ISBN Members Learn from Each Other’s Successes—and Mistakes
Birds Barbershop Co-Founder Jayson Rapaport says one of the most valuable benefits of belonging to ISBN and attending the annual ISBN Conference is that multi-unit members not only share business insights and data on success, they also openly discuss lessons learned from past mistakes, along with practical tips and advice for peers on what to do differently.
In that spirit, Rapaport, an ISBN board member, shares insights he and business partner Michael Portman learned from expanding their Austin, Texas-based Birds Barbershop into a new market for the first time.
“The internal metrics that drive you to make that decision to go into a new market are completely your own, unique to your situation,” Rapaport emphasizes. He believes other ISBN members and multi-unit businesses can benefit from knowing what he and the Birds team would do differently today, as they look back 18 months after opening their 10th Birds location in Houston, beyond their core of nine successful shops in Austin.
How Birds got to Houston
Once they’d done their internal due diligence and committed to grow outside their local comfort zone, Rapaport and Portman focused on where Birds’ new market home should be, weighing these factors:
- Brand visibility and name recognition: “Birds is well-known and established in Austin, a large college town. Strong name recognition transfers with students who move or return to other major cities, including Houston.”
- Validation of concept: “We looked at what makes us unique and successful in our home market and evaluated if it would work outside of it. How would we tell our story in two different markets? Was our concept—or something comparable—already available from a competitor?”
- Ease of operation: “Did we need to be close enough to our home base to be able to drive to the new market location, or would we have to fly? The idea of opening your brand in New York or LA might seem super cool, but not be practical logistically, for support and management.”
Rapaport says Houston ticked all the boxes in their process, but they seriously considered other markets. “We looked at Nashville, a city very similar to Austin, but it would have been a plane ride away. For our first new market expansion, with no experience, why be so hard on ourselves or be so expensive?”
So, Houston it was. Next, the harder part—choosing the specific location to match the concept, target client demographics, budget and more.
Planting Your Brand Flag
“Finding the right location can be really difficult, especially the first time you’re looking in an unfamiliar city,” Rapaport cautions. There are brokers you can work with—and third-party data you can get—but it is pricey.
If your business is a value concept, or if you have previous experience growing into new markets, you may already have a concrete profile and game plan, Rapaport says. “You might know you are looking for very specific things—a power retail center with a grocery store, for example.”
But as you move up the price ladder or have a distinct concept, as Birds does (see birdsbarbershop.com), the choice can be more complex. “You have to really understand what makes the location work for you,” he says. “It’s more than demographics and traffic. Is being near a school important? Is affluence of the neighborhood critical, or will co-tenancy with an awesome restaurant help drive success? You have to decide what matters.”
Regardless of your tipping points, the placement of the first store you open in a new market is critically important, Rapaport says. “You are planting a flag in the city for your brand.”
Mistake Number 1: Skimping on Location Investment
Our location was one of the first mistakes we made, Rapaport admits. “We had great name recognition and concept validation in Houston, so we thought we didn’t need to go super expensive for a high-profile location. It probably slowed us down.”
Mistake Number 2: Underestimating Impact of Culture and Mindset
The hardest part of opening in a new city was trying to transfer the culture and mindset of what it means to work at a Birds barbershop, Rapaport says. “Birds is so strongly identified with Austin, not just in demographics but in psychographics, too. We thought we had it all covered by transferring an Austin associate to Houston to manage the new shop. It worked great until the manager needed to relocate after just six months, due to personal circumstances. We brought in a new manager locally, from Houston, and that was a mistake. In retrospect, we needed to get through at least a full year and ideally well into the second before handing the reins over to someone who hadn’t come up through Birds own culture and processes.”
You have to have someone there who can protect the concept and say, “This isn’t how we do it,” Rapaport explains. “If the team starts to go off the rails, and management support doesn’t get there fast enough or often enough, the damage is done.”
Even if you and your leadership or operations team can spend more time in the new market, that’s an expensive and time-consuming proposition, and doesn’t solve the main problem, in Rapaport’s view. “You still need your day-to-day person to be that north star, the one who knows the Birds way and executes it.”
Mistake Number 3: Not Differentiating Marketing
Even though the Birds business concept and culture is rooted in Austin, Houston has its own identity and Rapaport soon realized some of the marketing and messaging needed to be adjusted accordingly. “We had an awful lot of Austin imagery and had to tone it down, to separate the two businesses in our digital communication especially, to be more neutral and appeal to Houston sensitivities.”
Mistake Number 4: Getting Too Comfortable, Too Soon
“Don’t get drunk on your early successes,” Rapaport warns. “Our Houston location started to really ramp up after it first opened and we were happy from a sales perspective, so we stopped visiting as often as we’d planned, and things ramped right back down. Turnover increased, clients posted unhappy Yelp and Google reviews, employees were doing their own thing. That’s a big part of why we had to do a reset and bring in new people and another manager from Austin. We also now commit to sending members of our leadership team into Houston for at least 20 hours per month. I wish it could be more.”
One mistake Rapaport and Portman refuse to make is to open a second Houston location too soon. “We haven’t ruled it out, we just haven’t mastered the first one yet. We’re not ready. The worst thing that could happen would be to take the focus off our home market.
“We do love Houston and our clients who have stuck with Birds love us back. We’re looking forward to a strong holiday season and feel strongly we will succeed. Regardless, I’m always willing to talk to anyone through ISBN or at the ISBN Conference about how and what we’re doing. Learning from each other is the best way.”