Thank you, Taj. Delighted to be here as we kick off a publication day tomorrow for both of us. We publish our books tomorrow, both by Doubleday, both with lots of publicity and hype, all aimed at selling more books and earning royalties for us.
How would you like to be the cleric competing with the pope? Same day.
First question, Danny, to ask you, and I have a whole list of questions here prepared by someone on your staff who doesn't really care for you. First question: why is Shake Shack stock down 30%? I'm not going to ask that question. Okay.
I don't know. Sounds like a good buying opportunity to me.
So, this is your first book in 20 years. Setting the Table is 20 years ago. So the obvious question for a New York Times bestselling author is what the hell you been doing? I mean, you haven't been writing.
No, I've been living the next book. And this is truly a book about a lot of the bumps and bruises and a whole lot of good things that have happened over those last 20 years. I was surprised at the bruises. You're pretty brutal about what this bit crazy business you're in. When you finished Setting the Table, you sort of bragged about the fact you had never closed a restaurant. And you start off this book by closing a restaurant. And it's not the first closure. There are a lot of them. And you're very honest about the mistakes that were made. You take responsibility for all of them. I don't think that's accurate, but it's a crazy business. You agree?
Is that a question?
Why would you do it? Why would you do this business? Or why would I tell people how many mistakes we've made?
Look, it's a great business. There is no business that I was better suited for than the business of hospitality and being kind and pulling a team together that also enjoys making people feel better. And what was great about Setting the Table 20 years ago was it was really my blueprint to understand the power of hospitality. And we've been using that book. Many have been using the book. It's not just for restaurants.
For 20 years. And it worked. And it worked so well that we started to grow. And once we started to grow, I realized there's something that Setting the Table had not answered for me. And that was, all right, how do you not lose the thing that made people love you when you were smaller? How can you actually scale values?
You're almost afraid to grow.
You were afraid to grow, not afraid, but you were hesitant to grow the great success you had with the first three or four famous restaurants and then the first Shake Shack that no one expected to do anything. And it took you how many years to open the second one?
Took five years to open a second Shake Shack. It took me 10 years to open a second restaurant, Gramercy Tavern.
And part of it was fear, part of it was a sense I don't want to screw up this thing that I always kind of thought was a fluke anyway. And so I didn't do it. I also was a little bit leery because when I saw my dad in St. Louis have a bankruptcy or two, I always associated those with when he grew his business. And it took a lot of self-reflection, some therapy, to realize I'm not my dad. And number two, that there's a whole lot of businesses that have scaled in history that didn't go bankrupt because of that. So it took a while to get over those things. The other thing I have to share, and you New Yorkers, you understand this, for many, many years there was a sense that, and I give André Soltner at Lutèce a lot of the credit for this. Some of you may remember Lutèce. He was in his restaurant every single meal that the restaurant was open. If he wanted a vacation, he closed the restaurant for two or three weeks, whatever. And I always felt this sense that we would not be taken seriously if we grew too much. And the last thing I wanted to do was be a chain or seen as a chain. So, yeah, it took a long time to get over that, but I did.
Let's go back to the very beginning. You came here from St. Louis when you what, 25 years old?
What was the crazy idea to open a restaurant as a kid from St. Louis in New York City?
It was just luck. It was luck that I got into that. And I've told this story many times, but you're asking the question. I actually wanted to be you when I grew up.
You.
I wanted to be, well, the first part of your career. I wanted to be, I didn't want to have 50 best-selling books. Anyone can do that.
Not to do it every 20 years, Danny. You have to write faster than that. Okay. You can't do a book every 20 years.
I don't have enough years left on my lease to do that. But no, I wanted to be a lawyer, or I thought I wanted to be a lawyer. And I just got really lucky that the night before taking my LSAT, I was out to dinner right in this neighborhood with my aunt and uncle. And I was in the world's worst mood because I had to wake up at 5:30 to take a test I didn't want to take. And my uncle got right to the point. And he said, 'I don't know what's bothering you, but you're ruining our dinner. We're having a good time.' And I said, 'Well, I have to take my LSAT tomorrow.' And he said, 'Well, of course, because you want to be a lawyer.' And I said, 'Actually, I don't.' And he said, 'You got to be kidding me. Do you realize how long you're going to be dead?' And I said, 'No.' And he said, 'I don't either, but I'll tell you one thing. You're going to be dead a lot longer than you're going to be alive. Why would you do something you have no passion for?' And I said, 'Because I don't know what else I could do.' And he said, 'You fool. All I've heard you talk about your whole life is restaurants and food.' And that was the night, 1984. I was 25, or I think I was still 25. And I took the LSAT, bombed it, never applied to one law school.
What are you making that face at me for?
When you mention the LSAT, I just get in a foul mood. It's just a... I think I'm being a lawyer. I just get in... slow down. Go back to what your uncle said. What was the beginning of this fascination with food and restaurants?
The beginning of it was that my dad and I were very, very close when I was very young and we cooked together all the time. He had a travel business primarily in Europe and we always had French people living in our home. They were like the sons and daughters of the innkeepers he worked with.
We didn't have that in Mississippi, by the way. We didn't have that down south.
Well, I bet you also didn't have a little French poodle named Ratatouille the way I did.
Yeah. So we cooked Ratatouille. Not the dog, but we actually made the dish together all the time. We grilled outside and my dad would drink wine while we were grilling and invariably he'd stop paying attention and the flames would, he would just take the bottle of Beaujolais and put out the flames with the Beaujolais. Anyway, so that was my life and I got to travel a lot because of his business.
She cooked chicken livers and Mrs. Paul's fish sticks, you know, but she could cook. Okay.
But I... Anyway, here's what the real... You got to understand this. You know a thing or two about Missouri, don't you?
Missouri. My grandmother's from Missouri.
Okay. I thought so. So Missouri back when I grew up was considered a bellwether state. It wasn't a bright red state the way it is today. Whichever way the presidential election went, Missouri always had voted for whoever won, either party. And I was the middle child of three. Republican dad and grandparents on that side, Democratic mom and grandparents on that side. Every night when I grew up, you got the news on with Walter Cronkite or whatever. Vietnam, Watergate, Earth Day, all the kind of stuff that fermented rage amongst a lot of people. And I was the guy sitting in the middle of the table in this middle state of our country trying to make peace. And the only thing that I found was that food brought everyone together. It was impossible to sustain a full-throated argument if you had a good piece of fried chicken in your hand. And it's not really a surprise to me all these years later that that's what I made my living doing. You know, as a lawyer, I'd be fighting with people. In my business, I'm bringing people together with food.
Okay. So, your uncle tells you to open a restaurant in New York City. That's not that easy, right? How much does it cost? How much did it cost back then to open a restaurant?
So, I spent about three or four months pounding the pavement looking for a site. This was a very, very cold winter of 1984 going into 1985. And I finally found a place on Union Square Park that was a 49-year-old vegetarian restaurant. The first vegetarian restaurant in the city. It was called Brownies. And I walked in. I was used to cold calling because I had been a salesman the first three years I lived in New York selling electronic tags to stop shoplifters. So if you can do that, you can definitely ask. So I asked the guy at the front, who was a cashier in the front of the restaurant on 16th Street, 'May I please speak with the owner?' And he said, 'Why?' And I said, 'I want to see if he wants to sell his restaurant.' I mean, who would ask that question? A 24-year-old kid who...
He said, 'He's busy right now, but if you leave me...' So I left him my business card that I had from the shoplifting company, I mean, anti-shoplifting company, I should say. And the guy calls me, his name was Sam Brown. The place was Brownies. And he said he'd like to talk. And so I went in the restaurant. He was wheezing. I guess he had developed asthma. And he said, 'You caught me at a time in my life when I'm actually ready.' And so I bought the last 13 years of a 20-year lease. I think it was his third 20-year lease. I bought the last 13 years of that for $240,000, which gave me the right to pay $8 a square foot in rent. Now $8 is a rounding error on something like a four-digit number today. And then I just put in a few more dollars. I got great advice from people, which is, don't... every dollar you spend today is a dollar that's going to make you have to keep raising your prices. Just be nice to people, serve them good food, and they'll come back. And so I cheaped out on everything. We took his old refrigerators in the back of his bar and just put linoleum green covering on it. One of them never worked, by the way. It couldn't work for the wrong reason, though. This is where we kept all of our wine. And this refrigerator, you could not get it above 34 degrees. And so that's where I kept all the dessert wines. And I called it the medicine cabinet because every time we made a mistake, which was like every minute on every table, he said, 'Go to the medicine cabinet, pour them some dessert wine.' But we were damned if we were not going to make these people leave happy. So, what did it cost to open back then? When you opened the restaurant, how much money had you spent? $750,000. So it was 240 to buy the lease and another half a million bucks to put the linoleum on.
Well, when I was working at Checkpoint Systems, which was the top shoplifting company. I was the top salesman there for three years. I was living in this neighborhood. I had a tiny rent. I had no one to support and I kept buying the company's stock, which was traded over the counter, now called NASDAQ, was selling for two bucks a share and it went up to $12 while I was there. And I was making $125,000 a year in commission in 1984 and wasn't spending that much on myself.
So there we go. Pretty gutsy move.
In all fairness, I got a loan from my mother, a loan from one aunt, and a loan from one uncle, which I was able to pay back pretty quickly. They, if they had been smart, they would have done it as equity, not a loan, but it worked out. Okay.
So, what was opening night like? 1985, 41 years ago.
Yeah, opening night was... I got Bell's palsy. Literally, I was so worried. I didn't get it on opening night, but I got it very, very soon thereafter. I was so worried about Bryan Miller, the restaurant critic, coming in that... and I had taken wine classes with him in New York before, well before he was the restaurant critic. So, he knew I was opening this restaurant and I was just so nervous. I guess you don't know if Bell's palsy is just nerves or if it's something else. But what I remember is on our first New Year's night, which was just a couple months after we opened, I could barely get a half smile out of my face. And it was a very, very tough night. I was going with Audrey to her high school reunion. It was probably her fifth high school reunion or something. And I noticed this because as soon as we got to the reunion, I could only taste wine on half my tongue. And it's a scary thing because they tell you, you know, 80% of the time it goes away, but in 20% of the cases you're not going to be able to taste again and you're not going to be able to smile again. That's not really good for my profession, is it?
Yeah.
So Audrey's in the picture by now, right?
Audrey was in the picture well before that because when I decided not to be a lawyer, my best friend, one of my best friends from college, got me a job with the one restaurant that his bank, US Trust, would give a loan to. Back in those days, banks ran the other direction if you said, you know, you want to take out a loan for a restaurant. And he felt badly because I had asked him, I said, 'Go into the business with me. You be the money guy, I'll be the food guy.' And he took two restaurant classes with me and dropped out. He said, 'This is for you, not for me.' But he felt so badly he introduced me to his one bank client. And that guy had a seafood restaurant on 22nd Street called Pesca. And he got me the interview. And the interview was the best interview I've ever had in my life. He waved me down the bar. He's sitting in the bar stool mid-bar. He says, 'Just... this is it.' He said, 'Turn around.' So I faced him and he looks me up and down and he goes, 'You'll do.' Next day I became the assistant lunch manager at Pesca. $250 a week. And on day one, they said, 'You're going to be taking reservations today. It's in the basement.' And I run down to the basement. And running up the basement is this beautiful young woman. And I go, 'I think I'm going to like this job.' That was Audrey all those years ago. Well, the next morning she was gone and I said, 'I'm not so sure I'm going to like this job.' She had gotten cast in Guys and Dolls, Sarah Brown, the lead role in a theater in the Midwest. And I still liked the job. And then she came back.
So she was not from New York.
She lived in New York to pursue her acting career, but she was primarily from Bucks County, Pennsylvania at that point.
What was her idea of what you were doing when you plopped down 750 for a brand new restaurant in New York and you're 25 years old?
Well, by this point I was 27, John.
And when I met her, I was 24, I think. I think she just cheered me on and she hasn't stopped cheering me on all these years. Yeah, she... Here's the thing. When you're an entrepreneur, you don't see what could possibly go wrong.
That's a great title for a book, by the way.
I think that's actually how I came up with a title for this book. And in a minute, I'm going to be asking you how you come up with the titles for your books because...
That's a short conversation.
It's not an easy thing. But as I think about my entire career and as I think about meeting Audrey, as I think about so many things that you look at them and you go like that doesn't feel like it's going to work out exactly. The ethos and the mindset of 'well, okay, but what could possibly go right' actually brings about either better ideas or better solutions to what look like intractable problems. And so getting back to your question, I think every entrepreneur in the world started by saying, 'I see a problem. I see a solution.' And then they go, 'What could possibly go right?' I don't think one great entrepreneur in history said, 'You know what could go wrong with this idea?' That just doesn't work. And especially today, I am so tired of all the negativity out there, pessimism, skepticism about everything. And so we could use a little bit of optimism.
Let's stay away from politics.
No, I'm just curious about the support you got from your wife when you're a couple of young kids, young newlyweds, and you're launching something that was pretty big financially for someone with no experience. That takes a lot of support from home and a lot of nights in the restaurant away from home.
I think if there was one benefit early on is that we met in the restaurant business. So Audrey only knew me as... she didn't have to make an adjustment. She only knew me as someone who was working those late nights and we had some of our best dates on Friday nights at the end of a long work week. We'd meet at the Union Square Cafe bar and have a really good dinner at the bar and it was like the payoff to...
You dated your wife in your own restaurant.
It's kind of a cheap skate thing to do.
Well, you give her a 10% discount?
I didn't even date my wife in the restaurant we met in. As a matter of fact, we did not have our first date till my last night of work. And this was well before me, too. I just knew that was wrong. Okay, let's stay away from my wife.
Yeah. One thing that I... by the way, weren't you a defense attorney? It seems like a prosecutor right now.
I was a criminal defense attorney and had a lot of cases and trials, but that was back in 1984. A long time ago, D.
Well, that's about the time Audrey and I try to forget all that. I was thinking that my first encounter with one of your restaurants was in the early 1990s when we first started coming to New York in 1988. My first literary lunch was at the old Russian Tea Room with my editor who just bought my first novel, A Time to Kill. And we got the magic phone call and so we raced to New York to meet the guy who's going to publish the book and we were so excited and we had to pay for the trip, by the way, back in those days.
I think you still would.
I said I think you still would.
Well, still, but we don't pay for the trips anymore. Okay. We came to New York when we had the Russian Tea Room was one lunch and then we had another lunch. But the first dinner that I recall was with my publisher at the time at the Union Square Cafe, probably 1991, 92. So we go way back. We've enjoyed so many restaurants, so many lunches at the Modern. We stay in Midtown a lot, walk down to the restaurant there. And just over the years, coming to New York, we do it two or three times a year.
I think you've been spotted in Gramercy Tavern a few times too.
More than a few. One of our favorites. 11 Madison, Mya, a few times. Has Mya found a home?
It has found a home and we will reopen it about this time next year and I cannot wait.
That's good.
You've been evicted from so many places though. You got kicked out. Danny and I got kicked out of several places.
And not because we don't pay our rent either. It's just... now we've had... Mya is the, I call it the little piggy that could, because it is determined to come back and she will. And I cannot wait.
There's a whole story in What Could Possibly Go Right about how determined I have been to manifest bringing back my...
I get that. Yeah. Well, what one amazing thing about the book again is your willingness to fail, to take a chance on something you're not sure about. Even after all this great success, you're very candid about your failures and the restaurants that didn't make it, the ideas that didn't make it. And that's kind of a gutsy thing to do. You still do that? You still unafraid to take chances, roll the dice?
