Not being a foodie (food aficionado/gourmand) myself, I hadn't heard of Danny Meyer until stock picker/funnyman/investment coach Jim Cramer mentioned him on Mad Money. Danny Meyer was mentioned numerous times of having picked a handful of stocks that met his standards, which he dubbed his "Hospitality Index" (more on this later), and how great those stocks had done in the market.
Was there something to Danny's restauranteur flair that could be applied to a wide variety of stocks from Banks, to Industrial stocks, to Telecom? Apparently there was. But first, who the heck is Danny Meyer?
Danny grew up around food, and Hedonism, his whole life. The family would spend extended periods of time in Europe (particularly Italy and France) when he was growing up, and in his twenties, Danny spent extensive time there working for his father's tourism company. All the while Danny went from restaurant to restaurant, cafe to cafe, sampling the very best pastas, seafoods and wines Europe had to offer.
Over the years, he built up quite a nest egg from his great tourism job, and later a sales job in New York. But it didn't feel right to be a money guy or a salesman. He was a foodie at heart. All his friends were in the restaurant business, and he felt it was time to jump in.
Danny tells the story of how he grew from his very first Union Square Cafe, to a massive Group of First tier New York eateries, from French food, to Indian, and American Burgers, and how he learned to be a great boss.
There had to be something to this guy. Something everyone else was missing. Danny lays his cards on the table:
"Hospitality exists when you believe the other person is on your side."
Why is that sentence so striking? Because we remember overwhelming positive feelings in rare cases where that sentence has been true, and we associate cynical, cold feelings whenever we feel a company is just trying to take advantage of us. If Danny's restaurants embody this message, is it any wonder he has so many regular customers? Is it any wonder he's been successful in so many different styles of cuisine? Is it any wound budding foodies desperately want to work for this company?
Some of the anecdotes that relay Meyer's version of Hospitality will really blow you away. Hardly anyone seems to get what Danny has: Today's dollars don't matter, it's Tomorrow's dollars that matter.
In the restaurant business you have to have 3 great servings before a customer will really fall in love with your restaurant. Great ones. One reason Danny's company has been such a hit is they go the extra mile, which is why people become hooked, and then become regulars. What do I mean by 'go the extra mile'?
One particularly amazing story from "Setting the Table" is a couple coming into the restaurant and revealing that it was their anniversary that night. It turned out the man had a favourite bottle of Champagne waiting for them at home. When he asked the Maitre D if it was alright sitting in the freezer,he started to panic: the Maitre D explained that, left unattended, his Champagne would explode when frozen! The man wanted to cancel the dinner, and rush home to move the Champagne, but the Maitre D wouldn't let that happen. Knowing their anniversary night would be ruined if the couple had to leave the restaurant, the Matrie D offered to go over to his house, and remove the bottle from the freezer. He even left a box of Chocolates next to the fridge as congratulations on this special occasion. The couple was stunned at this man's willingness to go the extra mile.
I know what you're thinking: "That kind of thoughtfulness, that kind of devotion, care, for the customer… is that even possible? What about profits? How can they run a business like that?? "
The same way the rest of the 'Danny Meyer Hospitality Index' companies run their businesses: they know that by being the best, and creating amazing moments like that one, they'll have hoards of 'regulars' night after night, year after year. Recession, Boom, it doesn't make a difference. They do quite well.
There's obviously a ton of stuff in here, I can't go into it all, but I want to highlight something so brilliantly simple Danny did early on in the days of Union Square Cafe: played Sports.
He took out a sheet of paper and cooked up anything negative he could think of about the restaurant. What would detractors say? "The location is bad? The food is too expensive? I have to wait too long for a reserved table? The tables are too small? The wine list is too short?" No matter how small, Danny went down the list of every conceivable weakness and instituted policies to not just meet those complaints, but turn them into strengths. He called it playing Defense. For Offense, just look at all the great things the restaurant was doing and could do.
Here's the brilliance: just like in sports, your Offence doesn't matter if your defence has holes.
in Sports, they say, Defence wins Championships. If you can handle Defence, the Offence is a breeze (especially with such great players/servers and a great coach/chef). And Danny certainly has done just that. Everyday, thousands of New Yorkers descend on his great restaurants, not because their hungry (they are), not because the food is of such delectable quality (it is), but because of the way the servers at any of the Union Square Cafe Group Restaurants makes them feel. And that's something every single company can do better at.