Our intention was to harness the greatest renewable human resource, which is mistakes. I mean, who makes more and better mistakes than humans do? And what if you could actually end up in a better spot because you made a mistake? If you ended up in a better spot than if you had never made it in the first place, that's free fodder for success.
Welcome to Stay Tuned. I'm Pit Barara. My guest this week is Danny Meyer. He's the founder of Shake Shack and Union Square Hospitality Group, which owns several of the best restaurants across New York City. Now, he's out with a new book, What Could Possibly Go Right? The Essential Journey to Scale and Enduring Culture. That's coming up. Stay tuned.
Daniel Meyer, welcome to the show.
Congratulations on the book. For the YouTube audience, I'm holding it up and you'll see that there are many, many, many yellow post-its because I spent a lot of time with the book in the last week. It's entitled, "What could possibly go right? The essential journey to scale an enduring culture." You are an optimistic guy.
1,000%. You kept, I think, at multiple points in the book, you say, you know, you see the wine glass half full.
I do. I see. It helps when the glass has wine, doesn't it?
It totally helps when the glass has wine. And look, I think being an optimist doesn't mean that you expect that everything will go right. But you start by asking, well, what if it did? And it's just almost anything good that's ever happened in my life started with that question.
All right. So, one of the good things that happened in your life as you began this really storied and I think unparalleled career in hospitality, shall we say? And I had to remind myself how young you were when you opened your first restaurant, Union Square Cafe.
All you have to do is look at how old I am now.
Well, I didn't do the math. You look very young, sir. Which would have made it even more remarkable. I have spent many special days of my life when big things have happened in my career and in my personal life. That's the restaurant I have gone to. In fact, just one more indulgence and then I'll stop flattering the guest for a moment. When I was writing my own book and I had every few weeks a meeting with my editor, my friend and editor Peter Gethers at Knopf, and he made an excellent suggestion, and that is over the course of about 18 months whenever we were going to meet and have a business lunch to talk about the next chapter that I had handed him of the book, we ate at Union Square Cafe on the publisher's dime, which was helpful because the atmosphere took the bite out of the criticism of the pages of my book. But you opened that restaurant when you're 27. How optimistic do you have to be to aspire to open what ultimately a lot of people think was the best restaurant in New York at age 27? What's up with that? Because I see you as a fairly modest man. That's very ambitious.
Well, when you're 27, you don't know what you don't know. In fact, I still think I'm going to illustrate your point about modesty. I still think I don't know what I don't know. But as an entrepreneur, you only see what could possibly go right. You don't see what could go wrong. And if you believe that your idea is solving a problem, and in this case it was I wanted a restaurant that would just be my favorite restaurant if only it existed in New York. And back in the 1980s, the restaurants that were most acclaimed were the really fancy places that started with L and L. And you couldn't just get a really good glass of wine and a good meal and wear jeans to the place if that's what you wanted to do. So, look, I didn't think I'd ever succeed at one restaurant. I didn't know if I would love one restaurant. I certainly wasn't thinking about many restaurants. In fact, it took, as you read in What Could Possibly Go Right, it took 10 years to open a second restaurant.
Why the hospitality business? Why restaurants?
I love food, love wine, always did. My dad and I cooked together growing up. He exposed me to all kinds of great cooking around the world. And you know, when I worked for him as a 20-year-old as a tour guide for his business in Rome, I learned that besides loving the food and wine, the thing I really liked was how to turn whoever was the crankiest one of his customers into the happiest. And it was a gift I had to do that.
Wouldn't you spike the drink?
I didn't have to. Didn't have to. Just listen to what people want and give it to them.
I guess a question that people have who have never been in the restaurant business, which I think is one of the hardest businesses you can be in because of the margins and everything else. And another quick biographical aside, which very few people know, my family was in the restaurant business for a brief period of time in the 80s, opened up only the second Indian restaurant in New Jersey in 1978. And you know, doctors maybe shouldn't go into the restaurant business. We did not have quite the success that you had. But a lot of people might think to themselves, how hard can it be? You get a cook, you get a lease, you buy some equipment, you get some wait staff, and if you make a good pasta or you make a good lasagna or you make a good chicken, people will come. And if you don't, they won't. How is it more complicated than that?
It's really not a lot more complicated. I mean, everyone says, "Oh, Danny, you're in the most competitive, hardest business in the world." Pit, I think you are, and I think that doctors are, and I think we all have a calling, and I feel really, really fortunate that I found mine. And what's not hard for me is the fact that I'm driven to make sure that however somebody felt when they first walked into our restaurants, that they're going to feel a little bit better when they leave. I'm not a doctor. I'm not curing anybody of any serious ailment. I'm just trying to make life a little bit better. And that goes for the people who work for us with us. That goes for the people who dine with us. Goes for the community in which we do business. But look, if I learn one thing about our business, I'm going to tell you a quick story. In 1985, in May of 1985, I was months away from opening Union Square Cafe. And as a just turned 27, I went to the big National Restaurant Association show in Chicago and they were just unleashing all this new technology for restaurants. And one of them was a brand new point of sale system, electronic point of sale system that was going to take the place of the NCR cash register that I'm sure your family had behind the bar at your restaurant as well, which was kind of a it was almost like a piece of furniture in your restaurant behind the bar. So, this was the waiter was going to be able to order food in the dining room on a computer by looking up numbers, keying in the numbers, and when you gave the check to your guest, it was going to come out on this thermal printed paper. And I actually when I went to this NRA show, I had the courage to stand up and ask a question in this seminar. And I said, "How in the world can we give our guests their guest check on something that doesn't have this kind of hard copy that everybody's used to?" And this old guy sitting in front of me turns around, looks at me, and he says, "Son, I don't know how young you are. I don't know what you're planning to do, but I'm going to tell you one thing right now. All you have to do if you want to have a successful restaurant, keep the place clean, give them a good plate of food, charge them a fair price, and at the end of the day, if you're nice to them, you can give them their check on a piece of toilet paper and they'll come back." And so I guess that was an early lesson that hospitality was one of the things that I was selling.
You know, you make it sound easy and I could give a similar description about, you know, just working hard, studying, and having common sense and being responsive to a client is really all you need to be a good lawyer and to have a constant stream of clients. But it's obviously more complicated than that because, you know, I often wonder why is it that there are so many bad restaurants? And I'll give you a particular and you don't have to single any out unless you want to. I feel like in this day and age, this is a pet peeve of mine, and then we'll get to some of your business ideology and philosophy, which I think is, you know, very applicable to every business, including my own. How can it be that there's a joint in New York City that serves bad pizza? Do you follow my question?
How can there be 26,000 restaurants in New York City? How can there be 26,000 TV series that you can watch on Netflix? It's not the Coke formula and it's not nuclear weapons. It's not fishing. It's really not fusion. Why hasn't everyone figured out how to make really good pizza? Because not everybody wants to. Not everybody cares. Not everybody is discerning. Some people, you know, I know a lot of people, it's hard to imagine, but I know a lot of people who eat to live. I live to eat. And if you just eat to live, you just don't really care about, you're fine with that pizza.
So, you have a market. So the people who don't care so much about making good pizza, their customers are the people who don't really care so much about food.
I think that's probably true.
And that's because for equal price, you know, whatever they charge for a slice in Times Square, you can go to one place and for the exact same, you know, $3, $4, you can get a good slice or a bad slice. It just struck me as something that's eminently discoverable. So, you have a lot of metaphors. I'm a big fan of metaphors. I overuse them. You, Danny, have just the right amount. I will say...
My kids tell me I have gone way over the allotted amount.
So there are a lot. We'll get through a couple of them, but you have a chapter in the book, Think Like a Wine Maker, and you apply that to the restaurant business, but I think it's applicable to everything. And you go through a list of things that one must have a maniacal focus on, right? You know, they've selected the right grapes for their territory. They've trained the vines. They've pruned the plants. They've selected only the best fruit. They've chosen a name and designed a label, etc., etc. And then you write, "All these variables matter, but often the most crucial one is the health of the soil. It's worth repeating, no grape can or will ever taste any better than the quality of the soil in which it is planted." Can you elaborate on that?
Absolutely. And the metaphor is that the soil is the culture and the grapes are the people we select to work in our culture. And the training and the pruning and all the things you just mentioned are absolutely crucial if you want to consistently year after year after year make the best wine of your terroir. And that's what we strive to do. And what's great about that metaphor for me is that it doesn't always work. We don't always make the best wine. And when we don't, it's a...
Well, and if I blame the soil, what that means is we are responsible for keeping that soil healthy. We're responsible for our culture. Culture doesn't happen to us. We are responsible for happening to it. And so, as you know, Pit, the biggest point that I'm really struggling with as I write this book and the reason I wrote the book was so I could learn. If I can learn and have language, then I can teach from it. And that's what I really want to try to do. But I learned that, you know, back when I had one restaurant for the first 10 years of my career, you would have found Danny on the front door of Union Square Cafe practically every single service. And when I wasn't on the front door, you'd have found me in the kitchen tasting food with the chef. And you'd have found me in the wine cellar tasting wine with our wine director. And I think that the thing that I've been really working so hard is how can and that would be like the wine maker having one tiny little hectare in France and they could make the best wine in the world. But what happens when they buy more vineyards? And what happens when they actually have a vineyard not just in Burgundy, but also in the Rhone Valley, and they want that Rhone Valley wine to be just as excellent. That's what businesses that are growing do. And so for me, restaurants are my laboratory. But I think you're right. I think that a lot of these stories, especially the ones that didn't go so right, are applicable really to almost any business out there. When you talk about culture, there's one feature of culture that there is not a business or a calling or a profession or an art that doesn't require it. And you can call it different things and there are different ways to describe it. You have it. I like to think that I have it. I've had a lot of success. You've had a lot of success and that is it's not excellence so much that's the product but it's a maniacal focus, right? Maniacal focus even on the small things. You know, my brother and his best friend started a company some years ago and they wanted to make sure that they had the best customer service of any company anywhere and some people know that they famously started a company called Diapers.com which was later purchased by Amazon for a lot of money and they did things that you did and I want to talk about one example and I think it's a lesson for anybody starting a business or trying to make it in a profession whether they're just starting out at 27 or whether they're 72. And so what they did was the CEO of the company would pretend to be a cranky customer and on a regular basis would call customer service which served two functions: one, he got to see if customer service was any good, and B, when word got out that the person on the phone may not be a cranky guy from Boston, it could be the boss, boy was everyone on better behavior. And so you tell a story. It's one of my favorite stories in the book. You had an event and a woman was seated at a table and there was an accident and she had a very nice inexpensive dress on and a waiter spilled olive oil all over the back of her dress and it was early in the evening. Hard to clean olive oil in the bathroom with some club soda.
Yes. And she was unaware it happened, but I saw the whole thing.
So, you see the whole thing. What did you do?
Well, the first thing I did was I asked myself, what do you do now? And you know, no harm, no foul. She won't know till she gets home. She won't know who did it, how it happened. But then I said, you know what? I cannot preach integrity to our whole team and not preach it to myself. And I've always defined integrity as having the judgment to do the right thing even when no one else is looking.
Yes. We say that in the U.S. Attorney's Office too.
Yeah. And boy does that happen all the time in government. And so the first thing I did was I spoke with her very, very discreetly. I spoke behind the back of the person sitting between us so that nobody would hear. And I said, "You're not going to believe this, but one of our servers just accidentally drizzled some olive oil on the back of your dress." And she came very close to blowing it right then and there or at least blowing my attempt at discretion. She was not happy. And I don't blame her. She said, "I just bought this dress this morning. It's the first time I've worn it. I cannot believe your people did this." And I said, "I promise we're going to make this right. I promise. This story is going to have a happy ending. This is how we do things around here." And she calmed down a little bit. And I had an opportunity to get the attention of our general manager who was checking in on this private party. And by the way, I don't want to go into all the detail but the table at Maialino seated comfortably about 18 people and because we kept saying yes to the host, 18 had become 20, 22, 26, finally 28 people sitting around this table.
Well, you were asking for an olive oil incident then.
We were asking for it. Asking for it. Absolutely. So anyway, the general manager immediately got her a pashmina shawl to put around herself so that very discreetly nobody else at the table would see the stain and that she wouldn't have to wonder. And then...
You're getting to the best part.
Yeah. The best part was the GM called Calvin Klein, which is where this dress had come from. They remembered exactly the circumstance under which the woman had bought the dress that morning. They had one more in stock in her size and of course we bought it. And then the very next day we had a big basket delivered to her home with a brand new dress. I remember some salami, a couple bottles of wine, a $500 gift card. Please come back and let us do this again. And of course, a huge bottle of olive oil as well. And look, you got to have a sense of humor.
But you know what? That's a wonderful thing. And you had quick thinking and generosity going for you in your general manager. But why is that so rare? Why is it so rare for everybody out there who is either a service professional or in the business world or you sell a good or you work, you know, pretty much anywhere, there are opportunities to do things like that, but it's exceedingly rare. And that's why we're talking about it.
And we're talking about it. In my first book, Setting the Table, my favorite chapter is called The Road to Success is Paved with Mistakes Well-Handled. And I learned that back in the 1990s from Stanley Marcus, the late founder of Neiman Marcus. And he heard me talking about some mistakes we had made. And he was the one that explained that. And so then it became our intention. Our intention was to harness the greatest renewable human resource which is mistakes. And what if you could... I mean, who makes more and better mistakes than humans do? And so what if you could harness that for the good? And what if you could actually end up in a better spot because you made a mistake? Now granted, it has to be an honest mistake, but if you ended up in a better spot than if you had never made it in the first place, hey, that's free fodder for success. So, I want to get back just very quickly to culture. Culture is an intention. Culture can happen by accident. It's the way we do things. But if you want your culture to be uplifting, it becomes an intention. And as you said earlier, the outcome of our culture should be more excellence and more hospitality. But that doesn't happen without intention.
You tell another story which you know probably hardened your ideas about making mistakes better. But this was not a mistake. This was just somebody who was very thoughtful in how they treated you who they believed was an important customer. You stayed at a hotel in Aspen. Everywhere you went, they upgraded you to a suite and everywhere you went, you saw that someone had taken the time to place something that would be meaningful to you. You want to tell that story in 30 seconds and then what you learned from it and what listeners might learn from it?
I got to my room, an upgraded room. I was giving some wine seminars. This was for Food and Wine magazine. And I dumped all my wine books on the desk that I carried with me on the airplane. The books I dumped hit the mouse of the computer that activated the screen. On the screen comes a live view of the Shack Cam in Madison Square Park with a really nice long line. I said, "This is too much. Just crazy." And it was crazy till I went into the little kitchenette in the room and I noticed that they had a copy of every single one of the books that I've ever written. Setting the Table, the Union Square Cafe Cookbook, Second Helpings, they had our cocktail book, Mix Shake Stir, and there was a big bookmark in the cocktail book to the page of the cocktail that I had named after my father. And then I look up and in the dining room they have not only the printed recipe for that cocktail, but all of the ingredients, the vodka, the Carpano, the fresh bowl of lemons. And if that's not enough, on my last night there, as I'm reaching over on the desk to get a wake-up call, because back in the day before I used my iPhone for that, there is a framed picture of my entire family. And on the frame it says Happy Father's Day. It's like they almost crossed the line.
So that was a little bit over the top and they weren't covering for a mistake. But again it's another example. Now you have a contradictory sentiment in the book which I also agree with. I agree with a lot of this stuff.
You sound like a lawyer. You know, odd that that should be...
Because I've said this about people that I've known who were successful and some of whom are very, very wealthy and have a lot of resources now and there are exceptions to this but it sounds like a paradox and that is don't aim for success, right? And you quote from Viktor Frankl, Man's Search for Meaning, about how success rarely happens when you pursue it overtly. And I don't know if you mean success at the restaurant business or success as a lawyer or success as a podcaster or you mean success is measured by having wealth and means and a big house. And you say the more you aim at it, you're quoting, the more you aim at it and make it a target the more you're going to miss it. For success like happiness cannot be pursued. It must ensue and it only does so as the unintended side effect of one's personal dedication to a cause greater than oneself. End quote. Is that in fact a paradox or how do you resolve that in your head?
I don't think it's at all a paradox. I included that amazing quote from Viktor Frankl because that has been my experience that almost every time I have aimed to make something successful, like I wake up and I go this is the thing, it doesn't happen. And the things that have worked out the best, and I put Shake Shack in that category, I put Daily Provisions in that category, Union Square Cafe, but the success of any of those have been a byproduct of when I was pursuing what mattered most to me. In the case of Shake Shack, it was caring for the community and learning about hospitality. In the case of Daily Provisions, it was taking care of our neighborhood, giving a gift to our neighborhood because I had some extra space next door to Union Square Cafe. So on the other hand, you will recall from reading What Could Possibly Go Right that many things didn't and almost 100% of the things where I was saying let's just do it because it's a good deal or it's a good, the landlord really wants us to do this thing where there was an absence of higher purpose. That was the thing that most correlated to the projects not working so well.
Just so we're clear, I'm sounding like a lawyer again. That doesn't mean that you didn't pay attention to the revenue and to the bottom line. And to the critics and all that. All that. But what you're saying is a mindset that if you set out on January 1, by the end of the year, I want to be famous or at the end of the year I want to have, you know, 27 new matters. I want to win three trials. Whatever metric it is, if that's your top focus, you're in trouble. But you cared about success.
