Damian Moga-vero's first attempt at injecting reason into the restaurant trade was short-lived—and expensive. In 1998, Harvard business degree in hand, the tall, exuberant gourmand landed a job as the CFO of a restaurant group in New York. What he saw there shocked him: The company had no tools to manage food, booze, or labor costs; assessing the performance of specific dishes meant running reams of paper reports from point-of-sale systems, then cross-matching by average check, total sales, number of comps, etc.; figuring out which servers were high performers and which were slackers was nearly impossible. It was a study in waste. So the following July, vowing to revolutionize the business through the wonders of technology, Mogavero gathered his credit cards and founded RestaurantTrade.com. By early December, his fledgling company was pretty much toast. "I was flat out," he says. "Done."
But Christmas came early that year, when two venture-capital groups—TH Lee Putnam Ventures, backed by noted foodie Tom Lee, and Onex Corp., a large Canadian fund behind airline caterer Sky Chefs—ponied up enough money to fund operations for 11 months. With cash in the bank once more, Mogavero launched a search for employees who understood the food business but were willing to work for a tech firm. It wasn't easy. Many of his recruits had degrees from culinary schools but didn't even use email. Looking to cross-pollinate the operation with some tech smarts, Mogavero supplemented the staff with a band of geeks; soon enough, the foodies were writing code and the techies were sending out for sashimi. "Programmers would come to us thinking McDonald's Filet-O-Fish was a great seafood dish," Mogavero says. "Within three months, they were asking if I'd tried the tuna tartare."
The goal was to develop a software product that was so easy and intuitive that even a chef could love it. Most chefs, after all, still think of themselves as artists, not MBAs. Theirs is a world of taste, smell, color, texture—not unsavory spreadsheets and operational details (which probably goes a long way in explaining why, according to an Ohio State University study, nearly 60% of restaurants go belly up within three years). Chefs needed "a tool so simple that, three levels down in the organization, people could use it to make better business decisions," Mogavero says. What he made was a system that allows operators to see every component of the business, from menu planning to server performance. Slingshot, as he eventually called his brainchild, tracks which wines and cocktails are popular (and which servers sold the most of them), which conventioneers eat steak and which trend vegan, and even cross-references consumption against weather, holidays, or special events.
Once he had built the software, Mogavero made the cunning move of finding high-profile beta testers to critique it, including Tom Colicchio, the celebrity chef behind Craft and a partner with Danny Meyer in Gramercy Tavern. With Colicchio on board, other chefs in the clubby New York restaurant community were willing to give the thing a try. By 2002, Mogavero had changed the company's name to Avero and signed such influential users as Stephen Hanson of Blue Fin and Atlantic Grill, and Wolfgang Puck, of Spago fame. Mogavero was fast becoming the man to drag the restaurant business into the 21st century.
In an odd twist of fate, Mogavero's most crucial proving ground turned out to be not New York, but Las Vegas—a town that actually pipes in oxygen to keep patrons spending money. Back when Mogavero was busy signing up New York's tony chefs, Vegas was deep in the throes of its own transformation: Recognizing that Americans were increasingly fixated on wining and dining, casino operators were looking to move past the old steam-table buffet to create a top-tier dining and entertainment destination. The money is huge—Vegas food and beverage operations managed to extract $238.32 per person per day from visitors in 2004, for a stunning $2.3 billion in revenue—and the competition to lure celebrity chefs has become as fierce as the battle to entice high rollers. In this climate, Mogavero's "thought leader" strategy really began to pay off: Many of the A-list chefs and other brass told the casinos that they'd open a location on one condition: that they could install Slingshot. Avero now counts 160 of its 700 customers in Vegas, including all of the restaurants of the MGM Grand, Bally's, Paris Las Vegas, Caesars Palace, the Rio, and Harrah's. The roster of chefs using Slingshot runs from Alain Ducasse and Joël Robuchon to Puck and Bobby Flay.
Their motives couldn't be simpler. Just ask John Stinson, the chef tournant at Antonio's restaurant at the Rio hotel, which is owned by Harrah's Entertainment. "My bosses keep asking, 'How many did you sell? How many did you sell?' " Stinson says. "I constantly need to provide the numbers." Which means the 5 o'clock lull before the dinner rush finds Stinson not at the stove or in the walk-in, but hunched over a keyboard, using Slingshot to data-mine the previous month's receipts. Turns out the sea bass was a big hit, selling 196 units at $29 apiece in January, but the ahi tuna was a loser, moving only 89 entrées in the course of the month, even though it cost the same as its fishy kin. On some sizzling July night, Stinson might log on to Slingshot to see how many lobsters he had sold the previous seven Thursdays when the thermometer topped 110 degrees; then he'd check his Slingshot log book to see if any events—a big fight or a gathering of Shriners—had skewed sales. Meanwhile, the sommelier would also be checking his numbers: What wine did customers order with the lobster? Did they top off the meal with cognac? And the manager might be assessing which servers had moved the most crustaceans the last time around—then, in the big predinner meeting, he'd ask them to demonstrate how they had described the dish to customers, and which appetizers and sides they might suggest to go with it.
Slingshot tracks which wines are popular, which conventioneers eat steak and which trend vegan, and even cross-references consumption against weather, holidays, or special events.
In fact, Slingshot's most significant impact may be less in the kitchen than in the dining room, where the ability to track server performance is a key factor in goosing revenues. At the Rio, each server is graded daily on an "Avero scorecard" that lists his average check, how many appetizers, entrées, and desserts he sold, whether he successfully peddled wine or beer, and if he managed to sell the table coffee or, better yet, the French press of Starbucks for $5.95. At the rear of Buzio's, the Rio's premier seafood restaurant, manager Diane Kemish shows off a colorful bulletin board, where the performance scores from the previous day are posted. "This makes it more competitive," she grins. Indeed, the rankings couldn't be more explicit, from superstars to grunts, for all the world to see. "Service is where we've grown our revenue the most," says Joe Grimaldi, the Rio's executive director of food and beverage. "We've seen a $1.4 million growth in revenues across the board in the past year, strictly by turning order-takers into salespeople."
What's more, says vice president of culinary operations William Becker, with the efficiencies from Slingshot, "we spent almost $700,000 less in January '06 on food [across all of the Rio's restaurants] than we did in January '05—with increased food quality." That comes from less waste, more efficient use of labor, and even things like more rational seating arrangements. Slingshot has been, in essence, the tool behind a sort of Six Sigma initiative for the hospitality trade. "The hospitality industry is so prone to serving others that it has sometimes been at the expense of taking care of our own house," says Alice Elliot, CEO of the Elliot Group, an industry search firm. "Damian has been on the forefront of reminding this industry that it must be competitive and providing a practical answer on how to do it."
The relentless push for performance is not without its perils, of course, even in the notoriously craven gaming industry. Becker notes that the attempt to spread the Rio's efficiency to Bally's and Paris Las Vegas, two other Harrah's properties, is not going well. "There's been tremendous push-back and tremendous attrition [among the staff]," he concedes. "Becoming a very competitive culture is very unpleasant at the beginning." Still, he says, "once the eureka thing happens, there's no more resistance."
Mogavero watches the transformation he has unleashed with barely disguised glee, the right-brain foodie coexisting happily with the left-brain MBA. "We bring a bit of science to the artistry of the hospitality industry," he says, "so restaurant owners can spend more on the artistry than on the business—and still make more money."
Linda Tischler (firstname.lastname@example.org) is a Fast Company senior writer.
A version of this article appeared in the May 2006 issue of Fast Company magazine.