Masters of Scale: Danny Meyer

  • I was completely ignorant of my own burning passion: Danny loved restaurants but spent 3 years selling electric tags to stop shoplifters. (0:48)

  • How Danny finally made the leap into restaurants: I decided to get a law degree. The night before I was scheduled to take the LSAT I had dinner with family. I was in a foul mood. My uncle asked why? Danny said: I don’t really want to be a lawyer. His uncle said: Don’t you realIze you’ll be dead forever? Why waste your life doing something you don’t want to do? All I’ve ever heard you talk about is restaurants your whole life. You fool, you should open a restaurant. (1:23) 

  • I applied to the New York restaurant school. I convinced my best friend to join me. When his parents found out they made him drop out: No son of ours is going to go into that nasty business [the restaurant business was no place for someone of good social standing]. (8:31) 

  • Learning what to do through poor execution: I knew what it felt like to not be treated well in a restaurant. I was picking up lessons about what not to do as much as what to do. (9:54) 

  • Why Danny was reluctant to open more than one restaurant: Watching my dad go through two business bankruptcies was deeply etched into my psyche. It was an incredibly painful thing to see my dad and family suffer through bankruptcies. I made the assumption that doing anything that looked like growth would lead me down the path of bankruptcy. (12:27) 

  • The first year of opening the 2nd restaurant: We got horrible reviews. My first restaurant dropped in the Zagat survey. My life was a mess. I didn’t know how to be in two places at once. (19:18)

  • Hospitality comes down to one proposition: For. If you feel like the other person did something for you that is hospitality. If you think about every transaction you go through in life you don’t necessarily feel like they did something for you - in fact, sometimes you feel like they did something to you. (27:17)

  • The best definition of hospitality: Hospitality is an emotional transaction. Service is a technical transaction. You need them both. (28:13) 

  • The hierarchy in Danny’s restaurants: Staff comes first. Customers come second. The community is third. Suppliers come 4th. Investors come 5th. This isn’t a linear one through five list. It’s a virtuous cycle. If you break the cycle anywhere you break the whole thing. (30:02) 

  • Danny’s advice to his staff: Take care of each other so that you can take even better care of our guests so that we will have more revenue so that we can have better suppliers This helped me understand you can actually scale culture (34:00) 

  • The first Shake Shack was a mistake: The most lucrative mistake I’ll ever make in my life. I was trying to prove to myself that hospitality was not a fluke. (36:00)

  • How Shake Shack started: There was an art installation that featured a hot dog cart. The park committee asked Danny to operate the stand. Danny thought it was a way to test a theory that hospitality can be expressed in something as mundane as a hot dog cart. Could we do the same things we were doing in fancy restaurants? (36:03) 

  • Some of the best advice Danny ever received: I don’t know that culture wants to be maintained. Culture is like a shark. It is moving forward or it dies. You don’t want to maintain a culture. You always want to be growing it. Why don’t you try a different question? How can we use our growth to advance our culture? (38:43) 

  • Architects and contractors have this law that I hate: The rule of two. Quality, speed or price - which two do you want? I think the restaurant industry did this as well. [Shake Shack is all 3] Fine casual gets to two in a different way: .65 + .65 + 70 = 2. We will save you 65% of the money. We will save you 65% of the time and we will give you 70% of the quality. (39:43)