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Why Shake Shack’s Founder Is So Inspirational! “Hospitality vs. Service”; Success Recipe!!

Why Shake Shack's Founder Is So Inspirational! "Hospitality vs. Service"; Success Recipe!!

60% of restaurants fail in their first year of business, and 80% are gone in five years.

That is why people are so inspired by Danny Meyer, the founder of Gramercy Tavern, numerous other restaurants, and the entire Shake Shack chain.

Virtually ALL of his restaurants thrive and his net worth is close to $700 million as a result.

CULTURE IS THE SECRET TO EXTRAORDINARY SUCCESS

His restaurants are extraordinarily successful not b/c of food quality or location, according to Meyer, but b/c of the culture he imbues in all of them.

He was on this excellent Masters of Scale Podcast last fall where he explained his backstory and recipe for success, and the takeaways were both invaluable and fascinating!

He was going to attend law school, b/c he didn’t know what else to do to make a living, until his uncle found out how badly Meyer did not want to become a lawyer.

LESSON #1 – PURSUE A CAREER YOU ENJOY

Meyer’s uncle became irate! He told Meyer that life is way too short of a blip in time to waste one second pursuing something you don’t want to do – great lesson #1.

LESSON #2 – IGNORE GENERALLY ACCEPTED WISDOM

Meyer then skipped law school and pursued his true love – restaurants, despite everyone telling him not to do it. Fortunately, he ignored the advice of everyone – great lesson #2.

When Meyer’s restaurant took off, Meyer was terrified of expanding b/c his father had gone bankrupt twice, devastating Meyer’s family when he was a young man.

BUT, Meyer finally realized the reason his father failed; his father always had to be the smartest person in the room and he refused to hire people who were smarter than he was.

LESSON #3 – IGNORE EGO AND SURROUND YOURSELF WITH SMARTER PEOPLE

Meyer learned to always surround himself with smarter people, and that was a huge factor behind his success – great lesson #3.

Meyer’s big epiphany was discovering the huge difference between “Hospitality” and “Service.”

Hospitality has an emotional aspect, relating to how team members make customers feel.

Service, in contrast, relates simply to performance and the technical aspects of a business.

Meyer’s restaurant cultures focus entirely on this “hospitality vs. service” contrast. When he reviews his team members, he focuses 51% on “Hospitality” (how they make customers feel) and 49% on performance.

LESSON #4: CULTURE ENABLES YOU TO SCALE

Every team member knows the “hospitality” distinction and the criteria for their reviews, and it is what makes his culture thrive. This leads to great lesson #4 – cultures scale far easier than systems and business recipes.

Meyer learned to scale so easily by focusing almost entirely on culture and then leaving successful expansions up to his team members.

Furthermore, Meyer’s obsession with hospitality does not just focus on customers, but also on teammates (his top priority in fact), vendors, and the community at large.

To maintain culture, every team member is taught the hospitality vs. service distinction and reminded that customers remember how they are made to “feel” more than anything else.

In addition, each team member is empowered to do whatever is necessary to make customers feel taken care of and team members are also required to “take care of” their teammates with a similar obsession on “hospitality.”

I of course love Meyer’s lessons b/c they translate to every industry – including mortgages and real estate.

If you are a sole proprietor, you can apply Meyer’s lessons to improve your own “hospitality” and your overall business.

If you want to grow, however, these lessons can help ensure your success – create a hospitality-obsessed culture where your team members focus on how great they make everyone feel.

We know this works for a fact b/c we do this at JVM, and it is why I love going to work every day.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167