20VC: Sweetgreen Founder Jonathan Neman on Leadership Lessons from Managing Through COVID, The Importance of Failing Fast and Iterating & How the Best Leaders Bring Together Brand, Capital Allocation and Strategy

Jonathan Neman is Co-Founder & CEO of Sweetgreen, the mission-driven restaurant brand that serves healthy food at scale. Alongside his co-founders, Jon has scaled Sweetgreen from one small restaurant to one of the US' leading food brands with over 5,000 employees, over 140 locations and $300M+ in revenue. If that was not enough, Jon is also an active board member of MeUndies. In Today’s Episode with Jonathan Neman You Will Learn: 1.) How Jon took the decision to leave his "dream job" as a consultant at Bain to start Sweetgreen? What did his Bain boss tell him that persuaded Jon it was the right decision to leave? How does Jon think about and advise people when it comes to choosing the safe vs the risky path? 2.) How Sweetgreen was not an Overnight Success: At what moment did Jon really not think that Sweetgreen would make it? Why? How did he deal with those moments of intense stress and pressure? How does Jon test for true grit and resilience both in hires and in founders today? 3.) Brand + Capital + Business Strategy: How does Jon think deeply about what brand means today? What did Sweetgreen do right when it comes to their brand building? How did they marry art and science in the right way? What do the unit economics look like on a per store basis? What is the payback period on a per store basis? How has this changed over time? How does the store design impact the profit per store? How has store design changed over time? What have been some of the biggest lessons in terms of when, where and how to open new stores? 4.) Leading Through COVID: What were some of Jon's biggest lessons from leading a consumer brand through COVID What were some of the toughest elements for Jon? How did he overcome them? How can founders bring people along with their thought process and inspire? Who is Jon's biggest mentor? What has he learned from them? Item’s Mentioned In Today’s Episode with Jonathan Neman Jon’s Favourite Book: Thinking, Fast and Slow: Daniel Kahneman

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

• 0:00Harry Stebbings?

  Welcome back. This is 20 VC with me, Harry Stebbings, and I cannot wait for the episode today. It's so awesome for me to have founders of brands that I love on the show. And whenever I'm in New York, I live off this brand's products. And so I'm so thrilled to welcome John Neman, co-founder and CEO at Sweetgreen, the mission-driven restaurant brand that serves healthy food at scale. Alongside his co-founders, John has scaled Sweetgreen from one small restaurant to one of the US's leading food brands with over 5,000 employees, over 140 locations, and over $300 million in revenue. If that wasn't enough, John's also an active board member of one of my other favorite brands, MeUndies. And I do also want to say a huge thank you to Sean Maguire at Sequoia for making the intro here to John, without which this episode would not have happened. So Sean, huge thanks for that.

• 0:43Harry Stebbings?

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• 1:25Harry Stebbings?

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• 2:10Harry Stebbings?

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• 2:52Harry Stebbings?

  AngelList handles your company's incorporation, banking, cap table, and fundraising processes, all in a single place. This allows founders to focus on building. If you're a founder, you can launch your company at stack.angellist.com/20vc. Whether you're a founder or a funder, you're in great hands with AngelList. But that's enough from me. So now I'm so excited to hand over to John Neiman, co-founder and CEO at Sweetgreen.

• 3:22Speaker 01

  You have now arrived at your destination.

• 3:25Harry Stebbings?

  John, this is such a joy to do. As we said, so many mutual friends, obviously Sean, obviously Evan, Steve, Scott. So thank you so much for joining me today.

• 3:33Speaker 02

  I'm a huge fan and it's great to be here today, Harry. Thanks for having me.

• 3:37Harry Stebbings?

  That is very, very kind. I'm also a huge fan. You actually keep me nutritious and filled when I'm in the States. So I think I owe you the thanks, but I want to start with a little bit on you because I heard from my wonderful friend Sean that when you started Sweetgreen, it was in your senior year and you already had accepted an offer from a big institution, either Bain or one of the consulting houses. So tell me, what was the founding story moment with Sweetgreen first?

• 3:59Speaker 02

  Yeah, absolutely. So I went to Georgetown University is where I met my two co-founders, Nicholas and Nathaniel. And we really bonded over two things. One, a shared vision for food and a problem we had in our lives where we couldn't find a place that was healthy, nutritious, delicious, and accessible. And we were also all first-generation immigrants. Our parents all moved here from somewhere else. We watched them create their own businesses as entrepreneurs. So we bonded over these two things of food and entrepreneurship. We knew we wanted to really create something for ourselves and create that partnership together. And so it really all started senior year where we complained so much that we finally said, let's do something about it. And you know, we looked around the world and we couldn't understand why there was not a healthy fast food restaurant.

• 4:42Speaker 02

  Why was McDonald's our best answer to fast food? And we couldn't imagine that the next generation was going to eat that sort of food at scale. And so we put our heads together and we decided to open one restaurant right off campus. We wrote a business plan, tested menu items, we built out that first little restaurant. It was 500 square feet. We took over an old burger shack. And we started serving customers that summer. And the idea was very simple. It was sourcing food directly from farmers, making it from scratch and serving it to customers. All the while creating a brand that stood for something. And so I'd say from the very beginning, it was, we didn't know what we didn't know. We were not restaurant people. We were more, I'd say, kind of business and brand people. And we're really excited about just creating a brand that changed the way people thought about food.

• 5:25Harry Stebbings?

  I'm too interested. You had that first restaurant. When did you know it was working? When did you look at each other and go, we should ramp this. We need more restaurants. More people need Sweetgreen.

• 5:33Speaker 02

  So you know, you mentioned the job that I had and it's true. So we started building the restaurant called the beginning of senior year. September of senior year, we decided we're going to do it. If you remember, when you're in college, you'd get job offers and apply for jobs right around that same time. So I applied for jobs. I got what I thought was my dream job, Bain and Company. Accepted the job, got a signing bonus in October, forgot about it. Said, I'm going to go build this restaurant. We'll see what happens. We build the restaurant, we open that summer and all of a sudden it's September, October and it's time to report to work. So I had a conversation with my co-founders and he said, we have two things. I can go or I cannot go. And they're like, you know what? This restaurant's too small for the three of us to even fit inside of it. And we can't pay the three of us anyways. Why don't you go learn something?

• 6:17Speaker 02

  Help us from there and then come back. And so I went, I thought I would go for a couple of years. I made it about nine months. Ultimately, my heart was with Sweetgreen. We had already opened the one restaurant. It was doing well. I was spending half of my day in the bathroom. On the phone with my partners and every weekend flying back and forth. And it just got to this point where it felt like this mission was calling me. I could see what we could do. I remember I had a conversation with one of my bosses at Bain. And he said to me, he said, you can either do this now or you can wait till your kids are in college. And he's like, I always remember, I actually reached out to him recently. He always told me, he's like, I kind of regret I wanted to be a musician. And I'm waiting now till my kids are eighteen to go pursue that dream. That kind of did it for me. I put in my notice, moved back to Washington DC.

• 7:00Speaker 02

  And we started building restaurant two and three and really started to lay the foundation for what we believe will be the McDonald's of our generation.

• 7:07Harry Stebbings?

  I mean, that is a great framing from your boss there. I am intrigued there because a lot of people obviously are making decisions with the new year and with new offers, new job offers. Covid makes people reevaluate their life in different ways. When you think about the safe path versus the risky path, how do you think about that? And I'm sure advise people when they come to you with kind of contemplative questions around decisions that they're making.

• 7:28Speaker 02

  Yeah, you know, it really has to do with someone's personality. For me, I never thought starting the restaurant was risky. I remember opening that very first restaurant and was never scared. I just knew it would be successful. I knew so deeply that it was going to do well because I believed so deeply in what we were doing. And I do think there's an advantage in a lot of ways in starting when you're so young and know nothing. You know, I think about today, if I was to do what I did, I don't think I could do it. I think I'd be too scared. Start it today with all that I know. But I remember I heard someone say, you can't fall from the floor. When you're at the bottom there, you know, you're already live used to a certain lifestyle. There's nowhere lower to go. And I think there's a reason so many of these like transformational ideas get started by kids. It's because they don't know any better.

• 8:12Speaker 02

  They're willing to take the risk because it doesn't even feel like a risk. So for me, I would think I was very lucky in the fact that I found something that I love so early. What I advise, you know, people when they're starting something is you really have to love it. And I think the biggest thing that, you know, the people that I've seen be most successful, resilience is key in success. And it's, it's really just about, you know, it's a lot of it's a probability game. It's how many shots do you get on goal? If you were willing to take thousands of them, eventually you're going to get your lucky break. People take three shots and then quit. Sweetgreen is not an overnight success story. We've been at it for fifteen years and we've had so many failures. I think the thing that's gotten us to where we're at is we refuse to give up.

• 8:51Harry Stebbings?

  Sorry, I'm too interested before we dive into the meat of the show. You know, we see Sweetgreen as this incredible company today, public company today. And it's easy to look at everything and think up and to the right. If you go back over that journey, what moment stands out to you where you really had to be resilient? Where you really dig deep and go, I still believe it.

• 9:08Speaker 02

  Oh, man, there's so many, you know, I'd say in the early days, capital was always an issue. And, you know, our business, especially in the early days, was very, very seasonal in that our winters were rough. And so a couple of our early winters, we almost did not make it. You know, we were pulling lines of credit, paying staff on our credit card, really doing anything we could do to save and stay alive. And there was moments there where we weren't sure we were going to make it. So call that the hustle startup, like make or break stage. Later on in our trajectory, there was a moment where the company was incredibly challenged. And this was about four years ago. Four years ago, we decided to make a pretty large pivot and invest much more in technology and build the infrastructure to scale at much faster pace.

• 9:51Speaker 02

  In doing so, we had to change the direction of the company. When we did, a lot of people didn't believe in what we were doing. A lot of the people that worked at Sweetgreen, my whole executive team, just didn't believe in where we were going. They wanted to be a restaurant company and we wanted to use technology in a way to transform that experience. Imagine I become CEO four years ago. Within three months, the whole executive team is gone. We're sitting there almost running out of cash, trying to pivot the company and wondering like, are we suited to do this? And so most people don't know about this, but it was like almost this crucible moment for us.

• 10:26Harry Stebbings?

  How did you literally as a CEO deal with that?

• 10:29Speaker 02

  You know, I'd say I was really lucky to have my co-founders, each of our spouses who were there by our sides, our incredible CFO, who was the one member who did stand by us, and a handful of incredible leaders throughout the company that did stay with us. So while the executive team left, we have a number of people who did stand by us. And we really hunkered down and we rewrote the business plan. It was Almost like a starting over moment of what do we want to be, where do we want to go? And we rewrote the business plan and we had to go almost refund raise for this new vision. So it was a complete reset of how we operate the company and where we were going. And for a moment there, it was, it was very, very scary. I still have kind of nightmares of some of those days.

• 11:08Speaker 02

  I remember very clearly, you know, we had lost three quarters of the team and I was sitting in Boston Airport in the middle of the winter. My flight was canceled. All of a sudden I'm like, I'm gonna be spending the night in this airport. And I get a call, you know, one of the execs and I'm like, oh God, the other shoe dropped and you know, he also told me he was leaving. And I was like, oh wow, everyone's gone. But you know, you get so low that you pick yourself up and you turn it around. And I think that moment was so powerful for us because we were able to just rewrite what Sweetgreen wanted to be.

• 11:41Harry Stebbings?

  I'm really interested. You said there about becoming CEO four years ago. And when I spoke to Scott in particular, Scott Belsky, he said, ask John about the time when there were three CEOs. How did that work? And with that experience, what would you advise founders contemplating single versus multiple CEOs?

• 12:00Speaker 02

  Yeah. So very interestingly, we ran the company as co-founders and CEOs for the first eight years. And it worked phenomenally well. It was awesome because the three of us were so close. We shared an office. We still share an office, by the way. We share a desk and an office. And it worked because there was immense trust between the three of us. Really a rule that we do not bring our egos into this. We always say what's best for Sweetgreen. And one of our leadership principles is win together. So we really put this owner hat on and what's best for Sweetgreen. And put our personal opinions aside. I think the partnership, it's unique. We have such a shared vision, mission and values, yet very different skill set. So we complement each other in a really, really great way.

• 12:42Speaker 02

  And it's what allowed the three CEO situation to work for so long. We about four years ago, as I mentioned, we transitioned where I became CEO and my two co-founders, each took very large media roles within the company and that's how we're operating today. And it's a unique setup because we still share parts of that CEO role, really that founder. Setting the mission, the vision, setting the strategy, really defining the culture. You know, the way I see it is, you know, I happen to sit in the CEO seat today. It's an honor to be able to do that, but you know, I share that responsibility with my co-founders. And I think another thing that I've learned with my co-founders in doing it that way is it's set a really great model for me and how I work with the rest of my executives. You know, you don't treat your co-founders like they work for you.

• 13:24Speaker 02

  You treat them like partners and it's very different to think about your whole leadership team as if they were co-founders or partners and not a direct reporting relationship.

• 13:33Harry Stebbings?

  So should you then treat your direct reports as partners or just those co-founders with you?

• 13:38Speaker 02

  No, I think what I'm saying is I learned that you can treat your whole leadership team as partners. And it's less of a reporting relationship and more of a team and a partnership. And how that creates a camaraderie that is so different than this is my company and you happen to work for me. So I'd say one of the biggest lessons from the three of us working that way was a model for how to work across the rest of the leadership team and really the rest of the company. We like to say so many of the cultural artifacts and the leadership principles and the values that we have at Sweetgreen today really stemmed from how we work together and together as the three of us. And how do we document those so we can scale it over the, you know, almost 6,000 employees we have today?

• 14:18Harry Stebbings?

  Fascinating when you apply that partnership model also to the direct reports. I do want to touch when you mentioned kind of cash and fundraising in the early days always being a challenge. Cause when I spoke to Evan Morgan before the show, he mentioned some unique skills, but he said it's your ability to marry brand, capital allocation and incredible business acumen together that makes you world class. That was his answer to why you're world class. Although he said, don't tell him, it'll give him the.

• 14:43Harry Stebbings?

  But I do want to ask, if we break that down, capital allocation, how do you think about capital allocation decisions in bluntly a more asset heavy business than traditional enterprise software? How do you think about that capital allocation decision making?

• 14:56Speaker 02

  So first of all, in terms of marrying brand and business, I think it's something that we've been very focused on. And again, I think how the three of us have really come together with our unique skillsets that has brought us to this point. So at Sweetgreen. We have a leadership principle, which is balance art and science. And that's really where this comes together. So what we mean by that is the brand is many times the arts, the storytelling, it's the cultural relevancy. It's the way things feel, but so much of it, you also need the science. The science being the technology, the data, the analytics, the capital allocation, the business acumen. And so many brands you see are either good at one or the other. They're great at, you know, the business side, but there's no soul. Or you see brands that have so much soul but cannot scale.

• 15:40Speaker 02

  And so from very early on, we've been very intentional about marrying art and science. In terms of capital allocation, Sweetgreen, you know, we think about capital allocation really in two ways. And it's all about these KPIs that drive our business. Most importantly, we think about return on invested capital of our store base, which is essentially another way of saying our unit economics. They're quite simply spend X to build a restaurant. How fast does that store pay back in return? That's the standard, how restaurants kind of evaluate the efficiency of their model. Sweetgreen has an additional layer when we think about capital allocation due to our digital penetration, which is about 75% of our orders are digital, which gives us another lens, which is really interesting, which is customer level economics. So most restaurants just look at the box economics.

• 16:23Speaker 02

  We're also able to look at customer level economics, which is much more similar to like a SaaS or e-commerce company, understanding things like LTV to CAC. So those are the two key metrics that we really are always trying to optimize. But the third piece of capital for us is G and A. You know, we're trying to build a really large company and to support what we're building, we invest in technology, we invest in brand, we invest in essentially all of the team to support it. There's constantly a push and pull between how deep do you want to spend from a G and A perspective to support the stores you're going. And so for us, it's really being very clear about the ROI of those G and A investments and how those impact the two measures I talked about, the unit economics and the LTV to CAC.

• 17:05Harry Stebbings?

  I love this. This is too exciting for me. You mentioned that the cost of setting up each restaurant. I'm intrigued, you know, when you're doing one, one, one, it's obviously probably similar or the same. How does that improve or change in terms of the cost of setting up a restaurant over time? And what drives the efficiency of opening restaurants over time?

• 17:24Speaker 02

  The efficiency of restaurants, really for us, it's different for different brands. For us, we find a lot of efficiencies as we densify markets. So what's unique about Sweetgreen is our customers are very, very frequent. Most restaurant companies, customers come once in a while, call it a couple of times a year. Our customers are coming many, many times a month and many times a year. So our frequency, our LTV of our customers is very high, which means the more stores we put in a region, the more access points we create. Not only do we capture more data to better service the customers, we create more access or pickup points, faster delivery times, and each store becomes, call it a billboard for us, to tell our story to our customers. So what's interesting is where most restaurants, the more stores they put in a region,

• 18:08Speaker 02

  the stores will cannibalize themselves. For us, the more stores we put in a region, they actually all grow. So the average unit volumes grow because our customers become more frequent. So it's a really unique dynamic that speaks to the way people treat our restaurant, which is more is a nutrition, you know, type of fulfillment than it is a treat.

• 18:28Harry Stebbings?

  I totally get that. I mean, whenever I'm in the US, it's kind of like the daily lunch for me. So I get you on the frequency. On the second one, you mentioned the payback. How has the payback on a restaurant basis changed over time? And what is good? Help me understand that.

• 18:42Speaker 02

  You know, I think good would be in the industry. I think if you could pay back in about three-ish years, you'd be pretty happy. So, you know, call it in the thirty or so percent return on invested capital. We shoot for significantly higher than that. And I think what allows us to do that and the reason our return on capital has increased over time has largely been the efficiency of the boxes due to our digital investment. Taking me back, when we started Sweetgreen, there was only one way to order. You could order just, you'd walk in the store, you'd order down the line. In two thousand and twelve, we introduced mobile ordering, where now you could either go in the store or you can order on your phone and come pick up. A few years later, we introduced delivery on our app. So now you could order through our app and get delivery. Then we introduced marketplaces. Then we introduced something called Sweetgreen Outpost,

• 19:27Speaker 02

  which is a virtual Sweetgreen hotspot anywhere. Essentially, we can put it in your office building, a hospital, university, and it's a shelf or a kiosk where you order by a certain time. And essentially, think about Sweetgreen as a cloud, cloud cafeteria, dropping off the food at a certain time. So what we're doing with each channel that we are adding, we're utilizing those fixed costs at a higher rate. And what that does is increases the average unit volume, which increases our return on capital. So there's a back to the capital allocation decision. In order to introduce those channels, there was significant capital that we had to do to build that technology and build that experience. But it was all done knowing that if we can continue to increase our return on capital, this is now a model that we can replicate hundreds and then eventually thousands of times. So in a way, think about it.

• 20:12Speaker 02

  I mean, you probably have many more people that think about, that are here talking about software. In a lot of ways, it's much more similar to software than you think. It's once you got that one right, then you can replicate it at a great rate. It's really about getting maximizing the unit economics at that single store as much as you can, so you can replicate it hundreds and then thousands of times.

• 20:30Harry Stebbings?

  Can I ask you, you mentioned like the expansion there with the kiosks in particular. You know, we see it in the UK. Dark kitchens are actually very popular and becoming more and more so now. How important is physical retail Sweetgreen stores to the brand, to the customer experience of Sweetgreen versus actually the kiosk where they suddenly get the food and love it, but you don't get that customer experience? How important is retail to brand?

• 20:52Speaker 02

  We find it to be incredibly important and as it's our best customer acquisition channel. What it does is it's, there's no better way to really illustrate what we're all about than a retail. You know, you get to come in, you get to see the food being made from scratch. You get to touch it, you get to smell it, you get to taste it. You see the local list, where you get to see where the food is coming from. You know, it is by far our best acquisition channel. What's interesting is after they come to the restaurant, experience at one, customers are typically downloading the app and maybe never going to a restaurant again. But from an acquisition channel, it's very, very valuable. Over time, do we believe dark stores and, you know, retail will shift for sure, but today we believe omni-channel is the answer. Because we're essentially, if you think about our, our stores, they are retail stores, but they're true.

• 21:37Speaker 02

  It's an omni-channel experience. We run delivery out of the stores. We run our outpost business out of the stores, run our pickup business out of the stores. So the actual retail business is a small part of that that experience. But it enables the digital experience we're looking to do. And we've been very intentional about building those restaurants in an omnichannel way. You cannot take an old retail store and add the digital experience on it. We've thought from a digitally native way, not just about how to build the technology. But I think what people lose and people forget about this is you actually have to think digital first and how you build the physical infrastructure.

• 22:10Harry Stebbings?

  What does it mean to think digitally first about building physical infrastructure?

• 22:14Speaker 02

  So for us, it's how do you design a restaurant that can operate across what we do is today a five-channel model? So in our early stores, you had one production line. So you could not do that. You could not run delivery without disrupting the in-store customer. Today, we have a line for in-store guests, but then we have, in some cases, one, two, up to six lines in the back or in the basement or upstairs somewhere. That is essentially our dark kitchen for the digital business. We've also had to think about the pathways of where does the courier pick up? You can't have the courier in the way of the customer experience. So we have a separate window. You have to think about where the customer is going to pick up their food in a seamless way. So really designing the physical space so that it's a great customer experience, a great courier experience,

• 22:59Speaker 02

  and you can manage across all channels has been one of the major unlocks for our business.

• 23:04Harry Stebbings?

  I mean, I totally get that, especially actually on the courier pickup. I find often it's a real brand denigration when you're a customer.

• 23:10Speaker 02

  Totally.

• 23:10Harry Stebbings?

  It's coming in, it's it's not great, nothing on couriers, but it does change it. Which moves to brand, which, you know, obviously it chatted to Sean before this. And he was like, there's many wonderful things about John. I have to say that he's my brother-in-law. But he said, when he talks about brand, it is fantastic. You have to touch on this. So drilling down specifically on brand, how do you think about brand today? And has your thinking on brand changed over time?

• 23:33Speaker 02

  You know, I think for us, brand, it always started with this idea of the why. So it was, you know, for us, our why is our mission, which is building healthier communities by connecting people to real food. That's what's always grounded us and I think been the north star from a brand perspective. You know, people talk about brand. And I think oftentimes when they think about brand, they think about how it looks. They think about the logo. They think about a lot of the aesthetic. You know, that is one part of the brand, but the brand is really your promise to your customers. How that promise is consistent across all of your touchpoints. It's really walking the walk every day in a truly authentic way. So the things that the artifacts that really make up our brand in the biggest way really are our mission and our core values. Those are the things that really everything emanates from.

• 24:16Speaker 02

  But from a brand perspective, brand has definitely evolved over the past 15 years. And I think that has been akin to the different things we've had to solve as a business. So when we started, you know, you think about from the beginning, you know, you put out this mission, building healthier communities by connecting people to real food. We want to be the McDonald's of the generation. So step one was how do you make people actually just want to eat healthy food? For so many years, healthy food was there, but it was this idea of like, go eat your vegetables. You know, nobody wants to be told to go eat them, but their vegetables. We had to make healthy eating delicious. We had to make it cool. We had to make it culturally relevant. So in the early days, it was a lot of community building. We started a music festival that we ran for seven years, 25,000 people. You know, and the idea there was can you have a music festival with The Weeknd and Kendrick Lamar

• 25:00Speaker 02

  and The Strokes playing, but you're eating a bowl of quinoa in organic green? Why can't you bring those things together? So that was, I'd say, kind of phase one of the brand. Phase two is how do you make this accessible in a broader way? You know, you have a brand that it's great, it's cool, it's desirable, now I want it, but it's only in a few places. It's only in a few cities. Now it's how do you make it much more broadly accessible? And then the third piece, I think where we're really excited about is we believe the best brands and the most enduring brands are the ones that make an impact. And they make an impact and they use their business model as a force for good. So for us, one of our first core values is called win, win, win. It's creating solutions where the community, the customer and the company all win. And we believe our brand at its best is one which will create systemic change

• 25:44Speaker 02

  in the food system and the health of our customers. So all to say, the brand has kind of evolved from, hey, how do we be cool and make you, you know, want to eat this to how do we scale this and maintain what we call intimacy at scale? How do we keep that what made a special in one store? How do you keep it in a? And then how do you use that platform that you've built and that brand as a force for good?

• 26:05Harry Stebbings?

  I totally get you and I love that win, win, win. Can I ask a bit of a weird one? You know, bluntly, you as the leader, you have to expel the, the brand and the mission and the vision every day. To every journalist, to every employee. I get founders and they're like, I'm bored of saying it. Like, how do you keep it fresh for yourself where you deliver it with the same enthusiasm and gusto that you just did?

• 26:28Speaker 02

  You know, I think you really have to believe it. You just can't fake this is where I get down to. It has to be so much a part of you and something you so believe in, deep down in your heart. And it's an emotional thing. For me, it is a mission. I do get very emotional about it. I do believe that, you know, we can really change the world through food. I see so many of the problems that we're having today, whether it be the COVID crisis we're in, the environmental crisis we're in, and how much of that is related to food. So I think what keeps me going is this true belief that we can do good in the world and by doing good in the world, we can create a really profitable business. And I tell my team all the time, these things go hand in hand. Don't tell me like we're gonna do things that are great, but they're not gonna make money. You have to be able to mirror the two, this capitalism with this social good.

• 27:13Speaker 02

  And I think people get lost on that oftentimes.

• 27:15Harry Stebbings?

  Clearly a great strength of yours being, you know, the ability to create, sustain and build brand. Everyone has their weaknesses, John, and I did my work on your weaknesses too. Ironically, your brother-in-law was very non-committal to weaknesses for you.

• 27:30Speaker 02

  He's scared of the dinner conversation, you know?

• 27:32Harry Stebbings?

  He was like, no, no, no, Harry, not getting involved in this one. Evan was not so concerned to hold back. He said, the brilliant thing about John is he has opinions. The challenging thing is he's not so scared of always telling you them. And he said that maybe diplomacy was something that was a learning curve for you. Would you agree with that as a weakness genuinely? And how do you think about actually create like idea sharing without trampling people? Cause I do the same and creating that safe space for people where you can share, but also listen.

• 28:03Speaker 02

  You know, I'd say I'm definitely pretty direct. I find that oftentimes a strength, but in certain instances can be a weakness. I think one thing I've learned as a leader is it's not just what you say, but it's how you make people feel. And so much of what you have to do as a leader, and I think this has been one of my learnings is how to bring people along. You know, there's the right answer and then there's people believing that's the right answer and being motivated around that being the right answer. So buy-in and empowerment is such a critical part of this. I think one of the lessons for me is how to tailor your approach. I believe when you have deep trust with someone, being direct is great. Cause it's, I love you and I'm going to give you this feedback as a gift, or I'm going to tell you exactly what's on my mind. I think when it goes wrong is when the trust may not fully be established yet.

• 28:47Speaker 02

  You know, I love when, you know, Toby talk, Toby from Shopify talks about the trust battery, which is something is really interesting. When your trust battery is full, you can be incredibly direct with someone. But if you're still building a relationship, you may need to tailor how you say something a little bit. So it really goes back to, is the trust there? And if the trust is there, they know the intent is there. And if we're on the same team with this shared mission and goals, and so we're doing it all. This is not about an ego of me versus you, that we're doing this for the company. And our leadership principles really help drive that. But I do think it's that I've learned over time and, and one thing I say is when I do give direct feedback, I always say it with a big smile and a lot of love.

• 29:25Harry Stebbings?

  Yeah, I'm sure that helps. Can I ask, how do you bring people along? You mentioned there, it's not just a decision, but it's how you bring them with you in that decision. How do you literally do that for founders and CEOs listening? How do you bring people along to your decision?

• 29:39Speaker 02

  You know, I think what I've learned, especially as the company has gotten bigger, you know, today we're almost 6,000 team members across the country. Is the best companies, the most resilient and sustainable companies actually operate in a much more decentralized way with empowered leaders across the company. And so what I've learned is that I should be making almost no decision. You know, I need to think about creating the system. Whether where are we going? What's the vision? What are we measuring? What's the team? And then trust my team to make those decisions and let them have the proper ownership, knowing what success is. And so I think that's been a huge shift for me is from going from a founder to CEO is less about me doing, more about me creating the sandbox for others to do their best work.

• 30:20Speaker 02

  And so I think this is going to be a multi-year journey. Right now, I'm trying to push this all the way down to the store level, where a head coach, which is what we call a GM, is truly the CEO of their business. You know, today I can make decisions centrally. We have 150 restaurants. What do we do when we have 5,000? Am I going to know what's going on in Peoria? Am I going to know what's the best decision there? Absolutely not. What I need to do is think about what are the systems and tools I need to create centrally so that our business owners and leaders can make the best decisions and own those decisions. And so it's really about empowerment. And I think for us, one thing, one tool that's really worked well has been our leadership principles. Our leadership principles becomes a common language. You know, we all ascribe to, and it's a way in which we all work, and that really helps that that empower.

• 31:03Harry Stebbings?

  When you think about those head coaches, how do you create an environment for them where they are ambitious and they set big targets and they want to do bold things, but they're also not scared that if this doesn't work, I'm going to get fired? How do you create that environment of ambition without the fear of it not working?

• 31:21Speaker 02

  Yeah, so it starts with with the principles again. You know, one of our principles is learn forward. So we celebrate failures as long as we learn from those. So and it's not just writing that principle, but then it's acting and sharing those. So, you know, we have town halls and oftentimes we share failures and celebrate them, saying, I'll share my own, saying, hey, I made this mistake, but look at what we learned from it. So I think it's creating that psychological safety around failure that allows people to do their best work. I think fear is really debilitating for anyone. And so you want to create, create a safe space where people can can try to do great things, make mistakes, as long as their heart is in the right place, they're operating with integrity, and they're learning from those decisions. Again, one of the biggest learnings I've had is how to move faster as a business

• 32:06Speaker 02

  by taking bigger risks, failing faster and iterating. Times where we've waited two years to launch something as an MVP. And it's like, well, that's not an MVP. The MVP should have been done in two months, should have put it out there. You should have been embarrassed almost about what you put out there, but you'll get to the right answer much faster than waiting two years to do a big launch. So it's in a way, again, it's taking much more of a software approach to rolling things out than a traditional deployment model.

• 32:31Harry Stebbings?

  You mentioned the six thousand employees. Do you worry as a leader that with scale you have slowness? It's inherent within every big business today. Often it's obviously the advantage of startups. Do you worry now as one of the big businesses that you introduce slowness?

• 32:45Speaker 02

  Oh, absolutely. And of course, as a founder, I think some of the things that keep you up are definitely becoming that which you were trying to disrupt. And so many things kind of revert to the mean and how do you prevent that? And so for us, I think it's possible to do. You've seen many companies do it, but you have to be very intentional about it. And it really does start with the culture, but it is also the things that you measure. It's how you set up the company and it's the time horizon in which you're working on. You worry about culture, you worry about the brand becoming irrelevant and, you know, maintaining that freshness. You worry about, you know, maintaining that leadership position and innovation cadence. All the while, being a bigger company that is, you know, now a public company has responsibility and accountability to shareholders in the public market

• 33:29Speaker 02

  and having to execute from a day to day. And so I do think there's this healthy tension in pushing the company forward, continuing to disrupt ourselves and take risks while also executing on our core business.

• 33:40Harry Stebbings?

  As you've executed on the core business and final one before the quick fire, and you can thank Sean for this one, because it's a bit of a tough one. But he asked, you know, COVID was tough for many businesses, especially consumer facing and more retail facing businesses. He asked, what were some of your biggest lessons for you from managing through, you know, very tough period, which was COVID?

• 33:57Speaker 02

  Yeah, so COVID for restaurants and for Sweetgreen was very, very challenging. You know, most, many of our restaurants, majority of them are in urban areas, you know, really catering to many people going to work. We were very fortunate in that so much of our business was digital, that we were able to pivot and meet our customers where they are in many places. Although we were still severely impacted. The biggest lessons for me around COVID, one was around communication. How we keep morale up even though the business is getting obliterated. And for me, it was always about setting our sights on a point outside of COVID. And using COVID in my mantra is how do we get come emerge from this stronger? We're going to be front footed throughout COVID. And we were fortunate to have the capital, the team and the opportunity where the many of the world was kind of retreating,

• 34:42Speaker 02

  especially in our industry, we saw it as an opportunity in many ways to continue to expand what we were doing. Even though we were taking hits on the face, the morale was and the energy was we're going to grow through this. We're going to improve through this. And when the world reopens, we're going to emerge as a much stronger and better company. So that was one. The second is communication and the, I think every leader during COVID has had to dial up communication significantly. Things are changing so rapidly and how we assure our team members about what we're doing and where we're going. And that transparency has been the second. I'd say the third and and probably it should have been the first is is how we take care of our people first and foremost. I do believe the companies that took care of their people and their community during COVID, people will remember. And we made a number of those moves in the early day, you know, right when COVID hit,

• 35:27Speaker 02

  we pivoted our outpost program and set up 400 outposts at hospitals, serving free food to the frontline. Throughout the time, we protect as best as we could, we protected the jobs of our team members. And we've taken extreme steps around their health and safety. So just remembering that companies are people and taking care of your people really matters. And people remember that and that is so much a part of your brand. So as we kind of come out of this, we believe that many of the investments we've made during COVID, whether that be actual investments in our experience, investments in our people, investments in our culture, are going to benefit us in huge ways as this thing finally goes away.

• 36:02Harry Stebbings?

  Finally goes away. And I didn't know that about the kiosks and hostels. That's amazing to hear and I love hearing that. I do want to move into my favorite though, John, which is a quick fire round. So I say a short statement and then you give me your immediate thoughts. Are you ready to dive in?

• 36:15Speaker 02

  Let's do it.

• 36:16Harry Stebbings?

  Okay, so favorite book and why? What must we be reading for the New Year's resolution list?

• 36:20Speaker 02

  That was a hard one for me because I love to so many, but I'm going to go with Thinking Fast and Slow. Daniel Kahneman, just love the way he kind of breaks down mental models and how to think about things.

• 36:31Harry Stebbings?

  You know, so many people recommend it and normally I lie and go, I love it. I actually haven't read it.

• 36:36Speaker 02

  I mean, anything that he writes is just brilliant, the way he breaks down how we think.

• 36:40Harry Stebbings?

  What is the hardest element of your role with Sweetgreen Stageon?

• 36:44Speaker 02

  Culture wars.

• 36:45Harry Stebbings?

  Huh, what do you mean?

• 36:46Speaker 02

  You know, as a business leader today, you're not just running a business, you're making decisions, whether it be vaccine mandates and masks and, you know, kind of social upheavals and where to take a stand and where not, and it's gotten increasingly challenging here in the United States, a lot of the culture wars that are going on.

• 37:05Harry Stebbings?

  Not on schedule, but I'm just interested, how do you think about your personal brand? You know, you mentioned your Tobys from Shopify's, you look at your Patricks from Stripe's and Johns from Stripe, you look at your Anne from Box, the CEO is now almost a celebrity in today's culture. Respectfully, you're you're more behind the scenes, you're not on Twitter every day smashing out Twitter threads.

• 37:25Speaker 02

  So I'm not on Twitter or, you know, social media I've found can be kind of toxic to the brain. I love to maintain my happiness and presence. I do have a pretty active LinkedIn is where I put my, you know, is where my personal brand is out there, but I try to stay off the Twitter and the Instagram. For me as a leader, it's anything I can do to best support the business. What I've said is if it helps the business and the mission for me to get out more in front of it, I'm happy to do it, but I don't need to do it to feed my own ego.

• 37:52Harry Stebbings?

  Oh, I do. Desperately insecure individual. What would you change if you could do it all again?

• 37:58Speaker 02

  There's so many times where I would have narrowed the focus. I think as leaders, you know, as an entrepreneur, we shiny ball syndrome is big and there's so many times where that next idea got us so excited. But I think if I could go back, I would have just focused, focused a lot more, said no to more things and really focused on our core business.

• 38:18Harry Stebbings?

  I love that answer. I'm terrible for shiny new things.

• 38:21Speaker 02

  We all are, you know, especially entrepreneurs are, we love that next idea, but sometimes, you know.

• 38:27Harry Stebbings?

  That's the bad thing, you can't.

• 38:29Speaker 02

  I like to remind myself, you know, we have one hundred and fifty restaurants. We can have probably five or six thousand just in the U. S. So all of these new ideas that sometimes we get excited about, just think about it. Like if we just scaled our core business alone, the opportunity is massive.

• 38:42Harry Stebbings?

  Who's your closest mentor and what have you learned from them?

• 38:45Speaker 02

  You know, I have so many mentors that I've been fortunate to work with across, you know, a number of years. But I'd say my closest mentor is definitely my father. Very close with him, I've learned so much from him as, you know, immigrated here from Iran as an Iranian Jew and had to restart his life and build his business and his family. And I think from him, I've learned, for me, success is not just success in business. It's success as a, as a human and creating that joy, happiness, just more broadly. And I think I've learned a lot from him around humility, around presence, around patience, and around really balancing creating a beautiful life with a family, community, and a business. And so that's what I go with.

• 39:22Harry Stebbings?

  I love that. I always think parents shape us in, in so many meaningful ways, but that's a really, really special one. Tell me, how has life changed for you now as a public C E O? Good versus bad, what's great, what's not great?

• 39:33Speaker 02

  You know, I think what's good is it creates an accountability, an attention in a positive way, where it creates a lot of focus on the things you said you were gonna do. So we said we were gonna do something and it really focuses the company on what are those things? At the same time, I think going public, it's an opportunity to tell your story in a really big way and of course raise a lot of capital to expand our mission. So I'd say a lot of good and so far, you know, we're, we're only a couple of months in, but so far it's been good. I think what's, what can be bad is if you're not careful, you can easily get stuck in the short term. And I've been very conscious and intentional about making sure we do not lose what got us here. Like I always like to remember like what got us to this point? Let's not lose that because we're public, because that really shouldn't change anything.

• 40:18Speaker 02

  Yes, we have commitments on a quarterly or yearly basis, but we're here for the next ten, twenty. I like to say we're building a hundred year business and make sure we do not lose that long term focus, that innovation cadence that really got us to this point.

• 40:31Harry Stebbings?

  You said building the hundred year business, final one. I was gonna say next five years for you, but like if we have this chat and say that's ten years. Sweetgreen's then in ten years.

• 40:41Speaker 02

  I believe Sweetgreen will be at that point all across the country and hopefully internationally. We've changed the way people think about healthy eating and really food is medicine. We have lowered the cost of eating healthy food through technology investments, both on the digital and automation side, which has truly democratized this idea of healthy eating. And we're on our way to overtaking McDonald's as the fast food player in this country and eventually globally.

• 41:07Harry Stebbings?

  John, I've so loved doing this, as you can tell from my off-schedule. She was proud of Natchi, but thank you so much for joining me today.

• 41:13Speaker 02

  It's a pleasure to be here with you. Thank you so much for having me. This has been a lot of fun.

• 41:19Harry Stebbings?

  I mean, I know it sounds soppy, but I just left that interview feeling what an incredible, inspiring, humble, kind person John is. And so I want to say a huge thank you to him for being so open there with some fantastic, fantastic answers. I love that interview. If you'd like to see more from us, of course, you can on the twenty minute vc dot com. But before we leave you today, from websites and online stores to marketing tools and analytics, Squarespace is the all-in-one platform to build a beautiful online presence and run your business. Now, there are three things for me that really stood out about why I love Squarespace. First, mobile optimized websites. All websites are optimized for mobile with Squarespace, so content automatically adjusts, so your site looks great no matter what device it's on. Pretty awesome.

• 42:00Harry Stebbings?

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• 42:41Harry Stebbings?

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• 43:24Harry Stebbings?

  I love using the AngelList platform because it abstracts away all the complexity and operational burden of fund management. So whether you're running SPVs, a traditional venture fund like me, or even a rolling fund, AngelList has you covered. And I'm also super excited about their new product, AngelList Stack, which is purpose-built for founders. With AngelList Stack, you can create a fundraising-ready startup in just a few clicks. AngelList handles your company's incorporation, banking, cap table and fundraising processes all in a single place. This allows founders to focus on building. If you're a founder, you can launch your company at stack.angellist.com/20vc. Whether you're a founder or a funder, you're in great hands with AngelList. As always, I so appreciate all your support and I cannot wait to bring you another fantastic episode of The Memo this Friday.

• 44:08Harry Stebbings?

  I can't wait for that.