Key Moments
Danny Meyer, Founder of Shake Shack — How to Win, The 4 Quadrants of Performance, and More
Tim FerrissKey Moments
Danny Meyer on building hospitality businesses, focusing on people, and learning from failure.
Key Insights
The "4 Quadrants of Performance" (Can/Will, Can/Won't, Can't/Will, Can't/Won't) is a framework for managing employees.
Prioritizing employees as the primary stakeholder is crucial for business success.
Learning from "failures" is essential; closing a restaurant can be done with grace and lessons learned.
The "Hospitality Included" model aimed to equalize pay between servers and cooks.
Curiosity and a "learn-it-all" attitude are key traits for personal and professional growth.
Assuming the best intent in others fosters better relationships and business outcomes.
THE ORIGINS OF A HOSPITALITY VISION
Danny Meyer's journey wasn't a direct path to restaurateur. A pivotal experience in Rome at 20, working for his father's travel business, exposed him to rich food cultures and transactional relationships. This led to a realization about the power of genuine connection. A chance conversation with his uncle, questioning his pursuit of law, shifted his focus entirely towards his passion for food and restaurants, a path that was not traditionally seen as a viable career choice at the time, highlighting a significant 'sliding door' moment driven by self-awareness and his uncle's probing question about living a life with passion.
LEARNING THE BUSINESS THROUGH CURIOUS OBSERVATION
Meyer's early career in sales at Checkpoint Systems taught him the value of "Always be collecting dots so you can always be connecting dots." He emphasized genuine curiosity and interest in others, learning about their businesses and connections. This principle extended to his restaurant career, where understanding people—whether guests, staff, suppliers, or the community—is paramount. His grandmother's analogy of gardening, watering the "flowers" (good employees) to naturally crowd out the "weeds" (problem employees), illustrates a core philosophy of focusing on positive reinforcement and growth.
THE FOUR STAKEHOLDERS AND THE VIRTUOUS CYCLE
Meyer identifies five key stakeholders in any business: employees, guests, community, suppliers, and investors. He emphasizes that the order of prioritization is crucial, with employees being his first focus. This approach fosters a "virtuous cycle" where happy employees lead to happy customers, which ultimately leads to happy investors. This contrasts with the "investor-first" model and is rooted in his experience leading volunteers, where a higher purpose, not money, was the primary motivator, a lesson he applies to treating all employees as if they are volunteering their talents.
NAVIGATING FAILURE AND THE ESSENTIALITY OF RESTAURANTS
Meyer views "failure" not as an endpoint, but as a learning opportunity. The closure of his Indian restaurant, Tabla, after 13 years, taught him that longevity isn't the sole measure of success; it's about essentiality—making a restaurant indispensable to people's lives. He advocates for "learning to fail fast" and closing gracefully, as demonstrated by Tabla's well-managed closure, which prioritized staff, community, and investors. This perspective reshaped his view, realizing that closing a restaurant isn't a failure but a business decision.
THE 'HOSPITALITY INCLUDED' EXPERIMENT AND ITS LESSONS
Facing industry-wide cook shortages and wage stagnation, Meyer experimented with the "Hospitality Included" model, eliminating tipping to better compensate kitchen staff and increase overall wages for all employees. This bold move aimed to equalize pay and attract talent. While challenging to implement due to deeply ingrained tipping culture, it highlighted the disparity between server incomes (tied to menu prices) and cook incomes. The initiative ultimately didn't prove mathematically sustainable long-term but led to valuable insights about fair compensation and the complexities of the service industry's economic structure.
THE POWER OF QUESTIONS AND CHARITABLE ASSUMPTIONS
Meyer's approach to hiring emphasizes qualities beyond technical skills, focusing on "kind eyes," curiosity, work ethic, empathy, self-awareness, and integrity. He adds the crucial element of a "love for winning," meticulously categorized by motivation (beating others, avoiding loss, or surpassing personal bests). His advice for external communication is embodied in the simple billboard message: "Can't we please have a charitable assumption about one another?" He believes starting with the assumption of good intentions is fundamental to positive relationships and navigating life's complexities, a philosophy he cultivated from observing his parents' dynamic and the importance of finding common ground.
Mentioned in This Episode
●Products
●Companies
●Organizations
●Books
●Concepts
●People Referenced
Danny Meyer's Principles for Business Success & Culture
Practical takeaways from this episode
Do This
Avoid This
Common Questions
While working as a tour guide in Rome at age 20, Danny Meyer frequented a trattoria that started calling him 'Meyerino' (Little Meyer). This evolved into 'Maialino' (Little Pig) because his favorite dish there was roast suckling pig. Years later, his wife surprised him with a 'Maialino' logo for his 50th birthday, which ultimately inspired the restaurant's name.
Topics
Mentioned in this video
A film that Danny Meyer references for two lessons: 'the only real failure is the failure to try' and 'the measure of success is how we cope with the disappointment'.
Fictional character from a Mark Twain novel, referenced by Danny Meyer in a comparison to his grandmother teaching him to weed her garden, akin to Tom Sawyer tricking others into whitewashing a fence.
Magazine that named Danny Meyer one of 2015's 100 most influential people.
City in France where Danny Meyer spent time learning to cook at two restaurants, La Réserve and Dubern, connected through his father's colleagues.
The preeminent dining capital in America, where Danny Meyer's restaurants are located, and where he observed the challenges of the tipping system.
Country mentioned as an example of a culture where tipping is not customary, providing a contrast to the American tipping system.
A town in Texas famous for its delicious meat (barbecue), from which Shake Shack in Austin sources sausage for its 'Lockhart Link' burger.
City where a hurricane occurred, which led to a conversation between Danny Meyer and Theo Epstein about rooting for the Astros in the World Series.
City in Texas where Shake Shack has a location that offers an exclusive burger called the 'Lockhart Link'.
A Major League Baseball team that Theo Epstein helped lead to their first title in decades.
A school where Danny Meyer and a friend enrolled to take a restaurant management class.
A collection of luxury hotels and restaurants, whose colleagues of Danny Meyer's dad connected him to restaurants in Bordeaux.
Professional baseball league in North America, mentioned in the context of Theo Epstein's career and the use of statistics in the sport.
City where Danny Meyer worked as a tour guide at 20, a pivotal experience that directed his career path and the origin of his restaurant's name.
The college Danny Meyer attended, where he met a friend who later introduced him to his first restaurant job opportunity.
A prestigious culinary school, mentioned as the alma mater of many servers at North End Grill who could not afford to work as cooks.
A Major League Baseball team famously rebuilt by general manager Billy Beane.
A company where Danny Meyer worked as a salesman selling electronic tags to stop shoplifters, achieving top salesman status.
One of two restaurants in Bordeaux where Danny Meyer learned to cook.
A Major League Baseball team that Theo Epstein helped win a World Series for the first time in many years.
A Major League Baseball team that lost to Houston in the World Series, and was rooted for by Theo Epstein for strategic reasons regarding future competition.
One of USHG's restaurants, mentioned in the context of it having been affected by the 'Hospitality Included' experiment.
One of three trattorias in Rome that would pay Danny Meyer a thousand lira per head for guests he brought in.
An Indian restaurant founded by Danny Meyer, which operated for 13 years before closing; its closure was a major learning experience for Meyer about embracing failure and closure.
The hospitality group founded by Danny Meyer, comprising acclaimed New York restaurants like Gramercy Tavern and Maialino, and also responsible for founding Shake Shack.
An Italian restaurant founded by Danny Meyer, whose name means 'little pig' and has a personal backstory relating to Danny Meyer's time in Rome.
Educational company whose course Danny Meyer took to prepare for the LSATs.
A Major League Baseball team, mentioned as the opponent the Boston Red Sox beat in 2004, a fact Danny Meyer jokingly regrets.
A modern day roadside burger restaurant founded by Danny Meyer and USHG, which became a public company in 2015.
An Italian restaurant in New York City where Danny Meyer had a pivotal conversation with his uncle about his career path.
One of Danny Meyer's restaurants that closed, which he cites as having a subpar location, and where he observed culinary graduates working as servers due to pay disparity.
One of USHG's beloved and acclaimed restaurants.
Airline that offered $44 roundtrip travel anywhere it flew for Danny Meyer until he was 21, thanks to his dad's travel business.
One of two restaurants in Bordeaux where Danny Meyer learned to cook, which had just lost its second Michelin star, creating opportunities for him.
Musician whose song 'Cold Turkey' Danny Meyer played to his senior leaders when he declared tips to be a 'drug' to get off of.
Founder and chairman of Union Square Hospitality Group (USHG) and Shake Shack. Author of 'Setting the Table' and recipient of the Julia Child Award.
Fantastic chef at Tabla restaurant who sadly died during Covid.
Marketing expert and author whose book 'This Is Marketing' Danny Meyer often gifts. He also shared a personal anecdote about Godin's restaurant experience.
Danny Meyer's wife, who co-created the Maialino logo for his 50th birthday, which later became the restaurant logo.
A mutual acquaintance of Tim Ferriss and Danny Meyer, who acted as an intermediary for Tim's invitation to Danny for his book, 'Tribe of Mentors'.
Economist from the University of Chicago, known for the idea that businesses should prioritize investors first, a concept Danny Meyer contrasts with his own stakeholder approach.
Famous tennis player, used as an example of someone who hates to lose, illustrating a type of competitive motivation.
Famous general manager known for rebuilding the Oakland Athletics and being the antagonist of 'Moneyball'.
A late restaurateur who had a notable expression about the definition of a classic restaurant.
Economist whose theories were studied in Econ 101, contrasting with Danny Meyer's stakeholder prioritization.
A restaurateur in London who taught Danny Meyer the lesson about 'shoulds' in decision-making.
Famous boxer, used as an example of someone primarily motivated by a love for beating someone else.
Boxer famously defeated by Muhammad Ali, used in an analogy to illustrate competitive motivation.
Youngest general manager in Major League Baseball history, who led the Boston Red Sox and Chicago Cubs to World Series victories, teaching Danny Meyer lessons about team dynamics beyond statistics.
Independent candidate for president in 1980, for whom Danny Meyer worked as Cook County Field Coordinator, learning valuable lessons about motivating volunteers.
Olympic sprinter, used as an example of an athlete motivated by exceeding his own personal best.
Danny Meyer's New York Times Bestseller which articulates his signature business and life principles.
Book and film about Billy Beane's use of sabermetrics to build the Oakland Athletics baseball team.
A book by Tim Ferriss, for which Danny Meyer was invited to participate, leading to his 'polite decline' letter.
Fictional character from a Mark Twain novel, referenced by Danny Meyer in a comparison to his grandmother teaching him to weed her garden.
A book by Seth Godin that Danny Meyer frequently gifts, valued for its insights into marketing as understanding people's longing to belong.
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