The Big Read, sponsored by Vodafone: Shake Shack founder Danny Meyer recently visited Dublin to speak at a Creative Minds event that US Ambassador to Ireland Kevin O’Malley arranged at his residence in Phoenix Park.
This year alone Ambassador O’Malley has hosted 17 events in the Creative Minds series. The series aims to build even deeper connections between the US and Ireland by building community around some great thinkers.
Danny Meyer fits that bill. The ultimate supply chain disruptor, Danny has borrowed from Silicon Valley’s playbook to bring fine dining to the masses. On the day we spoke his Shake Shack chain had just opened its 78th outlet, in Tokyo.
This January, Shake Shack was spun off with its own IPO, valuing the business at $2bn. Before starting Shake Shack, Danny had twenty years of domain knowledge running some of the USA’s best restaurants with his Union Square Hospitality Group.
By starting a high-end food stall in Madison Square Park as a fundraiser, he stumbled upon a problem and solved it in a completely disruptive way. He delivered a top class experience at a fraction of the price. You could call it an unbundling of fine dining. Those legendarily long queues were the ultimate validation of his product market fit. He instantly charged one of his top executives, Randy Garutti, with scaling the concept. The rest is the stuff of business legend: each outlet generates almost three times the revenue per square foot that McDonalds.
Danny is well aware of how our tech world functions. He’s been on the board of online real-time restaurant reservation service OpenTable since 2000. “I got a fantastic education in Silicon Valley,” he says. “I learned a lot, not only about the tech world and scaling but about how you have a board of directors that can really help your company grow. Shake Shack had its own board of directors for five years before we had a public offering; from the beginning, we were running it as if one day it might become a big company.
The tech mentality is one of scale. What’s odd for a lot of people is that a one-of-a-kind restaurant like Union Square Café (Meyer’s first NYC eaterie, opened in 1984) represents the opposite mentality. We can only do as much business as we can fit into this restaurant, which will always be governed by how long it takes to turn a table. Whereas, with the tech world, if you’ve got the right idea and you make the technology work and you’re solving an important enough problem for people, it can go on forever.”
Social media has been huge for Shake Shack, as Danny reveals with a smile: “It’s been very helpful to the business, because there’s no way that busy people would wait in line for thirty minutes for a burger if they didn’t have the opportunity to use their time productively by being on the telephone or sending an email or a tweet.”
Danny Meyer makes success seem effortless. Probably because he’s so in love with his work.
He sees it as his function to make his staff and customers feel like they’ve been given a big hug daily. He puts his staff first and has built his business around that.
His second restaurant opened nine years after his first. I kicked off by asking him why he took so long.
“People are in such a hurry these days to go from thing to thing to thing”, Danny replied, “I think technology has helped us to believe that we are all capable of doing 29 things in a minute and that we can actually create more than 24 hours in a day. The way to go fast is to go slow. I think that having taken almost a decade with just one restaurant before attempting to do a second was the opportunity not only to make that a great restaurant, to develop soul, to learn the business, to learn our clientele and to learn our neighborhood. I think that strong foundation is what allowed us to build a taller building in a certain way. I think the foundation is the part that a lot of people may skim over just a little bit.”
I was curious as to what those nine years felt like. Was it an angsty process deciding when to expand?
“I was never angsting about not growing”, Danny revealed, “I was angsting about what might happen if I did grow. I watched my father have two business bankruptcies and in each case I had associated growth with his business failure. I realised that it wasn’t so much growing that was his problem, it was growing without a really remarkable team of people to surround himself with who could compensate for his weaknesses and augment his strengths.”
This leads us onto one of Danny’s central tenets which he shares with most tech businesses: the importance of a great team.
His expansion was motivated solely by the desire to hang onto the great team he’d built, as he explained, “When I go to work each day one of my primary motivators is just how inspiring it is to get to work with amazing people. To this day I would say that one of my top priorities is to build a business that becomes an electro-magnet for talent.”
Some people believe that you can never truly reveal yourself to your team; that you always need to keep your game face on, sunny side up. A lot of CEOs say they find the process quite isolating. I asked Danny if he ever felt that CEO was a lonely job.
Danny’s answer is instantaneous and emphatic. “No. I never feel alone when I make a decision. I know that ultimately I am responsible for the outcome of not only each decision but I think that executives are justifiably judged on their record of having made good decisions and bad decisions and you can’t get them all right. I never feel lonely because even if I have to make a tough call, I’ve set it up so we have an executive committee and we meet every two weeks together and we talk about things. We have a board of directors which meets once a quarter and we talk about things.”
So many great learnings from a man at the top of his game.
Build great foundations. Hang onto your team. Utilise your board. Scale it once you’ve nailed it. And above all else, be patient.
— SHAKE SHACK (@shakeshack) November 23, 2015