Preet Bharara:

From CAFE and the Vox Media Podcast Network, welcome to Stay Tuned. I’m Preet Bharara.

Danny Meyer:

All you have to do if you want to have a successful restaurant, keep the place clean, a good plate of food, charge them a fair price. And at the end of the day, if you’re nice to them, you can give them their check on a piece of toilet paper and they’ll come back.

Preet Bharara:

Welcome to Stay Tuned. I’m Preet Bharara. My guest this week is Danny Meyer. He’s the founder of Shake Shack and Union Square Hospitality Group, which owns several of the best restaurants across New York City. Now he’s out with a new book, What Could Possibly Go Right: The Essential Journey to Scale an Enduring Culture. That’s coming up. Stay tuned. Danny Meyer, welcome to the show.

Danny Meyer:

Thank you, Preet.

Preet Bharara:

Congratulations on the book for the YouTube audience. I’m holding it up, and you’ll see that there are many, many, many yellow post-its because I spent a lot of time with the book in the last week. It’s entitled What Could Possibly Go Right: The Essential Journey to Scale an Enduring Culture. You are an optimistic guy?

Danny Meyer:

1,000%.

Preet Bharara:

1,000%. I think at multiple points in the book, you say, you see the wine glass half full.

Danny Meyer:

I do.

Preet Bharara:

It helps when the glass has wine, doesn’t it?

Danny Meyer:

It totally helps when the glass has wine. And look, I think being an optimist doesn’t mean that you expect that everything will go right, but you start by asking, “Well, what if it did?” Almost anything good that’s ever happened in my life started with that question.

Preet Bharara:

All right. So one of the good things that happened in your life as you began this really storied and I think unparalleled career in hospitality, shall we say, and I had to remind myself how young you were when you opened your first restaurant, Union Square Cafe.

Danny Meyer:

All you have to do is look at how old I am now.

Preet Bharara:

Well, I didn’t do the math, but you look very young, sir, which would’ve made it even more remarkable. I have spent many special days of my life when big things have happened in my career and in my personal life, that’s the restaurant I have gone to. In fact, just one more indulgence and then I’ll stop flattering for a moment, the guest.

When I was writing my own book and I had every few weeks, I had a meeting with my editor, my friend and editor, Peter Gethers at Knopf, and he made an excellent suggestion. And that is that over the course of about 18 months, whenever we were going to meet and have a business lunch to talk about the next chapter that I had handed him of the book, we ate at Union Square Cafe on the publisher’s dime, which was helpful because the atmosphere took the bite out of the criticism of the pages of my book.

But you open that restaurant when you’re 27. How optimistic do you have to be to aspire to open what ultimately a lot of people think was the best restaurant in New York at age 27? What’s up with that? Because I see you as a fairly modest man. That’s very ambitious.

Danny Meyer:

Well, when you’re 27, you don’t know what you don’t know. In fact, I still think, I’m going to illustrate your point about modesty. I still think I don’t know what I don’t know. But as an entrepreneur, you only see what could possibly go right. You don’t see what could go wrong. And if you believe that your idea is solving a problem, and in this case it was, I wanted a restaurant that would just be my favorite restaurant if only it existed in New York. And back in the 1980s, the restaurants that were most acclaimed were the really fancy places that started with Lo and La, and you couldn’t just get a really good glass of wine and a good meal and wear jeans to the place if that’s what you wanted to do.

So look, I didn’t think I’d ever succeed at one restaurant. I didn’t know if I would love one restaurant. I certainly wasn’t thinking about many restaurants. In fact, it took, as you’ve read in What Could Possibly Go Right, it took 10 years to open a second restaurant.

Preet Bharara:

Why the hospitality business? Why restaurants?

Danny Meyer:

I love food, love wine, always did. My dad and I cooked together growing up. He exposed me to all kinds of great cooking around the world. And when I worked for him as a 20-year-old, as a tour guide for his business in Rome, I learned that besides loving the food and wine, the thing I really liked was how to turn whoever was the crankiest one of his customers into the happiest. And it was a gift I had to do that.

Preet Bharara:

Would you spike the drink?

Danny Meyer:

I didn’t have to. Didn’t have to. Just listen to what people want and give it to them.

Preet Bharara:

I guess a question that people have who have never been in the restaurant business, which I think is one of the hardest businesses you can be in because of the margins and everything else. And another quick biographical aside, which very few people know, my family was in the restaurant business for a brief period of time in the ’80s, opened up only the second Indian restaurant in New Jersey in 1978.

And doctors maybe shouldn’t go into the restaurant business. We did not have quite the success that you had. But a lot of people might think to themselves, how hard can it be? You get a cook, you get a lease, you buy some equipment, you get some wait staff. And if you make a good pasta or you make a good lasagna or you make a good chicken, people will come. And if you don’t, they won’t. How is it more complicated than that?

Danny Meyer:

It’s really not a lot more complicated. I mean, everyone says, “Oh, Danny, you’re in the most competitive, hardest business in the world.” Preet, I think you are, and I think the doctors are. And I think we all have a calling and I feel really, really fortunate that I’ve found mine. And what’s not hard for me is the fact that I’m driven to make sure that however somebody felt when they first walked into our restaurants, that they’re going to feel a little bit better when they leave. I’m not a doctor. I’m not curing anybody of any serious ailment. I’m just trying to make life a little bit better. And that goes for the people who work for us, with us. That goes for the people who dine with us. It goes for the community in which we do business.

But look, if I learned one thing about our business, I’m going to tell you a quick story. In 1985, in May of 1985, I was months away from opening Union Square Cafe. And just turned 27 and I went to the big National Restaurant Association show in Chicago, and they were just unleashing all this new technology for restaurants. And one of them was a brand new point of sale system, electronic point of sale system that was going to take the place of the NCR cash register that I’m sure your family had behind the bar at your restaurant as well, which was almost like a piece of furniture in your restaurant behind the bar.

So the waiter was going to be able to order food in the dining room on a computer by looking up numbers, keying in the numbers. And when you gave the check to your guest, it was going to come out on this thermal printed paper. And I actually, when I went to this NRA show, I had the courage to stand up and ask a question in this seminar. And I said, “How in the world can we give our guests their guest check on something that doesn’t have this kind of hard copy that everybody is used to?”

And this old guy sitting in front of me turns around, looks at me and he says, “Son, I don’t know how young you are. I don’t know what you’re planning to do, but I’m going to tell you one thing right now. All you have to do if you want to have a successful restaurant, keep the place clean, give them a good plate of food, charge them a fair price. And at the end of the day, if you’re nice to them, you can give them their check on a piece of toilet paper and they’ll come back.” And so I guess that was an early lesson that hospitality was one of the things that I was selling.

Preet Bharara:

You make it sound easy, and I could give a similar description about just working hard, studying and having common sense and being responsive to a client is really all you need to be a good lawyer and to have a constant stream of clients. But it’s obviously more complicated than that because I often wonder why is it that there are so many bad restaurants?

And I’ll give you a particular, and that you don’t have to single any out unless you want to. I feel like in this day and age, this is a pet peeve of mine, and then we’ll get to some of your business ideology and philosophy, which I think is very applicable to every business, including my own. How can it be that there’s a joint in New York City that serves bad pizza? Do you follow my question?

Danny Meyer:

How can there be 26,000 restaurants in New York City? How can there be 26,000 TV series that you can watch on Netflix?

Preet Bharara:

It’s not the Coke formula and it’s not nuclear weapons. It’s not fission. And it’s really not fusion. Why hasn’t everyone figured out how to make really good pizza?

Danny Meyer:

Because not everybody wants to. Not everybody cares. Not everybody is discerning. I know a lot of people, it’s hard to imagine, but I know a lot of people who eat to live. I live to eat. And if you just eat to live, you just don’t really care about, you’re fine with that pizza.

Preet Bharara:

So you have a market. So the people who don’t care so much about making good pizza, their customers are the people who don’t really care so much about food.

Danny Meyer:

I think that’s probably true and that’s-

Preet Bharara:

Because for equal price, whatever they charge for a slice in Times Square, you can go to one place and for the exact same $3, $4, you can get a good slice or a bad slice. It just struck me as something that’s eminently discoverable. So you have a lot of metaphors. I’m a big fan of metaphors. I overuse them. You, Danny, have just the right amount, I will say.

Danny Meyer:

My kids tell me I have gone way over the allotted amount.

Preet Bharara:

So there are a lot. There are a lot. We’ll get through a couple of them, but you have a chapter in the book, Think Like a Winemaker. And you apply that to the restaurant business, but I think it’s applicable to everything. And you go through a list of things that one must have a maniacal focus on, right? They’ve selected the right grapes for their territory, they’ve trained the vines, they’ve pruned the plants, they’ve selected only the best fruit, they’ve chosen a name and design a label, et cetera, et cetera.

And then you write, all these variables matter, but often the most crucial one is the health of the soil. It’s worth repeating. No grape can or will ever taste any better than the quality of the soil in which it is planted. Can you elaborate on that?

Danny Meyer:

Absolutely. And the metaphor is that the soil is the culture and the grapes are the people we select to work in our culture. And the training and the pruning and all the things you just mentioned are absolutely crucial if you want to consistently year after year after year, make the best wine of your terroir. And that’s what we strive to do. And what’s great about that metaphor for me is that it doesn’t always work. We don’t always make the best wine. And when we don’t, it’s a one-

Preet Bharara:

You blame the soil.

Danny Meyer:

Well, and if I blame the soil, what that means is we are responsible for keeping that soil healthy. We’re responsible for our culture. Culture doesn’t happen to us, we are responsible for happening to it.

And so as you know, Preet, the biggest point that I’m really struggling with as I write this book, and the reason I wrote the book was so I could learn. If I can learn and have language, then I can teach from it. And that’s what I really want to try to do. But I learned that back when I had one restaurant for the first 10 years of my career, you would’ve found Danny on the front door of Union Square Cafe practically every single service. And when I wasn’t on the front door, you’d have found me in the kitchen tasting food with the chef and you’d have found me in the wine cellar tasting wine with our wine director.

And I think that the thing that I’ve been really working so hard is how can… And that would be like the winemaker having one tiny little hectare in France, and they could make the best wine in the world. But what happens when they buy more vineyards and what happens when they actually have a vineyard, not just in Burgundy but also in the Rhone Valley, and they want that Rhone Valley wine to be just as excellent?

That’s what businesses that are growing do. And so for me, restaurants are my laboratory, but I think you’re right. I think that a lot of these stories, especially the ones that didn’t go so right are applicable really to almost any business out there.

Preet Bharara:

When you talk about culture, there’s one feature of culture that there is not a business or a calling or a profession or an art that doesn’t require it. And you can call it different things and there are different ways to describe it. You have it. I like to think that I have it. I’ve had a lot of success, you’ve had a lot of success. And that is, it’s not excellence so much, that’s the product, but it’s a maniacal focus, right? Maniacal focus even on the small things.

My brother and his best friend started a company some years ago and they wanted to make sure that they had the best customer service of any company anywhere. And some people know that they famously started a company called Diapers.com, which was later purchased by Amazon for a lot of money. And they did things that you did.

And I want to talk about one example, and I think it’s a lesson for anybody starting a business or trying to make it in a profession, whether they’re just starting out at 27 or whether they’re 72. And so what they did was the CEO of the company would pretend to be a cranky customer and on a regular basis would call customer service, which served two functions. One, he got to see if customer service was any good, and B, when word got out that the person on the phone may not be a cranky guy from Boston, it could be the boss, boy, was everyone on better behavior.

And so you tell a story, it’s one of my favorite stories in the book. You had an event and a woman was seated at a table, and there was an accident. And she had a very nice and expensive dress on, and a waiter spilled olive oil all over the back of her dress. And it was early in the evening, hard to clean olive oil in the bathroom with some club soda, correct?

Danny Meyer:

Yes. And she was unaware it happened, but I saw the whole thing.

Preet Bharara:

So you see the whole thing. What did you do?

Danny Meyer:

Well, the first thing I did was I asked myself, “What do you do now? No harm, no foul. She won’t know till she gets home. She won’t know who did it, how it happened.” But then I said, “You know what? I cannot preach integrity to our whole team and not preach it to myself.” And I’ve always defined integrity as having the judgment to do the right thing even when no one else is looking.

Preet Bharara:

Yes. We say that in the US Attorney’s office too.

Danny Meyer:

Yeah. And boy, does that happen all the time in government. And so the first thing I did was I spoke with her very, very discreetly. I spoke behind the back of the person sitting between us so that nobody would hear. And I said, “You’re not going to believe this, but one of our servers just accidentally drizzled some olive oil on the back of your dress.” And she came very close to blowing it right then and there, or at least blowing my attempted discretion. She was not happy and I don’t blame her.

She said, “I just bought this dress this morning. It’s the first time I’ve worn it. I cannot believe your people did this.” And I said, “I promise we’re going to make this right. I promise. The story’s going to have a happy ending. This is how we do things around here.” And she calmed down a little bit and I had an opportunity to get the attention of our general manager who was checking in on this private party.

And by the way, well, I don’t want to go into all the detail, but the table at Maya Lino seated comfortably about 18 people. And because we kept saying yes to the host, 18 had become 20, 22, 26, finally 28 people sitting around this table.

Preet Bharara:

Well, you were asking for an olive oil incident then.

Danny Meyer:

We were asking for it.

Preet Bharara:

You were asking for it.

Danny Meyer:

Absolutely. So anyway, the general manager immediately got her a Pashmina shawl to put around herself so that very discreetly nobody else at the table would see the stain and that she wouldn’t have to wonder. And then-

Preet Bharara:

You’re getting to the best part.

Danny Meyer:

Yeah. The best part was the GM called Calvin Klein, which is where this dress had come. They remembered exactly the circumstance under which the woman had bought the dress that morning. They had one more in stock in her size, and of course we bought it. And then the very next day, we had a big basket delivered to her home with a brand new dress. I remember some salami, a couple bottles of wine, a $500 gift card, please come back and let us do this again. And of course, a huge bottle of olive oil as well. And look, you got to have a sense of humor.

Preet Bharara:

But you know what? That’s a wonderful thing. And you had quick thinking and generosity going for you in your general manager. But why is that so rare? Why is it so rare? For everybody out there who is either a service professional or in the business world or you sell a good or you work pretty much anywhere, there are opportunities to do things like that. But it’s exceedingly rare and that’s why we’re talking about it.

Danny Meyer:

And we’re talking about it. In my first book, Setting the Table, my favorite chapter is called The Road to Success is Paved With Mistakes Well Handled. And I learned that back in the 1990s from Stanley Marcus, the late founder of Neiman Marcus. And he heard me talking about some mistakes we had made, and he was the one that explained that. And so then it became our intention. Our intention, Preet, was to harness the greatest renewable human resource, which is mistakes.

And what if you could… Yeah. I mean, who makes more and better mistakes than humans do? And so what if you could harness that for the good? And what if you could actually end up in a better spot because you made a mistake? Now, granted, it has to be an honest mistake, but if you ended up in a better spot than if you had never made it in the first place, hey, that’s free fodder for success.

So I want to get back just very, very quickly to culture. Culture is an intention. Culture can happen by accident. It’s the way we do things. But if you want your culture to be uplifting, it becomes an intention. And as you said earlier, the outcome of our culture should be more excellence and more hospitality, but that doesn’t happen without intention.

Preet Bharara:

You tell another story which probably hardened your ideas about making mistakes better, but this was not a mistake. This was just somebody who was very thoughtful in how they treated you, who they believed was an important customer. You stayed at a hotel in Aspen. Everywhere you went, they upgraded you to a suite, and everywhere you went, you saw that someone had taken the time to place something that would be meaningful to you.

You want to tell that story in 30 seconds and then what you learned from it and what listeners might learn from it?

Danny Meyer:

I got to my room, an upgraded room. I was giving some wine seminars. This was for Food and Wine Magazine, and I dumped all my wine books on the desk that I had carried with me on the airplane. The books I dumped hit the mouse of the computer that activated the screen. On the screen comes a live view of the Shack cam in Madison Square Park with a really nice long line. I said, “This is too much. This is crazy.”

And it was crazy till I went into the little kitchenette in the room and I noticed that they had a copy of every single one of the books that I’ve ever written, setting the table, the Union Square Cafe Cookbook, Second Helpings. They had our cocktail book, Mix Shake Stir, and there was a big bookmark in the cocktail book to the page of the cocktail that I had named after my father. And then I look up and in the dining room, they have not only the printed recipe for that cocktail, but all of the ingredients, the vodka, the Campari, the fresh bowl of lemons.

And if that’s not enough, on my last night there, as I’m reaching over on the desk to get a wake-up call, because back in the day before I used my iPhone for that, there’s a framed picture of my entire family. And on the frame it says, “Happy Father’s Day.” They almost crossed the line.

Preet Bharara:

So that was a little bit over the top and they weren’t covering for a mistake. But again, it’s another example. Now, you have a contradictory sentiment in the book, which I also agree with. I agree with a lot of this stuff.

Danny Meyer:

You sound like a lawyer.

Preet Bharara:

Odd that that should be, because I’ve said this about people that I’ve known who were successful and some of whom are very, very wealthy and have a lot of resources now. And there are exceptions to this, but it sounds like a paradox, and that is don’t aim for success. And you quote from Viktor Frankl Man’s Search For Meaning about how success rarely happens when you pursue it overtly. And I don’t know if you mean success at the restaurant business or success as a lawyer or success as a podcaster, or you mean success is measured by having wealth and means in a big house.

And you say, “The more you aim at it,” you’re quoting, “The more you aim at it and make it a target, the more you’re going to miss it. For success like happiness cannot be pursued, it must ensue. And it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself.” Is that in fact a paradox or how do you resolve that in your head?

Danny Meyer:

I don’t think it’s at all a paradox, Preet. I included that amazing quote from Viktor Frankl because that has been my experience, that almost every time I have aimed to make something successful, like I wake up and I go, “This is the thing,” it doesn’t happen. And the things that have worked out the best, and I put Shake Shack in that category, I put Daily Provisions in that category, Union Square Cafe. But those were all the success of any of those have been a byproduct of when I was pursuing what mattered most to me.

In the case of Shake Shack, it was caring for the community and learning about hospitality. In the case of Daily Provisions, it was taking care of our neighborhood, giving a gift to our neighborhood because I had some extra space next door to Union Square Cafe.

So on the other hand, you will recall from reading What Could Possibly Go Right that many things didn’t. And almost 100% of the things where I was saying, “Let’s just do it because it’s a good deal or the landlord really wants us to do this thing,” where there was an absence of higher purpose, that was the thing that most correlated to the projects not working so well.

Preet Bharara:

Just so we’re clear, I’m sounding like a lawyer again, that doesn’t mean that you didn’t pay attention-

Danny Meyer:

Oh, of course not.

Preet Bharara:

… to the revenue and to the bottom line and to the critics and all that. What you’re saying is a mindset that if you set out on January 1, by the end of the year, I want to be famous, or at the end of the year, I want to have 27 new matters, I want to win three trials. Whatever metric it is, if that’s your top focus, you’re in trouble. But you cared about success, correct?

Danny Meyer:

Completely. A lot of what you see as a paradox is the road that I set down in the first place, right? Once I’m on that road, whether it was a good idea or not, the entrepreneurial road is I’m making a commitment. We’re going to try our hand at making juice. That was a bad one. I had no passion for juice. That didn’t mean that we weren’t trying hard while we were on that road. So I’m really making the distinction of what road did we set down.

Preet Bharara:

I don’t remember the juice thing. I was talking to my wife about that.

Danny Meyer:

That’s the problem.

Preet Bharara:

I missed that feeling… I guess. So you have another quote. There’s a lot of good stuff in here that’s yours and then stuff that, as we all do, you appropriate because they have meaning to you. And this is one of my favorites, and it was at a celebratory event where you’re sort of taking stock. I think it was upon the reopening of Union Square Cafe, I think. And you weren’t sure what you would say to the crowd, your team, and you decided to quote from the Stephen Sondheim song, Finishing the Hat from Sunday in the Park with George, which ends with, “Look, I made a hat where there never was a hat.” Why do you like that so much?

Danny Meyer:

It cuts to my core just even hearing you say that, because that gets back to what I was saying earlier about what is the meaning behind why my team and I are willing to put in so much effort on the things we do put in. Because if you create something of meaning that has the opportunity to become essential in people’s lives and make people’s lives better, what could be a richer experience?

And it gets back to what we were saying at the beginning about pizza places. I would not want to own a pizza place. I tried one, but I wouldn’t want to even try one if I didn’t think that that pizza could be a hat. I made a hat where there once was not a hat. I don’t want to do the exact same thing someone else has already done. I want to create something a little bit different, a little bit fresher, and maybe add something to the dialogue on what hats can be. I’m not in the hat business, but as a-

Preet Bharara:

It’s another metaphor.

Danny Meyer:

Another metaphor.

Preet Bharara:

Tell your family. I’ll be right back with Danny Meyer after this. One of my family’s favorite restaurants of all time, and they seem to have been a succession of your restaurants that we love for various reasons, including our ethnic origin. We love Indian food. And there was a restaurant called Tabla with a bread bar downstairs, and when I was younger, we would go there for special occasions.

You’re very forthcoming about your failures, things that went wrong, and you say it took you too long to close the restaurant. Now, that was a restaurant that was highly acclaimed. It had a great location. It was my family’s number one favorite restaurant in New York. Got great reviews. Why did you have to close it? And what does that say about the world, that you can do everything correct and you still don’t make it?

Danny Meyer:

Well, we didn’t do everything correct, so I’ll start with that. Keep in mind, I opened Tabla in 1998, long time ago. And what has fortunately happened with Indian cuisine in New York, New Yorkers always think of themselves as being the most sophisticated diners. But for the longest time, New Yorkers did not really understand Indian restaurants other than Little India, the 7.95 lunch buffet kind of thing. And Table hung in there for about 13 years. It did get three stars of the New York Times.

The mistake that I made at a time when there just wasn’t this level of Indian cooking in the city, it was our largest restaurant, 230 seats, actually 260 seats with the largest overhead. We had a kitchen downstairs, a kitchen upstairs, a bar downstairs, a bar upstairs. I can’t tell you how many cooks and servers we had, managers, et cetera. There just was not a big enough audience to sustain it with that kind of overhead, especially when the great financial crisis came about.

And we had to close it because it was losing close to a half a million bucks a year in its last two years. And it’s sad because I think today it would be probably very successful.

Preet Bharara:

Oh, boy. Every week, my friends and I are talking about the new posh Indian fusion restaurant.

Danny Meyer:

And there’s some good ones here.

Preet Bharara:

There are. So that’s one direction. You take the 7.95 special lunch or dinner from Little India and you turn that into a sensational culinary experience at Tabla. You also got in the other direction. And so I have a number of questions about Shake Shack, which my family also loves.

Danny Meyer:

I love your family.

Preet Bharara:

They’re big fans of your work, Danny, because people who are listening probably would identify with that business of yours if they’re not from New York than many of the other restaurants that some folks maybe never have been to and never heard of. But Shake Shack, everybody knows. Everybody knows.

How common is it for a business enterprise? I was thinking of examples of this, where you’re in the same general business but you have something that is quite at the high end of the range in terms of price and then quite at the lower end of the range in price. Rolex, I don’t know if Rolex makes a cheap watch, but I don’t think they do. Toyota, for example, has the Lexus and they also have the Camry. It’s not quite the same thing.

So you had had this reputation as sort of fine dining, but accessible fine dining, not like the stuff from the ’80s that you talked about. Explain to people why’d you open up a burger joint?

Danny Meyer:

It was an accident. It’s not something I woke up one morning saying, let’s open a burger joint. This really gets back to what I was saying earlier about what could possibly go right. So I wanted to take care of this park. I was the co-chair of the campaign for the new Madison Square Park and the Madison Square Park Conservancy. And I believe that it was great that we were able to raise $11 million to restore the park and make it beautiful and safe. But if you didn’t give people a reason to use it, it was just going to probably head back downward again.

And so it occurred to me that having public art would be a good reason for people to want to use the park. Unlike Union Square Park, we didn’t have a big open plaza for a green market, but the walking paths were perfect for art.

Preet Bharara:

Union Square Park, by the way, just for folks who don’t know, is about seven or eight blocks south.

Danny Meyer:

No, I think you’re absolutely right. No, you nailed it. Barrister Bharara, you nailed it.

Preet Bharara:

I could be a topographer.

Danny Meyer:

Yes, you could. So anyway, it just was our good fortune that the Public Art Fund in New York curated a sculpture from an artist from Thailand. And as part of his piece of art that had taxi cabs up on stilts, he wanted to have a working hotdog cart below it. His artistic point of view was that everybody in the world has either been able to afford to be driven in a taxi or had to be the poor guy driving it. Everyone else in the world could either afford to buy a hotdog or had to be the poor guy selling it.

And he needed someone to make and sell hotdogs out of this piece of art. And my team looked at me like I was crazy when I said, “Let’s do it. And let’s do it out of the private dining room kitchen of 11 Madison Park.”

Preet Bharara:

Another great restaurant.

Danny Meyer:

And I want to prove that hospitality matters even at a hotdog cart. So I’ll try to make this story short. If you want to get the whole story, read What Could Possibly Go Right. We have lines around the block for three straight years with this hotdog cart. And that’s when I said, “Guys, let’s make this a permanent kiosk.”

And I just scribbled down on a piece of paper some menu items really from my youth in St. Louis. And one of them happened to be burgers. It was never going to be called Burger Shack. I loved frozen custard growing up, so I knew it was going to have good-

Preet Bharara:

I’ve never had a shake actually at Shake Shack.

Danny Meyer:

Oh, you do not know what you’re missing.

Preet Bharara:

I’ve never had a shake, but I’ve had the others.

Danny Meyer:

Okay. Well, we’ve got great coffee shakes, vanilla shakes.

Preet Bharara:

So can we talk about the burger? Why is the burger better than the other burgers?

Danny Meyer:

Because we took a fine dining approach to it because that’s all we knew. So we bought the same beef we were using at Tabla in Union Square Cafe from Pat LaFrieda. We used the same chocolate that our pastry chefs were using to go into our chocolate milkshake. We just took the same approach to how we hired people for hospitality, how we designed the place, how we connected to our community.

And did we have a lot to learn? Of course we did. We didn’t know what it was like to serve a thousand people a day. We didn’t know what it was like to not have waiters and waitresses and flowers and tablecloths and chefs in the kitchen. So we had so much to learn, but after five years of that one Shake Shack, which was doing so well and raising a lot of money for the park because the park is our landlord, we actually gave that structure to the park so the park would become the landlord.

But after doing it for five years, we opened a second one and that only made the line at the first one longer.

Preet Bharara:

Right. But the real question there is, you say it as if like, no, after five years we opened a second one. Why didn’t you do it soon? A lot of people would’ve seen the outside success, would’ve understood that it’s replicable, but you had some doubts about that. I think you say in the book that until you did that, you had never done the same restaurant twice and you had to be in your bonnet about that. And it took five years for you to overcome that. Why?

Danny Meyer:

It did. I’d watched my father go bankrupt and I always associated his bankruptcy with expanding. It was just never my goal to have a burger place, nevermind to have more than one of anything. I had never done anything for a second time. And in a weird way, you talked about how the book opens with the closing of Tabla. It took the closing of Tabla to liberate me to realize life doesn’t end. You don’t have to go bankrupt just because you close a restaurant.

As a matter of fact, all of our investors got paid back plus a few paltry cents, but they actually made money. And the second Shake Shack happened to open the same year I closed Tabla. It almost liberated me to see that I don’t have to be so worried about failing.

Preet Bharara:

What’s the cost proposition? So you have this great explanation. I never really heard this before because it’s not my industry, but it’s applicable to a lot of industries, I guess, including as you point out, construction, manufacturing, and you say certainly fast food restaurants. The rule of two. When creating a product, three major variables are at work. This makes a lot of sense to me, quality, speed, and cost. And the prevailing view, it seems, as you write in the book, is that you have to choose which two of those things you will advance.

And you can’t have all three. I don’t know if it’s the law of conservation of energy or something else. So you want something fast and inexpensive, you’ll have to cut the quality. You want it to be high quality and fast, it’s going to cost more. If you want it to be high quality and inexpensive, it takes more time. And that seems to make a lot of sense to me. So I’m reading on to understand the business proposition, the commercial proposition of Shake Shack.

And you must be a math guy. And you said you asked yourself because then it gets more complicated. Whoever wrote the rule that the equation for the rule of two had to be one plus one plus zero equals two. That’s a really good question. And you asked yourself why can’t we change it to 0.65 plus 0.65 plus 0.70 equals two? And I checked your math and that does equal two. Where instead of picking wholesale two of the three, you give a little on each and your two is better than the other people’s two. Can you explain that further?

Danny Meyer:

I’ll do the best I can. I was really trying to explain to myself why had Shake Shack worked so well? It’s not fast food. I think fast food is brilliant at their version of the rule of two. You don’t go to a fast food restaurant. You go there because you expect it to be fast, inexpensive calories, but no one goes to buy a $1 hamburger expecting it to be the world’s best Angus beef like you’re going to get at Shake Shack. You just don’t. And they have a promise and they meet the promise.

So Shake Shack is never going to be as inexpensive as those, but it’s going to be a lot less expensive than when you get that same quality at a fine dining restaurant. Shake Shack’s never going to be as fast as those because we cook everything to order, but it’s going to be faster than if you get that quality at a full service restaurant. And Shake Shack’s also not going to have the same level of service as those because we don’t have waiters and waitresses, but that doesn’t mean we can’t smile and offer some hospitality.

Preet Bharara:

You get cranky people in that line sometimes.

Danny Meyer:

Yeah, but look what they have at the end of the rainbow. They get this amazing tray of burgers and fries and the milkshake that you are going to try one day.

Preet Bharara:

So I think culture is incredibly important. I think that innovation is incredibly important, and people will come along with innovations. AI is very complicated and it took a lot of scientists a long time. The internet took a lot of big brains to figure out. But I know I have a chapter in my own book about culture and another one about innovation. And then you marvel at why it took people so long to figure out that if you put a ketchup bottle upside down, you put the opening on the bottom, gravity is your friend.

Does it surprise you sometimes that there are these gaps in what people want commercially or from their political leaders for that matter, that there was this opening for you?

Danny Meyer:

It does surprise me. I think I’m really, really lucky. I grew up in St. Louis, Missouri, and I think that I know I love going to restaurants there growing up. And if I think back, besides the burgers and frozen custard, and for a while I even like Provel cheese on my pizza. But outside of those things, it wasn’t really the food. It wasn’t a great restaurant town when I grew up. It was a great hospitality town.

Then I moved to New York City in my early 20s and the food was amazing here, but there was no hospitality. And so it was kind of an obvious thing for me to say, “Would we like this great food any less if they treated you nicely like they do where I grew up?” And the answer was that became Union Square Cafe and then Gramercy Tavern.

Preet Bharara:

All right. So we’re going to talk about fries briefly because it is an object lesson that everyone needs to learn with respect to what criticism you listen to and what criticism you don’t. That’s incredibly important. And when I give advice to people, I spend some time talking about that from my own perspective. So the burgers are great, everyone’s loving them, but some picky people didn’t like your fries. How did you react to the criticism of the fries?

Danny Meyer:

Well, the picky people that didn’t like them were a couple of people in the media. Our customers, it turned out, were absolutely happy with our fries, but I listened to the restaurant critics because that’s what I was trained to do with full service fine dining restaurants. And I think the mistake was not listening to our customer. And the second mistake was being ignorant, the belief that fresh is always better with everything. That’s true with many things, but it does not happen to be true with french fries.

Preet Bharara:

So the debate was between using fresh potatoes that you would cut close in time to the preparation of the french fries versus frozen. I learned a lot about the virtues of frozen french fries-

Danny Meyer:

So did I, the hard way.

Preet Bharara:

… in reading this book.

Danny Meyer:

But only after having converted about 35 restaurants.

Preet Bharara:

It’s also a function of, it was a cultural phenomenon because that I remember more than the juice, that people cared so much that it was a sensation on the internet. It got a lot of attention. I don’t know if a formal petition was signed or members of Congress were lobbied about the french fry situation, but then you switched back and never looked back, correct?

Danny Meyer:

That is correct. We switched back to frozen fries, although we were determined to make them better frozen fries. So we got non-GMO frozen fries, crinkle cut, that’s what people like.

Preet Bharara:

So I went along with everything in the book and I was very copacetic with a lot of it because I think we’re on the same wavelength in a lot of things. And then you talk about the star system at the New York Times, and they give stars and it’s like one star, two star, three stars. And I don’t remember what all those mean, but that’s meaningful and important in the same way that there are awards and rankings in every profession and every business. And you had to close, I think it was when you reopened Union Square Cafe from 16th Street where I knew it initially to 19th Street where I still go.

And you open it and the Times critic of some repute came in, came three times, and you made yourself scarce because you were going to make everyone nervous, which was an interesting thing to learn that the head honcho makes himself scarce. And then you say, “So when the review was posted online that April and we regained our third star, I was beyond elated. I felt restored just as losing our third star had been one of the worst nights of my life. Earning it back was one of the most redeeming moments of my career.”

And so my question is, that surprised me a little bit, given everything else that you have said about where you find your success and the importance of the customer and the french fry experience such as it was. Why was it so redeeming that the one guy from one paper arguably, arbitrarily, but certainly subjectively gave you that star or not? Why’d you put so much stock in that? That surprised me a little bit.

Danny Meyer:

Good question. I think it’s pride. I know it’s pride. When you get a review from the New York Times or there’s a small handful these days of other mainstream media that give stars, it has the potential impact only in two categories and they both matter potentially. So the first one is, does that addition or subtraction of a star have any impact on your business or not? Number two, or maybe should be number one, is does the impact of that review bear on the morale of the people who work there? And the answer to that one is a thousand percent.

So if we want to attract the best talent to work in your restaurant, they want to have on their resume a restaurant of high repute. And it is terrible for morale for the people who work on the team to lose a star. It’s only happened once in my career so far. I certainly hope it won’t happen again, but you want to give them something to work towards. And whether I like it or not, I can pat everybody on the back all day and it’s not going to feel the same as getting an extra star from the New York Times.

So the morale part I think is even more important than the business part. We have yet to get a review, even a bad review that put us out of business. And we’ve also yet to get a review that dramatically, maybe the first time Union Square Cafe was ever reviewed in 1988.

Preet Bharara:

Because there must have been some skepticism of the first restaurant given your age and given the new concept. But once you’re established, people know who you are. When you open up a restaurant, it’s an event. Are you less connected to the review in terms of business?

Danny Meyer:

Yes.

Preet Bharara:

Yeah, that’s a good feeling.

Danny Meyer:

But you still care deeply for your team. You don’t want to see your chef could have spent her entire career working towards this moment when her restaurant is in the crosshairs of the New York Times. She gets to show her family, all of her colleagues. You care and I care.

Preet Bharara:

Speaking about of your team, you’ve always cared about equity and fairness, which I also respect. And you have enough influence that you, I don’t like the phrase thought leader, that term, but you are one and you’ve tried to engage in reforms from time to time, one of which seemed pretty good and seemed pretty smart.

A few years ago, you’d find fault for a long time but took action on tipping. And among other things, as you write in the book and as you said elsewhere, look, the cooks worked just as hard as the wait staff and the vagaries of tipping are such that it’s not really the fairest way to compensate people. Restaurants should increase commensurately the price of their food and then get rid of tipping altogether. How’d you think about that issue? Why was it important to you and why didn’t it take?

Danny Meyer:

Well, I think you just laid out why it mattered to me. It just felt… Imagine if you were the coach of a football team, and your team is down by 10 points going into halftime. And the offense is getting paid three times as much as the defense and you’re the coach and you’re trying to get everybody equally excited about coming back for the second half. That’s what it was like every single day and night with the tipping situation. And I just wanted to take that into our own hands.

It’s not legal in New York State, and you probably know a lot more about this than I do, but every state has its own labor laws. It’s not legal for tips to be shared between waiters and cooks. Waiters can share tips with bartenders and back boys, back waiters, but they cannot share them with cooks. But what we were able to do was to actually pay a commission, if you will, or a percentage of our sales to our cooks. And so when we brought back tipping after five years of trying to have this program called Hospitality Included, I didn’t want to erode the actual gains we had made in terms of narrowing the disparity.

And so in addition to welcoming tips today, we now pay a percentage of sales as a revenue share to our cooks so that they too can do well when it’s a really busy night. It’s a crazy system. It’s crazy that there’s different laws in every state. And I think what a lot of your listeners may or may not know is that there is an adjusted minimum wage for tipped employees. I don’t want to get too political on your show here, but all right, well, both parties were proposing, in fact, did propose that there should be no tax on tips. And it’s absolutely, I think, a misbegotten policy because that actually widens the gap between tipped employees and non-tipped employees.

Preet Bharara:

We’ve already made tips a sort of different kind of thing. By the way, you also point out, so if you’re a restaurant that happens to either on a regular basis or from time to time have a significant amount of tourist traffic from Asia or from parts of Europe, they don’t tip in the same way that… I used to wonder when I would travel why the wait staff seemed so happy when I left because I tipped 20%. I thought that’s what you did and you don’t do that elsewhere.

Danny Meyer:

I’m never happy when you leave.

Preet Bharara:

Well, I appreciate that. You’ve been very generous with your time. We could talk for hours and hours and hours, and I hope we can have that opportunity at some point soon. The book again, folks, is What Could Possibly Go Right: The Essential Journey to Scale an Enduring Culture. I just want to say that this is not a book about a person who’s in a particular business. The examples you give are obviously from the work that you have done, but they’re really applicable to every business, every kind of leadership position, anything entrepreneurial or not where you manage people, lead people.

So pick up the book, go to Danny’s restaurants, have some Shake Shack, enjoy the fries. Don’t overdo it with the sauce. Thank you, Danny Meyer. Good luck with the book.

Danny Meyer:

Great. Thank you so much.

Preet Bharara:

My conversation with Danny Meyer continues for members of the insider community. We discuss how his competitive streak has evolved throughout his career.

Danny Meyer:

Some people are competitive because they hate losing. I was like that for a lot of my career.

Preet Bharara:

To try out the membership, head to staytuned.substack.com. Again, that’s staytuned.substack.com. After the break, I’ll answer your questions about the Justice Department’s efforts to revive its criminal case against former FBI Director Jim Comey, plus some of my thoughts on civil disobedience.

Now let’s get to your questions. This question comes as an email from Calvin. Calvin writes: The Justice Department is asking a federal appeals court to revive its case against former FBI Director James Comey for allegedly lying to Congress. Does the DOJ have a realistic chance of bringing the case back from the dead?

Calvin, thanks for the question. Now, just to remind everyone and orient you, there have been two indictments of Jim Comey, one relating to false statements and the other which a lot of people call the Seashell Case. You have asked a question about the first one, the false statements case, which was brought, as you might recall, on the eve of the statute of limitations expiring and brought by someone who was dubiously put into the position of United States Attorney for a particular district and who had literally never been in the grand jury before and literally no prosecutorial experience, which practice point, not a great idea from the get-go.

This is a little bit more background. It was way back on September 30th of 2020 that Jim Comey testified before the Senate Judiciary Committee. Prosecutors later alleged, this was the basis of the indictment that you’re talking about, that he lied when he reaffirmed that he had never authorized someone at the FBI to serve as an anonymous source in news reports concerning an FBI investigation.

So five years later, as I mentioned, just on the eve of the statute of limitations running out, Comey was indicted on two felony counts, making a false statement to Congress and obstructing a congressional proceeding. Now, there’s a lot of oddity, as I’ve alluded to, with respect to that indictment. The interim US Attorney for that district, Erik Siebert, had reportedly raised concerns about the strength of the case, and he resigned after President Trump publicly called for his removal.

Then Attorney General Pam Bondi, remember her, appointed Lindsey Halligan, remember her? A former White House aide and former personal lawyer to Trump to replace Siebert as interim US Attorney. It’s interesting, by the way, that this entire cast of characters has now disappeared from the scene.

So the indictment was brought, but last November, just a couple of months after it was issued, a district judge dismissed the indictment ruling that Halligan had not been lawfully appointed. As a reminder again, federal law allows the Attorney General to appoint an interim US Attorney for 120 days. The judge concluded that once those 120 days expire, the Attorney General cannot appoint another interim US attorney to restart the clock.

Basically, that would be a successive end run around the important principle that the Senate provides advice and consent on certain nominees to important posts in the government. And so under a particular statute, in those circumstances, the judge held that the authority to fill the vacancy temporarily went to the federal district court to the bench. And so as you might expect, Comey brought a motion to dismiss the charges and a federal judge sided with him and the indictment was dismissed on the ground that Halligan wasn’t properly appointed.

By the way, as you might recall, there might not have been a problem if someone other than Lindsey Halligan, or Lindsey Halligan along with someone else, had gone into the grand jury to present the evidence and secure the indictment. But you had a dubiously appointed US attorney and she’s the one all by her lonesome with no experience committing mistakes in the grand jury after she was unlawfully appointed. That’s kind of a recipe for disaster.

So what’s going to happen next? At the appellate hearing last week, the DOJ lawyers argued that the district judge got it wrong. Surprise, surprise. They argued that the attorney general could make successive 120-day appointments and that even if Halligan’s appointment was defective, dismissing the indictment was too drastic a remedy.

But two members of the three judge panel seemed to be skeptical of the government’s position. One of the judges questioned whether the government’s interpretation would allow a bad faith administration, as I alluded to earlier, cycle through temporary prosecutors indefinitely. Another of the three judges asked what purpose the 120-day limit would serve if the AG could simply appoint another person when each term expired. What’s the point?

The third judge appeared the most receptive to DOJ’s arguments that any defect in Halligan’s appointment didn’t justify dismissing the indictment altogether. So you never know until a decision is rendered, but it looks like the Justice Department faces a steep uphill battle to revive that particular case.

But another reminder to folks, even if the case is revived because this ground is overturned, that wouldn’t end the legal fight. Comey’s lawyers raised a slew of other grounds for dismissal, including alleged vindictive prosecution and irregularities in the grand jury process that actually the lower court never addressed because it didn’t need to find more than one ground to dismiss the indictment. So if the indictment comes back to life, it could die again.

This question comes as a post in the Stay Tuned Substack chat from Victoria. She asks a big question: How do you feel about civil disobedience? Is it justified for things such as sit-ins or protests that block traffic or access to data centers or detention centers? So that’s a fairly big question and one that I’ve thought about, as I’m sure many people have over the course of my education and my career. It’s a difficult one to answer perfectly and cover all parts of the complexity of the issue in three or four minutes at the end of a podcast.

But I was struck by the question, particularly given current circumstances and some history that people may have forgotten. It may surprise some folks to hear that somebody who spent a lot of time as a prosecutor, as a rule of law guy, has support for the concept of civil disobedience in certain circumstances when it’s properly understood and responsibly practiced, and most importantly, when it’s done in a nonviolent fashion.

Nonviolent civil disobedience is very different from what some people call civil disobedience, which isn’t particularly civil, which involves the destruction of property and harm to people. I’m 100% against that in every circumstance. But civil disobedience in its nonviolent form, done in good faith and with great courage, can be an incredibly important force for justice.

That has been true both in the country of my birth, in India’s march for independence from the UK, and also in my adopted country, the United States of America, in the march for civil rights in the last half century. And I’ve always felt that there was a compelling kinship among people who were fighters for justice in both India and the United States in a way that I had not appreciated until a few years ago.

So the concept of civil disobedience can be traced back by some folks to the famous Hindu religious text called the Bhagavad Gita. The Gita doesn’t directly discuss civil disobedience, it explores a more fundamental question. How should a person determine and perform a moral duty when taking action carries profound consequences?

Now, fast-forward a number of centuries and you have the American philosopher, Henry David Thoreau. He read an English translation of the Gita and incorporated some of its teachings into his own philosophy. These were published in 1849. I was required to read it in school–I wonder if you were too–in an essay called Resistance to Civil Government, which is now widely known as simply civil disobedience.

Thoreau, other than arguing that the massive men lead lives of quiet desperation, also argue that individuals cannot excuse their participation in injustice by saying they were merely obeying the law or following the majority. When the government makes a person an instrument of injustice, that person has a moral duty to withdraw their cooperation. In that sense, the Gita’s teachings on duty, principled action, and detachment help shape Thoreau’s thinking about individual conscience and resistance to unjust government.

Fast-forward another half a century and you have Mahatma Gandhi. He encountered Thoreau’s essay while leading Indians in South Africa against discriminatory laws. Gandhi transformed Thoreau’s individual resistance into collective and organized mass action. He also made nonviolence central to the philosophy, and I think that’s essential. Practitioners were expected to accept suffering themselves rather than retaliate and inflict it on their opponents. So if you engaged in the breaking of a law, even an unjust law, you were supposed to suffer the consequences and accept the consequences.

Fast-forward again, a few decades, and those ideas returned to the United States through Dr. Martin Luther King Jr.’s studies on Gandhi, which taught him the method of organized nonviolent resistance that he and other civil rights leaders, as you know, used so effectively during the 1950s and the 1960s. So when I say that I have respect for and support for in certain circumstances, civil disobedience, I’m talking about this kind, the disciplined nonviolent tradition associated with Gandhi and King. That’s what I’m talking about.

An important thing to remember and put at the top of your mind is properly practiced civil disobedience is not lazy. It’s not easy, and it’s not a facile form of activism. It demands, as Gandhi and King demanded, extraordinary discipline and people who deliberately violate a law as an act of conscience must be prepared to risk arrest, prosecution, and even jail. And of course, the ability to remain nonviolent in the face of brutality requires almost unimaginable courage and self-control.

Just to recap the sort of cycle here of morality and fight against injustice, I’ve always been fascinated by that cycle. Consider after all that an American named King was inspired by an Indian named Gandhi, who had himself been inspired by an American named Thoreau, who had himself been inspired by an Indian text, as I mentioned, called the Bhagavad Gita. And that’s a cycle of inspiration that transcends race and religion and creed and color. And I’ve always thought that the mere fact of that cycle is deeply inspiring if you pause to think about it for even a moment.

Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Danny Meyer. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners find the show.

Send me your questions about news, politics, and justice. You can reach me on Twitter or Bluesky @PreetBharara with the hashtag #AskPreet. You can also call and leave me a message at 833-997-7338. That’s 833-99-PREET. Or you can send an email to letters@cafe.com. Stay Tuned is now on Substack. Head to staytuned.substack.com to watch live streams, get updates about new podcast episodes and more. That’s staytuned.substack.com.

Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The supervising producer is Jake Kaplan. The lead editorial producer is Gloria Teal. The editorial producer is Claudia Hernández. The audio and video producer is Nat Weiner. The senior audio producer is Matthew Billy, and the marketing manager is Liana Greenway. Our music is by Andrew Dost. I’m your host, Preet Bharara. As always, stay tuned.