Danny Meyer - The $2B Shake Shack Playbook

GM! It's Friday, March 31st - Today, we're covering the cheat code used by an entrepreneur that built a $2.3B restaurant empire out of New York City. If it works in one of the most competitive industries in the world...it can work for you.

Let's dig in!

 - Callum

FEATURE

Danny Meyer - Winning Formula In A Cutthroat Industry 

At 27, this entrepreneur opened one of the most popular restaurants in New York City.

19 years later he built a $2.2B burger empire.

With 80% of eateries folding within 2 years, what's his secret recipe?

Building A Restaurant Empire

Meet Danny Meyer - The founder of Union Square Hospitality.

Meyer founded his first restaurant, Union Square Cafe, in 1985 and went on to start over 15 more massively successful restaurants, including Shake Shack. 

His secret to success is what he calls “enlightened hospitality”. 

To Meyer, hospitality is the key factor for success across every industry, which he defines as containing 2 elements:

• Technical: Ensuring your product meets or exceeds customer expectations.

• Emotional: Provide good service in the delivery of your product and show respect to the consumer.

When these two components are skillfully implemented, customers feel as though you've done something for them, not to them.

It’s this understanding of hospitality that enabled Meyer to grow a fast-food chain with $900M in annual revenue.

The Business Model Behind The $2.3B Shake Shack Empire

Before Shake Shack, critics claimed that Meyer’s enlightened hospitality model could only apply to upscale restaurants. To prove these critics wrong, Meyer started a hot dog cart in Madison Square Park which would end up being a multi-billion dollar restaurant chain with 262 locations in the U.S. and 140 internationally.

Here’s how Shake Shack executes Meyer’s two key elements to hospitality:

Technical: If you’ve been to Shake Shack, you can’t deny that they make a phenomenal product. Meyer classifies Shake Shack as “fine-casual” dining, which pairs the ingredient quality and taste level of fine dining with the fast food experience.  

Emotional: With Shake Shack’s fine-casual model, the consumer is giving up fine dining’s waiters, bartenders, and reservations in exchange for 80% of the quality, 20% of the price, and a fraction of the time. Consumers walk away feeling like they got a bargain and that Shake Shack did something for them, not to them.

The Playbook

Here’s a breakdown of Meyer’s enlightened hospitality model that he’s employed at each of his restaurants - it works. 

• Recognize that every business has the same 5 stakeholders: employees, customers, community, suppliers, and investors. 

• You must prioritize these 5 stakeholders in this order.

• By prioritizing employees first and investors last, you create a virtuous circle that breeds success and in the end rewards investors.

When you hire the best people and keep them happy, you create the foundation to provide top-notch hospitality to your customers.

TOGETHER WITH GRAZE

Meet The Startup Bringing 5X Higher Margin Potential To Landscapers

Graze’s investment opportunity ends on 4/13 – here’s why you don’t want to miss it. 

The company is overhauling a tradition of high costs and low reliability in lawnmowing…by introducing robots.

Their fully electric, autonomous lawnmowers are on a mission to transform the world’s golf courses, airports, parks, solar fields, and more using less labor and fuel. 

In fact, they project: 

• 50% lower fuel and labor costs

• 5X higher potential margins

• Consistent, quality work 

That’s both a more affordable and environmentally sustainable option.

Which is why so many commercial landscapers have already expressed interest in their technology, representing over $32M in potential revenue for Graze. 

Thanks to lidar, odometry sensors, cameras, and a suite of computer vision technologies, the company has created a safer, more effective, and more cost-efficient landscaping experience. 

So it’s no surprise they already have 10,000 investors.

But the clock is ticking. 

Join Graze as they disrupt the $129B commercial landscaping industry before 4/13.

Please Support Our Partners ❤️ 

ON TREND

Lyft Co-Founders Resign as Stock Continues to Tumble

You Should Know:

Lyft’s two founders, CEO Logan Green, and president John Zimmer will resign on April 17th to serve on board positions for the company. 

Unlike Uber, Lyft failed to recover from the pandemic and made some questionable business ventures which has led to an 80% stock drop in just one year.

The takeaways: 

• The former VP at Amazon and founder of Worldreader, David Risher, will take over as Lyft’s CEO.

• Lyft spent significant capital acquiring scooter and bike-sharing companies that ultimately failed to bring profits.

• The company never expanded into food delivery like Uber did, so it struggled during the pandemic and still struggles to bring back consumer interest.

• Lyft’s Q4 2022 report shows $588.1M net loss.

• The co-founders’ resignation could be a positive sign of the company’s willingness to make needed changes to their business model.

Do you think a change in leadership is enough to bring Lyft back from the brink? Let me know what you think!