Adapting (by Acquired) Episode 1: Canlis

Mark Canlis speaks about adapting the world-renowned Canlis restaurant to the realities of life post COVID-19 by simultaneously announcing the closing of their 70 year old dining service and the launch of three brand new, no-contact concept restaurants in just one week: "Pretty quickly we realized that it would be just as risky to do nothing as it would to do something really radical. And if we were gonna live into our values, every once and awhile that’s really going to cost you something." This conversation is an incredible inspiration to us all, and a reminder of the vast power of the human spirit during challenging times. *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  It's kind of like the word pick six. I don't, that just like happened a few years ago. And now everybody says it. Watch now that like ESPN is like pick six, pick six.

• 0:08Ben Gilbert?

  And when it doesn't happen, they're like, we could really use a pick six right now.

• 0:11Speaker 00

  Totally, totally. Just no one said that 10 years ago.

• 0:26Ben Gilbert?

  Welcome to season six, episode four of Acquired, the podcast of-

• 0:31David Rosenthal?

  Ben, hey, I think you're on autopilot.

• 0:35Ben Gilbert?

  Yeah, sorry. Muscle memory. All right, listeners, we are coming to you in a time of enormous change and upheaval. The coronavirus has spread around the world, challenging global health systems, bringing economies to their knees and changing daily life for everyone, seemingly overnight. Given this, it just seems irresponsible to stay business as usual over here and put on our normal acquired episodes for you all.

• 1:01David Rosenthal?

  So we're changing acquired. For the first time ever, we're taking a pause from normal episodes. The world doesn't need acquired right now. People normally tune in to hear us talk about the stories behind great technology companies and what goes into building them. But these aren't normal times. What the world does need right now is stories of great leaders and how they and their organizations are responding to what might be the biggest moment of change we've ever seen. So we're going to take everything that we've put into acquired over the years, our format, our infrastructure, and the way we can reach all of you. And we're going to put our full weight behind this. So starting today, we're pausing acquired and we are launching adapting. Adapting is a series all about doing just that, showing

• 1:45David Rosenthal?

  leadership and changing to fit what the world needs right now, not what it needed last week. So with adapting, we're going to take a shallow dive, a more shallow dive at the beginning of each episode into the history of an organization. But our focus is really going to be on the present and on the future, not the past. We also won't be grading. Adapting requires taking risks and putting yourself out there. And anyone who's doing that right now is forever an A plus in our book.

• 2:11Ben Gilbert?

  Yep. Yeah, David, I think we were just talking about this, but I'm excited about this. It just feels right in this moment to do this.

• 2:19David Rosenthal?

  Totally.

• 2:20Ben Gilbert?

  Listeners, we are making some important changes to the acquired community. If you haven't joined our Slack, you can sign up on the acquired website and find all the announcements there. And we're doing some sort of new and pretty cool things in there. If you're not yet a limited partner, now is the time to join. In addition to LP episodes, we are adding a community component to the LP program. So last week, we had our first group Zoom call with everyone who's shut in at home, and it was really fun and therapeutic to get to talk with everyone. So we've decided to make it a regular monthly thing as part of the limited partner program. So we'll be announcing more details on that in the LP show. And in the meantime, you can sign up at glow.fm/acquired by clicking the link in the show notes below.

• 3:06Ben Gilbert?

  And lastly, David and I feel very strongly that money should never be a reason that a single person can't become an acquired LP. So we were talking about this beforehand, especially when introducing this new sort of community hangout component. If you can't afford a subscription, especially as we all respond to this pandemic together, even if you already are an LP, just shoot us an email, introduce yourself, and we'll take care of you.

• 3:30David Rosenthal?

  Yeah, we felt super strongly about this. We want everyone who wants to be part of this community to be able to, so shoot us a note.

• 3:37Ben Gilbert?

  Yep. All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 3:57David Rosenthal?

  Yep, your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 4:18Ben Gilbert?

  Right, and that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 4:40David Rosenthal?

  In half? Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 4:58Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of Acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off, and just tell them that Ben and David sent you. Now, what is today's episode actually about? Well, we are doing an episode on a topic that we never thought we would do on this show: a local restaurant. But it is so much more than that.

• 5:36David Rosenthal?

  Indeed.

• 5:38Ben Gilbert?

  And we think our guests' words are very inspiring and super important today. So, without further ado, please enjoy our conversation with Mark Canlis of Seattle's Canlis Restaurant.

• 5:50Ben Gilbert?

  All right, listeners, most of you are aware that restaurants are among those hit the hardest from our current health crisis. Canlis is leading the way in adapting to provide a product in need: delivery food, saving jobs, and ensuring the continuation of the business through trying, trying times. Many are asking, as a city, country, and a global community, can we do this? And as Mark said in the Seattle Times earlier this week, hell yes, we can do this, and we're going to do it with burgers and bagels. So, to introduce Mark, I'm going to borrow a line, or a little bit of Mark's bio from the Canlis website, because I find the prose just poetic. Mark Canlis is the second of three sons. He grew up in a restaurant

• 6:34Ben Gilbert?

  family. He joined Canlis in 2003 after graduating from Cornell University and serving as a captain in Air Force Special Operations. He met his wife, Anne-Marie, while opening famed restaurateur Danny Meyer's fifth restaurant, Blue Smoke, in Manhattan. Returning to

• 6:51Ben Gilbert?

  Seattle, Mark spearheaded the generational transfer and brand modernization that has garnered the family business national acclaim as one of the finest restaurants in America. He now owns and operates Canlis with his brother, Brian. He and Anne Marie reside on Queen Anne with their three children. And as for Canlis, Food and Wine Magazine has called it one of the 40 most important restaurants in the last 40 years. They have received 22 consecutive Wine Spectator Grand Awards and been nominated for 15 James Beard Awards and won three of them. Welcome, Mark.

• 7:24Speaker 00

  Thank you. It's good to be here. I also have the luxury of, when you write your own bio, you can kind of make yourself sound good. I hope I haven't inflated that in any way, but, um, but thank you.

• 7:34David Rosenthal?

  I was gonna say, the most important thing for, for Ben and for me is I know both of us have had many special memories at, uh, at Canlis, so thank you, guys.

• 7:43Speaker 00

  No, I'm honored to be on the show.

• 7:45Ben Gilbert?

  All right, David, take us in, history and facts.

• 7:47David Rosenthal?

  Yeah, well, so for anybody of our listeners who are in the Seattle area, and probably many who, even many who aren't, you already know a lot about Canlis, but Mark, can you give us a little bit of the history? I mean, it's a very, very special place. This isn't just another restaurant. Maybe, can you go back and talk about your grandfather's story and Hawaii and Pearl Harbor?

• 8:08Speaker 00

  Sure. You know, we, if we're gonna go all the way back, I run this restaurant with my brother, Brian, and we very much feel like this is the tale of a couple different grandfathers. It's the amalgamation of four generations of Canlises doing restaurants. Our great-grandfather cooked for Teddy Roosevelt, um, after his presidency on an African safari. I was picked up at a hotel in Egypt and invited to come along and be a steward on that whole thing for a year and a half. So really, it starts there. He and my great-grandmother would, um, come to the United States somewhere around 1909, 1910.

• 8:49Speaker 00

  They started a restaurant in Stockton, California, um, at that time and had a bunch of kids. One of them- Peter Canlis started this restaurant, Canlis, in 1950. So that was my grandfather. He would pass away in the 70s and my mom and dad ran this for 30 years. Brian and I have now been doing it since 2003 and in so many ways, we feel like we're just getting the hang of it. So, slow learners, but you know, more or less 100 years of trying to cook for people.

• 9:20David Rosenthal?

  There's a, there's a pretty cool military history with the restaurant and starting with Peter too, right?

• 9:27Speaker 00

  Yeah. So then on the other side of the family are a whole bunch of folks who have served in the armed forces and that is, just continues to be something that we're really proud of in this family and, and something that we've, many of us have chosen to do and, and represent, I think some of the sweetest years, at least for my own life. And I would say the same is true for my dad and my grandfather and my brother. So I was in the, I was in the air force with Brian. Dad was in the Navy. My grandfather was a Marine for 43 years. I don't even think you can do that anymore, but back then you could. And so we have, yeah, that's just been a part of our family story and, and to be completely

• 10:10Speaker 00

  honest, a very large influence on the way that we lead. At last, yesterday, we're running this crazy drive-through. We've got cars everywhere, shut down traffic and I get a, I get a phone call and I have hearing aids. So the thing just comes like straight into my head. It's as if like the phone is ringing in your brain. So I just answered it because I thought it was our, our road team. And it was the Colonel that I worked for, you know, 25 years ago, Colonel Mueller, and a man that just had such remarkable influence on the way that I lead. And it was random. I haven't talked to him in years. And I was like, Colonel Mueller, no way. I've been talking about you to everyone because in so many ways, I feel like you prepared me for this. And not just to, it's not about adapting your company, but the leadership, I think.

• 10:55Speaker 00

  The way the military teaches you to prize your people is just, you know, I just learned so much in my, in my time in the service. So that was, that's just been a gift to us.

• 11:05Ben Gilbert?

  That's great.

• 11:06David Rosenthal?

  So the first iteration of Canlis, the restaurant was on Honolulu, grew out of the USO after Pearl Harbor, right?

• 11:14Speaker 00

  You know, he left the place in Stockton. He'd grown up there and he wanted nothing to do with restaurants, the way his parents were doing. And he ends up in Hawaii. He's selling dry goods when Pearl Harbor happens. You remember his zeros flying over. He was playing tennis in the morning. Like everybody, like so many people in Honolulu at the time, they kind of all headed to the base and tried to do what they could. My grandfather had quite a healthy self-esteem. Just code for, you know.

• 11:44David Rosenthal?

  He sounds like an entrepreneur.

• 11:46Speaker 00

  Yeah, there you go. That's the, thank you. Yeah, that's a nice euphemism for had a large ego. And at some point he finds himself talking a lot of smack inside the USO about the quality of the food. The chef gets so upset that he kind of throws a towel at him and says, you think you do a better job? You try it. Which of course he does. And by the end of the war, he's running all of the food on base for the USO. It's about kind of between 3,000 and 5,000 meals. So maybe in some way, this drive-through is us getting back to our sort of, I don't know, high-volume roots, if you will. But, but that's what happened. And then right after the war, opened a restaurant on a beach that was a little less known before the war and

• 12:29Speaker 00

  certainly than before now called Waikiki. So he had that restaurant in 1947. It was called The Boiler. And then he came to, he came to Seattle in 1950.

• 12:39Ben Gilbert?

  And Mark, just to context that for our listeners a little bit, when you say getting back to our high-volume roots, for folks not from Seattle, Canlis is fine, fine dining. What does normal volume look like? And what does the adapted volume look like?

• 12:55Speaker 00

  I don't know. I feel like I live in a bubble and I don't really understand the real restaurant business. But in the world of. Okay, so let's just try to understand fine dining for a second because I think it's a funny term. We consider fine dining just to be the most considered form of caring for somebody with with food and hospitality. It's like, so for us, we're considered to be a massive fine dining restaurant in the world of fine dining. You know, 12 to 15 tables is pretty standard. We have 33. But on a busy night, the most guests we can serve are somewhere around 150 to 200. I have 115 employees to make that happen. So we

• 13:35Speaker 00

  are a model of inefficiency. And that's just six dinners a week. That's all we're doing. So I say that like, because I just want people to know just exactly like

• 13:46Ben Gilbert?

  And not open for breakfast, not open for lunch.

• 13:48Speaker 00

  No, no, no, no, no. Yeah, 115 people to figure out dinner.

• 13:52Ben Gilbert?

  And there's always, if not, maybe there's like a couple hours a day where there's someone not there. But when you talk about that 115 people, it's like 2am to bake bread or something.

• 14:01Speaker 00

  Yeah, there are four hours a day we don't use our kitchen. So it's 20, it takes us 20 hours to to to open for what is essentially five hours of of dinnertime service. So a lot of prep obviously goes into that. And yeah, sure, you're baking bread and and setting things up. Sometimes it takes a couple days to make. But today we served, you know, about 1,200 people through the drive through. We served about, I don't know, somewhere in the range of 300 people for breakfast. Tonight, we'll send a couple hundred dinners out for delivery. So it's a much different impact for us. And we're not exactly set up for it. So we're trying to figure that out as we go. But today was a day of rest

• 14:43Speaker 00

  for us. It felt so. Every day this week, we've opened a new restaurant concept. We started on Monday with a drive through Tuesday, we added bagels and yesterday we added added home delivery. So today we were just sort of refining some of those systems again. And it was kind of nice just to just to run them and see how we could tweak it.

• 15:01David Rosenthal?

  So let's get right into, you know, this show is adapting. It's now 70 years that your family has run Canlis Fine Dining. And in two weeks, really, since you started planning, you've thrown that out the window. And now you're doing these three different things. Like, can you walk us through, when was the moment you realized that this was going to happen and you needed to change?

• 15:22Speaker 00

  A couple of weeks ago now, my wife and I were in New York City. Doing something for the James Beard Awards and we got the news that Seattle had its first case. And we went back to the hotel and just sort of talking through like, you know, this thing's coming, it's here, it's here in Seattle. And what does that mean? What does it mean for our family? What does it mean for not just our marriage and our own children, but our extended family? I have parents who are in their 70s. And what does it mean for, for the restaurant family, for the staff? And a couple of days later, back at home, we had a meeting as a team and we just said, you guys, let's, let's really think through this a little bit.

• 16:05Speaker 00

  While we were having that meeting, King County or governor, I can't even remember who it was, but someone official announced, had this live stream and kind of came on and said, hey, this is a much bigger deal than we thought. And, you know, it's like, at first you just kind of had, it's like the sucker punch to the system, you know, you've got the wind taking out of you a little bit. And then, pretty quickly, we realized that it would be just as risky to do nothing as it would to do something really radical. And if we were, if we were going to live into our values, then, you know, every once in a while, that really is probably going to cost you something. And, and this way, it was going to cost shutting down what was still a profitable business for the unknown of opening up three new ones.

• 16:48Speaker 00

  And, and the only, the reason we're doing three is because, again, it just took that many ideas to get all of my staff up to having all the hours they would have normally had, and that was the goal here. So, we started with the drive-through. For those that don't know, we're a fine dining restaurant, looking this direction, but if you turn around, we're on a really busy road, you know, and that's not ideal, no one would plan that out these days. But we just said, okay, what do we have? Like, what, what, starting with, what do we have to be thankful for? And then, what, what assets are out of disposal here? If we, if we started from scratch, how would we play this? And we were, I remember watching the live stream, we're all sort of huddled on the couch there, the team, there's seven of us on.

• 17:33David Rosenthal?

  This is all in the first, in this meeting?

• 17:35Speaker 00

  This is like in the meeting, and we do these, like, three-hour offsites, and we go to one of, well, somebody's homes, we can like, kind of feel what it's like to be welcomed into their home personally. So, we're sitting on Maren's sofa, and, which is not a seven-person sofa, it's like a three or four-person sofa, and we're all kind of like huddled and watching this thing, and... Yeah, I think it just it just hit us that like the game isn't up like wait a second. This isn't over. This is just beginning. And I think we had all gone in with this sentiment of helplessness, if we're honest, maybe hopelessness. I think there was a feeling of, okay, I gotta bat in the hatches. I gotta hunker down. I gotta, you know, and

• 18:21David Rosenthal?

  Protect, yeah.

• 18:22Speaker 00

  Protect. And that's a lousy strategy in a lot of things, soccer being one of them. Like, you you see in sports all the time when when when an entire team sort of switches the defense and loses their offense, like suddenly you're like, ah, don't do that. Wait a minute, like, keep playing your game. And for us, we're like, if we're gonna keep playing our game, we just need to admit that the game changed. And the game now, currently today, this is two weeks ago, was no one understands the six foot rule, and no one understands what is socially socially acceptable. We don't understand if we should be shutting down schools and public places, or if that is, you know, building a fear that, right? So this is happening so quickly. But so we just said, well, today, what we know right

• 19:07David Rosenthal?

  Was it clear to you though, at that moment, that like, the game had changed?

• 19:10Speaker 00

  We just got the sense that it was going to. Yeah, it hadn't yet, but it was like the writing is on the wall. And I think nobody wanted to actually say that out loud. But it felt that way a couple of weeks ago. And so

• 19:25Ben Gilbert?

  Well, I can tell you from the outside, the way it it sort of felt is you made a more drastic move earlier than most places. Like, I think in the next week, a lot of places started trying to figure out what does it mean for us to do delivery. But I will say from the outside, the way it looked was, and frankly, part of what inspired David and I for this was, oh, my God, that was decisive, and that was severe and extreme.

• 19:50David Rosenthal?

  And risky, like you, you know, you guys

• 19:51Speaker 00

  I wish I could take credit for that. Let me tell you where a lot of that credit belongs. First off, we have an incredible board of directors and some advisors who are just remarkable sounding boards for us. Both of our wives Really key into sort of speaking into how are we, how are we, how are we were perceiving the world? And I think in this time, it was a time of just great perception, trying to understand and make sense of what we were hearing, how it pertained to us and our team. But really, when we launched this with the executive team, we said, you know, this thing could work. That's to say, there's a chance the boat is taking on water, and there's a

• 20:33Speaker 00

  chance it might sink. And also, there's a chance it's a lifeboat on the end. Will someone just go to the end of the ship and see if there's a lifeboat? That's kind of what that meeting felt like. And somebody came back and said, you know, it turns out there is a lifeboat on the back of the ship. Like, we could all get in it, right? And so, I was like, huh. So, we sat on that as a team for about 24 hours. I, the next, I, or 48, two days later, I was having dinner with our staff. And we're all sitting around, having family meal, talking this through. And I just said, you guys, let me just tell you where my head's at. And I'm scared to tell you, because I don't know what it means. But this is what we're thinking about as a team. And it would mean, all of you need to re-volunteer

• 21:14Speaker 00

  to work here. They would mean, all of you choosing to be in a position, choosing not to be laid off, or temporarily furloughed, choosing to actually continue to do this thing. And would any of you be interested? And not only that group of sort of five or six of us sitting around the table, but the next night, in a staff meeting, announcing it to the entire team, this is up to you, and you don't have to do this. And every one of them saying, we're in. You know, put me in, coach. And I think that was just such a boost of encouragement to us. It's like, if you guys are in, we're in. And let's do this, right? It had like, that sort of sentiment to it. It was like, okay, why not? And I think

• 21:59Speaker 00

  at some point, you say to yourself, in any time of crisis, if I have the ability to help, why am I not doing it? And that is what it felt like to us. It felt like this could be an encouragement to the city. It was clearly an encouragement to the staff. And it was, for us, just a way through, a way that, and an untested, untried way. But

• 22:26Speaker 00

  I don't know. We thought we'd give it a whirl.

• 22:28Ben Gilbert?

  That's awesome. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 22:43David Rosenthal?

  Yeah, the hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 22:57Ben Gilbert?

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 23:07David Rosenthal?

  Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent, visible and secure in one place.

• 23:25Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise: the workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 23:41David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 23:58Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 24:07David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. I want to talk about communication and language and the language you guys use and I've always I've always used, but particularly now is really inspiring. But before we get to that, can we go back to the three concepts you guys are doing breakfast, the bake all shed, drive through lunch, and then delivery for dinner? Where did they come from?

• 24:40Speaker 00

  There's also a fourth concept coming, which I'm super stoked about. But yeah, I can kind of walk you through all three of those. The first one was the was the drive through. We saw that as being the biggest revenue generator. We have a ridiculous amount of labor here. It's the most expensive thing. And we knew that one of these concepts had to actually work. And so we just geographically, if you understand the way this restaurant works, you can pull right off of the street, right under our portcasserole, you can stay in your car, and you can roll right on down the driveway. And it was like, that's what we knew we needed, that the cleanliness there, the ability to not have any contact with the guest, but

• 25:22Speaker 00

  still sort of be facing them. And so, yeah, we were embracing our inner drive through as a fine dining restaurant. It was just like, guys, this is us. Come on, let's just let it out of the bag. And chef can cook a remarkable burger. And we've always joked about doing this sort of traditional salad of ours, the Kamala salad, as a to go item. And like, yeah, why not? Like, let's just do burgers and ice cream sandwiches and salad to go. It's like, like, I don't know, sometimes that's all you need.

• 25:52Ben Gilbert?

  Can you talk about average ticket price for each of these three concepts?

• 25:55Speaker 00

  Burger price is $14. So you know what? We have designed this thing not to make money. I think it's a little bit weird to be, let's see, this is a tricky, this is tricky thing. I don't think there's any unethical, anything unethical about. Making money in this time. In a certain sense, we have a duty to do so. But mostly as a means of protecting the staff. And to be clear, I don't, we're only four days in. I don't know if we are. That's to say the bagel concept clearly does not make money. It's labor intensive. We don't have the equipment to scale that in any way such that we could, we could move that to be a profitable business.

• 26:40Speaker 00

  We could raise the prices, but that just feels dirty. So the point again is to keep people employed. So with burgers, we probably make a little extra. With bagels, we're definitely losing. With dinner, as we scale that up, that'll be profitable and somehow if we can get to break even. Even from the onset, that's what, that's what the goal was, was like, it'd be amazing if for the next three months, Canlis could not lose money. I think that'll posture us really well coming out of this thing on the other side. And I do think of it as a few months, not just a few weeks. So yeah, bagels came out of the idea of we're going to be really busy for lunch. Our expediter happens to be this incredible woman from the Lower East Side of Manhattan. She's a baker and she makes a ridiculous bagel.

• 27:25Speaker 00

  And chef is from Brooklyn and he was like, that's the best bagel I've had in New York City or in Seattle. We happen to have a bread oven and a shipping container and it was like a no brainer. So we just opened the bagel shed and we're doing, you know, everything bagels with fried eggs and homemade sausage and cheese and.

• 27:45David Rosenthal?

  Can you sell the bagels as an add on to dinner for like breakfast at home the next morning?

• 27:49Speaker 00

  Well, we, that'd be a good idea. We sell out of bagels in under an hour. So it's a full time crew of eight making these things and it lasts, that whole idea lasts an hour. So we actually thought about intentionally slowing the line so that, because again, the idea is to keep everyone employed here, but, but no, we've been blowing through them too quickly. So we're right now, we're looking at taking over another bakery that is closed and maybe we can use their space and kind of scale it a little bit higher somewhere.

• 28:19Ben Gilbert?

  Yeah, I did see something, it was like you had some message on your website this morning, like unfortunately, bagels are sold out as of 8:37 a.m.

• 28:26Speaker 00

  Yeah, yeah, they're going nuts. So the last concept is just doing family meal at home. You know, we cook an amazing family meal for the staff. That's the meal that twice a day chef prepares for our team. And we always joke about like one of the best restaurants in the city actually being Kamala's family meal. Like it's so good. The pastry chef is making cobblers and the bartenders are like making homemade sodas and chef is like, hey, this is my mama's meatloaf and this is like enchilada from Nico who's been prepping all day. And it's so good. And it kind of kills us that the rest of the city doesn't get to see what these guys are capable of outside of fine dining. And so we just thought, okay, well, that's a no brainer. Like, why don't we just keep making

• 29:09Speaker 00

  family meal? We don't need a big menu. Delivery is tough to figure out. And making a transition like this, I think if you can keep it simple, you should. And so we offer one thing a night. The very first night, it was cassa lay because we had all these dry aged ducks. We're like, what are we gonna do with ducks? And moreover, I have a farm saying, are you gonna take delivery of ducks going forward? And we had to say yes. So tonight, it is a rabbit pot pie and glazed carrots. And it's, I had it for lunch. It's insane. It's so, so good. So we just thought, shoot, we can bake all that stuff here, pack it up, throw a bottle of wine in it. And my servers, who used to take food from the kitchen to the table, are now just taking it to the parking lot

• 29:53Speaker 00

  and right on down the street a little way. So it keeps them employed and it keeps my kitchen cooking all night long. And it's kind of been fun.

• 30:01David Rosenthal?

  That's so cool. How technically, how did you make that happen? You guys adapted, you've been on TAC, the reservation and ticketing system for a while. How did you, did you work with TAC to make this happen?

• 30:12Speaker 00

  The guys at TAC were awesome. We called them early on and we're like, we have this crazy idea and we're actually trying to like hack the system. So TAC is a reservation system, for those that don't know. And those guys are awesome. And we were trying to see if we could morph the reservation system into a delivery system. And we just about figured it out. And they, they called like, you guys, stop it. Hold on a second. We can, we can do this. Give us five minutes. Five minutes later, they called back and they said, we stood our company down. We're turning it back on. We just called everybody in. They're in Chicago. And we're just gonna work on this till you have the platform. And they cranked it out, working around the clock for a couple of days. And we were able to launch. And so that is a mechanism that any restaurant in the country, look, not everybody can do drive through. It's just the

• 30:56Speaker 00

  physicality of it. The location's gonna work for them. But any restaurant, the company could do delivery. And now that we've got the software for it, it's just, it's, it's not.

• 31:07Speaker 00

  You know, overtly tricky.

• 31:08Ben Gilbert?

  Uh, can you talk through any restaurant in the country can do delivery? I'm sure there's a lot of folks that that own restaurants that are listening to this. What does that take?

• 31:16Speaker 00

  It takes a load of guts and it takes just that kind of good old fashioned restaurant scrappiness that every restaurateur already has. If you're in this business, I guarantee you have what it takes because it's just, it's just the same thing it takes to run a restaurant. It's, it's that. It's a little bit of, um, uh, the willpower just to make it happen. That's I think what all of us are going through. So all we did was figure out a menu and we'd launched a website. So someone that knows what to do on the internet, that's not me. Um, but our design team drew up a little logo, which is not necessary. Uh, we threw a little splash page on top of canlis.com, which is also not necessary.

• 32:00Speaker 00

  You could just post on Instagram, having to switch to delivery. Um, so appreciate you supporting us doing this. You can do various versions of it or it's pretty, it's pretty fancy. Our servers have it all on their phones. They get the maps, they get the texts. We can do drop offs, no contact drop offs. We can do alcohol. Again, talk made all that possible, but you can keep it really simple. I mean, it takes ordering some boxes and some to go containers, coming up with one thing that holds hot really well and letting your constituency know that tonight's a great night for takeout. So yeah, we sold out three nights worth of takeout in about 90 minutes.

• 32:38Ben Gilbert?

  Wow. One question that I have that I'd be remiss if I didn't ask, and I'll give a little context for listeners. So Canlis is innovative, not just in the way that over the last 60, 70 years, you guys have changed fine dining, which we haven't talked about on this episode, but, um, Mark's given some great talks that, that you can sort of read about and the evolution of fine dining and Canlis's role in it, but also in doing these wild experiments that you would not expect the finest dining in the city to also have a Shake Shack pop up in the parking lot before there was a Shake Shack, or you would not have expected.

• 33:11Speaker 00

  Well, why wouldn't you? Let's, let's just, can we, can we, can we uncover that a little bit? Do you mind if we dig into why you wouldn't expect a fine dining restaurant to do that? Yeah, definitely. One of the reasons I think this transition has been, um, possible for us is that we practiced this kind of thing. And by that, I don't just mean events in our parking lot. I mean, if you want to be a restaurant that is around, let alone relevant or germane to the conversation, you're doing a fair amount of this every year anyway. People always ask Brian and I, how come you guys haven't opened a second restaurant? I'm like, oh, you just don't know it, but we open a second restaurant about every 18 months.

• 33:56Speaker 00

  I would say that's how often the systems inside of Canlis are changing. And those are being rewritten by new employees and employees that have been here 20 years. The idea is that there's probably a better way to do it than the way that we're doing it. We just kind of believe that. And so I think if you want to matter, you need to earn that right. And to earn it, you got to be working all the time and opening a restaurant that's really good. And tonight, we're good. Tomorrow, we'll be better. And that's not news to anyone. I think what happens, that's to say, that's not a strategy that no one's heard before. If you're in business, you get it, right? And maybe thank you to the Japanese who made that a very popular concept in the late 80s

• 34:40Speaker 00

  and 90s, but like, we're all sort of thinking that way. What happens is it's really easy to get lazy. It's really easy to start to devalue that as the thing is working. And of course, if you go too far, that maybe you're undoing things that still had a usable lifespan inside of them, right? So you hate to take a system down that would have been amazing for the next foreseeable future. So that takes a little, I don't know, sorting through. You got to be careful there, but we're welcome to business. It's a delicate balance, right?

• 35:10Ben Gilbert?

  And lest listeners think that, you know, we're just talking about a one-time thing, opening up a Shake Shack. Like, I went to your restaurant last summer, and when I say restaurant, I mean parking lot, for the Hawaiian Nights luau, where, listeners, it's the largest hot tub you've ever seen.

• 35:27Speaker 00

  It's 24 feet long.

• 35:29Ben Gilbert?

  And it's up on like a second-story deck overlooking, like, you guys opened a little pizza shop and like a multi-story, like, hangout.

• 35:40Speaker 00

  We wanted a swim-up bar.

• 35:43Speaker 00

  Which we, which we, I think, I think we created and then we also had, so we built a couple of tiki huts and had, yeah, yeah.

• 35:53David Rosenthal?

  The story is, am I right, you bought the swimming pool on Amazon?

• 35:57Speaker 00

  Well, no, so for, we like to test things out on staff parties and the goal of a staff party is to throw one that the staff would willingly come to if they had no association with the restaurant, right? So you just said, look, you guys, it's a true day off or it's a true night off, like do whatever you want. And also, we're gonna be throwing this party over here and it's like totally like no expectation come, only let me just talk about it. And so, um, anyway, yeah, at some point, uh, we were throwing a luau. Oh yeah, we had covered the parking lot in sod, uh, because we were like, it's not cool to throw a party in a parking lot in cement and wouldn't be cool if it was grass. So we sawed the thing over and we threw a volleyball party and we had a pig roasting

• 36:40Speaker 00

  and somebody said at some point, well, every luau needs a beach. So we like brought it in sand and then I went on Amazon and I'm like, no way, you can buy a pool for like $2,000. Well, that's cheaper than, you know, in the world of staff parties, this, the stuff adds up quickly. So anyway, bought a pool and we filled it up, um, and then it just kinda like went from there. So then that was a really successful party and we were thinking about fun things we could do over the summer and we thought, well, why don't we just throw the staff party for the city? And honestly, you guys, I thought like a few hundred people would come. Like who goes to a parking lot to find any restaurant to hang out in a bog ground pool, right? It gets, yeah, like 1,200 people came a night, like it was nuts and all of them waited an hour or two to get in.

• 37:24Speaker 00

  So that caught us by surprise a little bit, but it was also a ton of fun. I mean, a DJ on top of a shipping container and underneath you're baking the best pizzas and roasting pigs and. I don't know what happened out there, but it was, it was, it was tons of fun. So we do like to just sort of think through these things. And, um, and I think it's, it's a little bit of a good exercise. Look, just because we're fine dining doesn't mean we're not thinking of 99 other ideas to do. And to us, it's kind of like the Formula One version of putting out a sedan. It's like, why don't we go push this as far as we can? Let's see what happens. And every one of these projects finds its way back onto our menu. Every one of these projects influences what we believe about hospitality.

• 38:07Speaker 00

  And you need that stuff. You need to be inspired by it, people need to be inspired by it.

• 38:13Ben Gilbert?

  Yeah.

• 38:13Speaker 00

  It's fun.

• 38:14Ben Gilbert?

  All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 38:27David Rosenthal?

  Yep. It's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 38:44Ben Gilbert?

  So the founders did exactly what great founders do. Operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 38:59David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 39:23Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 39:42David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 40:12Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at legora.com/acquired and just tell them that Ben and David sent you. So as we start to wind down here, that's, that's the question on my mind is, I know it's only been four days, but of the three restaurants you talked about and fourth that we'll keep under wraps for now, what do you think might make its way into Canlis when we live in a normal world again?

• 40:55Speaker 00

  Here's what I hope makes its way into Canlis. I hope that what comes out of this is a visceral reminder of how alike we all are. And if there's anything that I think we've learned so far, it's that our understanding of the human spirit is limited at best. And it's only when, when you come to me and say, Mark, I think you got this, man. And I reflect that back to you and say, look, Ben, you got this, right? Like, that's, that's what happens. Something really powerful happens there. And The whole mission of this company, which is, I know, a really weird mission,

• 41:38Speaker 00

  but it's to inspire people to turn toward one another. And when we saw the disease spreading, and I am not talking about COVID-19, I am talking about the amount of fear, the amount of discouragement. When we saw that spreading, and often for really good reason, this is not, these are not insignificant days. This is a good, overused, but good word. This is unprecedented for the entire world to go through something together, where no one gets to say, "Yeah, it doesn't apply to me," right? When something like that happens, I think we have a responsibility to remind ourselves of the truth.

• 42:19Speaker 00

  And the truth is, we don't know what we're capable of. We, the Canlis team, we, the city of Seattle, we, the United States of America, we, the citizens of this rock that we're floating around on. And I hope that we understand that better on the other side of this thing. And that's what we're learning. That's what we're learning inside this building. I don't know if we'll, we might not be able to do this tomorrow. Or maybe this will go for months. I don't know. But every day I tell the team, I was like, "Hey, look, you're gonna wanna go home and crawl under your covers and read your phone, and it is important to do so. But when you wake up the next morning, you go outside,

• 43:04Speaker 00

  you physically go outside of your house, your apartment, you look up at the sky and ask yourself the question, 'Is it still up there or did it fall?' And if it's still up there, you can be thankful for that. And you start with what you're thankful for. You say, "All right, the sky did not fall. Contrary to the way I feel, having read all the headlines, it's still up there. I hear a bird tweeting. I see a neighbor walking down the street." You know what? Let's start with what we have. Let's go from there, and let's ask ourselves the question, "If this is what I have, what can I do with it?" And I don't know. Maybe what we get out of this whole thing is that as a discipline, as a practice, as a reminder that, I don't know, maybe that's a reminder that we need right now. I think it's a reminder that I needed.

• 43:48Speaker 00

  And I think it's a reminder that my team needed. And I wish you could feel the difference inside this place before and after we made this decision. Before, it was a feeling of...

• 44:01Speaker 00

  Helplessness and after it was a feeling of hope. Before it was a feeling that the overwhelming weight of this thing was too much. And after it was the understanding that I had a role to play. And that even just enduring, even just enduring a little bit, might be my role. And I think when we tell those stories, then we start to remind ourselves the truth of who we are as people. And that's pretty cool. That's why we wrote on that website, "We got this, Seattle." It was the most poignant way I could say

• 44:42Speaker 00

  to a city that needed to hear it, "We are capable of making it through."

• 44:47Ben Gilbert?

  Well, I cannot think of a single better way to leave leave this episode and leave our very first episode of Adapted. And with that line, so Mark, thank you so much.

• 44:59Speaker 00

  Thanks for, thanks for having me on the show.

• 45:02Ben Gilbert?

  Anything else you want to tell listeners or tell them, you know, where they should go get some great food?

• 45:08Speaker 00

  I do want to tell listeners something, yeah. I think they have the ability, even though it doesn't feel this way, to make a difference. What we've been talking about here is my restaurant. And you know what you don't have? You don't have my restaurant and you probably don't have a restaurant. To dismiss this as someone else's story in a city that you don't live in, I think would be a great, what would make me sad. I think to hear this and to know that if we're crazy enough to give this a whirl, maybe, you know, maybe some of you are crazy is okay too. And I hope it gives them permission to think optimistically.

• 45:52Speaker 00

  I hope it gives them permission to smile at a neighbor. Keep it six feet away. I don't care. You can still smile at them. And so that's not insignificant. It's important and it's going to take all of us remembering that about ourselves, remembering that that is who we are as people. So this is a story about our country. And largely, this is a story about well beyond our borders and how alike we all really are.

• 46:23Speaker 00

  That's all I got, guys.

• 46:24David Rosenthal?

  Amen. Let's all go do not exactly what you're doing, but do what we all can to-

• 46:31Speaker 00

  You're all welcome to open a try shoot. I'm not against it. I think competition only makes us better, but

• 46:38Speaker 00

  but you're gonna have some steep competition. The burgers are pretty good.

• 46:43Ben Gilbert?

  Well, my, it is, it is on my calendar to come

• 46:47Ben Gilbert?

  tomorrow morning, I think, hopefully around 7:00, 7:30 to the, the bagel shed and pick one up.

• 46:51Speaker 00

  Do it. Swing on through. I'd love to see you here.

• 46:55Ben Gilbert?

  Thanks so much, Mark. Listeners, we will catch you for the next one.

• 47:00Speaker 00

  Thanks, guys.

• 47:01David Rosenthal?

  See you next time. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 47:09Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale.

• 47:20David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 47:40Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags and product analytics into one unified system so teams can ship safely, test rigorously and directly link what they changed to how users actually behaved.

• 47:52David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.