Interview – Nicholas Stone – Who Dares Wins

FeeSynergy - Interview

FS: Congratulations Nick on your success in establishing your Melbourne style coffee shop business in NYC. Tell us a little bit about yourself.

NS: I’m from Melbourne Australia and moved to New York City in September 2010 to attend Business School and follow my then girlfriend, Alexandra Knight, who had begun working in New York as a fashion model.

I attended Wesley College, graduating in 1999 and went on to complete a Bachelor of Business (Banking & Finance) at Monash University, a Master of Finance from Financial Securities Institute of Australasia, a Post Graduate Diploma in Management from Melbourne Business School and a Post Graduate Advanced Certificate in Corporate Finance & Treasury from Graduate School of Business at Fordham University New York.

I grew up in Brighton and was extremely passionate about sports, particularly AFL, and I was fortunate enough to realise this boyhood dream when I was drafted in the 1999 AFL National Draft to Collingwood Football Club, where I spent two years, before joining Hawthorn Football Club in 2012 for two seasons, playing 17 senior games, before joining the St Kilda Football Club in 2004 for another two seasons.

During my AFL career, I continued to study and was successful in completing my undergraduate business degree over 6 years part-time, which matched the time I spent in the AFL.

When I finished my time as an AFL Footballer at the conclusion of the 2005 season, I was fortunate enough to attain an internship at UBS Investment Bank, where I worked for 1.5 years, before I joined ANZ’s Graduate program and worked in a variety of corporate finance roles over a 10 year period in Melbourne and New York.

 

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FS: When did you first come up with the idea and how long was it before you made the decision to go for it? What is the story behind the Bluestone Lane name?

NS: The idea to create a premium Melbourne-influenced café and coffee brand began to be developed in 2010 when I was attending Business School in New York. I had no experience
in retail, hospitality or coffee, however I missed the experience
I would receive daily in Melbourne as a customer, so I began
to analyze the market and decipher how the industry works, its cost structures, market position and what’s so special about the Melbourne coffee culture.

I was fortunate enough to be studying a subject focused on Venture Capital, this provided me with a live opportunity to work on the business plan of developing an aspirational, premium, branded, highly scalable concept.

The name Bluestone Lane comes from the bluestone and cobblestone laneways found woven within the fabric of the Melbourne CBD. Lanes such as Flinders Lane, Hosier Lane, Degraves Street really epitomized the Melbourne coffee
culture and are so much more than simply a dispensary for
a commoditized, utility product. They provide wonderful experiences that focus on far more than just product. They also focus on engaging and personalised service, progressive and healthy café fare, a thoughtful aesthetic and environment where customers can take a moment to “escape” and disconnect.

I never appreciated how truly special all these elements are and why they are so important in a premium coffee experience and started to investigate how I could provide this consistently in New York and beyond.

We opened our first café in Midtown Manhattan (805 Third Avenue NY) in July 2013 and in 3 years we opened a further 11 locations. We have another 7 locations under various forms of construction, so we should have 20 stores by end of Q1 2017.

FS: When and where was your first shop established? How did you feel when you first opened the door for business?

NS:Our first store was a small hole-in-the-wall coffee shop located within a corporate atrium. It’s only 40 sqm, so very small but it’s located in the heart of midtown Manhattan, so it has terrific, captive customer density which provides revenue stability and enhanced ability to make a difference to our customer’s daily ritual every day.

Opening the first store brought tremendous excitement to quickly open the second store in October later that year.

FS: Your shops are surrounded by the ubiquitous Starbucks and Dunkin’ Donuts chains who combined have more than 20 outlets every square mile in Manhattan alone. How hard has it been to establish your brand and unique identity in the face of such competition?

NS: It has not been challenging for us at all as we knew exactly what we were to our customers and what we were not. We always focused on building an aspirational, millennial targeted lifestyle brand and our value proposition was so different.

We were really confident in following the tactic of, if we would go as customers then we are confident other people will too.

We have never paid for PR or Marketing promotions, all of
our growth has been fueled by word of mouth, selective partnerships, customer advocacy, particularly by Social Media.

We do not think of either DnD or SBX as competitors. SBX did an excellent job introducing and then commercialising espresso coffee, however the younger more discerning customer is after a better quality, more immersive experience.

FS: How many coffee shops and cafes do you have now? How did you go about identifying and then finding the right locations?

NS: We have 12 shops now including our two locations in Montauk Hamptons and one in Philadelphia in the Rittenhouse Square area.

Real estate is a huge barrier and source of failure in New York, so to mitigate this business risk, I brought on an elite retail broker as Partner, Jon Krieger, who I knew would bring us the best real estate opportunities, navigate risk and uncertainty, and leverage his contacts to assist with execution.

FS: What is your policy on hiring and training staff? Do they have to like vegemite ?

NS: We hire those who have the right values, commitment and hospitality mindset. All of our staff undergo significant training, particularly in coffee. We have even trained staff on how to eat vegemite.

FS: The iconic song “New York, New York” concludes with the famous line “If I can make it there, I’m gonna make it anywhere”. Well you have certainly made it in New York, so where to next?

NS: We are increasing our presence in Philadelphia with another 2 stores and have stores planned to open in New Jersey, Washington DC, San Francisco and another 5 stores in New York City.

The opportunity is significant, so it’s a very exciting time for the company.

FS: Lastly, what advice can you pass onto other entrepreneurs seeking to establish their business in the USA?

NS: You need to have a very clear value proposition and must be prepared to commit in a big way. You can’t do it any way other than really diving in the deep end.

It’s a very entrepreneurial environment with a lot of support mechanisms for new ideas and engagement. However, they can sense foreigners who aren’t really that serious or are not prepared to do what it takes in New York.

However, my closing remarks would be to absolutely give the US a go if you have completed the steps above. It’s an incredible country and I’m very lucky to have been provided the opportunity to live, work and now build a start-up company.

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