Clarity, Problem solving, and customer insight; wisdom from the multi-talented Michael Khuwattanasenee

As the founder of Khu Khu Eatery, The Taste, RENORM, and co-founder of BioFab, Michael Khuwattanasenee’s business knowledge comes from long experience in a huge range of sectors.

Michael spent the early part of his career consulting for companies like Frost & Sullivan and IAG. Later, he founded businesses in a range of industries – from hospitality to AI.

After all that, he says he would do things a bit differently if he could do it all again. “I wouldn’t focus so much on my career. I would focus on getting out and doing things, and taking action in my life. However, corporate jobs did make me a better business person by showing how large corporates manage teams efficiently.”

Michael will be talking about what it takes to overcome obstacles, having the mindset to succeed in business, how to achieve professional goals, and foundational strategies for any business in any industry.

Evän: Tell us a bit about your background in business. How did you get started?

Michael: I came to New Zealand when I was 14, and spent my after-school time washing dishes in my grandfather's restaurant. When the first-generation iPhone was launched, I spotted an opportunity, started importing iPhones from the US, and sold them on Trade Me – my first experience as an entrepreneur in New Zealand. It was good to make a bit of money when I was still in high school.

Then, I moved on to starting businesses. I opened a hospitality business, blockchain business, and an AI start-up. I also founded a consulting start-up and co-founded a biotech space before going back to hospitality. I have been in different sectors because the only way to know what you're good at is to test and experience the whole thing. I was trying to find out what I was good at.

Evän: What were the biggest challenges that came with moving between industries?

Michael: My goal was to experience as much as possible. Switching industries was good fun and gave me a steep learning curve. One of the key challenges is that the knowledge for each industry is unique. You have to be open-minded and ensure you have the right team in place.

When I co-founded my biotech company, I had no scientific background at all, so I needed a co-founder and team I could trust. I also had to make sure that I contributed to the team. It’s a two-way street, not just taking or benefiting from your teammates' work.

Evän: How did you find the right team?

Michael: For BioFab, the co-founder actually found me. You need to be very clear on what skills you're looking to onboard. I have found co-founders through personal connections and by attending conferences. There will be people in the room who share the same values, passion, work ethic and so forth, and you can decide whether they will make a good co-founder or not.

You don't want someone who is good at something but doesn’t share the same values. It’s not only about expertise and skill. It wouldn’t work in the long term if team members’ values contradict each other.

Evän: What would you say to someone who has started a company with a friend and then finds they’re not the right person to work with?

Michael: It is definitely a difficult area to navigate. If the relationship gets to a point where you’re arguing frequently, then you know it won't work out. It may be a matter of having an open conversation with each other to figure out a way to improve things. To do this, you have to be very clear on responsibility – who’s responsible for what and to what degree? Clarity is very important within the co-founder dynamic.

At first, structure doesn't seem so important because starting a brand-new company is a bit chaotic. We rush to get it live, and we don’t have time to reflect on each other’s strengths and values. But growing the company requires   consistent attention and action. We need to know exactly who is doing what, and communicate that in the organisation. In BioFab, we ran for almost two years, ranking in the top 10 finalists for Callaghan Innovation. When we began to grow as a company, our roles needed to be put in writing for clarity. You need to set it out in a shareholders’ agreement, just saying it is not enough.

Evän: Do you think this idea of clarity and transparency helped you transition between such different industries?

Michael: Yes, clarity is a really important aspect, and so is trust. You have to trust the people you work with while also being clear on what their roles are. People can look busy, but that doesn't mean they’re productive for the business.

Evän: So, the need for clarity doesn't only apply to founders, but also to employees?

Michael: Yes, business is all about people. For example, at my restaurant I have a set number of frontline staff per shift. In hospitality, we need to be careful with staff numbers because profit can be quite thin. If I hire an average waitress, I can't put the best waitress in place. I might pay more for the best waitress, but she handles more tables and delivers exceptional customer service. With an ‘okay’ team in place, the job isn’t executed to a high standard, and it’s not because we need more staff, the issue is with efficacy. To ensure that your people will juggle several tasks at once, you have to be good to them – give them a reason to care.

Evän: Is motivating staff a challenging part of working in the hospitality industry?

Michael: Definitely – I haven’t heard anyone tell me their goal is to be a waitress or dishwasher. It’s usually a temporary job to achieve something else, and the work is not as easy as people think. There's a lot of pressure to get it right, keep people happy and deal with customer complaints. On a really busy night with 20 or 30 customers for every server, miss one docket and the whole system will be messed up. The chef will be upset, the kitchen hand will be upset, the customers will be upset, the next table is delayed. There will always be issues that arise, so it's really important to offer staff maximum support, and be open, constructive and positive with communication.

Evän: How do you motivate your team to perform better and care more about their jobs?

Michael: It's about the whole experience. You have to make sure you hire the right people. How they present themselves to you in an interview says a lot about them. Training is also important. I did validation research about this. Most restaurants don’t train staff – they just hire them and tell them what to do. With that method, person A may retain 50% of what they’re told to do, and when they train person B, that person will only retain 25%. Person C retains 12.5%, so the most fundamental layer of a well-functioning team is missing.

Most restaurants don't provide many incentives either. One of the greatest ways to incentivise your team is to show them the progress made as a result of their work, and congratulate them for their part. They will then take pride in their work. You also need to understand what they’re working for. If they’re university students who need a bit of cash, you need to provide them with the flexibility they need to study. If they need full-time work, make sure they get enough hours to make a living. If you’re there for your team, they will be there for you and your business.

Evän: How did you wrap your head around business planning and strategizing for companies in contrasting industries?

Michael: Planning is similar for any business. For customer problems you build solutions – every business should be based on a customer problem. Khu Khu Eatery started with a problem. I put myself through a 30-day vegan challenge and it was frustrating that Asian restaurants didn't understand veganism. It's not just no meat – the sauces and other ingredients matter too. This was heart-breaking for me – I was vegan 20 days and this one meal broke it. I thought, ‘If this happens to me, what about the people whose lifestyle is centred around veganism?’ So, I started my own vegan restaurant. This is an example of the problem and solution model.

The same thing applies to the tech industry. In an acceleration programme, they're focused on the validation process of business planning. It's all about talking to your customers and spotting the solutions.

Khu Khu Eatery


Evän: Right now, we’re discussing getting the product out and creating the MVP. What is your opinion on the MVP? Do we need to perfect our launch product first?

Michael: If you try to perfect it too early, you'll waste your time. You need to put your product in front of your customer and get feedback as soon as you can. An MVP can come after you have validated your idea. The MVP shouldn't be too perfect either, because it doesn’t allow for criticism. For example, if you want to build a tablet and your MVP is a highly functional tablet that looks exceptional, you may get less constructive criticism than if you present the idea in a simpler format. People think you spent so much time developing it, so they feel reserved about their feedback. An idea written with a sharpie on a bit of cardboard should be enough of a prototype to get users’ feedback. Committing too much time to your MVP can have a negative effect on the feedback you get.

Evän: So, the common thread between industries is the need for customer feedback. It’s not about perfecting your business with the right marketing strategy, the right business plan, the right investors and so forth before actually acquiring user feedback?

Michael: Yes, people often focus on the wrong thing at the wrong time. Most people focus on logo and website. Making your brand look cool and pretty doesn’t matter if your products do not solve customers’ problems. For example, I wouldn’t go to a restaurant that serves poor quality food, no matter how good the logo and website are. I am there for the experience and cuisine, not the good-looking logo and pretty website. If you're not solving a problem, what are you doing?

Evän: With that in mind, when you launched your companies, was your approach just to get it out there, get the user feedback, and then sort out your marketing strategy and business plan? Or did you also fall into the idea about perfection?

Michael: When I was 18, I thought it was all about perfection. I was building an online marketplace and I had so much confidence. I hired someone to build an online marketplace for house painters. The concept was very similar to builderscrack. I was absolutely foolish – I had no idea about customers and no idea about house painting. I wasted all my money trying to build a website with no clue how to attract customers. The website was nice but there was no problem being solved – the word wasn't getting out so it didn't actually do anything for me in the end.

Evän: What if someone wants to build a business based on something they’re good at or passionate about, but they’re not solving an issue that isn’t already solved by another company? If they shouldn't invest in looking good, what should they invest in?

Michael: I think they should invest in understanding their niche, and then work backwards and choose their branding and so on. According to Seth Godin, you should focus on building the 100 people who love your product, rather than trying to please everyone. Obviously, looking good is an important part of business, but it shouldn’t be your first focus when you’re starting a company or building new products. Your 100% effort should focus on your customers and product development. If you’re not solving a problem, then I don't think it will go very far.

Evän: What is the most critical lesson you’ve learned? Why would you tell someone about this lesson? What would you want to teach from it?

Michael: Most entrepreneurs think about getting a product out to solve a problem but completely forget about cash flow. When a company starts to grow, you need more staff and more inventory - and it would be awful to lose your company just because you didn't have the cash to fund it.

When I was running The Taste, I realised I didn't have enough cash to fund it, so I was working full time. People think they can inject money into the business, but it's not always that easy to raise capital. So, focus on both the offence and the defence – understand your numbers because they matter hugely. Before I went to bed last night, I looked at my numbers and made sure I could understand what they were telling me. It’s an important habit to adopt.

Evän: What do you keep in mind when you analyse your numbers?

Michael: I analyse my fixed costs, staff costs, operational costs and so on. In hospitality, we have a formula: food costs should be below 30%, staff costs should be below 30%, and operational costs should be 30%. You have to look at each expense and ask what value it’s adding and what you can do to make it more efficient. You have to apply a ‘what if’ analysis too. For example, what if the effects of COVID-19 continue to affect your business? You have to adjust your business plan accordingly.

Our sales were cut by half, so I had to come up with solutions for a fast turn-around. At Khu Khu Eatery, we started selling fresh cold-pressed juice to generate more revenue. It also gave my staff something to do. We didn’t make money from cold pressing because it required so much time to press one drink, but we managed to keep everyone on the team. Sometimes you have to think past financial profit and strengthen your relationship with your team because there is an inherent value there too.

Khu Khu Eatery Fresh Juice

Evän: Why do you suggest that business owners do something that may only see a little profit increase? What’s the ROI that you’re gunning for here?

Michael: I think you have to look after your staff even if the profit isn’t high, because if your staff aren’t happy, then your business takes a hit. In hospitality, you can't work from home. We’re always at work together, and if someone isn’t happy it tends to bring the whole team down. So you need to look after them because hospitality they’re the backbone of your business. Even if you were the best restaurant in town, if you have unhappy staff members who are not incentivised to work, your business could face serious consequences.

Evän: So, you’re talking about solidifying and stabilising your foundation by ensuring your employees are happy and incentivised to do well at their job?

Michael: Yes, even if the profit is small for that time. You have to think about the bigger picture.

Evän: As we come out of the COVID-19 restrictions, what approaches have you adopted to increase your profit and grow? Not to just cover expenses and keep your staff paid but to grow your business?

Michael: COVID forced us to make decisions without much planning time. Act fast and fail fast is what was important coming out of it. Like we did with the juices, you just have to think quickly and adapt. My staff have more work now so we shrunk down the juices to the highest seller and gave up the other two.

Evän: What about your peak and trough moments? How have they altered your trajectory?

Michael: In my summer job before I set up my business, I was working as a street fundraiser for three months. While I enjoyed the interactions with people, it taught me a lot about rejection – I experienced about 100 rejections a day. You have to be quite thick-skinned in hospitality. So, this summer job was a really good way of learning to be tough and stick to my plans even when I failed. It built character.  

Evän: This leads quite nicely to personal growth. In addition to humility and the ability to deal with rejection, what would you say is a fundamental attribute that some entrepreneurs lack or need to improve in order to grow?

Michael: The most fundamental one is positivity. You need to be positive as you deal with different issues and problems. COVID-19 is a good example of this. If we only looked at profit reduction and the issues that came with that, everything would seem a lot worse and that negativity could cloud your judgement. When you stay positive, you may find opportunities to upscale your revenue stream – adding new things to your menu or running cooking classes. In my case, I looked at making vegan meat.

It was also a good time to examine your business plan, and reflect on where you could do better. You could update the look of your menus or reconstruct your branding. It's about finding opportunities, and that can only happen with the right mindset. You can't say ‘I can't do this because I've never done it before’ because you just limit yourself. You should look at ways to test and validate your product without spending a lot of money. This is why it's so important to stay in touch with your customers. There’s never a point where you should stop talking to them.

Be creative about how you can be the solution and how you can adapt to external stimulus. Ultimately, you decide the pathway you take. However, a positive mindset doesn’t mean you can ignore risk management. You might think ‘Okay, I'm going to sell my house or quit my job and start this new thing’. You can do it when you’re young, like I did when I was 18, but when you have people dependent on you or you have other commitments, you must take account of risk management.

Now I ask myself ‘How can I validate this idea for under $1000?’. I’ve seen people invest a lot in something and get emotionally attached to it as a result, but it fails because it was never validated. You don't need to take out a massive loan or build the best, most professional website. It could be buying a coffee for someone that gets your foot in the door.

Customer feedback and communication are valuable, yet underrated. Customers want to have conversations. People think customers aren't interested in surveys, but if they’re connected with your brand and the topic, they will take part more often than not. There's no need to spend a lot on ads – you have IG, FB, LinkedIn and so on. You should leverage these platforms as much as you can, at the lowest cost for growth. You don't need a lot of money to make a lot of money. To build your brand, focus on locking in 100 people who are loyal to it. It's better to have 100 people who come back than a thousand who will only come once.

The key thing is to fail fast and learn fast. Failing doesn't feel good – you think about what your friends and family think, but you need to keep your ego from taking over. Fail and pick yourself up. These lessons are important for learning how to do things more efficiently.

Michael Khuwattanasenee

Evän: On the topic of performance optimisation, to see the greatest ROI, what other characteristics or skills will you need to achieve this?

Michael: Surround yourself with people who are better than you. You shouldn’t be the best or most skilled person. I used to pay $500 an hour for a mentor. We’d have a coffee together and I’d get help to up-skill. While I understand that $500 is steep, it’s one way to be with people who are better in certain areas – to help you grow. With Khu Khu Eatery, I wanted to open five restaurants in five years. My investor asked me to be realistic, but someone else told me that five is too little and I should aim higher. By asking the same question to multiple people you can be either motivated or uninspired. That’s why you shouldn’t be afraid to invest in coaching or mentoring.

Evän: Should we invest in coaching or mentoring early on?

Michael: I read books before I got a coach. If you can’t afford a coach, read books. There are many resources about how to level up. Or just copy someone else who does what you want to do. Replicate and personalise it to your lifestyle and goals. I came to New Zealand not knowing English very well but I found a way around that obstacle by reading. There's really no excuse when it comes to bettering yourself. If you can't access professional mentoring, you can always learn through online research, reading books, and so forth. My personal favourite is a book because sometimes browsing online can be distracting.

Evän: In saying that, we forget about the ‘why’ question and only focus on the ‘how’ question. How do I become an entrepreneur, not why do I want to become one?

Michael: Some entrepreneurs get into business for the wrong reasons. It's important to have a purpose attached to everything you do. The goal of making money is not enough. You need passion and purpose to fuel your work. You have to ask yourself why you do what you do, and you need to provide a purpose for your customers, not just yourself.

Takeaway messages:

Some big ideas were discussed in this interview that can be pivotal if applied correctly and carefully. Here are some key takeaways – read the full article for more insight.




Written by Steven Male

CEO of Hello Mellows. My mission in life is to help marketers have more fun at work. Say hi to me on Twitter at @stevensomething.

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