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All In The Industry Is Watching Chipotle’s Steve Ells

Everyone’s on the lookout how Steve Ells, founder of Chipotle, can steer his new venture, ShopHouse Southeast Asian Kitchen, to success. People in the industry are eager to see whether the visionary CEO can repeat a similar performance with this new Asian concept as what he did to Chipotle when he started it in Denver eighteen years ago.

“Chipotle is deemed as the most winning restaurant concept in this decade, its accomplishment comparable to what Starbucks was able to do in the 1990s,” declared John Glass, an analyst at financial and securities firm Morgan Stanley. “Chipotle has transformed people’s mindset about Mexican food, and there’s a big possibility that ShopHouse will do something similar for Asian.”

If Steve Ells can replicate the same success, he will achieve something that even massive McDonald’s could not: stand out in two restaurant concepts at the same time.

Steve Ells, born in Indianapolis in 1965, is said to be an atypical CEO—he is a chef in a chef hat first and foremost, and most of the time one cannot see him in a suit. A graduate of the Culinary Institute of America, he has had a long-time dream of owning his own gourmet restaurant, but he needed to produce the capital first. He figured he had to open a taqueria, or a taco shop, first and reinvent the customary Mexican food—lighten-up the concept a bit, and make it sexier.

He needed to prove his friends wrong. They insisted that Mexican food is inherently cheap – there’s no way he would be able to charge $5 for a burrito, but Ells insisted that he would be producing real food, the highest quality burrito there is. Friends said he cannot have an open kitchen, but he was definite in wanting to make one. He wanted his restaurant to be similar to a dinner party, where all guests can see his chefs in their cool chef hats and watch what’s going on in the kitchen. They insisted that people have to get their meals by number. But he was firm—customers can go through the line and select their ingredients. They said there’s no way that the name would work—Chipotle? No one will be able to pronounce it!

His first investor was his father, who put in $85,000 in the first store. The second was financed with the profits and the third was built with the help of a Small Business Administration loan. McDonald’s, for a brief time, was one of his shareholders. By the time Ells had a dozen locations, he had already given up on the idea of getting a single, high end gourmet restaurant. Fast forward and we find a present-day Chipotle, with revenue of $1.8 billion and a total of 1,200 locations as of last year; and as analysts say, “room for another 3,000 more in the U.S.”

Unlike most Asian eateries that have a biblically long list of choices, ShopHouse has a menu that is as simple as Chipotle’s, although to an extent more spicy. And it is far from being the ordinary Chinese take-out. It has already garnered numerous praises as early as now, with people lining up outside its Dupont Circle, Washington, DC location during lunchtime, so much so that the line blocks the entrance of the next joint’s entrance. But it also has acquired a host of criticisms – no chopsticks, no side dishes, the price of $9.75 for a sandwich and a drink too high, its name can’t possibly connect with the consumers, along with a host of others.

Ells, however, is firm with this concept, as he gets the support of key industry analysts who have given ShopHouse a thumbs-up, christening it a success. As analyst Glass effuses, “If there’s someone who can crack the code on the Asian fast casual concept, its Steve Ells.”