forms. I must point out that when we started Rooftop, our first media partner was Myspace. Best to give you an understanding of like,

Wayne Lewis: Not everyone’s gonna remember that.

Frunch Nazzari: Yeah, does anyone actually. Well, Myspace was a first social media platform and it’s just a very interesting way of being explaining the world then. How you build a community, I put my brand hat on. You’ve got to really have a clear understanding of what your proposition is, you’ve really got to stay true to what that is. And I think the clearer you are with who you’re catering for, the more magnetic you become. Creating a community in this day and age is very difficult to create signal over noise. There’s a plethora of information. It’s all fighting for everyone’s attention. So building a community is very tough in this day and age, and that’s why you’ve got to stay true to what you know.

Wayne Lewis: In the early stages, what was some of the main challenges that you were faced with? Obviously, you had 200 capacity, was that something that played in your favor or…

Frunch Nazzari: The main challenges that I faced initially when building the business were probably more with myself. The market barriers, there was obviously legislation and stuff like that. Can you imagine here I was this young kid who knows nothing about nothing? I rang up the council and was like, hey, I want to lodge a planning permit to put a cinema on a roof. And they said, a cinema are on a roof? And they were like, what do you mean? I said, Oh, we want to put a cinema on top of a roof in the city. And they’re like,I don’t even know who to put you through to. I don’t know how to do that. So apart from the obvious a lot of the barriers come from within yourself, like the fears, the insecurities, and all that kind of stuff. So I come from a place where my family were entrepreneurs come from a family of immigrants. We had nothing we came from nothing. My parents got me through school, I got a great education, I kind of afforded it based on what they gave me that opportunity to do things. So I tried really hard to impress my parents and be proud which you still do have fears and stuff. And so that’s what the biggest challenge I think in starting a business is that you’re going to fail. The beautiful thing about being young and starting a business is you don’t know what you don’t know. And so ringing the council and asked me the lodge a permit for the first time on that kind of stuff. If I had to do it now probably be quivering now. I’m going to put a cinema-like they use a very different approach. So there’s a few things but the biggest challenge I think, is yourself apart from all the getting liquor licenses and getting this but I had a great experience in that context that we actually kind of changed the city. Rooftop Cinema was a catalyst for change, Melbourne went from the laneways to the rooftops based on what we did. And we worked with the city in the city of Melbourne. And that time was quite progressive, not saying that it isn’t now, but was quite progressive. We actually got awarded grants, and we kind of work together to build this and I knew that it was something special is an interesting time, but the challenges, I think, from any business yourself. You know, I can vividly recall when I was saying to my father that I wanted to do this. He kind of said to me, you’ve spoken long enough about it. And he was about to get on a plane and go overseas. And he said when I come back I want you to have done something about it. The one thing I want you to have done is just make sure you don’t look back, make a decision, and don’t look back, look forward. And that’s something that I think is really quite poignant. If you’re committed to a business idea. You’re the barrier. I mean, there’s obviously a lot of obstacles Don’t get me wrong, and in Australia doing businesses very tough. But you’ve got to back yourself to have the ability to think through things. And that’s where we talk about the insecurities that emerging businesses like I can remember very vividly another cinema operator was attending the cinema. And he was bad-mouthing us. And I can remember he’s like, this is never gonna last, you know, you can’t run cinemas on a roof. How do they get the footfall and all this kind of stuff? And it’s so funny because recently they have opened up a cinema and put a cinema on their roof. And it’s like, like, knowing like, it’s just, it’s just crazy.

Wayne Lewis: So how did you deal with Philly yourself? Were you scared about what their thoughts of failure are? What your thoughts of failure?

Frunch Nazzari: Failure is the same for everyone. We are all scared of it. You know, there’s this whole thing, don’t be afraid to fail. No, be afraid to fail. My greatest fears and my greatest motivators. And you’ve just got to be able to recognize that and drive that. And I don’t want to be all like Tony Robbins on you or anything like that. But I’m just saying, like, you’ve got to be able to balance that point of when you’re taking something or an idea, like, I’m gonna put a cinema on a roof in the city. And people just go you crazy, what are you doing? You’ve got to understand that when someone says that you’re crazy not to go, oh, maybe I am crazy. And I’m not going to do it or someone gives you an opinion to kind of be able to back yourself and go oh, it’s okay? And then understand, measure your failure. Don’t take stupid risks, like just be rational and contextualize a lot of what you do, then, my family, their support is unwavering. So that was also a relief for me just knowing that if I was to not succeed, that there was a non-judgmental support network that I couldn’t fall back into it. And not everyone has that. You know, that’s my circumstance. And that’s unique to me just rationalize the context of where you’re at, like, I was living at home at the time, and then I moved back home. So I didn’t have to worry about things like rent and all that kind of stuff. And my mom fed me too much always being an Italian mother. But I had a support network.

Wayne Lewis: And thinking about how you deal with decision making today. Is that fear still there? And how do you deal with it?

Frunch Nazzari: I’m petrified right now. I think I might fuck this up. I’m always got this fear of failing. In every decision. You do look at the pros and the cons. We can’t just be completely optimistic and think that everything is going to be fine every time.

Wayne Lewis: And what does the future hold for the Rooftop Cinema?

Frunch Nazzari: More of the same. So when I say more of the same, I’ll give you a picture into why didn’t we go and do multiple cinemas because we were at a time when there weren’t many around and I made a decision amongst the partners and the businesses and everything like that. Bigger is not always better. And it’s not about growth. I just want to contextualize that for you guys. And when you’re starting your business be okay with small, but I will push something on you try and be the best at what you do or try and do something of quality. So I will say that I think that rooftop cinema is arguably the world’s best outdoor cinema experience. And I challenge people to find a better outdoor cinema experience in the world with what we do, and that’s part of our strategy is to make our cinema better. So many years ago, when we looked at can we do this at scale? The level of investment was significant, and the ability to deliver the service was difficult. And then when I recognized what my skills were, yeah, okay, I was a little hustler promoter and I understand media so I can sell sponsorship and advertising but I wasn’t a hospitality operator. So when I looked at that, to launch the business to the level that we needed to, I needed to be a hospitality operator, which then would send me in a different track. So I stayed true to what we were about, which is very important. And then I looked at where did I want Rooftop to be? And I didn’t think that I could deliver the best outdoor scenery experience in the world or at a level that it was at scale. So I said, I’m not expanding, we won’t do that. And we were looking at sites and Sydney and doing that. And so I completely pulled back and focused on how do we make it better, and Rooftop were obsessed with it. So we think about it from a full sensory perspective. So we think about how can we engage every sense, the look, the touch, the taste, the smell, the sound, all that kind of stuff is really what we’re doing. And we focus on that with rooftop cinema. So it’s about telling a story, but it’s also about engaging the senses. So what we want to do is more of the same and how can we be the best at what we do and deliver an experience which is really unique.

Wayne Lewis: When you were making those decisions around the option to scale, did you tap into some advice? Were you kind of making those decisions by yourself? Can you walk through that with us a little bit?

Frunch Nazzari: I have built a network of advisors around me. So I had an advisory board that was around me. And I have confidants, mentors, all that kind of stuff. Here, I tapped into everyone. I often argue with them, because they tell me what I don’t want to hear. And that’s the honesty in business. But then once again, you’ve got to rationalize that you’ve got to contextualize it. What does that mean to you? And how do you navigate through that? But we made some really profound moves in that period that set us up for the long term. You know, we’re 13 years into our business now. And that’s great. I’ve never done anything for 13 years. Even my wife I’m like, this is I’ve done this for

Wayne Lewis: Hopefully she’ll outlast the business, right?

Frunch Nazzari: Yeah, she’s. she’s 12.

Wayne Lewis: Guys can give round applause for Frunch Nazzari.

Serpil Senelmis: Now that’s an out of the box takeaway from Frunch. Bigger is not always better. It’s okay to be small. If all that talk of movies has got you hankering for the candy bar, we’ve got a sweet treat coming up for you right after this.

Ed Guy: Masters Series is presented by WeTeachMe with a goal of being the world’s biggest school without campuses. WeTeachMe is the perfect meeting place for students and teachers. Find face to face classes near you at weteachme.com. This podcast is produced by Written and Recorded. Podcasting is a way to build your business by reaching, educating, and entertaining your customers. Find out who’s listening at writtenandrecorded.com. And now back to the podcast.

Serpil Senelmis: Thanks, Ed Guy. In episode eight of season, two Sheryl Thai of cupcake central told us how she turned her passion into her business. She said former boyfriend and co-director Thin Neu was instrumental in building the business. Now you get to hear his side of the story. In this fireside chat with WeTeachMe’s Wayne Lewis. Thin says every entrepreneur needs some guidance in the early stages of business. So pay for good advice early on.

Thin Neu: To give you guys a little bit of background, I’ll actually start from the very, very beginning back when we were refugees from Cambodia, so I’m Cambodian Chinese, but my parents were refugees from the 80s when we migrated into Australia in the early 80s. So to give you a bit of an understanding of my background I’m not from an entrepreneurial family or anything, I’m actually from a very conservative family who’s very, very risk-averse. And they don’t like taking risks. They don’t like going out and doing things. I live a very typical, what would you say Asian life where they expect you to go to school, go to uni, get a house, get married. That’s it. And I can see people laughing up there because they can relate. So that’s the general typical life cycle, a life journey of a young Asian male like myself, but things kind of change. When I reached 25. I did the whole thing early up until about 18 to 21, actually 22 so I went to uni, I got a degree in Business Information Systems. I worked in logistics is one of my first jobs where I learned a lot of skills. And then I moved from there to pause IT systems, which then taught me the next set of skills that I didn’t actually know that I was actually learning to become an entrepreneur before I even knew I was an entrepreneur. And then from there, I went and became the IT manager of a franchise company Paradise Retail Holdings, which was a company that actually owned multiple different businesses under one umbrella company. They earned a chain of 150 pet stores, cafes, they own steak houses. And that kind of opened up my eyes to saying, you know, what, how did my manager or director do this? How can you own all these different businesses and then run them effectively and efficiently? So from there, that’s where I kind of had a lot of learnings and kind of opened up my eyes in my work world to springboard me to the next phase where it was opening Cupcake Central. But even before that, I met a lot of people within the company that actually helped me get to where we are and open the first Cupcake Central. Also, my business partner Sheryl started off in markets, and then when I came along, I will look at the idea and the concept I got, you know what, I think this is gonna work because when we opened, it was eight years ago, there was an emerging market for cupcakes in the market. And then I said, You know what? Let’s do it. Yeah, I think this is a good concept. I think it was gonna do well. And then we decided to open up our first store in Hawthorne. But it wasn’t as easy as she thought, in that early period. You know, there was a lot of mistakes made and coming from it. And both of us coming from it backgrounds. We don’t have any hospitality background. I don’t know how to make cakes, but sell cupcakes all day every day. And I didn’t know how to make coffee or do anything at all those. But I think I attributed the first store opening to having all those good people around me. So having the CFO of the company, give me a hand in terms of determining my finances. The graphics designer next door gave us a hand developing our business and our lawyer, he’s one of my best friends to this very day, looking out for us in the background. So I think a lot of people neglect to look at those things before they start a business and jump into those key areas. And it’s good to become and go out there. And I’m an optimist. So I love going out doing new ideas, being creative. But I guess through business and the mistakes that I’ve learned, we’ve had to pare back in everything and look at the risks before you do everything. If you screw it up, how much is this gonna cost?

Wayne Lewis: Looking at the customer a little bit as well. And so and there’s a lot of similarities between yourself and Frunch speaking before focusing on that customer experience. Can you talk about how you make that special and…

Thin Neu: Yeah, it’s actually very funny because when I first wanted to actually open Cupcake Central, I said I didn’t want to open a pink frilly cupcake store that’s just targeted to women. I go if we’re going to open up Cupcake Central, it has to appeal to both demographics. And I think there was a niche in the market back then. But every single cake stores just like pink and frilly and alienated men to come into the stores. And I said when we wanted to do it, we want it to be fresh, we wanted to be cooler. We wanted to have a more masculine cupcake brand than more than a feminine brand. And working with the branding guy at the very, very beginning, which was introduced to us his name was Matt from The Anatomy, he helped us a lot in terms of how to brand cupcake Central Stores and all the assets that we produce. And he asked us, are you a female brand? Are you a male brand? And we said We’d rather be a male brand. So 60% appealed to men and 40% appeal to women. And that kind of dictated how we created and crafted our brand and how we communicated. So you’re not segmenting out that section of the market.

Wayne Lewis: Was it harder opening the second one to the first one or?

Thin Neu: I think actually the third one was the hardest one to actually build? Because that’s when we pivoted our concept into kiosk models. So our first three stores were all large format stores which were ranging from about 60 to 80 squares. And that was kind of easier to do because we had space. But when we wanted to go into a kiosk format, trying to condense 80 squares down into 20 squares, that was a little bit more of a challenge. So you’ve got a quarter of the room, but you have to actually produce the same amount of cakes and work in that space. So that was more of a challenge back then, you know, we did it. We did some research, we worked around it, we figured it out. But that was more of a challenge when you’re just trying to shift your business model. Yeah.

Wayne Lewis: Are you into the numbers, your numbers, your numbers guy? Yeah?

Thin Neu: I am the numbers guy. Funny or not, I probably failed accounting twice in university, and then now I’m responsible for all the finances in the business. But numbers drive the business’s action and strategy. So I look at the numbers every single day and numbers, what I need to look at to determine how the business performs. And my job is to decipher the numbers. So it tells a story. So, you know, you might have your cost of goods running at about 35%. What does that tell you? There’s an inefficiency somewhere. And then you start to dig deeper into those problems to go. Where is the inefficiencies? Actually what is happening here, then you might actually find out it’s a problem somewhere else that’s caused by a supplier that is actually causing you these inefficiencies. But yes, numbers drive everything. And I think that’s the biggest thing for our business or any other businesses that I work with now. I’m very, very big on numbers.

Wayne Lewis: And how do you then communicate those findings? So are you involved with communicating that to the staff members and the management?

Thin Neu: Yes, so because we manage a lot of different stores, we always have rituals towards the business. And we set up these meeting structures that we’ve been doing since, I wouldn’t say that day but until we got to about five stores, we had to put different processes and reporting into the business so that we could understand because you can’t be at every single store all the time. So every Monday we meet with all our management team, we look at pnl’s we look at store performance, What went wrong through the week, and we go through our minutes, we give him action items, we make people accountable for their roles. But to say that now, it sounds easy, but it took us a long time to get to that point.

Wayne Lewis: Three years was rounded looking past the fifth store that freed you up to think more strategically and or is it just made things…

Thin Neu: Made a little bit more difficult for ourselves because the business model wasn’t able to scale to a certain point. And because we were having multiple business models across different stores, it made it a little difficult to manage. And I’m in the process now of looking at how to reinvent these models to become a much much more scalable business. So we are looking at the problems and fixing them as we go now too. So we have a strategy coming into the next six months to a year, and we’re addressing it and then we’re actually putting the structures and executing the plan to actually be able to grow the company now.

Wayne Lewis: If you could go back to your 25-year-old self. What would you say to yourself?

Thin Neu: I think, you know, being younger, I was probably a lot more naive in terms of the way I did things, I would be very, very gang ho. So if I was go back to myself, I would say, you know what, pay for good advice early on. Sometimes you cheap out on advice, and it causes you more mistakes and more money in the future, you know, get good legal advice when you’re doing your leases and stuff. I’ll give you an example. If I didn’t have a good lawyer, helping me out at the very beginning is like my best mate now, I’d probably be paying 10 to 20% more on my lease, I wouldn’t know about fit-out contributions where they give you money from the shopping centers to actually help you build stores, which you have to be very, very careful about how do you reduce down bank guarantees, you know what I mean? How do you get your employment contracts right so that you actually don’t make these mistakes. So getting good advice early on, and sometimes if you have to pay a little bit for it, just get it because it will save you in the long run because you’re looking at the short term versus the long term.

Wayne Lewis: Once you’ve got this strategy out the way in the next kind of six months to a year, and you’ve worked on that, what’s the overall grand vision after that?

Thin Neu: I think with Cupcake Central, we’re going to keep growing it. Yeah. In terms of stores, probably not going to grow any more stores, but I think we’re going to grow the brand. Our key focus this year is to keep building our tribe and our community. We have a big tribe. You know, we have about 60,000 70,000 people on Instagram, I think about 30,000 on Facebook, and they’re all engaged. So I think this year, our main thing is to actually introduce more products for them. They want more from us. So we’re listening to our customers. So we’re going to give them more you know, they want merchandise, they want books, they want classes, they want cakes, they want all these different things. So our next step would be building the product lines for Cupcake Central building his brand and building his merchandise. We don’t need more stores to grow.

Wayne Lewis: Excellent. So guys, can we have a round of applause to Thin of Cupcake Central.

Serpil Senelmis: Some useful advice from Thin, listen to your customers, their feedback is really important. And don’t be afraid to ask questions when you don’t know the answers. Nobody’s going to bite your head off. Thanks, Thin. And thank you for Frunch as well. Next time on Masters Series failure and success, my business journey. Well, not mine specifically, we’ll have a couple of founders to explain how failure is actually a learning experience on the road to success. Until then, I’m Serpil Senelmis from Written and Recorded and for WeTeachMe this is the Masters Series.

About Masters Series by WeTeachMe

Masters Series is a show about inspiring entrepreneurs, creative thinkers, and visionary dreamers, and the stories behind how they built their companies.

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