How Smorgasburg Founders Eric Demby and Jonathan Butler Built One of the Biggest Small Business Incubators in NYC


The credit for Brooklyn’s status as an international brand may belong to many players, but few represent and commodify the borough quite like Eric Demby and Jonathan Butler. This is the duo behind the Brooklyn Flea, Smorgasburg, and, now, Berg’n (899 Bergen Street, Brooklyn; 718-857-2337) in Crown Heights, a collection of projects that has given their company the platform to serve as an incubator for Brooklyn brands that, thanks to the pair’s involvement and vote of confidence, grow and spread, perpetuating the influence of Kings County.

Smorgasburg booths are now coveted and nearly impossible to get, and the Flea attracts a large and serious lineup of vendors. But it wasn’t always that way, and the partners say that despite what it looks like, they had no plan or vision for their offerings to become what they are. In 2007, Butler had just quit his job in finance to run Brownstoner, the Brooklyn real estate blog he launched in 2003, full time. He tossed out the idea of a flea market there, and Demby, a former journalist who’d just left his job as the communications director for Brooklyn borough president Marty Markowitz, got in touch to help make it happen.

The duo staged a trial run called Salvage Fest in the P.S.11 schoolyard, and heartened by its success, signed a contract with Bishop Loughlin Memorial High School to make it a once-a-weekend thing beginning in 2008. “There’s no manual for how to put together a flea market,” says Butler, and over the next five months, the pair relied on their connections and common sense to bring the project to fruition.

In the early days, says Demby, there was a lot of attrition: “If there was some other event happening, we lost half our crowd. A great vendor would try it out that day and leave because it was a bad day at the market.” But over time, those sellers that stuck it out began to develop their own customer bases, and that sowed stability.

By 2011, their reputation was such that a Williamsburg waterfront developer asked if they’d bring the flea there on the weekends. They agreed to throw a flea there on Sundays, and on Saturdays, they launched Smorgasburg.

Last week, the pair opened Berg’n in Crown Heights, giving the neighborhood a beer garden supplied by several of their popular Smorgasburg purveyors.

In this interview, Demby and Butler talk about growing their company into a true small business incubator.

Talk to me about the evolution of Smorgasburg.
Jonathan Butler: Smorgasburg started because we needed to come up with a new concept for a second day. We were in the market for a Sunday space for the flea, but didn’t want to compete against ourselves [at the Fort Greene flea]. We thought, should we do an arts and crafts fair? Something with local artists? For a while, we were going to do something different every Saturday. In retrospect, food seems like a no-brainer. Now you go and it’s packed. But that first season was a real challenge — it was like ’08 [at the flea] all over.
Eric Demby: At the beginning, we had a huge diversity of things — a greenmarket, vendors like Mighty Quinn’s, places where you could buy aprons, and a play area — it was more like a fair.
JB: It turned out that people did not want to buy lettuce for the week — they wanted to stuff their faces. So that first year was challenging, but something happened over that winter, and we started getting all these great applications. The press drumbeat leading up to the second season was at a whole new level.
ED: As it has been every winter since. The first day is always bananas — every year, the base level of crowd is up by a quarter.
JB: The rising tide of Brooklyn has benefited us. I can’t imagine that there are many Europeans who come here that don’t go to Brooklyn now. We’re an easy proxy for the borough.

Where did the name come from?
JB: The name came to me while I was watching TV.
ED: We had some bad names — like Food Fair.
JB: Smorgasburg is a funny name. It’s like a person who has a weird name, but once you know them, it doesn’t seem weird anymore.

What’s your process for finding vendors?
ED: It’s basically just how we feel that day. Jonathan’s a picky eater — he doesn’t like pickles, tomatoes, mushrooms — so those people never get in. And there are, like, 100 vendors, so it’s hard to find something that’s not already there. You could be the best pizza guy, but we have a pizza guy who we love. So you have to figure out a way in. Be like, not only do I make noodles, but I make this country’s noodles in this interesting way. We also want people who aren’t going to just sit there and make money; we want people who will add something. Who won’t leave a mess, and who will show up on time. It’s fairly intuitive — it’s like speed dating now. People will set up in the conference room, I’ll look in, and I’ll kind of know already.

What was your vision for Berg’n?
JB: We’d been talking off and on, saying that we should do something like this for a while. A lot of what we do is driven by or constrained by real estate. Through Brownstoner, I remain fairly up on the real estate market. This building came on the market in 2010 for $14 million. I wrote a blog post about it that summer being like, this is a really cool
building in an area surrounded by these neighborhoods that are exploding, and it
has potential for a commercial center. A year later, no one had bought it, and the price was down to $12 million. I got the email address of the head of the Urban Investment Group at Goldman and sent a cold email saying here’s who I am, here’s the building, let’s buy it. They wrote back an hour later and said, sounds interesting, come in next week.
ED: It’s our concessions model, the same one we use at SummerStage. The bid for SummerStage went out in 2009, and we’d only been in business for a year. The thought of having a food concession was ridiculous, but we got it, so we said, let’s figure this out. The first year was good, and it worked. Last year, we did the South Street Seaport — we had eight vendors and we ran a bar seven days a week. We transplanted that to Jones Beach this summer. Food vendors love the weekend markets, but they want more. This model is better for staffing and all kinds of stuff. So it works out for everyone.

And you have something new upcoming with SummerStage, right?
JB: On September 19, we’re doing Smorgasburg at SummerStage. There will be no concert. We’ll have some special food stuff and DJs at nighttime. Editor’s update: Demby confirms that music on September 19 will be provided by Mister Saturday Night DJs Justin Carter and Eamon Harkin.
ED: Next year is SummerStage’s 30th anniversary. If it works, we might do it more regularly. Everyone is trying to upgrade their food these days. Good food has become part of the programming.

You guys always seem to go places right as gentrification really takes off. Does it follow you? Or are you actively looking for trends?
JB: It’s hard to say where we are on that curve. And constituents are going to have a lot of different perspectives on the subject. In Ft. Greene, there was no concerted effort to be like, let’s catalyze this. It seemed like the perfect spot, and I lived there.
ED: And I lived down the block.
JB: With Williamsburg, we were invited. In 2010, the towers had just gone up, and there were really no businesses west of Berry. So the question was, are people going to come over to the waterfront?
ED: We were not convinced. The developers really wanted us to do Friday, too — they were trying to sell their buildings. They wanted to draw people over to the waterfront.
JB: Here in Crown Heights, the center of gravity was shifting, but we, probably better than most, have a good sense of where the wind is blowing. I wouldn’t have thought this building was interesting if I didn’t think that. All the stuff that makes it right for us was already well in motion.
ED: We didn’t create it. In Ft. Greene, we knew the neighborhood. That schoolyard is the nexus. So much is about our gut, not demographic studies. Something happens when we look at a space — we say, there’s a ferry over there, and here’s a cool cafe, and on the Subway, you see a certain kind of people. But there are so many places we don’t get.

So where is the wind blowing next?
JB: Crown Heights is very big. A friend of mine came in and told me he’s buying a house on Pacific and Brooklyn, which is four or five blocks east [of Berg’n]. The housing stock is incredible. It’s better than Bed-Stuy, and it’s remarkably in tact. Bed-Stuy has lots of beautiful blocks, but there are also blocks where houses have been ripped down. Here, the blocks east of Franklin are pristine. Each block has different character. It’s a good place to invest or buy a home.
ED: It’s sort of a funny thing — Franklin has always been a psychological gap. Prospect Heights is small, Crown Heights is huge, and this is in between. It feels far away, but it’s not. My mother-in-law walked up Franklin and said, “You made it sound so far.”

Tell me about the legacy you’re creating.
JB: We must be one of the biggest small business incubators in the city, and we like to think about it that way.
ED: It’s different from a tech incubator. This has a bit more lasting power.
JB: It gives vendors time and space to develop while reducing the risk normally associated with starting a business. For the ones that fail, they’ve only blown a few hundred bucks on kitchen equipment. Compare that with building out a storefront and finding out no one likes it.
ED: That’s the beauty of that market — you pay whatever the booth fee is, and you’re marketing your product, making revenue, and testing your product.

Talk to me a bit about the dynamics of working together.
ED: Jonathan and I are really good at working together, and we don’t really talk about it. The way we come to decisions is pretty unofficial.
JB: It’s pretty obvious when an email comes in whose lap it should land in even though we’ve never sat down and said, “I’ll do this, you do this.” We have good fluidity, and we complete each others’ thoughts.
ED: The last year of this project has been very intense — we’ve worked hard to maintain an even keel, and everyone around us has been like, “How are you guys staying so chill?”
JB: But building this restaurant is the hardest thing I’ve ever done. By far. I was construction manager guy. There were many periods when I was physically and mentally absent from what was going on in the core business.
ED: That forced the folks that work with us to run the markets so I could focus on other things that Jonathan usually does.
JB: This was also the first thing we raised money for, and that was a lot of work. In the fall of 2012, I was over here showing people this shitty space, and it was like squeezing blood from a stone. We have investors who have lived on the Upper East Side their whole lives and came out here and believed the pitch.
ED: They believed in Jonathan at that point. The power of the stuff we’ve created so far gave them the confidence to say, “Whatever you guys do is probably going to be good.”

Where do you guys go from here?
JB: We don’t know. We’re fortunate in that we have a lot of opportunities that come to us — I would call us opportunistic in that we see a lot of possibilities, and it’s all about picking which ones work. I spent a year writing business plans for start-up companies, but we’ve never sat down and written a business plan because it would be obsolete as soon as it was done. So far, our guts have worked really well. That doesn’t mean we’re careless when we evaluate, but it’s not like we sat down two years ago and said, “Two years, we’ll be here.” So it’s hard to say what our next big thing will be. Europe or Asia sound sexy and interesting, but on the other hand, there were challenges when we tried to open flea markets in Philly and DC. So much of what we do, so much of our success at this point, is based on our competitive advantage in knowing the market so well. If we went to London, we wouldn’t know how that three-block area had developed over 10 years.
ED: Or that the fried sardine guy is the one you really need.
JB: Or that there’s a neighborhood group you have to kiss the ring of.
ED: Here, we have relationships.
JB: That makes such a difference. We make a very concerted effort to try to reach out to local community members and public officials.
ED: Here, when we open a place, all our friends are here, and that’s more in line with how we view success. When you start expanding geographically, it becomes more about numbers and margins. That’s important, but that’s not the only way we run the the company. We go to the Flea. Our friends are there. If we go afield, we might be successful financially, but do we feel things about it?