by Georgina Peters
From investment banker to bagel baker is an entrepreneurial
leap by anybody’s standards. In 1998, New York-native Danielle Downing
gave up a well-paying job with Salomon Brothers to make some real dough
-- she started Bagel Street, a bagel/deli chain, in London. In a world
of dot-com hype, it’s reassuring to meet a MBA with her feet on the ground.
For Downing, it’s been a long -- and eventful -- journey.
She collected her MBA from Wharton in 1992, and headed east -- to Russia,
to be exact -- where she spent the next five years.At the time, there
was the wild-west capitalism in Russia. I went originally with the intention
of setting up the bagel business there, says Downing.
But the reality, when she arrived, didn't inspire her
with confidence: Everything took such a long time. I got really frustrated.
Just negotiating a lease was problematic, and even if you found the right
premises, you knew someone might show up with an Uzi one day and say that
the place belonged to him now. Reluctantly, she put her own plans on
the back burner and joined Salomon Brothers as an equity strategist, staying
for two years. The job was challenging and lucrative, but something was
missing.
I was never really a banker. I was an entrepreneur
working for a bank, explains the 35-year-old. I remember I was in some
boring meeting in Portugal, and I just thought, This isn't what I want
to do with my life.
Like other entrepreneurs, Downing says, there was an
element of push and an element of pull that created the spark for action.
The pull is that you are convinced that the numbers make sense. But the
push is that you believe you can do more than what you're doing.
It was time to dust off the bagel/deli business plan.
Her research showed that the average American ate 30 bagels a year; average
bagel consumption in the U.K. was about two, so there was plenty of room
for growth. Certainly, the success of Starbucks in the U.K. suggested
the British were ready for American-style stores. Starbucks also provided
a useful template for a revamped business plan. She raised £900,000 (about
$1.3 million U.S dollars) from friends in investment banking and friends
of friends.
Then, it was back to the U.S. for a spell at bagel
school. We learned about yeast and flour and all that stuff, but my aim
was to network among the bagel community. I wanted to recruit a master
bagel maker, she explains.
She then had to convince U.K. immigration to give her
new recruit the necessary work visa. Downing knew, too, that simply transplanting
the American formula into the U.K. wouldn't work. In the U.S., she knew,
there were regional differences in terms of taste. Local adaptation was
clearly in order.
If I sold American bagels here, British people
wouldn't want them, she observes. Testing with customers indicated that
a distinctive British bagel recipe was required (i.e. a more-bready product,
she says, so that it lends itself to sandwiches.) Size was also an issue.
The British don't like to throw away food, so Bagel Street offers a mini
bagel, as well as the traditional New York-sized monster.
The first Bagel Street store opened in September of
1999 in Hampstead, London. Hampstead has a strong Jewish community, lots
of bankers who have spent some time working on Wall Street, and an American
community, too, Downing explains. The second store opened in December
of 1999, and has a very different personality. Located in the City, opposite
the Old Bailey, it is aimed at the business community. The third store,
a 24-hour store in Soho, which opened in the spring of 2000, is targeted
at young people out for a night of clubbing. Eventually, Downing plans
to have a chain of 50 stores throughout the U.K. in the next few years.
What makes an entrepreneur? You have to want to take
risks and really believe in your product or service. You have to love
to work with and motivate a team of people. The other thing is you have
to want to do it without a corporate structure. You have to want to do
it without any safety net, says Downing, I don't think it’s going to
be my only business, just my first. Whatever service or product you provide,
be the best. That’s my philosophy.
Georgina Peters is a business writer whose work appears in magazines
worldwide. She writes for the in-flight magazine Business Life and is
a contributor to the Financial Times Handbook of Management (Pitman Publishing,
1999).
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