During a time when most Americans are just trying to hold on to their jobs, it’s not common to hear about someone choosing to quit, and doing so to launch their own business.
Yet, that’s exactly what Dan Leahy, 25, did last year when he abandoned his Wall Street job to co-found VillageVines, an online membership club that helps New York City restaurants fill last-minute empty tables and gives diners discounted access to high-end restaurants.
Although Leahy originally went into finance with the goal of eventually starting his own business, he never expected it to happen so fast. The recession changed things, as it did for many, but in Leahy’s case, the downturn was actually a blessing in two-fold. The impact of the economy on the restaurant industry opened up a unique entrepreneurial opportunity, and the resulting change in the environment on Wall Street inspired him to leave and make his own dreams happen.
After a year of ups and downs, VillageVines is gathering speed. The service has just expanded to Washington, D.C., with several other major U.S. cities coming soon, including the food-centric hubs of Chicago and San Francisco. A new partnership with a much larger dining website, MenuPages.com, is expected to significantly increase exposure. The website recently received coverage from CNBC and the New York Times, and, two weeks ago, it signed up its 400,000th subscriber.
We sat down with Leahy in the VillageVines Flatiron office to find out about his experience starting a business during the Great Recession.
Q: When did you first get the idea for VillageVines?
A: Ben [McKean, Co-founder of Village Vines] and I were roommates… and I would say we first seriously started talking about it, putting together our business plan, about a year and a half ago now, two Decembers ago… And for about three months before [we quit our jobs] we absolutely knew we were gonna do it… But a lot of it was, “Can we really do this, or are we going to run out of money in two months and look really stupid for leaving?”
Q: How did you come up with the idea?
A: Our thesis was that, at that time, even huge corporations with all these resources weren’t using the Internet effectively… and small businesses [certainly weren’t either.] So many of them were businesses that had been around forever, they’d done business a certain way, and there were some incredible inefficiencies in how they were marketing themselves. We started thinking, what if there was a tool that we could give them to help their business?
And, we knew the biggest restriction for almost anyone as to why they don’t dine out anymore is the price. So if we could enable restaurants to change their prices based on demand, we could also enable consumers to access these restaurants that they couldn’t have otherwise.
Q: Tell me specifically about the unique experience that you had launching a business during the recession.
A: I think the recession was a huge benefit to us. Some of these restaurateurs are just so set in their ways, that, if we had come earlier, maybe five years ago, with a new way for them to market themselves online, we would have had all these doors slammed in our faces – not that we don’t have doors slammed in our faces now, but much more so.
These restaurants that rely on discretionary income from the high earners in New York City – which was down, down, down – they’d been hurting for the last few years, so they were much more willing to [consider it.] Before, they might have said, “I’ve had this thing running 10 years now, I don’t need to change.”… This, especially, was an industry that was absolutely hammered by the recession, so people were willing to speak with us that I don’t think would have been available at other times.
And, similarly, I like to think we would have done this no matter what, but, if I was getting double the bonus I was, it would have been much easier to say, “Why don’t we stay for two more years, de-risk it, and then we’ll do it ourselves?” So that lit a fire under us a little bit.
Q: Were there any moments where you thought, “I wish I hadn’t quit my job?”
A: It was never like I wanted to go back, but the lows, the stress, it’s unbelievable. The highs are very high, but the lows are low. You’re risking everything. All our money is in this; we invested everything we had to get the design stuff done. So that’s what makes it a little bit of a roller coaster.
But I knew I didn’t want to go back into finance. I was thinking, If this goes really badly, I’m gonna be fine, I’ll figure something out, so there’s no reason to turn around and go crawling back.
Q: So, you didn’t have weeks where you were just eating ramen?
A: Oh no, we did, absolutely! Five-dollar foot-longs, the cheapest thing I could get. I mean, I didn’t take the metro once my first year; now, I think the metro is too pricey, so I take my bike. But it’s kind of fun, too. I learned how to cook because it’s a lot cheaper to cook. I don’t get a gym membership -- I go for runs. You figure stuff out. Living on a budget will really force you to do that. So you learn.
You can take complete control over everything in your life, and that’s one of the most empowering things about this. With corporate jobs, everything’s very passive – “don’t mess up” is basically the MO. Whereas with this, it’s, “Here’s ten audacious goals; let’s try to get 75 percent of each them,” and that really translates to every aspect of your life.