Episode 56 | Salt Partners Group: Hanson Li
I think that the richness of kind of what the restaurant industry is and what the food industry could be and how we Asians have really participated, not just as followers, but as leaders, as trendsetters...really sets the stage.
Below is an abridged audio transcript of Episode 56 from Season 4 of Rock The Boat: Making Waves, edited for clarity.
The COVID-19 pandemic has halted many industries, and perhaps one of the hardest hit has been the food industry. In this podcast episode, Lucia talks to the founder of Salt Partners Group, Hanson Li. He got in on the ground floor with Michelin star restaurant Saison in San Francisco when he heard about it from a coworker when it was still only a pop up shop.
Whether you are looking to get into the food industry or you are interested in hearing about Hanson's journey from making late night nachos to working in finance to starting Salt, you'll get all of that in this episode. We find out about:
How Hanson thought about the idea behind Salt for 10 years before jumping in
What he learned from working in finance and going to business school
What drew him to getting into the food industry
I. Meet Hanson
Hanson: My name is Hanson. I was born in Hong Kong. I have been living in the Bay Area for over 20 years. I'm in the restaurant industry.
Lucia: Did your parents actually work in the restaurant industry?
Hanson: No, actually, that's the funny thing. I have no family in the restaurant business.
My mom was a teacher in Hong Kong and my dad worked for the same company for almost 30 years. It was an American company in Hong Kong, Kodak, and now unfortunately a company that my kids don't know what it is anymore.
Lucia: So for your love of cooking, what's like, what's your favorite restaurant?
Hanson: This is like choosing my favorite kids. There's one restaurant that comes to my head immediately is a restaurant in Malaysia. When I was age 15, my family lived in Malaysia, and there was this Chinese restaurant when we used to go to that served Haka food, Haka being a minority ethnicity within China.
It's been 20 odd years, and I can still see the restaurant, I can still taste addition my mind's eyes. And I don't know why that image of that restaurant and those dishes just really stuck. So that's, I think that's continued to be one of my favorite restaurants even though I haven't been there for over 20 years.
Lucia: Wow. Are there particular dishes that you were fond of?
Hanson: Oh, yes. I can still name them. They had this steam fish with this shredded chili on top. They had few popular dishes. This chili crab, where you have big crab chopped up and stir fry with various chili sauces. And then this very iconic Haka dish which is stuffed tofu. So it was meat paste that you stuffed into tofu, or various veggies, and then you fry it and then you steam it again. I can still taste it.
II. How Hanson got into food
Lucia: Sounds delicious. You're making me hungry. It is lunchtime here in New York. How did you get into food?
Hanson: I think all of us enjoy eating food. I think that's probably not the best reason. I think really started in college at Stanford where I went to college. I was lucky that I lived in a bunch of different dorms, which had kitchens in them. So throughout college, I had access to a regular kitchen and I became known for making midnight nachos for a lot of my friends.
And that act of making food for a lot of people and gathering people and bringing a little joy to everyone, I think that continues to be the reason why I am in the restaurant business.
Lucia: And so you went from being the late night munchie chef, to graduating Stanford, and then you actually pursued a career in finance at the beginning, right?
Hanson: I did. So after college, I moved from Stanford to Washington, DC and joined Capital One to be in the finance industry, even though my first job offer ever was for a kitchen manager job of a restaurant in Hong Kong. During business school is when I really invested and start to think about a career in food and in business school. I had an idea, an observation and then an idea. The observation was there are some great small food businesses.
We've always asked the question to ourselves like, "Hey, why hasn't this bakery expanded?" Right? Or this restaurant, why haven't they opened more? Some of the answers are, it's constraints, right? In terms of they may not have the capital, financial capital. It could be a human resource thing where we know a lot of small business entrepreneurs who are running the show day and night and maybe they don't have to help or the hiring to help extend.
When it came up from business school, I started investigating that hypothesis, and I thought about raising a small private equity fund and everyone told me that investing in restaurants is a terrible idea.
I actually graduated business school without taking a job to pursue that idea.
Lucia: What kind of prompted you to say, okay, I understand the risks, but the rewards are such that I want to continue forward with this idea?
Hanson: A couple of things that happened over those 10 years, I got more experience in terms of understanding businesses, both in terms of from an investor side, but also from how businesses are run, and having seen a lot of different businesses. The second thing is over those time, there have been a lot more recognition that the restaurant industry can generate really good returns from the success of Shake Shack, for example, to other chains that we all know now that really got started in the last 10, 15 years and have risen to both popularity and financial success.
And third is I think on the question of talent, which I think for the base is a lot of what we do. You have a lot of folks over the last 10, 15 years who have gone to culinary school, who have trained at great restaurants in New York or San Francisco or Chicago. Now you have a great talent pool that are doing some really amazing things all over the country, right? And I think that the culinary industry in America is really fun because you have all these talent in all different cities and not just the big cities.
III. Getting Salt off the ground
Lucia: When you were leaving that investment firm and starting salt, do you recall if there were specific instances where you were like, "Yes, this is the time." Like was there a particular thing where you felt like, okay, I have to stop what I'm doing now and I'm finally ready to start this business that I had ideated 10 years earlier?
Hanson: It was a series of dominoes that fell on each other that finally pushed the last domino over, which is leaving my firm and starting Salt. The first one fell almost exactly 10 years ago. when my wife and I went to a pop up restaurant, just a couple of blocks away from where we live.
It was recommended by my colleague Victor. He came in one day at work and raved about this pop up that he and his girlfriend went to. And the one thing that caught my attention was that he raved about the salad at this meal. And having worked with Victor, who was Taiwanese American, he doesn't eat raw vegetables. I have lunch with him three times a week. He's never had a salad in his life.
So that caught my attention and it happened to be three blocks away from our place. So I made a reservation. We went and it was a phenomenal meal.
It was so good that that night I probably drunk email them. I still have the email, tell them them how great a meal was, and then ask them, "Hey, have you guys considered making this into a real restaurant?" And they responded back, "Yes. Come on in again. We would love to talk in terms of taking this from a popup to a real restaurant."
Over the course of a couple of months, I got to know the two guys who were behind this idea. I made a small investment to help them get started along with a couple of other people. And within one year, he got his first Michelin star. In two years, it got a second, and then eventually he got a third star.
Lucia: So that was domino number one. What was domino number two?
Hanson: A few years later, I was still working at my finance for a friend call me up and say, "Hey, we have this opportunity to potentially work with this beloved Asian brand, to get their franchise rights for the Bay Area." And I love this restaurant. And so I partnered with my friend and we started negotiating with the company.
We got really far. So far along that a friend who joined the team who was going to be the opening general manager and actually flew to Taiwan and that trained for a couple of days with a company. I actually also had a space picked out, had a lease to negotiate.
Unfortunately, the dude didn't go through this is maybe 2011, 2012. I still have regret about not getting that deal done.
Lucia: What's the name of the restaurant? Are you able to share?
Hanson: Din Tai Fung. I think many people have tried. I don't think I'm the first person to try to climb that mountain and not succeed.
IV. The future of the food industry
Hanson: One of the great joy that I have in working now in the restaurant industry is that you walk into a restaurant and you see it full of people and they are a little bit happier, right? Coming out of the restaurant and that little dose of joyfulness and happiness is something that I love. Right? And I've always loved from my college days and now.
Lucia: Making nachos for people.
And that little smile or that the satisfaction never gets tired. And now I'm lucky that I have a bunch of restaurants that does that day in day out serving thousands and thousands of customers a day.
Lucia: And is there anything particular that you look at when deciding which restaurants to take on for Salt?
Hanson: I do, but probably not the answer that you're expecting. When I started Salt, and as I look around the restaurant industry, there's basically a realization that anything could work. And the anything meaning different cuisine, different price points, different locations.
So for me, the concept is actually not the most important. And probably what's most important is the people. with a good team and the location, the concept will come.
Lucia: What kind of advice would you give somebody who is interested in restaurants, either on the investing side or the opening of a restaurant? Of course, right now in this environment, you're probably like, don't do it.
Hanson: So I think for someone who was looking to get into the food space industry space, if they are thoughtful about addressing both the current environment and then having a little foresight of how the business need to exist with the new environment, I think there's great opportunities, because everything that we've ever known about restaurants is somewhat out the door.
For anyone who's getting started or thinking of getting started either as an investor in the space or as an entrepreneur in the restaurant space, the big part of what you end up doing is management of people. It's not about cooking, it's about management of people.
So just making sure that you want to be surrounded by people. You want to motivate a team. If all you want to do is just cook, running and opening restaurants is probably not for you.
I still think that people want to go out. I think people still want to go eat. I think people still like the memories that they've had of going out to eat or being around people eating and drinking.
And those memories are like the restaurant I mentioned, plenty of years ago in Malaysia, those are important things.
And I think we'll continue to create those memories, but how we do it as an industry, as restaurant tours is going to be very different.
You can find Salt Partners Group and all the restaurants they are involved with at their website.