#665: Danny Meyer, Founder of Shake Shack — How to Win, The Art of The Graceful “No,” Overcoming Setbacks, The 6 Traits of Exceptional People, The 4 Quadrants of Performance, Lessons from Hospitality Excellence, and More

Brought to you by Eight Sleep’s Pod Cover http://eightsleep.com/Tim sleeping solution for dynamic cooling and heating, Athletic Greens’s AG1 http://athleticgreens.com/tim all-in-one nutritional supplement, and LinkedIn Marketing Solutions http://linkedin.com/tfs marketing platform with 900M+ users. Danny Meyer (@dhmeyer https://twitter.com/dhmeyer) is the founder and chairman of Union Square Hospitality Group (USHG), which comprises some of New York’s most beloved and acclaimed restaurants, including Gramercy Tavern, The Modern, Maialino, and more. Danny and USHG also founded Shake Shack, the modern-day “roadside” burger restaurant, which became a public company in 2015. Danny is the author of the New York Times bestseller Setting the Table https://www.amazon.com/Setting-Table-Transforming-Hospitality-Business-ebook/dp/B000OI0FCQ/?tag=offsitoftimfe-20, which articulates a set of signature business and life principles that translate to a wide range of industries. He is the recipient of the 2017 Julia Child Award and was named by Time magazine as one of 2015’s 100 most influential people. Danny and USHG’s restaurants and individuals together have won an unprecedented 28 James Beard Awards, including Outstanding Restaurateur in 2005. Please enjoy! This episode is brought to you by LinkedIn Marketing Solutions https://linkedin.com/TFS, the go-to tool for B2B marketers and advertisers https://linkedin.com/TFS who want to drive brand awareness, generate leads, or build long-term relationships that result in real business impact. With a community of more than 900 million professionals, LinkedIn https://linkedin.com/TFS is gigantic, but it can be hyper-specific. You have access to a diverse group of people all searching for things they need to grow professionally. 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Right now, Athletic Greens https://www.athleticgreens.com/tim is offering you their Vitamin D Liquid Formula free with your first subscription purchase—a vital nutrient for a strong immune system and strong bones. Visit AthleticGreens.com/Tim https://www.athleticgreens.com/tim to claim this special offer today and receive the free Vitamin D Liquid Formula (and 5 free travel packs) with your first subscription purchase! That’s up to a one-year supply of Vitamin D as added value when you try their delicious and comprehensive all-in-one daily greens product. * This episode is also brought to you by Eight Sleep http://eightsleep.com/Tim! Eight Sleep’s Pod Cover http://eightsleep.com/Tim is the easiest and fastest way to sleep at the perfect temperature. It pairs dynamic cooling and heating with biometric tracking to offer the most advanced (and user-friendly) solution on the market. Simply add the Pod Cover http://eightsleep.com/Tim to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. It also splits your bed in half, so your partner can choose a totally different temperature. Go to EightSleep.com/Tim http://eightsleep.com/Tim and save $250 on the Eight Sleep Pod Cover. Eight Sleep currently ships within the USA, Canada, the UK, select countries in the EU, and Australia. * [05:21] The meaning behind Maialino. [08:58] Control vs. surprises. [10:53] A pivotal conversation. [19:46] Converting the cranky. [22:16] ABCD: Always be collecting dots; always be connecting dots. [25:35] Danny's first steps to chefdom. [31:06] Being paid the worst to learn from the best. [34:56] How business is like gardening. [40:37] A virtuous cycle of stakeholders. [43:57] The politely genuine decline. [49:47] Six qualities Danny looks for when hiring. [56:07] Work ethic lessons from Theo Epstein. [1:03:19] Should they stay or should they go? [1:13:37] Softly landing from a favorite failure. [1:21:35] Taking on tipping culture. [1:36:30] 51 percenters. [1:38:04] Most gifted books. [1:39:17] Seth Godin is a mensch. [1:41:20] Danny's billboard. [1:42:21] Hope vs. optimism. [1:44:10] Parting thoughts. * For show notes and past guests on The Tim Ferriss Show http://tim.blog/podcast, please visit tim.blog/podcast https://tim.blog/podcast/?utm_source=podcast&utm_medium=podcast&utm_campaign=podcast-description. For deals from sponsors of The Tim Ferriss Show http://tim.blog/podcast, please visit tim.blog/podcast-sponsors http://tim.blog/podcast-sponsors Sign up for Tim’s email newsletter (5-Bullet Friday) at tim.blog/friday https://go.tim.blog/5-bullet-friday-1/. For transcripts of episodes, go to tim.blog/transcripts http://tim.blog/transcripts. Discover Tim’s books: tim.blog/books http://tim.blog/books. 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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tim Ferriss?

  This episode is brought to you by Eight Sleep. Temperature is one of the main causes of poor sleep and heat is my personal nemesis. I've suffered for decades tossing and turning, throwing blankets off, pulling the back on, putting one leg on top and repeating all of that ad nauseam. But now I am falling asleep in record time. Why? Because I'm using a device that was recommended to me by friends called the Pod Cover by Eight Sleep. The Pod Cover fits on any mattress and allows you to adjust the temperature of your sleeping environment, providing the optimal temperature that gets you the best night's sleep. With the Pod Cover's dual-zone temperature control, you and your partner can set your sides of the bed to as cool as 55 degrees or as hot as 110 degrees.

• 0:41Tim Ferriss?

  I think generally in my experience, my partners prefer the high side and I like to sleep very, very cool. So stop fighting, this helps. Based on your biometrics, environment and sleep stages, the Pod Cover makes temperature adjustments throughout the night that limit wake-ups and increase your percentage of deep sleep. In addition to its best-in-class temperature regulation, the Pod Cover sensors also track your health and sleep metrics without the need to use a wearable. So go to eightsleep.com/tim, all spelled out, eightsleep.com/tim and save $250 on the Eight Sleep Pod Cover. That's eightsleep.com/tim. Eight Sleep currently ships within the US, Canada and the UK, select countries in the EU and Australia.

• 1:22Tim Ferriss?

  Again, that's eightsleep.com/tim to save $250 on the Eight Sleep Pod Cover.

• 1:31Tim Ferriss?

  This episode is brought to you by AG1 by Athletic Greens, a true staple of my daily routine as it has been for more than a decade. I take it most mornings and I even travel with it, whether I am skiing, traveling abroad, going to an event where I'll be around a lot of people. I just use it to cover all of my nutritional bases. But let's start with the basics. What is AG1? And we'll get to the ingredients. But I get asked all the time what I would take if I could only take one supplement. The answer is invariably AG1.

• 2:05Tim Ferriss?

  And as I mentioned, I view it as my all-in-one nutritional insurance. I recommended it long ago in my 2010 number one New York Times bestseller, The Four Hour Body, and I did not get paid to do so. With approximately 75 vitamins, minerals, and whole food sourced ingredients, you'd be very hard-pressed to find a more nutrient-dense formula on the market. I know how much time they put into quality assurance and sourcing. It has a multivitamin, a multimineral greens complex, probiotics and prebiotics for gut health, an immune support formula, digestive enzymes, and adaptogens. I always do my best, of course, to get nutrient-rich meals, and that is a top priority. But AG1 makes it easy

• 2:46Tim Ferriss?

  to get a lot of nutrition when good whole foods simply aren't at hand, or when you just want to ensure you are covering your bases. Furthermore, it's also NSF certified for sport, making it safe for professional athletes, as what's on the label is actually what's in the powder. AG1 is the ultimate all-in-one nutritional supplement bundle in one easy scoop. Because, let's face it, if it's not convenient, you're just not going to use it. And Athletic Greens is giving you a free one-year supply of vitamin D and five free travel packs with your first subscription purchase. Go to athleticgreens.com/tim. You can check it out one more time, actually, two more times. Athleticgreens.com/tim. They

• 3:29Tim Ferriss?

  also offer a 90-day money-back guarantee if you are not 100% satisfied. Learn more, try it out. Athleticgreens.com/tim.

• 3:41Tim Ferriss?

  At this altitude, I can run flat out for a half-mile before my hands start to shake. Can I ask you a personal question? No, it would seem inappropriate, Tim.

• 3:51Speaker 01

  I'm a cybernetic organism, living tissue over metal endoskeleton.

• 4:04Tim Ferriss?

  Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of the Tim Ferriss Show. I'm going to keep my intro spiel as short as possible because my guest today is someone I want to ask many, many questions. Danny Meyer, you can find him on Twitter @DHMeyer, M-E-Y-E-R, is the founder and chairman of Union Square Hospitality Group, USHG, which comprises some of New York's most beloved and acclaimed restaurants, including Gramercy Tavern, The Modern, Myelino, and more. I've been to most of them. As a Strong Island native, I have made the trek several times. Danny and USHG also founded Shake Shack, which you may have heard of, the modern-day roadside burger restaurant, which became a public company in 2015. Danny is the author of the New York Times bestseller, Setting the Table, which articulates

• 4:48Tim Ferriss?

  a set of signature business and life principles that translate to a wide range of industries. We'll be digging into that. He is the recipient of the 2017 Julia Child Award and was named by Time Magazine as one of 2015's 100 Most Influential People. Danny and the USHG's restaurants and individuals together have won an unprecedented 28 James Beard Awards. Think of those as the Oscars of food, including Outstanding Restaurateur in 2005. Danny, so nice to finally connect.

• 5:16Speaker 02

  I know. It's about time. It's great to see you and to be with you, Tim.

• 5:21Tim Ferriss?

  I have so many pages in front of me and so many questions. It's really just been a challenge, an embarrassment of riches in terms of where to start. I thought I would start with Myelino. So, little pig, little piglet. What is the backstory on the name?

• 5:37Speaker 02

  I think I was about 20 years old. I got to work for my dad, who was in the travel business, and he was selling these group tours to airline employees and their families. It was this crazy idea he had that he had this niche market, and he was going to aggregate all of the benefits and discounts that you would get as an airline employee and package them all together to create these tours. And so, by the time my brother, sister, and I each turned 20, we were each invited by my dad to go work as a tour guide in the city of our choice. And my sister had picked Denmark, Copenhagen. I picked Rome. My brother would later pick Paris. So, I'm in Rome, and this was one of the most pivotal parts of my entire

• 6:22Speaker 02

  Life experience that would probably direct where I ended up in my career. And so I was the guy that would wake up every single morning early, go pick up these cranky tourists. They were pilots, flight attendants, baggage handlers, because keep in mind, they were all airline employees. And pick them up at the Rome airport, collect all their luggage, get them on the tour bus. I'd get on the microphone as a 20 year old, tell them all about what the next three days were going to be like. Here's how you got to hold your purse so you don't get it stolen by a, you know, someone on a motorcycle. Here's what you should or should blah, blah, blah. So anyway, I was supposed to be taking these tours to all the typical places like the cameo factories and the Vatican museum, all

• 7:07Speaker 02

  the stuff that was on their itinerary. But instead, I was looking at this as an opportunity to get an education in food. So I kept going to these trattorias. I found three different trattorias that would actually pay me a thousand lira per head of every guest I brought in. So I'd go get free food at these really good restaurants and I'd end up with 25,000 lira in my pocket afterwards. Well, so one of the restaurants, which was called La Taverna da Giovanni, started calling me Meyerino, Little Meyer, because they knew it was my dad's company. And I thought that was kind of cute. And somehow, over the course of

• 7:48Speaker 02

  that summer, without my inexperienced ear really picking it up, Meyerino, Little Meyer, had somehow changed to Mialino, which means little pig. And the reason they did that, and the joke was on me, but every single time I went to this restaurant, my favorite thing to order was the Mialino, the roast suckling pig. And so, fast forward many, many years later. On my 50th birthday, my wife Audrey, she knows I hate surprises, so the party was not a surprise. But what was a surprise to me is that she had co-created a logo for my birthday,

• 8:29Speaker 02

  which was Myelino. And she had my picture as a little kid with a pig underneath it, and made these stickers for bottles of wine that everybody was drinking that night. And it was such a damn good logo that when it was time to open a new restaurant, I couldn't come up with a better name or logo. So we ended up naming a restaurant Myelino after this whole experience. So you can call me Little Pig or Little Meyer. I'll answer to either one.

• 8:56Tim Ferriss?

  Now, in the course of doing homework for this conversation, I spotted, and this is true for, I suppose, everyone on some level, but sliding door moments. You've had so many different sliding door moments where your life could have cut one way, or was headed one direction, and then seemed to pull a right or a left turn at 90 degrees. But before I get to asking about one of those, specifically your uncle and prepping for the LSATs, you mentioned you hate surprises. Why do you hate surprises? Or how do you think about surprises?

• 9:31Speaker 02

  I think underneath it, I'm a little bit of a control freak. And I realize that there's this great expression my grandfather taught me many times, which is, man plans and God laughs. So as much as you think that you're planning for success, or planning for the stuff that's going to work out, the world usually has another idea for you. So on the other hand, look, if we're driving, I like to be behind the wheel. It's my wiring. So I never mind not knowing where the story's going to end. But I like to have some, at least, it may be a false sense, but I like to have some sense that at least I had some

• 10:15Speaker 02

  say in the matter. So I mean, I'll be flying on an airplane, and it's not that I need to get in the cockpit with a pilot. But for example, I'm the absolute world's worst sleeper on airplanes. I've got the window open. It's almost as if I'm afraid I'm going to miss one of the clouds outside the window if I don't keep paying attention.

• 10:35Tim Ferriss?

  I think I share some similar programming and it brings to mind for me this metaphor that a novelist once shared with me, which was writing a novel is like driving a car cross-country with the headlights on. You can't see where you're going, but you see enough in front of you, you know you're headed in the right direction. So coming back to what I alluded to a little bit earlier, I know that we're establishing, setting the table, as it were, for people listening who may not have a whole lot of background. You studied political science, if I'm getting my facts straight. Then, at one point, you were preparing for the LSATs, so you're thinking of pursuing law education, perhaps becoming a lawyer. And you had a conversation with your uncle. Could you describe that conversation?

• 11:19Tim Ferriss?

  And then I have a few follow-ups.

• 11:21Speaker 02

  With a poli sci degree, and the reason that I did study political science is, as a child of pretty much the 1970s, middle child of three in the middlemost state in the country, Missouri, Republican dad, Democratic mom. Every night at the dinner table, there was a quote-unquote "discussion" about politics. It could have been Watergate, it could have been Vietnam. And the dinner table was where our family, we could agree on what we wanted to eat, and that was kind of about it. The food was the comfort. And I, as a middle child, I was the one who wanted to make everybody feel good and bring everybody together and

• 12:01Speaker 02

  keep the family together. And on the other hand, as much as my dad and I were best pals, played a lot of sports together, we cooked together all the time. It was the time I spent with my mom, hanging out, watching the news every night, that I found most interesting. So I knew I loved what we used to call current events. I just was taken by it. And so after I graduated with my poli sci degree, I was either going to be interested in going into politics, because what else do you do with that kind of degree? Or maybe I was going to go into journalism. I just liked either writing about or impacting the events of the day. So after I spent a few years being a salesman, just to make some money, selling

• 12:45Speaker 02

  electronic tags to stop shoplifters of all things. I said, you know what? That's not what you want to do the rest of your life. It's been good. You made a bunch of commissions and I actually invested all those commissions in that company's stock, which was a good thing. But I said, you gotta do something right now. So I did take the LSATs. I decided law degree instead of journalism degree. And first of all, I think anyone who knows me knows I would have made the world's worst lawyer. I don't wake up every morning saying, I'm looking for a fight. I'm looking to prosecute. Kind of the opposite. I think hospitality is the opposite, which is how do we bring people together? But it was on the eve of taking my LSATs.

• 13:28Speaker 02

  I had taken the Kaplan course, preparing for them and everything, hated every minute of it. And the night before going to take this test was a Friday night and I was out to dinner with my aunt and uncle and my grandmother in New York City at an Italian restaurant I still go to called Elio's. And I was in a foul, just awful mood because first of all, I didn't want to take the test, didn't want to be a lawyer. And my tablemates were all having a great time, eating good pasta, drinking lots of wine, and I couldn't do it. So at a certain point, my uncle, Richard, turns to me and he says, "What the hell is bothering you anyway?" And I said, "Well, I've got to take my LSAT tomorrow morning."

• 14:12Speaker 02

  And he said, "Of course you do. You want to be a lawyer, don't you?" And I said, "Actually, no." And he basically, he wanted to throw his pasta spoon at me at that moment. And he asked me what was, to this day, the most impactful question of my whole life, which was one I was not expecting. He said, "Do you have any idea how long you're going to be dead anyway?" And I said, "No, I hadn't really thought about that. Why?" And he said, "I don't know either, but I'll tell you one thing. You're going to be dead a hell of a lot longer than you're going to be alive. Why in the world would you do something that you have no passion around?"

• 14:53Speaker 02

  And I stopped and I said, "'Cause I guess I don't know what else I could do."

• 15:00Speaker 02

  And within a second, he said, "You gotta be kidding me. All I've heard you talk about your entire life is food and restaurants." And I said, "So what am I supposed to eat in restaurants the rest of my life?" It was so obvious, and I yet I could not see this. And he said, "No, you fool, you should go open a restaurant." It had never dawned on me that that was a valid thing to do, because that's not what you ever heard about in college back then. You didn't hear about going to open a restaurant. Now, I'm really, really glad that all these years later, being in the food business has become a validated entrepreneurial career choice for people with an education. But it wasn't back then, and it's still,

• 15:45Speaker 02

  well, to cut to the chase, I did take the LSAT the next morning. I had already paid for it, for God's sakes. Never applied to one school. But what I did do is, the following Monday morning, I connected with one of my best buddies from Trinity College, who I used to go out to eat with all the time. He was a fraternity brother. And I said, "I got this idea. I'm gonna open a restaurant. You be the money guy, I'll be the food guy. What do you think?" And he was in a bank training program at that point. And he said, "Okay, I'll do it." So, we enrolled in the New York Restaurant School, which was, all you had to do was pay your 150 bucks and you got in. And we took a restaurant management

• 16:28Speaker 02

  class. And he promptly dropped out after two sessions, because he made the mistake of telling his parents that he was thinking about leaving banking to go into the restaurant business. Bottom line is, he felt so bad about leaving me all alone, that he said, "Look, our bank has one restaurant client," which was a big deal, because mostly banks would run the other way if they heard the word restaurant back then. And he said, "I'll be glad to see if I can get you an interview with that. Would you like that?" So, I got the interview. The interview pretty much consisted of the owner sitting midway down his bar. I'm at the front door. He waves me down the bar, tells me to stop and stand

• 17:11Speaker 02

  right in front of him. He looks me up and down from my Wallabies up to my Brooks Brothers shirt. And he goes, "You'll do." That was my first job interview. I got the job.

• 17:26Speaker 02

  I was assistant lunch manager, which meant nothing, which meant I was getting 250 bucks a week to answer reservation lines and set up the reservation book for lunch and be on the front door. Here's the good news. Out of that deal, I figured out in seven months that I love this business. I met the woman who would become my wife. She was a waitress, an actress. She actually left on day two to go get an acting job and I couldn't stop thinking about having just seen her for one second. I met the neighborhood in which Union Square Cafe and Gramercy Tavern and so many of our restaurants have been. And I met my career.

• 18:09Speaker 02

  And that was a major, major pivot point. But it just shows you so many things in life are those moments. I mean, the fact that none of this ever would have happened if I had not gone to Trinity College, for example, because that's where I met my friend. And I was 0 for 3. I was such a screw up in high school. I applied to only three colleges. I was rejected from two and waitlisted at Trinity. And I had to get down on my hands and knees and write the best letter of my life to get off the waitlist at Trinity. So first of all, that had to happen. And the only reason that Trinity happened is that when my dad's business was in Rome,

• 18:54Speaker 02

  his travel business, he met Trinity College's lawyer at dinner one night and the lawyer said, hey, your son should consider Trinity College, which none of us had ever heard of. So all that stuff. And then, by the way, this friend of mine who introduced me to his restaurant client, the only reason we ever met is on the first night that I was at Trinity College, there was a pickup softball game and there weren't enough baseball gloves to go around. And so I lent my glove and I went up to this guy and accused him of stealing my baseball glove. And somehow we became friends after that. So it's just all these moments that didn't have to happen and that it happens in life every day.

• 19:36Speaker 02

  And you just got to pay attention and just be grateful if you're fortunate enough to have a good choice based on stuff that never should have happened in the first place.

• 19:47Tim Ferriss?

  Yeah, so wild. So I have a number of follow-up questions, which will dig a bit more into a few of these bits and pieces. So the first is, and this will lead to a question about not applying to law school. When you were working in Rome, and you would say have a group of four or five people, you pick the crankiest and they become your, not mark, but your objectives, in the sense that you're going to turn them into a happy, raving fan by the end. What were the keys or techniques, what did you learn over time as most reliable for doing that for that person?

• 20:25Speaker 02

  I was probably in five different schools, growing up in St. Louis. So there was a nursery school, then there was a public school, then we moved, so there was another public school. Then I went to an all-boys school because I wanted to play football on their team. And then 10th grade came, and I wanted to go to school with girls, so I went to a co-ed school after that. So that was five schools. And then, by the time I was 18, now I'm going to college, so now I'm in six schools by the time I'm 18. You gotta learn a lot of social cues along the way. And I just found that I was really good at kind

• 21:05Speaker 02

  of understanding what made people tick, and a really good observer of body language, moods, etc. And it's not that I didn't have a sense of myself. I wasn't like Zelig or a chameleon, changing who I was, but I knew what people needed. And, you know, kind of a blessing to have found a career where that is a really useful thing to be able to do. And as I said, even before going into the restaurant business for three years, I was the top salesman in this company, as a young 20-year-old, selling against...

• 21:40Speaker 02

  Hardened salesmen from around the country. I loved it. I loved like getting into my little blue rabbit and traveling to the worst neighborhoods in New York where there was the worst amount of shoplifting and meeting these people, these shopkeepers who own drugstores, bookstores, clothing stores, fur stores, supermarkets, and learning to speak their language and making the sale. I just loved it. So I just think that I'm cut out to do this and the fact that I happen to love food and wine as much as I do has certainly helped a lot.

• 22:16Tim Ferriss?

  I would agree for sure that you are well cut to excel in these various areas. And there have been various points where you've had to, for lack of a better term, maybe operationalize or externalize yourself so that you could, say, expand in the restaurant business. So I'm curious, I mean, you mentioned making ends meet. I was gonna say, that was Checkpoint? Am I getting that right?

• 22:39Speaker 02

  Yeah, Checkpoint Systems.

• 22:41Tim Ferriss?

  Checkpoint Systems. If you had to try to break down what you did, let's just say in sales at Checkpoint Systems that made you so successful so that you could teach somebody else, does anything come to mind that you think somebody else could emulate or principles perhaps they could attempt to implement if they were in that same job?

• 23:02Speaker 02

  Well, the first thing is, keep in mind, this was before we had the internet, but I would still do a lot of research and I would still learn as much as I could possibly learn, not only about the business that I was trying to sell, but the person who I'd be meeting with. And what I came to learn very, very quickly in the New York retail world, and keep in mind, I was primarily selling to retailers because that's who had the shoplifting issues, is that many, many, many of them, they were either related to each other. There was a huge Syrian Jew population. That was not the only population, but I started

• 23:40Speaker 02

  to develop a sense for the family trees of either real families or relationships. And I got to know who knew who and I would take that as far as I could possibly take it. So I learned early on something that has... Been something that I teach our teams, even in the restaurant business. We call it A B C D, so you can A B C D. Always be collecting dots, so you can always be connecting dots. And I learned early on that people will take exactly as much interest in you as they believe you're taking in them, no more and no less. And so, I don't want to give away all my trade secrets here, Tim, but I've listened

• 24:19Speaker 02

  to your show for a long time, but I listened to a couple more segments much more recently because I really want to understand more about what makes you tick. I don't look at it as gaming the system. I think it's genuinely being curious and being interested. And so, if you're looking for one tip, it's curiosity. And I should throw in one other thing. The real trick was that I would pick my, since I was largely cold calling people, or often cold calling people, I would actually make my own schedule for where I was going to go that day, based on a restaurant that I wanted to try in that particular borough or neighborhood of New York.

• 25:02Speaker 02

  And I would organize my day around my lunch. I even organized it around some guy who would bring in lobsters in Brooklyn at exactly 2:00 in the afternoon, and I'd go get his lobsters and bring him home to cook. But, in a weird way, I was developing two careers at the same time without even thinking about it.

• 25:20Tim Ferriss?

  You were collecting dots in a few different areas at the same time. And also, giving yourself, it seems like, small rewards, which would probably give you more endurance in doing what you were doing, in terms of gathering or organizing your schedule around those lunch spots. How did you navigate the conversation? And how did your parents respond to the conversation related to not applying to law school?

• 25:46Speaker 02

  Well, it was easy at first because I didn't tell them. I kind of sidetracked and sidestepped, and I finally, at one day, got the courage to say that I wanted to be a chef. They knew I loved to cook. Now, you may say, "Well, how would you get the courage to say you want to be a chef, but not to be a restaurateur?" Well, in fact, I thought I did want to be a chef. And I had seen, at that point, there were a number of really well-educated people who had gone into the culinary profession, and chefs were starting to become... Kind of well-known. And we keep in mind, this was way before the Food Network.

• 26:28Speaker 02

  But you know, you had people like Alice Waters, who had gone to Berkeley. You had Jeremiah Tower, who had gone to Harvard, Joyce Goldstein on the West Coast, Mark Miller, on and on and on. There's probably like 15 of them. And Wolfgang Puck had become a household name. Paul Prudhomme in New Orleans had become a household name. So I finally gathered the courage to say, I think I want to be a chef. And by the way, I was, in these days, I spent almost all of my time walking around the city, looking at menus on restaurants. I memorized every menu. I ate at many of the restaurants. I would go back to Italy many, many times,

• 27:10Speaker 02

  not just when I was a tour guide working for my dad, but till I was 21 years old, I could travel anywhere Pan Am flew for $44 a round trip, thanks to my dad's travel business. And so I was constantly going to restaurants and learning and learning and learning. I finally said, I'm going to be a chef. And so my dad was kind of open to it. My mom, maybe a little bit less so, but you know, I went for it. My dad actually connected me with two of the Relais & Château colleagues of his in Bordeaux. He said, Look, I know you want to go to Italy, but in Italy, they basically cook food with three ingredients, and that's the genius of Italian cooking. But if you really, really want to learn to

• 27:54Speaker 02

  cook, you got to go to France. So I said, Well, let me do both. So I spent time in Rome, Bologna, Sardinia, Milan. And then my dad did connect me with a restaurateur in Bordeaux named Roland Florent. And he had two restaurants in Bordeaux. One was called La Réserve. The other restaurant was called Dubern, D U B E R N. The day before I got to La Réserve, they had lost their second Michelin star. Now chefs have actually gone off the deep end for less, because the Michelin stars were everything for the French. And so I get there and everybody in the kitchen is like completely dejected. And I'm this guy who doesn't know anything about cooking and

• 28:40Speaker 02

  Who is he and how did he get in our kitchen? And why are they letting him live with the chef? The good news was that after a couple of days, a bunch of people in that kitchen left because they did not want their resume to say one star. So they figured if they left with two stars on the resume, they'd be fine. And so all of a sudden I started to get some opportunities, some really big opportunities, like chopping shallots and opening oysters and pulling feathers out of pigeons to prepare them. And here was the big one, I got to cook family meal. That's a big deal to get to cook for all the other cooks. And I was doing some of my family's favorite recipes. I'll never forget when I made barbecued ribs. They didn't even know how to eat these things. Cotelette de porc, you know?

• 29:25Speaker 02

  It was just a great, great experience. They took me to oyster beds. They took me to chateaus in Bordeaux. They took me to places where they made sausage. They took me on a, like, one of my favorite days of my life, a day that the restaurant was closed to go hunting for wild pigeons called Palom. Just a great life experience.

• 29:49Tim Ferriss?

  Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by LinkedIn Marketing Solutions. If you are a business to business marketer, your needs are unique and your solutions should be unique as well. B2B buying cycles are long and your customers face incredibly complex decisions. It's time that you had a marketing platform built specifically for you. LinkedIn Ads empowers marketers with solutions for both you and your customers. LinkedIn Ads allows you to build the right relationships, drive results and reach your customers exactly where they are already. You'll have direct access to and can build relationships with decision makers of all different types. 900 million members, including 180 million senior level executives and 10 million C-level executives.

• 30:33Tim Ferriss?

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• 31:07Tim Ferriss?

  I thought that it might be helpful to people listening, and I'd certainly love to hear your thoughts on, for lack of a better way to put it, free work. So in the food world, you have people who will stage, and maybe you could describe what that means. But my understanding, based on Bill Gurley's, our mutual friend Bill Gurley's, speech at UT, I think it's called Running Down a Dream, might have a slightly different title to it, but I recommend everybody see it. There's a 10-minute segment on your arc, and he presents it really well. And he talks about how you went from star salesman at Checkpoint Systems, and then over time, got to zero, and then kind of went upside down, because I think some of these restaurants asked you to pay them for the privilege of working there. Could

• 31:52Tim Ferriss?

  you just speak to the logic or thinking behind that? Maybe it's as simple as, hey, I didn't have a choice, and I really wanted to do this. But it seems to me that a lot of younger generations now have the impulse to say, I want to be paid what I'm worth. And I see a lot of wisdom and value in the secret weapon that a lot of young people have, when they don't have a lot of money, but they have a lot of time, which is working for free and learning a lot. Would you be able to share any thoughts that you have on that?

• 32:22Speaker 02

  In our industry, there's a sense that if you really want to dig your roots and build a career, you should learn from the best. And how do you get your foot in the door with the best, so you're willing to work for nothing? The only time I ever had to pay anybody was this cooking teacher in Milan, who told me that she was the Julia Child of Italy, which she certainly was not the Julia Child of Italy. I paid her my money and moved on, but I did many, many stages where I was not paid anything. And as I told you, the one that I did in New York City, I was paid 250 bucks a week, which, kind of laughable, that's what a waiter makes in half of a night in New York City these

• 33:02Speaker 02

  days. So I just think that it took me 10 years to open a second restaurant, and today we'll probably open two Shake Shacks somewhere in the world. If I've learned any one thing is that there's a benefit to being a little bit patient, and try to grow where you're planted. And I think that-

• 33:23Speaker 02

  As life has accelerated for so many reasons, technology being primary amongst those, I think that people feel like there has to be a beginning, middle, and an end that all gets resolved within a 30-minute sitcom. And that's just not how life works. And I think that if you can do time, paid or not, but really learn what it is you're trying to do and not scratch the surface and move on too quickly, it really pays big dividends. Now, there were reasons it took me 10 years to open a second restaurant. Primary one was I didn't want to go bankrupt. And since I had seen my dad go through two different bankruptcies, one in my teens and one when I was about 20-something, I forget how old I was.

• 34:08Speaker 02

  And I always associated his bankruptcies with expansion. And I assumed that that was the business thing he wanted to avoid was expansion. And I didn't want to end up like my dad. I just said, there's no way I'm ever going to open a second restaurant. I don't want that to happen. The silver lining in that, even though I eventually, after my dad died, I got some therapy and the first thing I learned was, hey, guess what? You're not your dad. And number two, there's a whole lot of businesses that have expanded, and that wasn't the reason they went bankrupt. In fact, they didn't go bankrupt. But the silver lining was I really learned my business. I really learned it. You know, that's probably the reason it took us five years to open a second Shake Shack. I didn't want to expand too quickly,

• 34:52Speaker 02

  and I did not want anything bad to happen. But guess what? We learned our business.

• 34:56Tim Ferriss?

  This might seem like a naive question, but what does learning the business look like? Because there's experience, and then there's developing expertise. Like, some people can repeat the same mistakes for every year, for 20 years straight. And then there's learning a lot.

• 35:10Speaker 02

  Every business is made up of five stakeholders. And so when I say learning the business, it's learning as much as you possibly can about how to motivate all five of your stakeholders to root for your success. That's what you want. And so the best way to motivate all five of those stakeholders to root for your success is to make sure that they believe you're on their side first. So it was learning, who's our staff? That was our first stakeholder. Who are they? Who are the best staff we could possibly have? Who are our guests? And I mean really learning about them. And to this day, to this very day, I end every single night reading all the reservation reports for all of our restaurants.

• 35:54Speaker 02

  So I know who's dining in our restaurants tomorrow. And then I either, if I stay up really late, I read all the after-service reports, or I'll do that first thing in the morning to find out, and how did all those experiences go? And I weigh in. And to this day, I'm connecting dots because I care about who our guests are. This one knows that one. Seat them near each other. This one has just published a book. Make sure to go buy that book and have it on the maitre d' stand so they can sign it. I care about that stuff as much as I've ever cared about it. But it also means, you know, getting to know the community in which you do business. Because why should your community root for your success if you're not investing in your community? Same thing goes true of our suppliers.

• 36:39Speaker 02

  Get to know your suppliers. You want the best product. You can't have the best business if your raw products are no good. I learned that lesson, by the way, from my grandmother. Very, very important. I loved the cooking in her home. And I'll never forget when I asked for her tomato sauce recipe. And she said, "I'll give you the recipe, but I'll tell you one thing right now. It's never going to be any better than the worst ingredients you put into it." And number two, those ingredients themselves won't be any better than how well you treat them after you buy them. You better get the best tomatoes, which in New York is like a two-month season. Right? It's like August and September.

• 37:20Speaker 02

  And even if you get the best tomatoes, you better not throw them in the back corner of the walk-in refrigerator and bruise them so that they lose their sugar. Treat them the right way. Well, guess what? Same thing goes for people. You can have the best recipe in the world for how you hire people, but you better pick the best tomatoes. You better treat them the right way if you want the best sauce.

• 37:44Speaker 02

  So I've just learned so many lessons. It's amazing how many life lessons actually apply to learning your business. Another great one that my grandmother taught me. When I was a little kid, growing up in St. Louis, my favorite moment was March and April, because spring came kind of early to St. Louis. And that's when my grandmother would plant her flower garden. She had an amazing green thumb. Well, keep in mind, she lived in an urban apartment building. It was a skyscraper in St. Louis. It's six stories tall. And her apartment building gave her a plot of land in the parking lot

• 38:23Speaker 02

  that was probably 20 feet long by about four feet wide. And she called it carbon monoxide gardens. And so every spring, she would invite me to come help her plant her garden for the summer. And this would always be probably late March, something like that. And, you know, this probably started when I was six years old or something like that. And she gave me my gardening gloves. And she taught me early on to figure out which were the weeds. And I kind of liked that scene from Tom Sawyer and Huckleberry Finn. She was basically having me do all of her free labor, weeding the garden. So I learned to pick all the weeds.

• 39:07Speaker 02

  So now, by the time I'm about nine, I go down there for my annual spring visit. And now it's probably April or May, because I would do this, you know, as the garden would keep growing. And she said, now I'm going to teach you the real secret to how you have a great garden. So I go for the weeds dutifully. And she said, nope. She takes my hand gently, pulls it off the weeds. And she hands me a watering bucket with something in it. I have no idea what was in it. And she says, I'm going to teach you how to water the flowers. Because if you really want to get rid of the weeds, the best thing you need to do is water the flowers. Because the flowers will provide a canopy that will actually prevent the weeds from

• 39:52Speaker 02

  getting the sunlight that they actually need. So voila, best business lesson ever. Because I spent the first 10 years of my career.

• 40:03Speaker 02

  Almost exclusively focused on trying to motivate problem employees to be better, like the weeds, right? And what I learned was that our employees are like sunflowers. They will turn wherever the sun is. And if I'm spending all of my attention on the weeds, I'm actually pulling the gravitational force that way. My grandmother's lesson was right. If I water the flowers and spend more time with the people who maybe I've taken for granted because they're doing such a great job, they actually crowd out the weeds and the weeds take care of themselves.

• 40:36Tim Ferriss?

  I'm definitely going to ask you more questions about hiring with some hypothetical situations, but before I move on, the five stakeholders, did you list them? And I think it was employees, guests, community, suppliers, investors in roughly the order that you would or did weigh them in your restaurants?

• 40:56Speaker 02

  Exactly, exactly that order. It took a long time to figure that out. Every business has those same stakeholders. You get to pick in which order you're going to prioritize them. And when I went to college, I took exactly one econ course, econ 101. And of course, you learn about Adam Smith and we studied Milton Friedman, the guy from University of Chicago. And he was like, take care of the investor and everything else takes care of itself. So I had that voice on my shoulder. But I also, you know, one of the first jobs I had after college, I was the Cook County field coordinator for John Anderson's independent run at the presidency in 1980.

• 41:38Speaker 02

  And leave it to me to work for the independent guy, not the Republican, not the Democrat. But 100% of the people who reported to me, that job, by the way, I got 214 bucks a week, but 100% of the people who reported to me were volunteers. And most of them were older than I was because I was only 22. And I didn't have any way to motivate them with money. Couldn't give them a raise, couldn't dock them their pay. So I learned such a crucial lesson, which is that if someone's volunteering, the only way to motivate them is to have a higher purpose. We're all doing this because we agree with this bigger idea.

• 42:17Speaker 02

  And so basically took that idea to work with me when I first became a restaurateur. And again, everybody was getting paid, but at least half the people were older than I was and I was learning what it was like to be a leader, to be the boss. And I basically, to this day, treat all of our employees as if they are volunteers, which is not in the real sense, you're going to get paid, but if you're working for me, it means you're probably good enough to have gotten another 25 job offers, at least. And so as far as I'm concerned, you're volunteering to share your gifts with us. I better give you a higher purpose and reason for wanting to be here.

• 43:00Speaker 02

  And that's when it became clear to me that our first stakeholder had to be our employees. And by the way, I look at this, Tim, like it's a virtuous cycle. It's not a totem pole where the employees on the top and the investors on the very bottom. It's a virtuous cycle where one input leads to something even better. So if you want to have really happy customers, they shouldn't be the input. You should have really happy employees, which I think then leads to a greater chance you're going to have really happy customers. If you want to have really happy investors, you wouldn't want that to be the input, Mr. Milton Friedman. You'd want that to be the outcome. And by the way, what's ultimately the best way to have happy employees?

• 43:44Speaker 02

  Have really happy investors, because that's the only way people are going to get promotions and raises. And I've run a business where nobody was getting promotions and raises and it was not happy. And we had to go out of business when that happened.

• 43:57Tim Ferriss?

  I'd like to ask you a question about writing. And I'm going to begin with a blast from the past, which I've kept for a very, very long time, because I think it's so masterfully crafted, and it's something that you crafted. And this is a polite decline, I'm not going to say rejection, a polite decline, when I, via a mutual acquaintance, close friend of mine, Jeffrey Zarofsky, reached out to see if you would participate in my book, Tribe of Mentors. And the beauty was, your response ended up being incredibly valuable as a polite decline. So I'm going to be paraphrasing a bit, but this is what I received.

• 44:40Tim Ferriss?

  And it was via Jeffrey, who was acting as the Yenta slash intermediary. Jeffrey, greetings and thanks for writing. I'm grateful for the invitation to participate in Tim's next book project, but I'm struggling at this moment to make time ends meet for all we're doing at USHG, including my ongoing procrastination with my own writing projects. I thought carefully about this, and it's clearly a wonderful opportunity, but I'm going to decline with gratitude. Know the book will be a big success, exclamation point. Thanks again, Danny. So this is so noteworthy for me, because there are many ways you can decline something that are likely to upset someone, or don't do anything to offset the potential for someone being upset.

• 45:22Tim Ferriss?

  I came away from receiving this just laughing and wanting to get better at writing polite declines, because I felt better about you, I respected you more after receiving that. How did you learn to write? How did you improve or develop your written communication?

• 45:42Speaker 02

  I can't believe you pulled that letter out. That's wild.

• 45:47Speaker 02

  And you know what? I do that almost every day, but I wouldn't do it if it weren't genuine. I wouldn't have gone to the trouble of saying all that stuff if it weren't genuine, you know? I've always loved writing. My dad was an amazing editor. He was actually the managing editor of the newspaper at Princeton, the Daily Princetonian. And he took great pride in marking up anything I ever wrote. And I, you know, I care. I love writing. I love expressing myself. But I also, I think more to your point, it's not the quality of the writing as much as it is the sentiment behind it, which is that, gets back to what we were saying earlier, if somebody cared enough to reach out their hand and say,

• 46:31Speaker 02

  "I want to shake hands with you," that's what that was. Or they reach out to give you a hug. What are you going to do? Just become a tree and not hug them back? And I think that I've learned a very, very important lesson. In fact, I'd be curious, and you'll probably know, I care so much about letting someone know, if I do appreciate an invitation, but I just genuinely can't do it, I care that they know that their invitation mattered to me, so much so that I sometimes procrastinate writing that note. And I've learned the hard way that sometimes my mind and my heart are at war with each other. My mind knows I shouldn't do it. My heart really wants to do it. And if that translates to making you or Jeffrey wait too long to get that response,

• 47:16Speaker 02

  it doesn't really matter what I wrote. So I'm really curious to know when Jeff's invitation came and how many days went by before I responded. My bet is more days than there should have been.

• 47:27Tim Ferriss?

  I don't have the dates, but I'll take a look. Has your approach to that type of polite decline changed over time? Do you have other language that you like to use? And again, this is not to imply, to your point earlier, that this is disingenuous. Like the assumption is made, and I believe that it's genuine.

• 47:45Speaker 02

  And it's really hard.

• 47:45Tim Ferriss?

  Have you found?

• 47:46Speaker 02

  It's just really hard. It takes time because what most people do sadly is they just delete the invitation or they just ignore it. And I think it kind of falls into a couple of camps here. So number one is, is this something I really want to do? Number two, if I really want to do it, can I do it? So that's easy. Look at your calendar. And number three, is this something that I feel like I should do? And then of the shoulds, there's another couple buckets, which is, is it a should because I have to? Or is it because it should because it's good? I've gotten into most trouble on the shoulds.

• 48:29Speaker 02

  If I really, really want to do something, like I really wanted to have this conversation with you today. I'm the guy that reached out to you. I love when I get a spark of something that I really want to do. But many, many times the invitations come in. I get a lot from politicians, we support this or that. I get a lot from, you know, speaking opportunities, et cetera. And I'm not complaining. I'm very, very fortunate. But if it's a should, I learned this lesson from the restaurateur Jeremy King, who's in London. Great guy. He said, the shoulds are what have gotten me in the most trouble. And I asked myself a simple question.

• 49:09Speaker 02

  If this thing were tonight, because it's generally something, you know, four, five, six months from now. But if this thing were tonight, is this something I would be excited to do? Or would I roll my eyes and go, oh, man, look what I have to do tonight? And so by making it in the very present, that's really helped me a lot with the shoulds. And then I just feel like it's not my obligation to say yes to everybody, but I do care. I genuinely care. If somebody had the courtesy to invite me to do something, they deserve the courtesy of a gracious response. All they're guilty of is saying, I'm interested in you. How bad is that? That's a compliment.

• 49:48Tim Ferriss?

  It can be really challenging and I just want to give you kudos again for an incredibly beautifully crafted polite decline that I was, might sound bizarre, but thrilled to receive. I really admired it so much that I've kept it on hand.

• 50:03Tim Ferriss?

  And I asked about writing because I find that you seem to pay a lot of attention to language and communication and clarity. And my attention was drawn in doing homework for this conversation to questions. Now, you can't believe everything that you read on the internet, so I do want to fact check this. But I found a list of six qualities Danny Meyer looks for when hiring, that is. And the first is, I'm just going to read through these and then you can correct as needed or expand as needed. But I'm going to get to a few at the end, they're only six, that have questions associated. So number one, kind eyes. Eyes don't lie. Kind eyes is a hell of a start. Curiosity, does this person see themselves as a finished product? Or are they looking to continually learn? Three,

• 50:48Tim Ferriss?

  work ethic. You can teach someone how to can't a bottle of wine, but you can't teach them to see opportunities to do more. Now, we're going to get into some questions. So four, empathy. Is this the kind of person the entire team is going to want to be around? Ask, on a scale of one to 10, tell me how lucky you are. So I'm curious about that. Self-awareness. Can this person read their own weather report? Ask, what is the single biggest misconception people have about you? And then integrity, trust, you know, ask, name something that happened to you before the age of 12 that has changed your life forever. If you were hiring for your first restaurant today, would you ask some of these questions, look for these six things, or would you modify this?

• 51:26Speaker 02

  I would absolutely look for those things. In fact, I've checked them with myself year after year, and there's not one of them I would take off the list. I want to work with people who are kind people, who genuinely are optimistic people. I'm not really excited working with skeptics, who just see what could go wrong all the time. You do need to surround yourself with, I'm a cockeyed optimist. I'm, you know, I'm so damn optimist, I basically see the wine glass as half full even before I pull the cork on the bottle. But it's important for me to surround myself with people who at least ask me some tough questions. So I want kind optimists. I definitely want curious people. I don't want know-it-alls.

• 52:09Speaker 02

  I want learn-it-alls. I don't want someone who's already a finished product. It's not fun, especially if you're trying to make your business better every day. I definitely want people who have an excellent work ethic. I don't mean to the point of being sick because we can all push it too far. But it's not fun to be on a team where everybody's really bringing their best. And there's a couple of people just putting in a C-level effort. That doesn't work. And I definitely want empathetic people, people who understand the wake they leave in their path, who care about how they make other people feel, just as much as they care how other people feel. And definitely I want self-aware people and I want people with integrity. So 100% of those.

• 52:51Speaker 02

  The one thing I would add that has really, really come to light for me. I want people who just love to win because that's not really captured in any of the six that I mentioned earlier. Wanting to be a champion, you look at the best athletes in sports. Sure, they have God-given physical ability, but they also had to train like crazy. You don't get to be the Kentucky Derby winner without, you got your bloodlines, but you also had to train like crazy. You don't get to be Serena Williams without the bloodlines, but you don't also get to be Serena Williams without working incredibly hard. Or Michael Jordan, whoever it is you want to talk about. So I look for that.

• 53:37Speaker 02

  I'm really interested to know the motivation behind what makes someone competitive. And I basically have four buckets. First of all, there's A-competitive people. They're great people. They just don't wake up every day saying, "I gotta win. I'm dying to win." Tim Ferriss did not get to be Tim Ferriss without desiring to be the best. I know that. And that doesn't necessarily come across, but you're not A-competitive. I can tell you that. Then the other three buckets I look for, and this helps me with someone's self-awareness as well. Is to understand, assuming that you are motivated to be a champion at what you do, what is your primary motivation for wanting to compete to win? And I find there's basically three buckets.

• 54:22Speaker 02

  Sometimes people have a little bit of each. You know that picture of Muhammad Ali standing triumphantly over Sonny Liston, whose back is on the mat with his fist up in the air? So I can pretty much tell you that Muhammad Ali was primarily motivated by a love for beating someone else. That felt really good to him. It's not a bad thing or a good thing, it just is what it is. Then you got, imagine this photograph of John McEnroe with his headband on and his long curly hair yelling at the umpire, "You've gotta be kidding me." That man hated to lose. It wasn't so much, "I'm motivated by who I'm gonna beat."

• 55:04Speaker 02

  It's like, "I will not be seen losing." The third image I would have would be a great Olympian, let's say Usain Bolt, and his leg is outstretched with the veins popping, trying to get that extra inch or that extra half second off of his time or whatever. And that guy is, he's out there, his primary motivation, he wants to exceed his own personal best. He's competing with himself. So by knowing these questions, this is something that I would absolutely want to add today because I know that I want to be the best and I can't do it by myself.

• 55:45Speaker 02

  So I gotta stock my team with people who look at every day as an opportunity, not for perfection, because I think perfection is stupid, it's impossible, it's a recipe for unhappiness. But I do look for people who look at every day as an opportunity to honor whatever they did yesterday and figure out how to do it a little bit better today. That's the journey of excellence.

• 56:06Tim Ferriss?

  How do you assess, this might sound silly, work ethic? Is it by trialing someone? Because everyone's gonna be on best behavior and saying, "Oh, my biggest flaw is I just work too hard," you know, that type of college application nonsense in a job interview. Do you have particular ways that you would approach assessing that proactive work ethic? Not just doing what you give them, but thinking about what else they could do? How do you think about assessing that?

• 56:32Speaker 02

  I basically define it as you've now learned how to do the job, but only you can determine if it matters to you to do it as well as it can be done. And you can see it in people. There's so many ways we can all take shortcuts. The obvious things are, did you show up? Did you show up on time? Did you show up shaven? If that's what your job is in the dining room, let's say. Did you press your shirt or just take it easy and get that extra third use out of your shirt? Where you don't really care what it looks like. And you see this in sports all the time, and I think sports has so much to teach us. Number one is I think hospitality is a team sport. We rely on each other. It doesn't matter whether you had a bad night or not.

• 57:16Speaker 02

  You're not expected to go strike out if you're a baseball player. It doesn't matter whether you woke up on the wrong side of the bed or not. You're not expected to let a ball roll through your legs at shortstop. Well, it's the same thing in my business. Your job is to make the rest of your team better. And your job is to make the rest of your team better, whether you're on the field or in the dugout. And I got a quick story that I learned so much from other people.

• 57:41Tim Ferriss?

  Yeah, please.

• 57:42Speaker 02

  You've probably heard of Theo Epstein. In fact, maybe you've even interviewed him at some point.

• 57:45Tim Ferriss?

  I have not, actually. I'm going to plead ignorance.

• 57:47Speaker 02

  Well, so Theo Epstein is the youngest general manager in, I think, the history of Major League Baseball. And he was hired at a very, very young age to take over being the general manager of the Boston Red Sox, who had not won anything for decades and decades and decades. And, you know, they talked about the Yankee curse, or whatever the hell it was. But for whatever reason, they couldn't win. He comes, he's the general manager, revamps the team, and of course, they win their first title. I want to say it was in 2004. Actually, I don't want to say that because if that's the case, it was against my St. Louis Cardinals. But he then went on to go win a couple others for them. And then he leaves to go to the Chicago Cubs.

• 58:31Speaker 02

  And the Chicago Cubs, guess what? They have not won a World Series forever. He revamps their team. Chicago Cubs win a World Series for the first time in all these years. So now this wonderkin, Theo Epstein, is asked by a lot of people, basically, what's the secret here? And you've got to understand, baseball is a game of statistics. They measure everything. There's statistics I don't even begin to understand. But 100% of those statistics are what's happening on the field. So, running, caught stealing, your fielding percentage, your batting percentage, your batting percentage with runners on base, your batting percentage against left-handers, right-handers, on and on and on and on.

• 59:13Speaker 02

  Half the game of baseball is played while you're sitting on the bench. Your team is in the field, you're on the field. When your team is at bat, you're on the bench. And so, the real question is, how do you measure what your impact is on the rest of the team when you're in the dugout? Did you help the rest of your teammates get better? So, I've been watching this guy, Theo Epstein, trying to learn from him, and finally, I have the chance to meet him once. And he had given a talk at a conference I attended. It was the year that there was a big hurricane in Houston. I want to say it was Hurricane Maria, but I'm probably wrong about that. And this was like, a week after the World Series.

• 59:53Speaker 02

  Houston won the World Series that year, beating the Los Angeles Dodgers. And he was still with the Cubs. The Cubs had lost to the Dodgers in the championship series that year. So, the team that the Cubs lost to went on into the World Series and lost to Houston. So, I go up to Theo Epstein, and I finally get a chance to talk to this guy who I've been learning from afar. And I ask him the stupidest question in the world. And I go, "Who were you rooting for? I gotta know, who were you rooting for in the World Series? Were you rooting for Houston because you felt bad for the city because they just had this hurricane? And you wanted to see something nice happen for Houston? Or were you rooting for the Dodgers because it would make the Cubs look better if the team they lost to went on to become the champion?"

• 1:00:38Speaker 02

  And he looks at me like I'm from Mars, and he goes, actually, very politely, he goes, "Actually, neither one of those things. I was absolutely rooting for the Dodgers to win, but not because it would make the Cubs look better. It's because if the Dodgers win the World Series, I know that the Cubs have to face them eight times next year during the season. And if they win the World Series, they're going to be like every other team that wins the championship, and they're not going to do the things they need in the offseason to improve their team." And that's going to make them easier for us to compete with next year. And I went, shit, that is such a great lesson because it's like when you think you're doing well, or you think you're on top of whatever profession, that's the time you got to break the glass.

• 1:01:23Speaker 02

  And you got to start over. And that's when, when I think most of us, and it's not just laziness, and it's not just sitting on your laurels, it's you think it's great. The world keeps moving, and if you don't keep moving with it, you will definitely not keep up.

• 1:01:37Tim Ferriss?

  That is a great story. I'd be curious to know, I mean, did you dig into or have a chance to study how he assessed things that were not captured in the usual stats? People showing up early to practice, maybe staying later, practicing A, B, or C. Were there any other particular approaches that you've gleaned from studying him or speaking with him?

• 1:01:59Speaker 02

  It was all intuitive, Tim, and it's the stuff I was looking at on our team. In my business, this is going to sound really trite, but our staff, the cooks and the servers, sit down and have what's called family meal before every lunch service and before every dinner service. And it's an opportunity for people to come together, stop. We call it family meal. We are a business, not a family, but you can watch during that time. You can just watch who's bringing motivating thoughts to the table, who's actually bringing outside ideas to the table, who's asking questions. You can tell who's bringing the conversation down. There's always someone on every team

• 1:02:42Speaker 02

  who's the ain't it bad person. That's not someone we really want in the dugout. I want people who are like, just imagine if we, I want that person. Just imagine if we could do this kind of person. But I didn't study that in Theo, except I watched how, before Theo Epstein, the most famous general manager was a guy named Billy Bean, who famously rebuilt the Oakland A's.

• 1:03:08Tim Ferriss?

  A main character protagonist of Moneyball for people who might recognize that.

• 1:03:12Speaker 02

  And I think what Theo did was he added the emotional. Aspect to the technical aspect.

• 1:03:20Tim Ferriss?

  So let's say you have someone on your team you don't want in the dugout. And let's say there's a reality TV show where you put on a Groucho Marx makeup kit. And you go and you're starting a new restaurant. You can use all the knowledge you have, but you can't use the contacts. You can't use the bankers and the financiers or whatever you might have had access to before. And you have to let somebody go. How do you make that decision? Is it made quickly? Have you set rules for yourself as to how to go about doing that? And then what is the language or approach that you might use?

• 1:03:52Speaker 02

  Well, I've gotten much, much better at it as the years have gone by. I mean, I'll never forget the first people I had to fire when I was 27, 28. I'd lose sleep for days, literally days. I even went on my honeymoon, knowing that I was going to have to fire someone when I came back from my honeymoon. I really regret that. I really regret that I hadn't done it ahead of time because that's not something that I should have been thinking about on the honeymoon. You know, the early days, I really looked at our business as if it were a family. And again, the way I grew up, it's like my job is to keep the family together. I'd be great at, if somebody wasn't working out at one position, I'd find a different position and move them to. Anything to keep them because it felt like I had somehow failed if someone was leaving our company.

• 1:04:37Speaker 02

  And I was really, really good, on the other hand, at rewarding great performance. But I was pretty damn bad and or slow at exiting people who shouldn't have been on the team. So a big thing happened over time and not too far in the rearview mirror either. And that was this thing that I've already alluded to, which is that, number one, it's a business, not a family. One of the great things about the restaurant business is that it does feel family-ish to people because you spend so many damn hours working with each other. But it's not a family.

• 1:05:17Speaker 02

  So it's a good thing, but it's a double edged sword because when you fire somebody from the family, also known as your restaurant. You have to ask yourself, what will this do to the fabric of that group? That troop that's working together? So I was able to come up with the help of some restaurateurs in California. They gave me this model that I just absolutely love. And we've turned it into something that we do. And they basically created a four quadrant thing. You've seen these axes many times with a Y axis and an X axis. And in one of the quadrants, there's the word can.

• 1:06:00Speaker 02

  Let's say the upper left hand, it says can. And then in the upper right, it says can't. And then in the bottom left, it says will. And in the bottom right, it says won't. So you basically have someone's technical abilities, the can and can't. And then you have somebody's emotional willingness or aptitude. And that's will and won't. And so what we've been able to do, we've actually created mirrors, which we put in the locker rooms of our restaurants. Cause we're not trying to keep this a secret. And the mirror has all four quadrants. And so when you go put on your uniform every day, you get to look at yourself in the mirror if you so choose and see this quadrant.

• 1:06:45Speaker 02

  And so basically, if you have someone who will but can't, that's a very different thing than someone who won't and can. You know, I could go through all of them. But what we've basically done, Tim, is that we have an action point and a timeframe for each one of those. So if you've got somebody who can and will, I want to celebrate that person. I want to replicate that. Those are my flowers. I really want to water them.

• 1:07:21Speaker 02

  Too often, we ignore those people because, oh, that's easy. We don't have to worry about Johnny because he always gets it right. But you really want to water those flowers and celebrate them. If you have someone who can't but will, I'm going to coach them. And I don't mind saying this, but the wick on my candle is pretty long for someone who will. Because if you can teach them how to do the thing, and they're willing to do it, and they've got the right approach, the right hospitality attitude, once they learn how to do it, you're going to have a loyal employee for life because you stuck with them. Now, on the other hand, so let's say that's a six-month wick on my candle.

• 1:08:02Speaker 02

  But let's say you've got someone who can't and won't. I'm going to put the candle underneath their rear end, and they're going to have to learn that this isn't working. And that's going to be a very, very short, that's got to be a short window. Because the longer that person stays on the team, everyone else on the team says, why should I try? If they keep batting that person in the lineup, instead of benching them or sending them to the minor leagues, why should I try? The hardest one I find is the can but won't. That's the person where you just go, you know, you're way better than this, but for some reason, you're just choosing not to bring it here. And so that's going to have a pretty short life as well.

• 1:08:48Speaker 02

  But by actually naming all four of those things, it really, really helps us to have these conversations. And we tell people upfront, they see that mirror. So it's not the first time you're having this conversation. It gives you a language to say, here's where you are right now, and it's not working. And I'll say probably the greatest lesson I've learned about anything has been really trying to understand, how do you scale culture? And I've kind of come up with this equation in my own mind that took me a long time to get to. I used to think that by rewarding the behaviors I wanted, that was the best way to fuel the culture I wanted. And now I look at it a little bit differently because...

• 1:09:31Speaker 02

  That's turning a blind eye sometimes to the behaviors I don't want. So I've now learned that the culture you have in your organization is the sum of all the wanted behaviors that you celebrate minus all the unwanted behaviors that you tolerate. And I've learned that the hard way because people think I'm full of crap. They can read anything I write about our culture, et cetera. But if I'm tolerating behaviors that don't promote either the excellence or well-being of the team, then everything I've done on the positive side should be called into question.

• 1:10:13Tim Ferriss?

  How might you, these days, having had much more practice since your honeymoon, if you had to let somebody go, or you wanted to maybe suggest language that someone might use, but you could make it personal, how might you phrase that conversation?

• 1:10:28Speaker 02

  Well, the first thing is it shouldn't be the first time you've had the conversation. There's nothing worse than when somebody feels like they got whacked in the back of the head and they're just shocked because you had never had the conversation. You hadn't had the tough conversation that said either your performance or your behavior, it's one of the two, are not measuring up. And that's another reason that we have to be really clear about what excellent performance looks like and what the wanted behaviors are, which we're very, very clear about. And by being upfront with people and not having this be the first time you're having the conversation, takes a lot of the emotion out of it. It doesn't mean someone's going to be happy, but it basically sounds like actually something

• 1:11:11Speaker 02

  that I've said on a few occasions, not in the time I'm actually exiting somebody, but in the time leading up to it, is I use what I call the jigsaw puzzle analogy. We've all done jigsaw puzzles and like the more challenging they are, you get to this point where it's starting to take some shape, but you still have a lot more pieces that you haven't put together than what you have in your little shape there. And invariably, you're going to come up with a piece that looks like it's right. And you put it down and it's almost right. It's so almost right that you keep kind of jiggering it around

• 1:11:55Speaker 02

  to make it right, even though you know it's not right and the piece knows it's not right. And what starts to happen is the paper on top of the jigsaw piece starts to fray a little bit. And in fact, the jigsaw puzzle, if you keep trying, starts to fray. Well, that's what we do too often with employees that are almost right, but they're not really the right fit. And it ends up not being good for the puzzle or for the puzzle piece. So I try to explain that to people. If you get that conversation with me, chances are probably 80% that the next conversation is, "You're a beautiful jigsaw piece, but you should probably

• 1:12:36Speaker 02

  be part of a different puzzle." It doesn't make you wrong, doesn't make you bad. Now, if it's someone who actually did something bad, that's a very different conversation. It's like you cannot work here. You've betrayed integrity. You've betrayed someone on our team. You've betrayed one of our guests. You've betrayed our investors. If you cross any one of our stakeholders, that's a very different conversation, lack of integrity. But if it's just not the right fit, number one, it shouldn't be the first time they've heard about it. And they may not love the conversation. Who in the world wants to be exited? But I'll tell you, one thing I feel really good about is that we have a pretty

• 1:13:15Speaker 02

  small industry. And invariably, if you're someone who left our business on your terms or on our terms, you're probably going to be serving me in a restaurant sometime in New York. And I feel really good that I never mind seeing these people. It just feels like as long as it's clean and we were honest with each other, it tends to work out in the end.

• 1:13:37Tim Ferriss?

  Reading your bio, looking at the highlights, you've had so many successes, I would imagine beyond your wildest dreams or expectations that you could have had in your, say, late twenties.

• 1:13:52Tim Ferriss?

  What are some of your favorite failures or any favorite failures that come to mind? And by favorite failures, I mean a failure that you learned a lot from that set you up unexpectedly for later success. Anything that sticks out, comes to mind as a seminal moment.

• 1:14:09Speaker 02

  Yeah.

• 1:14:10Tim Ferriss?

  A teaching moment.

• 1:14:11Speaker 02

  Many, many, many. Every day we have micro failures. There's a really good movie called The Best Exotic Marigold Hotel. I don't know if you've ever seen it. So it's a terrible title because I can almost never remember it. I want to say Carnation, Chrysanthemum, but it's The Best Exotic Marigold Hotel. Takes place in India. There's two great lessons from that, one of which I think answers, there's probably more than two, but one of my favorite lessons is that the only real failure is the failure to try and that the measure of success is how we cope with the disappointment.

• 1:14:45Tim Ferriss?

  Like a letter.

• 1:14:46Speaker 02

  I'd say that I was, probably the first most pivotal experience for me was closing the first restaurant I ever closed, which was Thabla, an Indian restaurant. Interesting that I'm using an Indian film to talk about this, but Thabla was about 13 years old. And if I regret one thing that I wrote in Setting the Table, it was actually in the very first paragraph of the book. And I proudly stated, at this point, we had been in business for about 20 years, and I proudly stated how many restaurants we had opened.

• 1:15:25Speaker 02

  And then I super proudly stated, and in all that time, we've never closed one, as if closing a restaurant is failure. And it was the stupidest thing I could have possibly written because closing a restaurant is not failing and it's also nothing to be ashamed of and nothing to be proud of to keep a restaurant open forever. It either, it is or it isn't. So. Tabla, I guarantee you, I was so falsely proud with what I had written that I kept Tabla and I was so afraid of my dad's, you know, I didn't want to go down the path of being my dad. You telling me that something, I couldn't make something work here? Tabla

• 1:16:07Speaker 02

  was a great Indian expression in a very groundbreaking way in New York City, using fresh green market ingredients. We had a fantastic chef who sadly died during COVID, Floyd Cardo's groundbreaking restaurant, lived for 13 years, probably should have closed it at year 11. We had just hit the Great Recession and we started to lose money. It was our biggest restaurant in terms of numbers of seats. We had 283 seats on three different dining rooms, two different levels. I was so afraid of closing it, so afraid of talking to the team and saying we couldn't make the restaurant work, that I kept it

• 1:16:51Speaker 02

  open for two years longer than I should have. And that was the restaurant where for two years, we had people working out of loyalty. No one was making a raise, no one was getting a promotion. And I finally gathered the courage to do what I should have done two years sooner. I'll never forget the day I've said, look, what if we could distinguish ourselves as much based on how well we closed a restaurant as we had with how well we had opened the restaurant? And so we started writing a list of, all right, what are all the ways that we could look back on this and say, we did it the right way? And first thing was, we

• 1:17:32Speaker 02

  told our whole staff. Now, that sounds, well, why is that such a big, well, sadly, in our business, sometimes the first time a staff learns a restaurant's going out of business is the day they go to work and see a padlock on the door, because the restaurant is dead afraid that no one will work there. No one wants to stay on a sinking ship. So we told our staff quarter of a year ahead of time.

• 1:17:57Speaker 02

  Told our landlord, told the community. We invited all of the alumni of the restaurant in to come cook with us. So we celebrated the restaurant. We hosted job fairs for all of our team members, not just with us teaching them how to interview and working potentially in our other restaurants, but again, inviting famous chefs who had once cooked with us, or general managers who had once worked with us, to come in and hire our staff. We hosted three fundraisers. We brought in Indian chefs from around the country to do a fundraiser for earthquake victims in India. We did a fundraiser for Madison Square Park.

• 1:18:40Speaker 02

  So by the time this was done, we paid our landlord everything. We actually even paid our investors, I think they got a 0.1% return on their original invest. They got all their money back, plus a couple pennies. So if you're going to close a place, at least that was the way to do it. And the biggest learning I had was, there's no shame in closing. Since closing Tabula, I would say we've probably opened 15 restaurants and we've probably closed another six. And we had to close about three of them during COVID. And I think that learning to fail fast and to realize that if you hadn't tried the thing in the first place, there would neither have been a success or failure.

• 1:19:24Speaker 02

  So the real failure would have been not in trying. But not everything has to go on forever. The late restaurateur Joe Baum had this great expression that I love and I don't love. But he used to say that the definition of a classic restaurant is one that can outlive its original lease. That was a goal of mine for a long, long time. And frankly, we've done that with almost all of our restaurants. I now have a different goal of my own, which is I want our restaurants, and I think your podcast is this as well, and we all have songs in our lives that are like this, or pieces of art, or movies, or books. But I want our restaurants to become essential in people's lives.

• 1:20:07Speaker 02

  I want people to say, "My life got better because that restaurant existed." Doesn't matter how long, and God forbid the restaurant goes out of business. I want people to say, "I just lost a little something when that restaurant closed." There are so many restaurants, dry cleaners, whatever, that come and go, and it's like, who cares? There's so many songs, if I never heard it again, I'd be fine. But there's those handful of songs that when I listen to them, I'm grateful for the person who wrote it, I'm grateful for their life. "My life got better because that song existed." And I can't even imagine my life if that song had never been written. That's my, more than longevity, it's essentiality that I think matters.

• 1:20:50Tim Ferriss?

  You know, I haven't thought about this in a really long time, but I still remember every restaurant and coffee shop in which I wrote my books, because these locations, and I took great pains to find the right spot, became my surrogate family for a period of time. While I worked on these things, that of course, became a huge part of my life, continue to be a huge part of my life. And even though some of them have gone out of business, or I shouldn't say gone out of business, maybe they were just closed, maybe the decision was made to close, they still have left this indelible mark in my mind. And it just brought all of these memories rushing back like the Pixar movie Ratatouille.

• 1:21:33Tim Ferriss?

  The similar effect just now as you're talking about that. And I admire you for being, in my mind, an experimentalist, running experiments, being willing to try in terms of testing things. And I remember, this was some time ago, you could probably place the timestamp effectively, but when you experimented with no tipping. And I would love for you to speak to that and just discuss lessons learned through that. And this ties into something we were talking about a little bit before I recorded, which was time in Japan, where tipping is not a thing, as an example. It's just not really part of the culture. But could you describe what you did and what you learned?

• 1:22:17Speaker 02

  Yeah, we had faced a major, major shortage in really good cooks. This was probably starting in about 2012, 2013, 2014. And I'll never forget, I went to one of the restaurants we closed, which was a really good restaurant, but I think we got a subpar location for it. It was called North End Grill. And I'll never forget going into the restaurant one night and I said to our general manager, Kevin, I said, God, um, service has gotten really good here and I'm so proud. I spoke to four different servers and they all told me that they had graduated from the Culinary Institute of America. And I said, how are we getting so many people who want to be professional servers?

• 1:23:02Speaker 02

  This is great. And he goes, boss, I wish I could tell you that was the truth. He said, these are all people who wanted to be cooks, but they can't afford to be cooks. And there's like three of them living in a studio apartment, commuting all the way from Queens. And we can't pay them any more money because we don't have any more money to pay them. We're trying to give them free Metro cards, but that's not going to keep them. So the only way they can make a living is to be waiters. And something I'd been thinking about for many, many years was how much I did not like the tipping system. Initially, in the early part of my career, I didn't like the tipping system because

• 1:23:44Speaker 02

  there would always be a situation in these early days of Union Square Cafe or Gramercy Tavern, when a tourist from Japan or from France or Great Britain, where there's not a big tipping culture, would either leave no tip or they'd leave a pretty shitty tip. And it would be so demoralizing for the waiter. There was one occasion where one of our waiters actually chased somebody out onto the sidewalk and I was mortified, just like, you cannot do that. And yet here I was, because of the tipping system, where they were getting the adjusted tip minimum wage back then, which was $2.21. And if they didn't get a tip, they weren't going to be able to pay their rent. So I understood it, but it was just, I hated it.

• 1:24:27Speaker 02

  But then later, now bringing it up to the mid 2015 time, I said, you know what? I'm so tired of this system where we are legally prohibited.

• 1:24:40Speaker 02

  From allowing tips to be shared between waiters and cooks. Cooks work at least as hard as waiters. The guy who made the risotto, stirring the risotto like crazy, didn't work any less hard than the guy that brought it to the table. And by the way, if somebody's gonna have truffles shaved on that risotto, and therefore the price is gonna go way up, the waiter's gonna make a whole lot more money and the cook's gonna make zero more money. And what I had noticed was that every year, the waiters were making increasingly more money. Why? Well, because menu prices only go up, and what's a tip if not a multiplier of the menu price? And cooks' hourly wages had remained stagnant. And so you may say, well, why don't you just raise the cook's wage? Great.

• 1:25:25Speaker 02

  Every time I raise the cook's wage, I have to increase the menu prices, which only increases the disparity because now the tipped employee makes more. So I was really tired of trying to argue that New York State, or many, many other states, should change their laws so the tips can be shared. And so I said, screw it, I'm just gonna take this into my own hands. And I came to a meeting one day with my senior leaders, and I played one of the worst John Lennon songs I've ever heard, called Cold Turkey. And I said, I am now declaring tips to be a drug, and we've got to get off this drug. And if we can't change the rules, we're just gonna stop taking tips.

• 1:26:09Speaker 02

  And we came up with this idea called hospitality included. And my goal was that we would narrow the gap between what a cook could not make and what a server could make. I didn't want to punish our servers, but I wanted our cooks to get to make more money so we could attract more cooks. Otherwise, New York City as the preeminent dining capital in America was definitely gonna be threatened. So we established this idea, did some really, really hard math, and I'm telling you, it's incredibly hard, because you've got three legs on a stool. You've got the consumer who's looking at menu prices that now include everything.

• 1:26:51Speaker 02

  So if you go to a typical restaurant in America, the menu price has to include the cost of whatever it is that menu item is, right? The chicken and everything that came with it. It's gotta include the cost of the linen, the flowers, the rent, the insurance. It includes everything except paying the person who brought it to your table. You're gonna pay that two and a half hours after you start your meal. You're gonna get your bill and then you're gonna go into your other pocket and add 20% to that. But you're gonna do it. So with hospitality included, I said, everything's included. And I purposely called it hospitality, not service, because the way I look at it is,

• 1:27:34Speaker 02

  I want you to feel like you're paying for how we made you feel. I want the food to be free, the drink to be free. And when you look at that big number at the bottom of your thing, you gotta feel like, man, I just got a $350 hug. And so that's why I wanted to call it hospitality included. And I wanted our staff to understand that. And so the math was really hard because by the time I included everything on the menu price, I don't want to bring our waiters down. I just want to bring our cooks up by 20%. Oh, by the way, I also wanted to bring our starting manager salary up because one of the worst things about the tipping system is that you cannot afford, in most cases,

• 1:28:16Speaker 02

  to promote yourself from being a great server to being a manager without taking a 25% pay cut. That's really screwed up, that there's nowhere to grow. It's a dead end for waiters. We're gonna raise our manager's wage. Oh, by the way, we're also gonna put in a retirement plan for our team. We're gonna put in a family leave policy so that when people are pregnant or people have a baby, both the birth mother and the birth father can get up to eight weeks of paid time off. We wanted to put all that in the price. And we didn't want to scare people away from dying at our restaurants. And we wanted to leave some money for our investors.

• 1:28:57Speaker 02

  So we tried it at one restaurant, The Modern, really hard, but it worked pretty damn well. Amazingly, the guests did not balk. They loved not having to buy their coat back from a coat check at the end of the meal because everything was included. And then every four or five months, we'd roll it out at another restaurant. And we started to see our profits started to erode a little bit, but damn it, I was gung ho on making this thing work because the good news was we were getting better cooks. And I knew we were doing the right thing. There's another thing that I should add is that in making this choice, we actually had to forego a million dollars in federal tax credits, like real money that they pay us.

• 1:29:42Speaker 02

  The federal government pays you to accept tips. Does that seem crazy or what? And once we eliminated tipping, we had to forego those. And the reason they did that is that probably 15 years ago, when the government realized they were not collecting a lot of taxes based on tips because people were hiding what they were making, they actually brought the restaurant industry under their cloak. And they said, for every tip, dollar tip you report to us that your servers are making, we will pay you back a certain percentage. And so that's why they pay restaurateurs to take tips because they want the tips reported. But so we gave up a million bucks in making this choice. I just wanted to do the right thing.

• 1:30:27Speaker 02

  So now all of a sudden, COVID happens. We're basically brought to our knees with no revenues at all for four months. Could have gone out of business and had to lay off a huge number of our team members. So finally, in the summer of 2020, New York made it legal to open your restaurant with a certain number of outdoor tables. We weren't going to make any money, but it was going to hopefully get the city back up on its feet. And I was a big proponent for the city, for our whole industry. And I saw this really amazing dynamic happen, Tim. The New Yorkers who had been locked up in their apartments for all these months,

• 1:31:10Speaker 02

  unable to go to restaurants, they could only get curbside pickup and, you know, delivery and that kind of thing, were so incredibly grateful for our servers who were willing to come out and serve them on the sidewalk, that they were literally throwing $20 bills at our servers, $50, $100 bills to say thank you. And now I'm telling our servers, not only can you not accept that, but you have to tell our guests, you may not say thank you to me. After about two weeks of this, I said, and by the way, we had no vaccine at this point. So, any server working there, serving someone who's not wearing a mask while they're eating, this was a dangerous time in New York.

• 1:31:51Speaker 02

  And I finally said, this is inhumane, this is not being on our employee's side. And so I said, guess what? We're going to resume tipping, but in so doing, we as a company will start to pay a percentage of our revenue every night to our cooks who are tip ineligible. I don't think that should be our responsibility, but I did not want to erode the gains we had made. And so now, that's where we are. So our servers are making tips, and if we have a really busy night, our cooks are really happy, they're benefiting, they're not just, like in so many restaurants where on a busy

• 1:32:31Speaker 02

  night, you're watching the waiters counting their tips, and the cooks just perspired more. That's not right.

• 1:32:39Tim Ferriss?

  Yeah. I grew up earning my keep on Long Island as a kid. I probably started really young, God, I was, I don't know, 14 or 15, working as a bus boy, and occasionally, if the moment presented itself, a server at restaurants on Eastern Long Island. So I grew up as a townie in the Hamptons, which has a whole set of stories for another time. But I'm wondering, as we think about the four quadrants that you described earlier, the can and will, the can't and won't, and the other permutations, did you run into, or how did you handle a dynamic where people who, in the previous paradigm, so now I'm

• 1:33:21Tim Ferriss?

  talking about in the hospitality included transition, you're already there, but people who in the tipping environment had been

• 1:33:30Tim Ferriss?

  Top performers contending with that. So the sunflowers that you want to water, how did you contend with, if you did, the dynamic of maybe prior top performers feeling like they were not going to earn their fair share?

• 1:33:47Speaker 02

  It was really tough. And you want to take a communications lesson, just try rolling out hospitality included at your restaurants because tipping is such a deeply held American way of life, both for the people providing the service and for the people on the receiving end. This was a really tough thing to break and not many restaurants joined us in this. A couple tried and a lot of them folded their hand well before we did on the whole thing. But what we did do, and I feel really good about this, was to do the same thing we do with our cooks. So you get a raise based on merit if you're a cook. If you're a server, you're getting the same adjusted minimum wage, no matter what you

• 1:34:31Speaker 02

  do. And so we created learning opportunities with our teams and we had several tiers of learning opportunities. And if you got to a different tier, you got a higher base wage. Obviously, we were not doing tipping. So you could actually get a raise through the whole thing. So if you look at our staff, we factored in longevity, but sometimes the longest serving servers are the ones that most need to go because they're just overripe and they've lost their smock. But we definitely factored in longevity because here's the thing. The way you make the most tips in a restaurant is generally through longevity because you get the, classically, the Thursday, Friday, Saturday shifts and classically,

• 1:35:16Speaker 02

  you don't get the Monday, Tuesday lunch kind of thing. What was great, and this was a win for everybody, was that while longevity would factor into your base rate,

• 1:35:28Speaker 02

  It did not factor into your schedule. And so a lot of people who in order to make their money had to work weekends, sometimes away from their family, they could actually have a schedule that was a much better balance of life. So there were some wins in this, but at the end of the day, we just couldn't make the math work and it just didn't seem right to tell our staff, "Stop. You must tell our guests, 'No, thank you.'" That was a pretty awkward thing. And going back to Japan for a minute, they have a wonderful culture, very different from ours, and they call it omotanashi, which is their word, which is so much more than hospitality.

• 1:36:10Speaker 02

  It's the providing of hospitality and service without expectation of any further reward in anticipation of someone else's needs. It's a beautiful concept and that's how that culture has been brought up. And I've learned a lot from it, but I do believe that the kind of people we hire, who we call 51 percenters, people who have a high hospitality quotient, genuinely are happier themselves when they do something that makes you feel good. But that's no reason that they should be penalized relative to this marketplace in terms of how much money they can make.

• 1:36:51Tim Ferriss?

  What does 51% refer to?

• 1:36:54Speaker 02

  Well, we want 100% employee, just like all of our employees would like. I want to get 100 on my test. I think that happened probably three times when I was a kid, but it doesn't mean I didn't want it. And so it's our way of basically saying, "Great, you want 100 on your test? Here's how you get it." Cool thing is, there's only two ingredients in this recipe. There's your technical performance, how well you do the job you're paid to do. The most points you can get for doing it perfectly is 49. Then there's your hospitality performance. That's and how did you make everyone else feel while you were doing it? That's worth 51 points. I think we both know 51 is a little more than 49.

• 1:37:37Speaker 02

  I don't want to get a 51 on my test. That's a failing grade. If I don't do the technical stuff right, the food sucks or it took too long. Doesn't matter how nice I am. I'm one hundred. But I will tell you right now that the only way I've learned to become essential and to burrow our way into people's hearts is the food better be damn good. But more than anything else, you got to feel like we're on your side. And that's where the 51% comes in.

• 1:38:04Tim Ferriss?

  Love that. Danny, I'd love to ask you just a few more questions and one that comes to mind. You seem to be, I have to imagine, a reader. And besides your own books, what books have you gifted the most to other people? If any come to mind or gifted frequently?

• 1:38:23Speaker 02

  Well, outside of our cookbooks and setting the table, which is the most gift I give because someone's got to give it. I love marketing. I just love marketing because marketing is understanding the other person. Marketing is a dialogue. It's a lot like hospitality. And I love Seth Godin's books. And I would say that I've given many of his books, but probably the one that I've given the most is This is Marketing. He's just so brilliant at getting to the essence of what something really is. And he thinks marketing is when you can convey that people like us do things like this. And that sounds so simple and yet it's so deep, actually.

• 1:39:05Speaker 02

  I believe that the biggest longing people have is to belong. And so great marketing actually doesn't just sell you something. It makes you feel like you belong to a tribe.

• 1:39:17Tim Ferriss?

  Seth also walks the walk. I really am a huge fan of Seth and have gotten to know him over the years. Very sweet guy. Always will tell you exactly what is on his mind. You don't have to guess, which I love. Makes me pine after the East Coast every once in a while when I have to deal with the opposite somewhere.

• 1:39:37Speaker 02

  I hope Seth won't mind this story, but he once told me exactly what was on his mind. He had a pretty bad service experience at one of our restaurants, Myelino. And he told me. And I've known Seth for a while. Love him. And I felt so badly and I said, I gotta write a great next chapter on this. I gotta figure out something. So I invited Seth to have breakfast with me at Myelino. And he didn't want to talk about the service mishap. He said, I gave you the gift. You go deal with that's your problem. Go, go figure that out. I just want to have a good conversation with you. So we had a great breakfast and I'm going,

• 1:40:20Speaker 02

  all right, finally got Seth back and my good graces here. As he's leaving the restaurant after breakfast, I don't know what happened, but he banged into our clear door. The door was so clean that day, he banged into it and broke his nose.

• 1:40:35Tim Ferriss?

  Oh, no.

• 1:40:38Speaker 02

  And I'm going, now what am I gonna do here?

• 1:40:40Tim Ferriss?

  Oh.

• 1:40:42Speaker 02

  Oh, poor Seth. Anyway, he's, he's a genius and he is the definition of a mensch.

• 1:40:47Tim Ferriss?

  Yeah, he really is. He's one of the best people I've ever met at walking the walk with what he describes or his values, whether publicly presented or not. He's very good at defining his values and I don't think he would think of it this maybe explicitly, but sort of rank ordering them and then organizing his life, making decisions about family, business, et cetera, travel that are aligned with all of those. It's very impressive. I aspire to be better at it, certainly. Leading off of the very pithy and very, I think, accurate also expression regarding marketing from Seth, if you could put anything on a billboard, this is metaphorically speaking,

• 1:41:30Tim Ferriss?

  just to get a message out, could be an image, could be a quote, it could be a word, could be anything at all, just to convey something to a very, very large number of people. Is there anything that you might put on that billboard?

• 1:41:43Speaker 02

  Can't we please have a charitable assumption about one another? I think I'd put that on there. I, I feel like when we go into a conversation with somebody or read about somebody and we assume the worst as the starting point, it doesn't usually end up very well. On the other hand, when you assume the best intentions, you just never know. It's very possible that you hadn't communicated, understood what someone really meant. And I feel like going into any relationship or experience with a charitable assumption.

• 1:42:19Speaker 02

  Is such a helpful thing.

• 1:42:21Tim Ferriss?

  Is that something that you've had out of the box? You mentioned the glass half full even before you uncorked the bottle. But in this particular context, going into, say, conversations, having charitable assumptions as opposed to assuming the worst, is that something you've cultivated? Is that something that just seems to come with your hardwiring?

• 1:42:41Speaker 02

  I just think that's who I am. I don't think it's something I've ever thought consciously about, but I do know that it's not just about being optimistic, but it's about being hopeful. There is a difference between hope and optimism. I think that hope is an active act. And, look, I think it's so much this gets back to growing up. My parents got divorced after 25 years and I'm watching all these conversations and there's two truths to every single conversation. And I think one of the gifts I got as a kid was getting to cherry pick the good stuff from each of my parents and leave the bad. Didn't make them bad people.

• 1:43:23Speaker 02

  It's just like you pick and choose, but you start from a standpoint, this person actually means well, their intention is to do the right thing. And we're all flawed. We all make mistakes constantly, but that's not a reason to vilify us. And, you know, the other thing I'll just say is that you've clearly gotten the sense, I live my life within the 40 yard lines. I don't live my life on the five yard lines where you can't hear people yelling at each other from the five yard lines of a football field. And I know that we've gotten so tribal in this country, so tribal with everything, that if you're not all the way on one side or the other, you're wrong. And that's just not how I look at life. It just gives me great joy to find, how can we make progress together?

• 1:44:07Speaker 02

  And it starts with assuming the best in people.

• 1:44:11Tim Ferriss?

  Denny, we've covered a lot of ground and we're, we're honing in on nearly two hours now, or roughly two hours. And as we wind to a close, is there anything else that you would like to say or request? Could be a request of my audience, could be anything at all that maybe we didn't discuss that you'd like to bring up? Any closing comments, complaints you'd like to lodge publicly? Anything at all?

• 1:44:40Speaker 02

  Go support your local restaurants because and your local butchers and your local fruit growers, et cetera. You cannot know how important for the economy and also for the emotional fabric of a community restaurants are. Restaurants provide a place for the community to come together and do their social life, to do their business life, to do their personal life. We saw what life looked like when we didn't have restaurants during COVID and it gets to the human desire to connect with people. People are so eager to be with people. And so the more you can do to support people who work in the food

• 1:45:25Speaker 02

  industry, that's my hope.

• 1:45:26Tim Ferriss?

  That's a perfect place to and Danny, thank you so much for making the time. It's really nice to have a long form conversation with you and I appreciate you carving time out of your schedule to do this. So first and foremost, thank you very much. I have tons of notes, many things to follow up on, many things to think about, which is always the sign.

• 1:45:48Speaker 02

  I'm really grateful to you and thank you for sharing me with your amazing audience. And I hope I'll get to see you in New York.

• 1:45:55Tim Ferriss?

  Absolutely. I do love New York City. I mean, there's no place like

• 1:45:58Speaker 02

  Or at a Shake Shack near you. By the way, in at the Shake Shack in Austin, we have a burger there that we only do in Austin.

• 1:46:07Tim Ferriss?

  No kidding. All right. So I can find that on Lamar, on the South Lamar location?

• 1:46:11Speaker 02

  You can find it there and it's called the Lockhart Link. So we get a amazing sausage from Lockhart, Texas and put it right on top of a Shack Burger. I wish we had those in New York, but only in Austin.

• 1:46:23Tim Ferriss?

  All right. That's on my to do list. And for those who don't know, Lockhart, very famous. This is one of the meccas of delicious meat here in central Texas. So I will have to try the Lockhart Link. And for people listening, they can find you Danny on Twitter at DH Meyer, Instagram, also DH Meyer. We'll link to many, many other things that we've discussed. I recommend people check out Setting the Table. They can find USHG at USHG.com as well as your team member description and so on. And I will add links to everything we discussed in the show notes for folks after the fact, and you'll be able to find that as always at tim.blog/podcast. And until next time, be

• 1:47:08Tim Ferriss?

  just a bit kinder than you think is necessary to others and to yourself. Assume good intentions. Make charitable assumptions about the next person you're going to have a conversation with. And as always, thanks for tuning in.

• 1:47:23Tim Ferriss?

  Hey guys, this is Tim again. Just one more thing before you take off, and that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend? Between one and a half and two million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kind of like my diary of cool things. It often includes articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast guests. And these strange esoteric

• 1:48:07Tim Ferriss?

  things end up in my field, and then I test them, and then I share them with you. So if that sounds fun, again, it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about. If you'd like to try it out, just go to tim.blog/friday, type that into your browser, tim.blog/friday, drop in your email, and you'll get the very next one. Thanks for listening. This episode is brought to you by AG1 by Athletic Greens, a true staple of my daily routine, as it has been for more than a decade. I take it most mornings, and I even travel with it, whether I am skiing, traveling abroad, going to an event where I'll be around a

• 1:48:49Tim Ferriss?

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• 1:49:33Tim Ferriss?

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• 1:50:18Tim Ferriss?

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• 1:51:02Tim Ferriss?

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• 1:51:44Tim Ferriss?

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