The Interview: David Steele The Inner Workings of a Serial Entrepreneur

david steele

When Michael Gerber first published his bestseller “The E Myth in 1995, he introduced a new way of thinking about a founder’s role in successful companies. As Gerber lays it out, entrepreneurs must be the visionary for their company, not the manager or the worker. A good team and a good model is everything.

What Gerber introduced in the 90’s, San Francisco’s David Steele is re-envisioning now. He is expanding his list of businesses around a firm belief in collaboration and great—sometimes “magical”—preparation to get things done.

As of this article’s writing, David is either owner or managing partner in at least 11 growing businesses. His resume is, in a word, dense.

He is the co-founder and CEO of San Francisco’s One Wealth Advisors — a private wealth management firm. He is managing partner at Ne Timeas Restaurant Group which owns and operates a number of restaurants in the Bay Area including flour + water, Central Kitchen, Salumeria, Trick Dog, Cafe Du Nord, Aatxe, and The Swedish American Hall. He is managing partner with Noise Pop Industries which focuses on promoting San Francisco culture through a number of music and cultural events. He’s also managing partner for Moxie Yoga — a budding yoga studio with three locations to date.

He’s an active mountain biker, passionate mixed-media artist, board member for two nonprofits, playwright, and all around inspirational guy to get to know. We wouldn’t be surprised if he were secretly great at spear fishing either.

With all of his success, it would be easy to assume that David’s origins were extraordinary or that he’s somehow gotten here through sheer luck. The truth is, David’s story is one with very humble beginnings. He owes his success not just to hunger, vision and planning, but also to surrounding himself always with the right people to help him grow.

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We listened in as David and his friend—Trumaker CEO and Founder, Mark Lovas—shared a conversation about how his background, drive, and philosophies on people have paved the way to a pretty remarkable career.

 

Mark: How did all of this start? You had a regular job. You had a career.

David: It really starts back when I was working in restaurants in high school and college. I worked in restaurants for 8 years. I put myself through school. I mean I didn’t have any money at all… we were broke.

So, because I grew up broke, I wanted to get out of college and go make a little dough. I went to go work on Wall Street with the objective of making money. I found myself unhappy, so I converted my business from being a stockbroker to a financial planner, which was a lot less money but a lot more meaningful and “enough” money.

I wrote my business plan for what ultimately became flour + water in my late twenties and never did anything with it. Just had this hypothesis that there could be an intersection — a healthy tension — between artisanship and best practices/financial discipline in business.

 

Was the original idea exactly like Flour + Water or was it to build a restaurant in general?

Well I had to do the restaurant. It had to be a restaurant. I went to work on Wall Street and I hated life. I converted to financial planner, built that practice up, until it was — as I like to call it — a “hub” for what would be eventual spokes that would become the wheel. And that hub was all but guaranteed to be successful, sustainable, provide me with a stream of income that allowed me to maybe take some of my focus and put it into other areas.

 

So what was the first thing you did? How did you actually get this rolling?

Well, I didn’t know at the time that I had a philosophy about partnership and symbiosis. Collaboration. The power of that. I just sort of had instincts about it back then.

I’m a people person, I love people, I work with people, help people, I love trying to empathize with and for people. It was very natural for me to think that I would do that with partners. So the first instinct I had with flour + water was “let me go get some operating partners.”  

 

Okay, so when did you finally get over the hump of taking initiative to get it done?

I had a breakup. I had been with a woman for nine years. So when we broke up, within a year I’m like, “Time to do it. Let’s do this.”

 

And then who did you call?

I met David White, who owned and operated a restaurant called Nua in North Beach. It was a fantastic restaurant — super standards — which I later found out was not succeeding financially because it was in the tourist hellhole of North Beach. Everybody was like “why are you going into business with a guy who failed at his last restaurant?” I said “Exactly. Because he knows what works and what not to do now.”

 

So how did you and your partner get things started then?

We finished the plan. Made it magical. Beautiful, gorgeous business plan. Instinctively I wanted our business plan – which I was using to raise money from investors – to be a representation of this magic we were going to try and build. So I wanted a magical investor deck, for lack of a better term.

Thomas McNaughton [our eventual chef] answered an ad we put on Craigslist. He was in Italy working in a pasta factory in Bologna.

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Wait, he answered an ad from Craigslist?

Well, he’d been in Italy for 6 to 12 months and he knew he was coming back and he needed a job. He was 24 years old and David White had worked with him at a previous restaurant.

We sent him the investor deck and when he opened the investor deck he apparently said “holy shit these guys have their stuff together.” We didn’t, but we looked like we did… I guess looking back, maybe we did?

So we hired Tom and he will tell you, without that investor deck looking like we had our shit together, no way he would have come to work with us. He could have worked anywhere.

It was so successful that immediately – just months after it opened – I went down the street and signed three more leases, not knowing what businesses we’d put there. Now we have Salumeria, Central Kitchen, and Trick Dog.

I just went to Dave and Tom and said, “Hey, we have a restaurant, how’d you like to start an organization?” We signed the fucking leases and then we wrote the business plans.

 

Because you knew it was a great space?

We knew the neighborhood was going to blow up and we knew that we could be a self-fulfilling prophesy. The neighborhood is going to blow up, let’s make sure the neighborhood blows up by doing what we do.

 

So one thing I’m picking up on is that it seems like you’ve been able to build all of this with great partnership.

It’s all about the partnership. I’m shipwrecked without my partners.

 

Has that always worked out? Has it always been a smooth path?

Yes, actually, it’s always been a smooth path.

 

You just knew they were the guys to do it?

Yes and no. But the thing is, it’s always been a smooth path — smoother than most — because we’ve had each other when it hasn’t been smooth. Those things that other people would experience on their own without strong partners.

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So how did you get involved with Noise Pop?

One of the investors who gave me the money to open Central Kitchen, Salumeria, and Trip Dog was this guy named Jordan Kurland, who is one of the core founders of Noise Pop. He and I became very fast friends. He kept saying “hey, can you help us with Noise Pop? We’ve been around for 20 years and haven’t made a ton of dough and could use your help.” I was resistant at first but over time I realized that even though I didn’t have quite the same itch to scratch with music as I did with food, it was still an itch i wanted to scratch. So it just sort of fell in my lap.

 

And how many days a week is that?

It’s not days a week. It’s hours a week. It has to do really with my goal of being a mentor to the general manager of Noise Pop, this guy named Dawson Ludwig, who we made partner. It’s really to be a mentor to him and provide him with guidance and direction which allows him to then move the company strategically in a way that we wrote in the business plan – which we wrote together.

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One of the coolest things that this idea of collaboration has brought to your personal life is the idea of “Boys Night Out.” Tell us about that.

Well, I moved to San Francisco around the time I realized that my stock broker business was really just being a salesman. I was a parasite on society just selling people shit that they frankly didn’t need. I converted my business to be a financial planner which I believe is a valuable role in the world. So that was a life-changing sort of self aware moment for me.

Around the same time I realized I didn’t have very many friends. I was sort of looking more like my father who had no friends and I didn’t want to be like that. So I went to my brother {who is also my business partner) and eventually convinced him to move here. My best friend Michael Gaines – who I’m writing my book with – I convinced him to move out here too.

So it was the three of us so I said “how about we agree to have a beer together for the rest of our lives?” It started on Thursdays. Every Thursday. No matter what we’re doing, let’s just promise to have one beer together for the rest of our lives. And when we find other people who we find interesting enough to join the group, we’ll have them join. That started almost 20 years ago.

As we got older and had a little more money we started wanting to do dinners instead of beers. We started with cheap Indian and Thai food but now we have a little more money so occasionally we step it up a notch.

 

What happens in these nights out?

The people who are not welcome are those who are explicitly there because they think they have something to gain other than mutual love and respect for each other. With that said, a shit ton of collaboration and business comes out of it. Motivation… support… emotional support… whatever. It’s just, we’re brothers. There’s all kinds of cross-collaboration. But explicit business development talk never happens – there is never that intention.

 

So if you had to think of the Measure of a man, how would you define that?

Simply how he helps people.

 

What’s something you’re currently trying to grow on, how are you trying to be a better man?

The most recent thing I genuinely, consciously worked on was my relationship with my brother. I spent a year in therapy really trying to… I was a big brother to my brother which is not always a good thing. As my business partner, in the business environment,  I wasn’t seeing him as an equal and peer, and that’s a problem. Because he was deserving of being treated as an equal and a peer. I had to deal with the fact that I hadn’t been treating him as an equal or peer for a very long time.

That took literally years. I now generally think it’s all overcome thank God. My fault, not his.

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You do a lot of things, where does money fit into all of this?

I make too much money… I do. I believe there is such a thing as too much. The world could have more people that realize there is such a thing as too much.

Whenever our businesses grow, the first thing I do in my partnerships is give up a portion of my interest to my partners. They naturally have less than me because I started them, but the first thing I think about is giving. And I give away a pretty big portion of my income to charities too, mostly around the arts. Specifically theater and visual arts.

I keep working my ass off to grow these businesses because I love doing it. And I think that makes the business stronger, which makes their neighborhood stronger, and culture is stronger, and my partners are stronger, and my employees are stronger.

By the way. I like nice things but I don’t think one should be able to have anything they want. I think there is a disease especially in the Bay Area with this cash-out liquidity event moment where somebody gets richer than God. I’ve observed people like that. Most of them are miserable. And I’m really nervous about being out of touch and miserable.

 

Are you nervous about giving up some of the energy you put towards your career as you take on all of these new things?

No. Maybe I should have been nervous? But it comes down to my ideas around partnership and my ideas around personal scalability. You give up bigger pieces of the business but I think you get partners who are really dedicated to helping you and respecting your role

I think and talk and I generally don’t do. If you give up a big piece of the pie and be generous in that way, they’re willing to have you think and talk and not always do. I’ve always trusted that.

The more that leaders talk and think and tell people what to do, the more they become personally scalable. I have a saying: I don’t want to personally “do” anything. I want to think and talk. The more I can get people to “do” based on my thinking and talking, the more scalable my time becomes.

 

But you’re also, of course, starting and planning. You initiate. You sign the lease. You raise the money. You pull together the resources – you collaborate.

When I do business consulting, the first thing I talk about is the power dynamic between the leaders and creators and the team. It’s something that really needs to be thought about consciously.

So when somebody is starting a business, I make sure that that person has a fully vetted business plan that is attractive and impressive. That way when they go to hire people and bring on partners the power dynamic is healthy between the person who started and the person who is going to work with them going forward. If it’s not, there is going to be questionable leadership. That power dynamic has got to be defined with expectations and comfortable roles between the leader and the team.

 

And what’s your philosophy about ultra wealthy clients?

You only asked me that because you know my answer.

We tend not to do business with people with more than $20 or $30 million in investable assets. Not because I begrudge them. I mean, I’m a capitalist. I just don’t have empathy for them and a good portion of them — in my experience — have become less in touch with society and with their role in society.

Everybody wants a piece of them and therefore their relationship with society changes. There is not as much loyalty and long-term-mindedness in terms of their relationships.

So I’ve chosen to focus my practice on those I call the “Mass Affluent”: the under $30 million people.

I had a lot of those really big clients during the .com bubble. They come and go. Some with several hundred million dollars. Every one of them was miserable. Now, that’s not to say that you can’t be really rich and really happy. It’s just to say that anecdotally i never saw it.

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So how are we going to engineer the next breakup so you can create something new?

Hah! You know, very few people get to where I’ve gotten in life.

If any young person asked me, “what approach will give me the highest chance of success?” I’d say, “Set your goals, set your intentions, and figure out a path to your success that actually makes sense.”

The greatest luxury is that I no longer have to set goals. I don’t have enough money to retire and not work, nor do I care about that, but I have businesses that provide me with an income that I know is sustainable. That way if I just tend to the garden, I know it’s going to keep growing fruit.

I can now be more opportunistic. Things just come my way and I don’t have to go looking for them. I don’t know what the next thing is going to be, and that’s a real luxury not thinking about it.

 

 

 

Special thanks to David Steele, Mark Lovas, photographer Bret Woodard, and the people at Salumeria for making this interview possible.