00:07 Joe Bastianich: And that's a scary place because when you open up a restaurant and you're done building it, that's kind of where the investment begins.
In 1998, Joe Bastianich set out to launch the restaurant Babbo in Manhattan's West Village with his business partner Mario Batali.
By the time construction had finished, Babbo was $300,000 over it's $400,000 budget.
And the restaurant hadn't even opened its doors yet.
00:32 Bastianich: In the beginning of a restaurant you don't take and fill the place up every night doing all the people you can do. You very much limit it and you do less covers and you do less people every night in order to refine the experience. Hopefully to have a good impact on the people who come in so they go and spread the good word of your restaurant around to other people. But also, to give you a chance to have the best possible experience for food critics which the traditional food critics were still very important back in that day. And if you're doing so little business and trying to refine the experience, not only are you still owing that $300,000 which everyone's asking you for, you are continually adding up more debt.
Babbo opened for business in July 1998--and lost money every day for two months.
The start-up debt increased from $300,000 to $500,000.
01:19 Bastianich: Ruth Reichl was the reviewer for the New York Times back then and we knew she was coming in. I mean, we didn't want to take the chance that she could come in on the night that we were packing the place and it was out of control and we didn't have the best food and the best service. Then everything would have been in vain because we knew we needed to get a three-star review. That was big. It would've been one of only two or three-star Italian restaurants in the city at the time and that was the bet. And we did everything we could to ensure that happening. And there were some dark times when you're on COD with the liquor companies and you're out buying bottles of vodka at the corner liquor store because the liquor company won't deliver to you, when you're sitting at the end of the bar on a Friday afternoon and it's payroll day, everyone expects the big payroll envelope to come and you have your personal checkbook and you're writing people checks out of your personal checking account, so they'll come to work the next day because if you bounce one payroll check, you can be sure that the next day not a single person will come to work. But we knew we had something big. So, like in the back of our minds, we knew this place was gonna be a hit. We hoped, we knew, we thought. We were willing to continue to bet on it and basically leverage everything we had.
Restaurant critic Ruth Reichl came to Babbo four times.
On August 26, 1998, she gave Babbo a three-star review in The New York Times.
02:41 Bastianich: Oh, my God. Yeah. It was like the greatest moment of my life. I mean that's like... For a young guy, I was 30 years old then, to get a three-star review from the Times in a West Village, happening Italian restaurant. That was about as big as it got. At that point, once you have the three stars no one could take them away. So, you kind of write your own ticket and then slowly we started... Not only that we increased the amount of business, we increased the prices, we increased the check average. And once the machine started, then we paid back the $500,000 probably in the first year of operation, and that was a pretty intense experience.
Babbo now serves 300 people every day.
Babbo was the first restaurant that Joe Basitanich and Mario Batali opened together.
Today, Batali and Bastianich Hospitality Group is comprised of 23 restaurants around the world.