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Michael Dorf went from selling broken cookies to booking Lou Reed and Sonic Youth to launching his latest venture—the innovative City Winery venues.

More often than not, highly successful people from the business world like to frame themselves as infallible, indomitable, unflappable, not unlike the bronze statues of their likenesses they hope to one day commission for the company atrium.

Not so for Michael Dorf. (And not just because his atrium might be better defined by the sweaters that blanketed the ceiling of his storied club The Knitting Factory.)

As interviews peppered over the years reveal, the proprietor who would go on to launch the City Winery empire has seemingly just never operated that way—he was perhaps too prone to blunt honesty. And thank god for it—for in his decades of hustling, Dorf has left a trail of takeaways in his wake. In chorus with the latest episode of Design Matters, here are seven.

Sell the Broken Cookies
Dorf was raised in Wisconsin, grandson of the founder of the Milwaukee Biscuit Company. But he didn’t rest on his family’s laurels (and in fact, his dad would later sell the company so that Dorf couldn’t). Growing up he shoveled snow. Curated beer can collections for sale. And then, while selling cookies from the family plant at a flea market—or rather, not selling cookies, since nobody was buying them—he and a friend accidentally crushed a few boxes. So they labeled them damaged goods and offered them at a discount … and they began to sell like crazy. The boys smashed all the rest, and soon enough they were selling all the factory’s damaged goods, bringing in thousands of dollars every week. The takeaway, which Dorf recounts in his new memoir, Indulge Your Senses: Scaling Intimacy in a Digital World: “Make do with what you have, and make people feel they’re getting a very special deal.” The former could also be said for Dorf’s music career … or lack thereof, as he was never able to pick up any steam on the guitar. But he did have business acumen and a passion for the industry, so soon enough he was managing his friend Bob Appel’s band, Swamp Thing.

Make Mistakes
After dropping out of law school, Dorf cashed in his Bar Mitzvah savings and headed to New York City to find an office space to run his label, Flaming Pie Records. Rather than pursuing the dual coffee shop/office he was envisioning, Dorf and his friends transformed an old Avon Products hub into The Knitting Factory venue that would become a legend in experimental jazz and alt rock. It opened in 1987 and hosted an amazing roster of acts, from John Zorn and Lou Reed to Sonic Youth and Beck. But what you don’t read about often is the people Dorf actually turned down: Harry Connick Jr. (Dorf wasn’t a fan of his demo). Phish (Dorf told Trey Anastasio, “We don’t do Dead music here”). Sure, it would be a nice feather in his cap today if he could boast about them alongside the other acts on The Knitting Factory’s bio, but not every decision is a win. The key is just to have enough to balance the scales … or at least tip them in the right direction.

Learn From Said Mistakes
In the ’90s, Dorf had a vision—to live-stream shows from his clubs to the world via the internet. He got his hands on the new tech to be able to do so and did three rounds of venture capital … but then the Dotcom bubble burst and the VCs gobbled up his enterprise out from under him. So when he started dreaming up his next project, City Winery, he strategically deployed his pitch. As he writes, “This time, I would not make the same mistake I made with the Knitting Factory, when I allowed the Vulture Capitalists to buy preferred shares and lost control. This time, I would gather lots of investors willing to put up smaller amounts, so nobody would have disproportionate influence—and everyone would have common shares, so this time, the playing field would be even.”

Embrace Your Frustration
Dorf abides by the wisdoms of Richard Branson, who has urged entrepreneurs to not start a business unless they’re doing it out of a sense of frustration. Dorf’s: “I reached my late thirties and early forties and could not find a nightclub in New York City where I could sit down comfortably, enjoy a great meal and glass of wine, and see the bands I loved.” That’s what led to City Winery. There’s a simple—and powerful—lesson in that.

At the outset, Dorf’s goal was to create an intimate, high-class venue where major acts could play to small crowds imbibing in fine custom wines. A key part of the plan was also to have patrons create their own barrels of wine—something that doesn’t come cheap. (Think ~$10,000 and up.) But the Financial Crisis hit and knocked the business plan on its side. Then, not unlike the jazz musicians he built his career alongside at The Knitting Factory, Dorf adapted and improvised. One of the key innovations that came about as a result—developing a method to tap custom wine in beer kegs, allowing the club to sell it by the glass and make a much higher return on its volume than wine in barrels.

Behave Karmically
At City Winery, 300 is a bit of a magic number. It’s the venue’s capacity, and it’s limited by design. It’s small enough to feel intimate, and it’s big enough that the club can make its money on the food and drink. And by doing that, Dorf doesn’t have to chip into his talent’s cut—something that was of immense importance to him. “I found myself remembering the mistakes I’d made in dealing with musicians over the years and thinking about how badly I wanted to do things right this time. At The Knitting Factory, I had become so preoccupied with selling our concerts around the world that I ignored the needs of artists who were actually making the music. In fact, I wasn’t even calling it music anymore. Now it was content.” At City Winery, almost the entire ticket fee goes to the artist. There’s no live-streaming, no grant of intellectual property. “My biggest sin over the years was not ambition, but letting technology interfere with the simple human exchange between artist and audience,” Dorf has written in retrospect.

Trust Your Vision
In 2008, at a time when all chatter was about the digital space, Dorf invested deeply in the physical by building City Winery. After the original New York City venue, further installments have opened in eight locations across the U.S., and only one, the Napa venue, has not gone as planned. (And, naturally, Dorf has learned from its closure.)

This is all to say: Trust your vision. Allow your passion to define you, not to mention your frustration. After all, you never know where it might lead.


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