Today we’d like to introduce you to Derin Alemli.
So, before we jump into specific questions about the business, why don’t you give us some details about you and your story.
I never set out to be an entrepreneur. In fact my initial life plan was to work in finance – I majored in finance through undergrad, worked in mutual and hedge funds for six years, and got an MBA from the University of Chicago in analytic finance as well as a CFA charter all while working. What I didn’t realize until after I left the industry was that I found it far too boring. The reason why I got into hedge funds was because I love asset management. But what I found over time was that the actual asset management was only a small portion of my job, and most of it was really client management, compliance, and bureaucracy. So that’s why when I saw the opportunity for DownBeats, and it’s relatively low cost to start, I took the risk.
I have been a concert fan since as long as I can remember. From the age of 14 until even now I went to a show once a week on average. But in my mid 20s I realized I was starting to develop some hearing loss, which while genetically predisposed to it was still far too young. I had started using ear plugs but found my options to be too conspicuous, not easy to carry around, and too expensive to be replaced when invariably they would be lost in the concert setting. And then it was at Ultra Music Festival in Miami that it hit me – all of these people need this product from a medical perspective, and there are millions more people just like them. How can I help these people avoid hearing loss by using ear plugs, but also make it cool enough to wear? And that’s where DownBeats was born.
Over the next year I sourced manufacturers, designed the product, and got set up on sales channels. Somewhat as a blessing in disguise I was laid off right as the product launched, so armed with a severance package I had time to see if I could make this a real business. I won’t say it was easy or that I didn’t have my doubts, but by the end of 2013 I had a steady paycheck and by the end of 2014 the business was rolling, well automated and taking up only a small chunk of my time. I was a full time entrepreneur, and it was time to find my next business.
When I was in my busier phases of DownBeats, this is where the idea of Square Roots Kitchen began to percolate. I had always worked in food all through college and high school, so now that I was viewing the world through the lens of an entrepreneur I saw a real pain point – I ate low carb, and many others like me had specific diets. Why was there not a place that I could order from using technology to get my meal customized to my dietary preferences, quickly, with quality food to go with it? I never envisioned myself getting back into food service, but with my specific experience in restaurants, my new entrepreneurial skills, and my data driven financial background, I knew I was the guy to do it.
SRK went to market out of a shared space in January 2016 and my expectations were low going in. We served 100 entrees that month, and we had no financing for our first store. Retail was always the goal, but catering was a way to dip into the market. Here we are 17 months into the business and now we’re serving 4,000 entrees a month, are profitable month to month despite paying huge fees to channel partners in catering, and are almost fully financed with a mixture of equity investments and an SBA loan. I honestly wouldn’t have guessed this is how we would have ended up, but as much work as this new venture has taken it has all been completely worth it. I am beyond excited to bring SRK to retail this year and show the world what we can do.
Has it been a smooth road?
Of course not, building yourself into a self-sustaining entrepreneur is never easy! With DownBeats, I had to go a full year without a paycheck. Although I did have the benefit of some severance and unemployment benefits to get me through, I went back to bartending and serving to grab some quick cash. It’s pretty humbling having to wait on people you went to business school with, but I knew that my dreams were worth it and that I was making progress month to month. That first paycheck from DownBeats felt like the best earned money I’d ever made.
Square Roots Kitchen has had its own challenges, but as with anything the second time around was much easier. I knew where to spend money smartly and where to get the best return on investment for the dollars I was putting up. I knew there was a lot of work and revenue building ahead of me before I would see investment, but I was prepared for it. And having worked in the food business previously, I knew I’d be pulling off a lot of miracles on crazy days, dealing with employees calling in, delivery drivers not showing up on time, the whole gamut. But with every challenge I saw an opportunity to improve the process and make our brand something great. I was also blessed with having a successful business in DownBeats paying me as I grew this business, so I wasn’t struggling with the same “no paycheck” issue as many entrepreneurs face when they have a great idea.
So let’s switch gears a bit and go into the DownBeats and Square Roots Kitchen story. Tell us more about the business.
DownBeats is a brand of high fidelity ear plugs for concerts. They are clear and low profile so no one will notice that they’re in while you’re protecting your hearing, and they actually can help you hear higher frequencies better over the course of a concert. They come in a convenient carrying case and cost only $10 via our website ($14 via Amazon Prime), so if you lose a pair they are easy to replace. Hearing is priceless, and I never wanted anyone to say they couldn’t afford to protect it.
Square Roots Kitchen is a fast casual healthy restaurant using proprietary technology to allow customers to customize their meal from our menu of salads, wraps, and quinoa bowls, or just build their own, getting real time nutritional transparency and dietary filtration as they do so. All of our ordering is done through a technology platform whether that be in-store kiosks or our mobile application. SRK is currently serving Chicago through catering, pop ups, and delivery services like GrubHub, Uber EATS, Postmates, and Fooda Select during weekday lunches, but will be coming to a retail location in downtown later in 2017.
How do you think the industry will change over the next decade?
The music industry is an interesting one, but I think in that space the focus on live shows has persisted and will continue. Information itself is going down in value, so musicians have to monetize themselves via live performances more than ever. That’s great for DownBeats, because music isn’t getting quieter anytime soon! The more concerts there are, the better our business does, and we’ve seen steady growth year over year since inception.
With SRK, I think we are hitting the market at just the right time. Consumers are increasingly health aware, especially in urban areas, and with the rise of technology they are demanding faster and more on demand ways to get it. We have a technology and a process that allows us to serve those changing needs better than any of our competitors and I’m excited to be at the forefront of that shift.
Pricing:
- DownBeats are just $9.99 at www.downbeats.com, and area also available via Amazon Prime
- Square Roots Kitchen can be ordered directly Monday-Friday from 11 am to 2 pm on GrubHub anywhere in the city, or UberEATS and Postmates within 3 miles of Lakeview. Our meals average around $9 for a basic entree.
- Square Roots Kitchen is also at multiple Fooda popups each weekday, so if you have one at your office ask your Fooda rep for us to come by. We would love to share our delicious and nutritious food with you!
Contact Info:
- Address:
405 W Superior St FL 5
Chicago, IL 60654 - Website: www.downbeats.com // www.squarerootskitchen.com
- Phone: SRK 773 413 9711
- Email: info@downbeats.com // orders@squarerootskitchen.com
- Instagram: downbeats // squarerootskitchen
- Facebook: facebook.com/downbeats // facebook.com/squarerootskitchen
- Twitter: downbeats // squarerootskit
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