S13E29: How to thrive after 80% business decline, with Matthew Guelke (CEO, The Plant Cafe Organic)

Matthew Guelke
It’s top heavy when you’re having to find the place, design it, build it, pay for it, hire the staff, rehire a manager. It all becomes it becomes more about HR in a way than just pure purely concept conceptual. And what we found with our franchisee is they’ve got bonafide experience and they own many, many franchises. And so I just tend to that. And so the idea of being able to grow faster by just having more places around the country that I don’t personally have to manage and hire the staff for Makes a lot more sense for our goals, which are to spread this brand and this concept as largely as we can. And when you’re doing it store by store, it’s it’s Slow and difficult, and there’s hiring challenges, especially in California. It’s a very challenging place to run a small business, especially restaurants. So with the end goal being to expand, I think this is a much better way to to do it.

Richard Medcalf
Welcome to the Impact Multiplier CEO podcast. I’m Richard Metcalfe, founder of XQuadrant, and my mission is to help the world’s top CEOs and entrepreneurs Shift from incremental to exponential progress and create a huge positive impact on our world. Now that requires you to reinvent yourself and transform your business. So if you’re ready to play a bigger game than ever before, I invite you to join us and become an Impact Multiplier CEO. Today, I speak with Matthew Ghelke. Matthew is the chief executive and the founder of The Plant Cafe Organic, Which is a San Francisco based restaurant group focused on a 100% organic and sustainable food. Picked up a string of awards along the way. What I found fascinating in today’s conversation is what happened during COVID.

80% of his business disappeared. He had to close down most of his restaurant chain. And then something amazing happened. He emerged phoenix like from the flames with a new business model The have potential to have a 100 x, perhaps even 1,000 x more impact on the world and on important issues around health And sustainability. This is a really fan fantastic example of the fact that what we think might be a terrible event actually becomes the catalyst for something extraordinary. So enjoy this conversation with Matthew Gelke. Hi, Matthew. Welcome to the show.

Matthew Guelke
Thank you. Thank you, Richard.

Richard Medcalf
So I’m looking forward to this, and I’m gonna jump in with a really boring question. I couldn’t say it boring because everyone by this day just had way too much of the pandemic and talking about the pandemic, everyone rolls their eyes. I roll my eyes about it. And yet I know that as the owner of a chain of cafes, that COVID moment when you had to reduce the business by 80% of your staff was actually the beginning of a new birth, A new direction. So before we get into what, you know, call the the deeper purpose and meaning right beha behind, behind your your business, Let’s just go there. Like, why why was that crisis moment the beginning of a of a new lease of life?

Matthew Guelke
Good question. So it started out, very difficult, having to clo probably the most challenging Time in my career was having to close locations and lay off 80% of our staff.

Richard Medcalf
And at this point, you had about 7 did you say you had about 7 cafes across San Cisco or the area?

Matthew Guelke
Yep. And, some of them quite big. You know? 4 thou couple of 4,000 square foot locations downtown San Francisco financial district, very busy areas that were thriving. Yeah. And then we had just suddenly closed them down. So that was that was That was a difficult time, letting go of some of the managers that had been with us for over 10 years, etcetera. And at the time, we also had, a franchise, or a franchisee in the airport, which we still have. So I guess the silver lining was Instead of building out more and more brick and mortar stores, which is expensive, and you expand your staff, and it spreads you thin thinner and thinner and thinner, and you have to replace yourself the president and director of operations, which we had.

I sat, fell back into that role myself. They left because we didn’t have the need for them. And I basically took a different direction, which is the franchise route, which is something we had thought about in the past, but had been told by potential investors that, no, you’ve got to have all brick and mortar company owned stores. And so we went, we sort of took that advice and went that direction. And in that time having different sort of, concepts or sort of different models of the same concept, full service, small cafe, neighborhood eatery, that kind of thing. We kind of honed in on what worked best and, but we still had 7, 8 cafes. And so in restaurants. So from this point forward, I said, okay, now we know the model that works the best, and this is what we’re gonna push forward with.

And so from that point forward, kind of just strengthened the concept, really fine tuned it, and I step back into that role, walking with my staff again and just interacting with them on a much more daily basis. And now we’ve got a kind of a trajectory that’s getting us to a place where we wanna be, I think, maybe faster.

Richard Medcalf
Mhmm. Yeah. So I love it. So What I heard in that actually, Matthew, was what I call in my model is incubate then scale. So often we try to scale too early because actually when you start the business, in fact, you didn’t know which of these formats of stores was really the sweet spot for you, which was really gonna take off. And so it can be hard to suddenly scale something. One of my one of my previous guests on the show actually said that. He said they scaled too early when their business model was not And actually the more they scaled, the more they lost.

And then they had to obviously then suddenly transform a business that had scaled into 50 different locations, which was a nightmare. So So I think this idea of getting things right, figuring out the model before you scale is perfect. But I’m curious. What’s, What made you then change and go back on the investor advice? Right? You said at the start, investors were advising you against the franchise model. What changed to make you go, yeah, forget that. I’m doing it my

Matthew Guelke
way. I guess the concept of growth. So having grown from 1 to 2 to 3 to 4 to 5 to 6 to 7. It’s top heavy when you’re having to find the place, design it, build it, pay for it, hire the staff, rehire a manager. It all becomes it becomes more about HR in a way than just pure, purely concept conceptual. And what we found with our franchisee is they’ve got bona fide experience and they own many, many franchises. And so I just tend to that. And so the idea of being able to grow faster by just having more places around the country that I don’t personally have to manage, and hire the staff for, makes a lot more sense for our goals, which are to spread this brand and this concept as largely as we can.

And And when you’re doing it store by store, it’s it’s slow and difficult. And there’s hiring challenges, especially in California. It’s a very challenging place to run a small business, especially restaurants. So with the end goal being to expand, I think this is a much better way to to do it, based on my experience to this day.

Richard Medcalf
Yeah. So so let’s dive in bit into the purpose of the business because I know it’s really important to you. So the business is called, right, just we haven’t said it yet. It’s called The Plant Cafe Organic. And I know you became the 1st ever in the US to achieve platinum certification by Eat Real. You’d be recognized as one of the world’s leading 30 sustainable food and beverage companies by The Real Leaders, and their Impact Awards, this year. So you’re obviously really sent really focused on this question of sustainability, and and health. But perhaps Talk about, like, what’s behind that.

Is that just a lifestyle choice? Is it deep conviction? Is it a competitive, strategy, differentiation. You know, what what’s behind this? What’s the ethos behind the business when you set it up? What are you really what were you really trying to achieve?

Matthew Guelke
Trying to achieve, better health for Americans and humans on planet, but as well as sort of a sustainable focus for the businesses that supply those restaurants, which are farms and organic farms that farm sustainably. So I kind of saw an intersection between 2 things that provided the same goal, which is health of people and health of planet. And they’re not mutually exclusive, as we know. It’s an eco- we live in an ecosystem. So I was working in design before this for a virtual reality software company, and I really enjoyed it. But it didn’t have Purpose aside from creative purpose, which I which I did enjoy. So I was looking for something like that and something happened in my life that shed light on it. To give you the the sort of the short the short story is a family member, my brother in law’s brother, who was a doctor, got cancer and and he passed away quite quickly.

It was a real shock because he was diagnosed and then 6 months later that was that was it. And it inspired my family to go to a health retreat called Hippocrates Health Institute. Hippocrates, the famous philosopher that said, let food be died in medicine. And so I went down there and we spent 3 weeks, and the diet that they had us on was very extreme in the sense that was They cut out anything that was bad for you, and all you ate was very medicinal, good, healthy foods. And so most people don’t that way all the time. I was a healthy eater and athlete at the time, but this sort of reset the bar in what I thought was healthy. And while I was down there, my parents helped improve dramatically. They were tested before and after, but I also met people that had heal themselves from terminal cancers.

And so, the proof was in the pudding, so to speak. You know, a lot of the time people get sick and they they They think there’s nothing to be done, but that’s not always the case. And so I returned from this health retreat after 3 weeks and, came up with the concept of making it as easy as possible for people to eat this way. Because you can say, hey, you should eat this way, you should do this, but people aren’t necessarily gonna do it. And I didn’t wanna, like, shake sort of shake my finger and tell people how to live. I thought it’d be better to make it easier for people to live that way. And also, of course, the environment is an important thing for all of us, so it intersected there. And so my business partner and I, he was the Chairman of the Board of the software company I worked for, I approached him and He started eating this way and his health dramatically improved.

And we decided we’d open the first of many restaurants. And the concept would be all the food, all the ingredients are a 100% organic, so you know what’s not in your food in a way. And then everything’s made from scratch. So there’s no preservatives, 0. And a lot of companies and businesses and restaurants out there, they’ll say organic wherever possible or sustain most sustainable for this or that, but everything, every idea and design that went into this, the menu and the the the spaces, everything was done with this concept in mind. So there’s no really trying to decide, oh, is is how sustainable is it or how organic is it, which is what you have to decide when you’re looking at different menus. Everything is. So we made it easy for the consumer to say everything in this meal is 100% organic, locally sourced, and has no chemical preservatives, you know, fertilizers, etcetera.

Richard Medcalf
Right. Yeah. So I I love the fact that You really shift what you really focused on there was this ease. Right? Simplicity. When I talk, there there’s a a book. I think it’s called, $100,000,000 offers, and, it has a very simple formula For creating value, right, value we offer. So 1 is the outcome, how valuable the outcome you’re facing. The second is how probable, You think, you know, your your clients think that outcome is if they actually follow your method.

And then, those you multiply those together, and then you divide it by The the time it’s gonna take and the effort and sacrifice it’s gonna take. And those ones on the bottom If you can reduce those, creates new markets. It’s like, yeah, whatever the Ipod, you know, made it so easy to carry music around. Boom. Right. It was, it was, It was so easy suddenly. And what I’m hearing is the power of our environment around us. Our, you know, our immediate environment is so is It’s such a barrier for people.

As you said, you realize it’s really yeah. It might be a good idea to eat like this, but the reality is I’m out and about Working. I need to get some of my little member work for lunch. They’re gonna be at Starbucks or whatever, you know, and that that’s all I could that’s all I can Defined. Right? So no matter what my intentions are, if the energy barrier is so high to actually fulfill them, we’re probably gonna fall back. And that’s what I’ve been hearing. You decided to address that angle.

Matthew Guelke
Yeah. Solving a problem. Exactly. And and that’s what happened. I came back from this at this retreat, and there was no place I could eat that was sort of solving this problem, which is just clean, healthy, pure, unadulterated food. You know, the only way to do it was to really cook that way myself or go to a very, very sort of earthy vegan cafe, which is not the way everybody wants to eat. So We created something that’s more, as we call flexitarian. So there is meat on the on the menu, but the fish is wild, line caught, you know.

It’s not farmed, which is the dirt one of the dirtiest meats you can have. And the the, you know, the beef is grass fed, you know, local. Chicken’s organic, free range, that kind of thing. So vegans, vegetarians, and meat eaters that wants responsible meat eating and ethical Sourcing can eat in this one place. So yeah.

Richard Medcalf
Yeah. Fantastic. Yeah. So again, you’re blurring that yeah. You’re trying to find a new space on the map that you could really own, which which I love. So it sounds like this is something, you know, with the Story of of your brother-in-law and and and your family’s experience with it. It sounds like something it was it was a transformation that you had And that you got really serious about and you wanted to promote. Right? It sounds more than it was it wasn’t just a pure entrepreneurial Idea of how, like, how how can I make some money? It’s what I’m really getting.

So so tell me about that. So tell me about because I know that you’ve said you said in the past, the mission and intention Mean more than the monetary success and why you do something is, is as important as how well you do it. And let’s say a lot of people might give that lip service, but you feel that that’s really important to double down on that. So if I just talk about about how how does that show up in your leadership, right, in the day to day? Now you’ve launched on this journey. How does that mission intention show up in your day to day? What decisions might you make that are different Because of that.

Matthew Guelke
I mean, you know, the simple answer to that is because the concept is very simple in itself, you know, pure food without compromising, quality or integrity whatsoever. That message is very clear to the staff. It’s very clear to the customers. And so we’ve had people I I say had because, you know, we did have to lay off a great number of people. But we still, to this day, have people that have been with us from the beginning. You know? This 1 guy, Nelson, who’s been with us for 20 years, and he would do anything for us. I mean, and and a lot of the staff. And not everybody that works for us believes wholeheartedly in the mission, but most of them do.

And if they didn’t to start, they do now, and they see how they feel healthier. And so when they talk about the food, you know, to customers, it all kinda comes through because It’s clear to them and it’s clear to the customers. And for me personally, I, I act like I’m an employee. So when somebody walks into the run of the restaurants, they have no idea who I am. In fact, when we were building out one of our many restaurants, Some people thought I was like a painter because I’m standing around in a T shirt like,

Richard Medcalf
Asha, you do look like a painter, so I get that now.

Matthew Guelke
And I kind of treat you know, I will have anybody that works for me, a busboy or anyone who come up to me, feel comfortable and say, hey. You know what? I have an idea for a dish, or I really don’t like this about such and such, or I’m upset about so and so, you know, and come up to me as if I was their their friend. And that’s how I operate. Everything’s just clear and simple, and let you know, let’s leave ego out of this. I would say, even though this isn’t the question you asked specifically, but I would not have continued doing this after the pandemic if it wasn’t something that I was very passionate about and feel like it makes a difference. I would have cut and moved on because it was painful laying off so many people and trying to reestablish something, after that.

Richard Medcalf
I hope you’re enjoying this conversation. This is just a quick interlude to remind you that my book, Making Time For Strategy, is now available. If you wanna be less busy and more successful, I highly recommend that you check it out. Why not head over to making time for strategy.com to find out the details. Now back to the conversation. How did you feel in that moment, like, in that in that darkest moment when you were like, what have I done? I built this business, and now it’s just collapsed. What was going on?

Matthew Guelke
It was quite horrible. I I it was dark. It was sort of sort of dark days because not only did we lose people, but we lost we lost 1,000,000 of dollars. I mean, we had built out some very big, beautiful spaces that I had a hand in designing myself in some of the most traffic parks in San Francisco, which are now sadly dead zones. I mean, you walk there and it’s homeless everywhere, and you see these big beautiful restaurants, they’re still closed years later. So that was that was really difficult, but it it it forced me to refocus. And Again, if I hadn’t done if if the meaning behind the business wasn’t there, I don’t know how I would be feeling, but I turned around and said, okay. How can I push this forward? I’m not I’m unwilling to let this go because of this and just walk away because I did it for a purpose.

And so Purpose really is everything. I was, you know, my, my young son was asking me what, what makes me happy and, and, and purpose is something. You know, you sleep a long part of your life is sleep, and a lot of your life is work. And then maybe it’s family, maybe it’s activities. But if your work isn’t something that you feel is meaningful, it’s a very different reality that you live in. You know?

Richard Medcalf
Yeah. It’s what I talk about, around key part of magnetism is being able to really reconnect So like, what is it? The fundamental with all this stuff going on, whatever it is, the difficulty, it’s like, this is what I believe in. This is what I stand for. We have to Tune into that. And I think so often, especially as high achievers, we can end up playing a game, which is like, well, I’m, you know, I’m Getting the buzz of the of the targets or the ever increasing numbers on some metric that we’re tracking. Right? And that can give us short term buzzes. But then of course, if I put identity in that, then what happens when the numbers go down? Right? What happens when we miss the target? What happens when the industry is there? We start to stress out Or whatever. But what may put me on my journey, I think was that when I asked myself, what do I wanna tell my grandchildren or great grandchildren when I’m 90 and they’re on my lap? And they say, what did you do in business? You know, in life, I tell them all the things about my family and all the things I’m happy about there.

Yeah. Well, what about all the other time that you spent working? I just wanted to have better. I wanted to have better stories than the ones I had more inspiring stories that put a grin on my face. It’s kind of a selfish reason, really. I wanted to be able to smile at the end of that.

Matthew Guelke
I a couple of months ago, I got contacted by an elementary school and they said, can we come in and learn about your business? And I said, sure. So I stopped what I was doing because I was, I was out of city out of the city, and I came back, picked up my son and we went to one of the cafes and I did a, sort of a, a demo of the food and why it’s important to eat this way and what some of the things you should avoid and some of the things that are more helpful helpful, and and you have these, like, 67 year olds asking questions. And, You know? It was as meaningful as as doing a TEDx talk. So and then my son got to sit there and ask questions, and Later, he’s like, my dad’s the CEO of the company and what the company does. It means something to him and it means something to me. So yeah. I mean, I think that’s the a really important thing. My sister, one of my sisters was, working in corporate, high up in a corporate job for years and she gave it up to become a social worker, and she makes a fraction of what she made, but she’s happier, you know?

Richard Medcalf
Yeah. And people don’t, it’s hard people to see this, when you, when you’re in it, it’s so hard when you’re just in, in that It’ll box that you’re used to. So, Matthew, let’s just change gears a little bit. This is the Impact Multiplier CEO podcast. I’m curious about So first of all, let’s just bring it down. What’s the impact you’re trying to make in the world?

Matthew Guelke
Health and Sustainability of the planet is the simple answer. So what you put in your body affects your health, and I’d like more and more people to have less pharmaceutical drugs, and have less health issues, and, and move forward, and live a sort of healthy and inspired and active lifestyle. And also by doing that, you know, we’re we’re supporting ethical businesses, and so I really believe you what you spend your money on makes a huge difference as a consumer. So by offering this for people’s health, we’re off also offering The people support businesses that we wanna see grow, and I would like more businesses, you know, like Patagonia, for example, or, a small organic or medium sized organic farm that’s that’s giving food that’s healthier because the soil is not depleted, you know, versus It’s a massive farm that’s really providing no, no sustenance at all and fewer jobs. So by supporting healthy practices, It it helps people’s health, and it also helps the environment in in sort of burgeon better industries that I wanna see grow.

Richard Medcalf
Yeah. One theme I’m seeing in this season actually of the podcast is this kind of ecosystem thinking. Right? So The difference between a traditional business owner, if you like, and a more aware or purpose driven owner is more just the scope of their thinking That is not just on the adding value to customers. Right? It’s it’s the that, but it’s also adding value to the planet and information or to the ecosystem and create local economy and Thinking bigger. That is the difference here is what I hear. So that’s the impact. What would what’s multiplying Your impact gonna look like for for your business, right, for the plant, organic cafe. What If we’re having this conversation 3 in 3 to 5 years, what would that nullification have created?

Matthew Guelke
Well, I would like plants to be everywhere. My business partner, Mark Lewis, he used to say when we’re talking to investors, He’d like the plant to be like McDonald’s, and it would always make me cringe because, you know, I don’t have good associations with McDonald’s, the type of food they serve and, you know, health benefits. But What his meaning was was you, we just wanna proliferate this wherever we can and provide access to this food and also for farms that have access to consumers. So what I’d like to see is plants on the East Coast and throughout America. We’ve We’ve had offers to, you know, bring it to India, to Japan, to, you you know? Sorry. United Arab Emirates, and throughout the throughout the country. And when we had more brick and mortars, I was really focused on just managing and running those. So moving in the franchise direction, that’s really our goal is to support others to open up more plants, and then thereby supporting local organic farms and such.

Richard Medcalf
Yeah. I I love the I can see the co the impact of that because whereas some Businesses are so they they expand, but in a very monolithic model. What I hear the difference here might be is that actually as you enter different territories, You can support different local farmers, different local economies, potentially, from a hearing. So How will you need to change as a leader? How you so you multiply your impact as As the business grows because we’re always at a certain level. It’s got us to where we’ve we’ve got to. But to be the leader capable of this next level, it always brings something new out of us, new you know, stretch, I call it, off the stretch for you, do you think it’d be over the next few years?

Matthew Guelke
You know, fine tuning the the concept, I suppose, and that’s something I’ve been doing and I’ve had the time to do based on the the shrinkage from the pandemic. As I said, I was sort of became my job almost became more about HR and managing people, which isn’t my favorite thing, quite honestly. I prefer the conceptual and the It’s sort of mission based. So now it’s being a sort of a, a figurehead and an inspiration, and working with the different teams to help them enact that vision. And bring on people. Like they said Ford wasn’t necessarily a genius at everything he did, but he would bring in good people that were in different operational aspects. So that’s, kind of, what I wanna do. Help people succeed and help them create the, sort of, the plants, the vision of what I’ve been producing.

And In the past, having we had full service restaurants, we had, neighbourhood eateries, all with the same concept, but different models. And we’ve really figured out what works best. And so fine tuning that and working on the marketing and the concept, I think that’s My my vision for the future is helping people sell it and and create it for themselves.

Richard Medcalf
So what I’m hearing in that is there’s something around helping people Exceed. I’m just wondering, is that is that something which is which is new for you? Like, you know, you were doing you need to do differently in the future than how you did it in the past?

Matthew Guelke
You know, working on a sort of a brick and mortar style growth model. As I said, it was- It was really, it became a huge sort of management task. And So, you know, moving forward, this is this is sort of a new thing where well, it’s it’s returning to the the beginning in a way, which is this is how it started, and then it evolved to a certain degree that way. And now I’m finding I can move back to where I started and develop the concept, and spend more time developing the concept and making sure that it works really well as opposed to, you know, moving a a 100 different pieces around and having to be responsible for that every single day, you know.

Richard Medcalf
Got it. I’m with you. Yeah. Okay. So it was clearer for me. So the managing there was a manager there, and that managing people Blossom. And now it’s about being the figurehead that you said and and being the inspiration and and creating the concept. And then I guess marketing it, which is the other part you mentioned, Which again, perhaps requires a different skill set probably from the local promotion of a cafe To running a franchise.

Matthew Guelke
Yeah. It was really, again, taking having that sort of idea and then kind of getting somewhat bogged down in the operations of it and losing sight not losing sight of the mission, but losing sight of being able to be that person that sort of just sits at the top and tries to inspire everybody and make sure that the concept is the way it should be and you know, where it sort of started from and it it finishes there or it continues on. Sometimes I think companies can get sort sort of bigger and bigger and bigger and lose sight of why they started. It’s chasing the margins, chasing everything where you’re not what you’re not who you were when you started. And I think that can sometimes unwind companies in a way.

Richard Medcalf
Yes, definitely. So I love this, so Matthew, I really enjoyed our conversation. You’ve been talking here That’s some really important things, I think about, first of all, that those pivotal moments that we have, where we really get clear on what really matters to us and what we wanna focus on. And I think you mentioned a great point. We don’t spend too much time on it, but that point around, you said around creativity, That we they we can be inspired by creativity. Well, the creative having a per creative purpose versus having a purpose that It’s significant to us. In other words, we can intellectually or even, you know, creatively get engaged in something just because it’s fun and interesting, But there’s a difference when it when when we’re ignited by it. So I think I heard that in your story as well.

And then we talked about, you know, the Pivoting. Right? When things are hard, the fact that purpose can take take you through, but it can also set the seed for a whole new direction is what we’re seeing for you now as you’re pivoting from being the super HR manager having to run, you know, shop upon shop and turning into something which actually could have a huge, much bigger impact on the planet and on the purpose you set out. So it’s really fascinating to hear you could articulate that. So, so thank you so much for for this conversation. If people want to find out more about you or about the plant, how do they do that?

Matthew Guelke
So they can visit the website, which is theplantcafe.com. Com, or they can also find me in LinkedIn. I don’t spend too much time on social media personally, because I find it distracting, but I’m there on LinkedIn and I and I’m contactable that way. Or if you send a a message to contact at the PlantCafe, I read every single one of those and respond to them. So I’m around.

Richard Medcalf
Perfect. Well, thanks, Matthew. It’s been great to, to hear your story. All the best on your mission to change the way people eat and make it easy. Remove the barriers to them actually eating the healthiest way possible. And so hopefully within long, there’ll be a Plant on every corner just like, McDonald’s and Starbucks and all the rest. So thank you for the conversation.

Matthew Guelke
The world needs more plants. Thank you, Richard.

Richard Medcalf
Thank you. Goodbye. Goodbye. Well, that’s a wrap. If you received value from this conversation, Please do leave us a review on your favorite podcast platform. We deeply appreciate it. And if you’d like Check out the show notes from this episode. Head to xpodrint.com/podcast where you’ll find all the details.

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