Sal Malatesta is best known as the man behind South Melbourne café St Ali. But he also runs a host of other businesses, including several cafes and restaurants, an architectural practice and a social media company.
Last year his businesses turned over $18 million and they have a projected growth of 20% for this year. Malatesta is a man that always has a million things on the go and his interview with SmartCompany was no exception.
An interview that was supposed to take place at St Ali ended up involving a car journey around Melbourne with Malatesta and a visit to his children’s school assembly, where he told SmartCompany about how he pioneered “third wave” coffee and outlined plans to open five St Ali’s in Australia and then expand internationally.
Owner: St Ali, Sensory Lab, Plantation, My Mexican Cousin, Barbara and Fellows, Anchor and Twist, Salvatore Ink and Digidoor.
At last count I think you had opened over 88 businesses. Are you a serial entrepreneur?
I’ve always enjoyed business because I think business done well is always different. When you do any job, I was a lawyer for a while, you do the same thing every day pretty much. If you’re doing contract law, you’re doing contract law, pretty much every day. If you cook, you’re pretty much cooking every day. But if you have a business, you’re learning something new every day. So, for me, I had a travel agency; I had a fashion label; I had an IT business; and a construction business. Hospitality is my core competency, but obviously when I opened the travel agency, I didn’t know what Galileo was – the software program for agencies to book flights – and there was a massive learning curve. So for a guy like me who’s project-oriented, I don’t get bored; whereas if I was doing one thing all the time, I’d be bored. So, yes, I’m a serial entrepreneur, but then I’m a serial person. I don’t do anything for more than six months.
How do you spot these niches for everything from coffee to travel to festivals?
Okay, so, a really good book that I recommend is The Tipping Point, have you read it?
Yes, by Malcolm Gladwell?
I think it’s a really easy read, it’s not very complicated but I’m always looking for things that are tipping to mainstream. A good example of that is when we did the Laneway Festival, I think four years ago now; fixed gear bikes were the thing to be doing. And we had what they referred to as an alley cat race, so a fixed gear bike race with courses around Melbourne. But now Giant do fixed gear bikes, so obviously fixed gear bikes aren’t that cool any more, they’re a bit passé. So then I picked a roller derby. So I’m attracted to fringe dwellers and things that are on the edge, when I see things that are on the edge that I think will translate well for mass consumption, that’s probably my skillset.
I think it’s fair to say that we – and particularly I – pioneered the third-wave coffee movement in Australia and, in particular, we became a global opinion-maker in a very small space because it was obvious to me that in a world full of people demanding transparency, getting to understand the earth, soil and organics and whatnot, that people would want to know where their coffee came from. Saying “Africa” wasn’t enough. People wanted to know that it came from Panama, and that the farm was Don Pachi Estate and their harvest period was October 2011. And that to me was obvious – and it’s obvious to everybody now – but eight years ago it wasn’t obvious to everybody. A lot of people thought I was crazy because who cares so much, people drink latte-based coffees. I could tell even in 1998, I opened Melbourne’s second sushi bar at Melbourne University called Plush Fish.
Plush Fish was one of those things where I can remember talking to the commercial letting manager, and I said, “I don’t need a kitchen because I’m doing raw food” and he said, “What are you going to do?” I said sushi, and he said, “What’s that?” And I said “Raw fish,” and he said, “Who the f–k’s going to eat raw fish?” And I said, pretty much everyone who wants to be a size eight who lives in the eastern suburbs. And sure enough, I remember the queues at Plush Fish, it was everybody really, the queues went for five hours. A lot of women, a lot of girls from med school, and that place is still busy.
I’d lived in Japan for three months and I thought, this stuff’s unbelievable, I feel really good when I eat it. Why don’t we have it en masse? Sushi Sushi approached me when they had no stores and asked if I wanted to work with them and I said no because I can’t concentrate on more than one thing, the same thing over and over again. I don’t know how many stores they have now, they must have a hundred of them or something and they’re everywhere. So my skillset is identifying fringe things that are tipping.