Money makers: how a long-lost recipe became a surprise hit

A secret recipe for battered, skewered meat and vegetables went viral, leading to a franchised food operation worth $82m.

When Hiroe Tanaka was a child her father spent endless hours working out how to perfect her favourite dish kushikatsu, made by battering skewered meat and vegetables, deep-frying them and then dipping them in sauce. But when she was 21 her dad passed away, say Min Jeong Lee, Hiroyuki Sekine and Toshiro Hasegawa for Bloomberg Food, and Tanaka thought that her father's recipe had died with him. In the meantime she had dropped out of university and was working in a bar managed by Keiji Nuki, who is now her business partner, but despite numerous attempts she couldn't replicate the taste of her father's kushikatsu.

When the 2008 financial crisis hit, Nuki's business struggled, yet Tanaka refused to quit, even offering to borrow money for the business under her own name. And then she found the answer. "In a box of memos and mementos from her dad" was a recipe. "It's not like the memo had success guaranteed' written on it", says Nuki. But the recipe worked. Soon the Kushikatsu Tanaka had gone viral. "People were lined up to get in even at 1am." Today the firm has adopted a franchise model and is worth $82m. As for the recipe, Tanaka "says only herself and Nuki have seen it since she found it, and it's going to stay that way".

The Chinese village that spawned four empires

"For a Chinese hamlet deep in the mountains, Xiatang village has a lot of mansions," say Gabriel Wildau and Ma Nan in the Financial Times. "Tonglu county in eastern China's Zhejiang province is home to the founders of four separate express delivery and logistics companies, known in Chinese as kuaidi."

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Zhejiang is famous for its entrepreneurial culture provincial capital Hangzhou hosts internet giant Alibaba and other nearby cities have used their coastal location to profit from the export boom that started in the 1990s. Remote Tonglu had been somewhat left behind. Yet the poverty of its villagers, and their willingness to "eat bitter" the Chinese phrase for toughness and an ability to endure hard labour would prove to be a strength.

The first generation of kuaidi delivery people proved more willing than city people to endure hardship to make some cash. In the 1990s China Post took three days to deliver business documents to the customs office in Shanghai, but Nie Tengfei, the founder of STO Express, realised that he could do it overnight, even if operating in a kind of "loophole" as regulations officially banned private firms from this kind of work. Nie died in a car accident in 1998, but friends and relatives in the once-poor village went on in subsequent years to found three other courier services: ZTO Express, YTO Express and Yunda Express. "Over the past 16 months, all four have listed on Chinese or foreign stock exchanges, turning their founders into billionaires."

Pandering to the whims of multi-billionaires

A Saudi prince spends £31m on hiring the Egyptian pyramids and flying in 300 friends and family members to watch while he pops the question to his girlfriend, says Will Smale on the BBC. But how do those with money to burn go about organising such an event? "We made it happen," says Aaron Simpson, co-founder and chief executive of the UK-based concierge services provider Quintessentially. Simpson originally started out as a film producer, but given the weakness of the UK film industry he decided he needed a career change and teamed up with two friends to co-found Quintessentially in 2000. Today the business has 70 offices worldwide, with 2,500 staff and an annual turnover of £150m.

The demand for specialised concierge services has grown considerably in the past 15 or so years. Quintessentially, which is one of the largest in the sector, "does everything from organising holidays, to advising clients about private schools, helping buy properties or arranging private concerts by pop stars" to more eccentric tasks such as making a client a bouquet of flowers made from 100 folded 1,000 Hong Kong dollar notes. "Madonna, Indian steel giant Lakshmi Mittal, UK entrepreneur Richard Branson, author JK Rowling and rap star P Diddy" are all reported to have used the service. "We can arrange most things," says Simpson, "unless of course it is illegal or there is a moral objection to it, and that very rarely happens perhaps once or twice a year"

Silicon Valley unicorn hunters get spooked

The frenzy of investing in Silicon Valley start-ups appears to be over. In 2014 and 2015, investors "pumped billions" into fledging tech firms that they now see as overvalued and unlikely to pull off an initial public offering (IPO), says Eliot Brown in The Wall Street Journal. And while venture-capital firms still raised $44bn last year the most since the dotcom boom in the late 1990s investors are becoming "pickier" about where they put their money. That's forced many struggling start-ups to "fight for survival".

Take Beepi, for example. Launched in 2013, the San Francisco-based company offered people a "fail-safe" way to sell their used cars online. Beepi guaranteed sellers a price, and if it couldn't find a buyer, it bought the car itself. Beepi would mark up the price and pocket the difference. Venture capital poured in and its valuation soared from $12m in early 2014 to $525m by mid-2015. Revenue for the first half of last year was $50m, an increase of 40% compared with the previous six months. But with little revenue from add-on services, Beepi was losing up to $5m a month last year. It had also spent "a fortune" on advertising, and been "whipsawed by cars that sat unsold for a month". Boss Ale Resnik went hunting for cash, but investors were spooked. Most of the Beepi's staff were laid off in December.

More established start-ups have been better able to weather the storm. Demand from investors for holiday-lettings platform Airbnb and office landlord WeWork is "still robust", says Brown. But it only takes a little bad news to put the frighteners on investors, as Uber has found out recently, says tech news site The Information. Shares in the privately held taxi-hailing app have been selling at a 15% discount on the secondary market.

Chris Carter

Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.

You can follow Chris on Instagram.