His Simple Business Model: The Ladder

By Thomas Heath
Sunday, May 17, 2009

I promise this isn't another column about food or drink, although as you know, I'm a bit obsessed with them.

When I interviewed restaurateur/entrepreneur Bo Blair, General Motors came to mind. That is, the General Motors of legend and not today's suffering icon.

Blair targeted and captured Washington's 20-something-to-40-something upscale, urban, college-grad, preppie, money-to-spend demographic much the same way the old GM went after American drivers.

Sound crazy?

GM's "ladder of success" started new buyers on the Chevrolet, then led them to Pontiac or Oldsmobile as they grew older and made more money. In their 50s and 60s, they were encouraged to step up to the higher-end Buick line or, if they really made some dough, drive a Cadillac.

Blair, 36, has something similar for his Georgetown-centric crowd.

His Smith Point is an exclusive (you must be on a list) restaurant/bar that caters to the young, preppie, conservative customer base from schools such as Villanova, Princeton, Duke, Fairfield, Trinity, Virginia or Georgetown.

Blair opened The Rookery bordering Georgetown for the same group in their 30s and 40s, when they start to settle down and relax with some live music. Like Smith Point, if you are not on the Rookery's list, you don't get in.

For the preppies who start a family (Blair counts 120 married couples who met at Smith Point), Blair opened Surfside -- a Tex-Mex restaurant on Wisconsin Avenue in Glover Park -- last fall. Jetties sandwich shop in Foxhall caters to the prep crowd's fast meals.

How about some cookies and cakes for the 4-year-olds destined for Vanderbilt, Wake Forest, UNC or Penn? Blair has a dessert shop called Something Sweet that's coming soon. If you recognize the names, perhaps you are a prospective client; Blair has named many of his ventures after places on Nantucket Island off Massachusetts.

"We really have created a group of restaurants that has been my vision for a while," he said. "Everything feeds off everything else."

This weekend he opened The Bullpen across the street from Nationals Park in Southeast. The $100,000 project -- which includes a $25,000 a month rent bill -- is banking on its novelty and location. He is the first businessman to introduce the concept to the ballpark area, and the location across from the main gate is impossible to miss.

Still, the 15,000-square-foot festival park with band stage, beer garden, giant tent and sports clinic area for youngsters could be a bust if the Nationals remain in last place and attendance wanes. But Blair is thinking beyond baseball, too.

"We feel we can do political events and private events where people want to be outside," Blair said. "When the Red Sox come, we can do political events for people on [Capitol Hill] from Massachusetts . . . for California people before the Giants game."

Not all Blair's business ideas pan out. He had one misstep already, but it was a small one -- literally. The "Teenie Weenie" hot dog stand (the place was the size of a closet) that he opened in Georgetown a few years back closed after a couple of months.

Mostly, though, Blair's formula seems to work because he knows his target audience. Long before Facebook and Twitter, he began cobbling a social network in a vinyl address book that he still has. It has grown into the 9,000-person e-mail list that feeds his empire.

"The Northwest D.C., Bethesda, McLean social network is incredibly powerful," said Blair, who grew up in Georgetown and attended Georgetown Prep. "I enjoy creating things that this crowd likes to patronize."

The Blair empire this year will likely gross more than $5 million. He and his investors will likely split a net profit at least in the high six figures and maybe more than $1 million. Surfside threw off a healthy dividend for the last quarter of 2008, and he expects it to gross more than $2 million this year.

Blair got his start throwing parties. He organized events as a hobby at Villanova, where he was social chairman of his fraternity. After graduating and returning to Washington, he started doing it for profit. His first New Year's Eve party in 1994 at "the Car Barn" on M Street in Georgetown drew 800 people and yielded $35,000 profit. He has done one every year since, and now rakes in more than $100,000 combined from his New Year's and Halloween events.

"I realized I had something," he said.

In 1997 -- with no research and without a business plan -- he walked into the Savoy Hotel in Glover Park and pitched the manager on an idea: turning the 2,000 square-foot outdoor deck into a bar. Blair began a word-of-mouth campaign and The Deck -- with its little tiki hut -- ran for three summers. He took 35 percent of the gross (the Savoy took the rest) and netted about $100,000 in profit each year.

The Deck's profits, plus an investment from partner David Simone, provided the $175,000 in seed money for Smith Point, which became a gathering spot for the upper-middle class preppie crowd that Blair unashamedly targets. He kept costs down by skimping on the cash register system and by keeping the atmosphere basic, which is consistent with his Nantucket theme.

He also discovered a few things that work: outdoor decks, serving beer in a bottle (much easier than kegs), and guest lists, which creates the illusion of the "hot ticket." Blair keeps a careful hold on the guest lists, updating them every weekend and making sure he knows everyone on the list.

"Everyone who gets in has to come through me," Blair said.

There's no guest list at The Bullpen. With a $25,000 monthly rent, Blair's slogan is the more the merrier.

"Rent is the big dog on this one," Blair said. "We've got to be busy and sell a lot of beer. If the team starts a free fall, it could not be too good. I think it's going to be good. And I'm usually pessimistic going into projects."

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