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Hello, and welcome to the Advice Line on how I built this lab.
I'm Guy Raz. This is the place where we help try to solve your business challenges, and each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you.
And so, So, if you are building something and you need advice, go ahead and give us a call, and you might just be the next guest on the show.
Our number is 1 -800 -433 -1298.
Send us a one minute message with your name, a bit about your business, and the issues or questions that you'd like help with, or you can send us a voice memo at hibt at id .wunderi .com, and make sure to tell us how to reach you.
also don't forget to sign up for my newsletter it's filled with insights and ideas from the world's greatest entrepreneurs you can sign up for free and guy Rawes com or on substack and we'll put all this info in the podcast description all right let's go joining me this week is Jonathan Neiman he's the co -founder of sweet green Jonathan it's great to have you back on the show guy it's great to be here with you so you were first on the show back in 2020 I think you were my last in -person interview before Kove it and it was It was like a week later, and for anyone listening, if you haven't heard
that story, we will put a link in the episode description of this episode, and it's well worth going back and listening to it.
It is such a cool story.
You guys started Sweet Career, in 2007, you started with your friends Nicholas Jamay and Nathaniel Roux, and you guys opened it, a salad shack in Georgetown in Washington, D .C.
You guys were students there.
I know the location well.
I used to live there.
Since then, you guys have grown into a huge national chain of almost 250 stores all over the US and I think just about a year, Jonathan, after your episode aired, this is in November of 2021, you guys went public and you are now the CEO of a publicly traded company valued around $3 billion, which is just incredible, what a ride.
Well, thank you. Oh, first of all, never forget that day recording with you because it must have been exactly five years ago, almost to the day.
because when we flew up in the morning everything was fine, and I remember landing in San Francisco and getting a call from a board member, Steve Case, and he's like, are you ready for what's about to happen?
I'm like, is this really that big of a deal?
We recorded, we left, and within hours, you know, the news started coming out.
And so it's been, it's been quite a wild ride the past five years, and so much was happening.
Like you guys were going through all kinds of changes with the business.
I think your entire corporate team turned over and you had to kind of start again and amazing things that have happened and amazing innovations which I wanna ask you about.
But before I do, I wanna ask you some, first of all, give me a quick update of where we are now.
I mean, a lot of people have heard your episode of How I Built This.
A lot of people have eaten at Sweetgreen.
I know it well, I have my go -to...
I love the lemon juice, olive oil, salt and pepper.
That's my thing. I love it, very healthy.
Tell me a little bit about where you guys are right now and just a kind of a taste of where you're headed.
Absolutely, so today Sweetgreen has 250 locations around the country, we're now in 22 states.
And since we last spoke, a few things we've been focused on, one has been a broadening of our menu.
So while we started as more of a salad shop, our vision was always more around connecting people to real food and leveraging the supply chain we had built and the scratch cooking and more the ethos and the brand to go beyond just salads.
So, over the past couple of years, we've introduced protein plates, we've introduced caramelized, garlic steak.
We had a huge launch introducing ripple fries.
Ripple fries? Yeah.
These are air fried French fries.
Exactly. Sweet greens to take on the classic French fry.
Only five ingredients air fried, no seed oils cooked in avocado oil.
Just about transparent ingredients, cooked, great quality food cooked simply.
And the vision is to redefine fast foods.
It's kind of this idea of, you can have your cake and eat it too, there's a permissible indulgence.
So one has been this menu expansion and broadening.
Obviously, we've been opening a lot of restaurants.
And then there's been a new innovation that we've been working on which is called our Infinite Kitchen.
We've always been huge innovators in technology, thinking about ways to leverage technology to improve the experience for customers and team members.
And the Infinite Kitchen is our newest way of doing that.
It is an automated assembly line.
So the way it works is you still put in your order we still scratch cook and prep and cook, you know Make everything from scratch, but the actual bowl is now assembled by a machine by robot by like by hands It's not a hand.
It looks more like a Giant kind of mainframe but like giant like refrigerators They're clear tubes where you can see the food and there's a track underneath it Oh, wow, and it shoots out like lettuce or shoots out the cabbage That's exactly right.
And every single dispenser had to be engineered for that ingredient.
I bet. Yeah. So to get the perfect dispense, you know, thinking about the different viscosity levels of different dressings and different items. And you gotta make sure it doesn't get blocked up.
Yeah. With kale. Exactly.
If everything was was as easy as almonds, this would have been an easy exercise.
But you have to make it so that it plates perfectly.
It doesn't all sit on top of each other.
So, you know, the bowl spins around and customers are loving it.
We can do 500 bowls an hour, perfect consistency, the food quality is better.
We're seeing great results from a business perspective, as well, as, you know, we're able to run the stores with significantly less labor and I think a better quality job for our team members.
So, how many of these locations do you have now?
We have 12 open today, and this year we'll open at least 20 to 25 new ones.
So, it's interesting, because we had Steve Elza Chipotle on a year or so ago, and he talked about trying to do an automated concept to New York, which I think they are doing.
I don't know where it is now.
But when you go into one of these stores, are you ordering from a human or do you order from a screen?
So, you have the option of ordering from a human that has a mobile tablet where they can take your order.
Okay, and they're walking around, they can go up to you.
That's exactly right.
So, the idea, the vision for this is actually to give more hospitalizations.
and more service. So we save some labor on the menial tasks so we can lean in to more of the service side of the business.
We also do have kiosks and you can order on your phone.
So we have those options available for you.
But yeah, again, the idea is how do we make it feel more human, more theater, more soul, and the technology just be an enabler to that experience?
Compared to let's say a non -automated store, how many people do you need to run the automated store?
So like all of our stores, it depends on the time of day.
You know, a peak lunch in a New York store is much more than an average store, for example.
But on average, 30 % to 50 % less labor at the store level.
So you're running it with far fewer people.
But what's interesting is our turnover, our employee turnover is a really critical metric for us because the more we can hold our team, the more productive they are, the more they know their customers.
Everything kind of starts from there.
But the turnover in the stores with the Infinite Kitchen is significantly less than our classic store.
Because there's less stress.
There's less stress.
It's a little bit...
It's an easier job to work in.
Jonathan, before we get to our callers, I'm curious.
When you started Sweetgreen, you had that location in Georgetown, it was the three of you running it and then you had more people in.
But you had a really clear vision.
Like the dorm food sucked.
You wanted really great, healthy food.
And I remember going to, you know, those restaurants in the early days and...
But they've evolved over time, 250 locations, even though they're corporate -owned and managed.
It does become harder to maintain the culture, maintain the quality, maintain the commitment by the staff.
It's very, very rare when you go to a chain of restaurants and they are all entirely consistent.
I think In N Out is an example of a brand that does it very well.
I don't know how they do it.
How do you make sure that they are all operating at the same level?
So you're asking the the billion or maybe the trillion dollar question because that is the business of restaurants.
I think the you know, the way we think about it is in a balance of art and science.
The science is all of the tools, how do we make it really easy for you to do your job, whether it be you know, software in the back of house or helping you or you know AI to help you order the right amount of food, or we're now leveraging AI to schedule labor, kind of make some of the routine things easy for you, but the art is really really important.
The art is leadership, and the most important position at Sweetgreen is the general manager of a restaurant.
We call them the head coach, and one of the critical metrics we track is our stability at the head coach level we know if we can get a head coach to stay in their store for a few years everything gets more consistent and all the numbers get better so really figuring out what's the right profile for a sweet green employee and the amazing thing about the restaurant industries it's one of those places that with not a lot of experience or education you can start here as a you know work in the line and if you work hard you can be a manager making over a hundred thousand dollars a year in less than three
years and for us those are best managers.
Our best managers were promoted from within.
They're the ones that preserve the culture and understood the business kind of from the front line.
Yup. Jonathan, why don't we take some calls, because I know people are super excited to have you on and to get your advice.
Why don't we go ahead and take our first call.
Welcome to the Advice Line.
You're on with me and Jonathan Niemann from Sweetgreen.
Please tell us your name, where you're calling from, and just a little bit about your business.
Hello, Guy. Hello, Jonathan.
My name is Dini McCullough Amosurutia.
I own a small pie company called Dini's divine pies in Rockville, Maryland.
And we make all of our pies in small batches, handmade using simple ingredients, all butter crust and a whole lot of love.
So that's the ethos of this company.
Cool. And is it like tell me?
I mean, what kind of pies?
I really like to draw on my own background.
I'm half Mexican half Irish American.
And so right now we're working on some Irish inspired recipes.
Other times I am putting together, you know, I have like a mixed berry made with mezcal for example.
So I really like to play with my my background, but also to be very creative with the recipes.
And how long has the business been around?
So it started during the pandemic.
I was actually recently divorced.
I was dating my former yoga teacher, and he really liked key lime pies.
So I made him one for his birthday that year.
That was October of 2021.
And, you know, you do crazy things for love.
So I just busted out the best key lime pie I could imagine.
I had never made - you know, I'm not a baker.
I didn't grow up baking or anything like that.
So anyway, he said this is the best key lime pie I've ever had in my life.
there's a market for this.
I'm going to prove it to you." He took it to work the next day.
Then that fall, basically fall and winter, people were asking me to make not only the key lime pie, but then they'd say, well, that was so great.
Can you make a strawberry pie?
Can you make whatever?
I, having never been a chef or anything like that, I learned a lot on YouTube.
I read a lot, and figured it out.
And lo and behold, now three years later, I have a really thriving small business.
I quit my job, I'm a lawyer.
I'm a public interest attorney, I resigned last spring and I'm all in.
So I'm reluctant to ask this because I'm imagining the Andy MacDowell, Hugh Grant movie version of this story.
What happened to the yoga instructor boyfriend?
That's a secret question actually.
You know, he moved away.
He made some choices and it's okay.
inspired the business.
He did and I had this amazing thing.
And you know, it's all good.
It's all good. We can still make a movie out of it.
We can. He just had a small role in the end.
He did. Yes, good part.
Okay. Jonathan Neiman.
First of all questions for Deany.
Where are you selling the pies?
I have a small little brick and mortar that's in a not a really great strip mall and I'm doing all of my production out of a gorgeous huge commercial kitchen where I am right now.
But I see that I need to pivot and really think about if I'm going to scale up the way that I am, I have to diversify, I think, my revenue streams. And so I'm pivoting away from the retail and focusing more on wholesale and pop -ups and I'm on DoorDash as of last week.
Part of what happened in the beginning was that I wanted, I was baking out of my house, so I approached a winery and they said, hey, you know, bring us five pies of your favorites and, you know, we'll try them and no promises.
So, I did that, and they said, you're on the schedule for Mother's Day.
That was 2022. And they said you're going to need to be licensed and shirred and be prepared to, you know, serve pie to 500 people.
So, having, you know, again, I figured it out.
I found a shared commercial kitchen space and squeezed a lot of key limes and rolled out a lot of dough by hand and peeled apples by hand and was incredible.
Before we forget, you brought a question for us.
What do you need help with?
What's very important to me in all of this is that the company retains its heart and soul.
I think part of why it has taken on a life of its own is because there's something about these pies that make people joyful.
I've made so many friends, I've gotten to know customers who have now become very good friends.
It's kind of like a little neighborhood hub in a big city.
Assuming that I can scale this up, and I have some conversations actually this week that are happening with a major national food chain, and they're already asking me questions about, well, are you willing to change a name?
Are you willing to change a logo?
And things like that.
Jonathan, I want to bring you in here because you have 250 locations, and we talked about maintaining a brand and quality.
And I think that Sweetgreen's done a great job at it, obviously, Deenie's in a different spot, but as she thinks about growing and expanding, how can she keep the ethos that kind of homespun feeling with a brand that might sell in a dozen or two dozen different places?
You know, I really think it starts with the ultimate vision you have and what your goals are and what's gonna make you happy because it's from the way I hear about it so much of it is about the love you put into it and the connection to your customers and scale will change that your business will change you won't you know I mean I'm in restaurants a lot and I meet my customers but it's not the same as when I was working in the first store and I knew all the customers and I remember you know my CFO tells this story he joined us with the exact almost exactly ten years ago he's like you know these
guys had a really beautiful business.
They almost owned all of it and they could have slowly opened a store a year and owned all of it and had full control of this high -quality experience.
But that wasn't the vision.
The vision was, we want to be the next version of McDonald's.
So we had we built it to be that.
It was never built to get to 250.
It was built to get to 3 ,000.
And I think you have to kind of think about what is...
like is that what you want?
Or do you really want to have the known for the best pies that are really high priced with great margins and you're sold in the best restaurants in the world and you're on gold belly and you're better at your key lime pie is known to be better than Joe Stone Crab.
And that's what's gonna bring you joy you're still actually baking the food so I think you just I think where some people get suckers they think bigger is better you know and it's not always better because you're gonna actually to get big you have to go through years and years of less profit, I have friends today that have like really nice businesses that they own 100 % of don't have investors do what they love, and make really, really good money, oftentimes, they make more money than then people who says they're doing 10s of millions of dollars that aren't profitable.
Look, Dini the question is, like, again, to Jonathan's point here, do you want to put resources and time in trying to get into stores and, and and see if this can really drive business directly back to your business?
Or do you wanna focus on creating a premium product that people will line up and pay for?
And it's an important question to ask yourself because you could charge a premium price for what you're making.
You're using high quality ingredients, it's all handmade, it's really special and local.
I mean, there's a pizza place I used to go to in Berkeley and the guy only opened from 5pm to 8pm, and you had to order it and Venmo the guy.
It's a well known place.
I think it's called Amelia's Pizza.
And it is amazing pizza.
And he sells out every single day, and he's only open 4 days a week.
He controls his schedule, he controls his lifestyle.
You're probably spending a lot of your time now baking, right, I imagine?
I mean I spend my time doing it all of it so it's you know I'm doing the social media the everything right now and that's something as I'm growing I have to figure out how to you know manage but I do bake but I do have you know my I have two chefs who are part -time and that's made a huge difference because I can just give them the recipes and they're off and running and I can you know go try to you know talk with people about wholesale opportunities or work on the social media stuff.
Yeah, I mean, Jonathan, I mean, I think it's a natural human instinct, right, to want to expand, right?
As you did, as our show has, everybody wants to do that and I think there are good arguments to be made to do it.
If you are in Dini's position here, and you're thinking about, okay, how do we take this from the shop in Rockville, farmers markets, to at least a bigger regional presence?
what do you think our interesting options for her?
I'm actually very bullish on on brick -and -mortar right now.
I think that in this world, and you said of kind of everything digitized, we're seeing a lot of energy around the analog experience again, and the power of building community in a physical space.
I'll give you an example in our business, when delivery became a thing, we're like, oh maybe we need restaurants because people know the brand we can open these kind of ghost kitchens and we can just deliver to people through either our app or all these other uh all the all the marketplaces well what's interesting is i can have delivery coverage in an area and then i can open a restaurant there and the whole thing lifts so the physical presence of an actual a place actually can help lift your wholesale and the rest of the business.
You have to make sure you can afford it and build it out and all of that.
And with real estate, I'll say real estate markets are relatively efficient.
When rent is really, really cheap, there might be a reason it's really cheap and that the old adage of location, location, location, it's means something.
It's real. Like even today, a brand like Sweetgreen, we can market, we could all of this capabilities.
If we take a bad location, it doesn't work.
You know, I just had an idea, Dini, which is, you know, especially in where you are, it's all over the country, right?
There are often incentives to bring local businesses to a new development, right?
Like, I think here in the Bay Area, there was there's a famous fried chicken place in Oakland called Bakesale Betty's.
And then when the Chase Center where the Golden State Warriors play opened up, they invited them to open a location there.
because it's local.
You go to San Francisco airport and there are all these local restaurants there with locations there.
And I imagine that to Jonathan's point, this idea of authenticity of analog experience, like I think that's so true.
I'm seeing it anecdotally and I'm sure the data is gonna back this up soon, which is a brand like yours, which is it's rooted in Rockville, it's rooted in the Maryland Virginia area.
I bet that there might be opportunities to partner with, you know, somebody who's building some kind of, you know, new development or maybe a food hall or something where your presence will be really welcome because you are local and I don't know exactly what's available but there might be something out there.
I love that idea guy you know, you've probably been to Union Market.
Yeah, exactly like Union market.
Union market like a perfect place for that and you could you have the dispute the people that go there are looking for those Those sorts of things.
It can also, you know, function as your bakery.
So instead of the rent space, you're renting there, but then you have a physical presence for discovery.
So I really liked that idea.
Yeah, I think there's a lot of cool opportunities.
Dini, good luck. Thank you.
The company is called Dini's Divine Pies.
We are cheering you on.
Thank you. And we'll keep tabs on you.
Thank you very much. It's so nice to meet you both.
Thank you. Best of luck, Dini.
Great to meet you. Bye.
Yeah, I mean I feel like especially with a business like this, where people are willing to pay more for...
Like when you're seeing the people actually made it, and you can talk to them and it's a sense...
It's like wine, it's like a terroir, like you're tasting a sense of the place.
In this case, Rockville, Maryland.
And you know what I mean?
So I feel like there's something there about a willingness to pay more for something that you can really connect with.
Absolutely, and I also think you've probably heard of the Japanese term ikigai.
Yeah. It also matters, what are you uniquely good at, what do you love to do, what you can be the best in the world at, and make money, and you've got to find that intersection.
So from what I heard from Dini, she loved the actual hands -on piece of it and that connection, and scale may come at odds with that.
and there's a way to have a very successful business and brand and keep it tight still and do the things you love.
We're going to take a quick break, but when we come back, another caller, another question, and another round of advice.
I'm Guy Raz, and we're answering your questions right here on the Advice Line on How I Built this Lab.
Welcome back to the Advice Line on How I Built This Lab.
I'm Guy Raz. And my guest today is Sweetgreen cofounder Jonathan Niemann.
Jonathan, let's take another call.
Let's do it. All right.
Let's bring in our next caller.
Welcome to the Advice Line.
You are on with Jonathan Niemann, cofounder of Sweetgreen.
Welcome. Please tell us your name, where you're calling from, and a little bit about your business.
Yeah. How's it going, guys?
Well, Guy and Jonathan.
My name is Matt Pinstine.
I'm calling from Gloucester, Massachusetts.
And I am the founder of Underground Mushroom Co.
I produce gourmet mushrooms for local farmers markets, at home deliveries and restaurants in the area.
Nice. Well, welcome to the show.
Thank you for calling.
And so you've got a business.
You're growing mushrooms. where are you growing the mushrooms?
Because Gloucester is a, I don't know if I'm about mushroom cultivation.
I mean, I eat them.
But I think Gloucester's pretty cold for a big part of the year.
So I'm assuming it's like indoors, like heat lamps, a kind of like, that sound like you're growing something dodgy, but is that right?
Yeah, so the name Underground Mushroom Co.
my intention was to start in a basement just for that very reason, less fluctuation of temperature And consistency is really the name of the game when you're growing mushrooms. They like about 63 degrees.
And I figured the heating and cooling throughout the year would be more advantageous in a basement.
So that's where I started.
You are growing in a basement?
I am, yeah. And you know, as far as retail space is concerned, you get cheap rent.
I rent 2 ,000 square feet of commercial basement space.
It used to be a lobster pound, so they used to wholesale lobsters out of there.
And I took one of the lobster pools and converted it into a mushroom grow room Oh, wow So it's a 12 by 20 foot space and it allows me to grow anywhere between 150 to 300 pounds of mushrooms a week Wow, what's your rent like there?
Oh, it's like 1600 bucks a month.
Oh, so it's nothing.
It's super cheap. Yeah I mean one of the things is During King tides, I've been told that it floods I mean there was flood damage in the space But I saw that and I'm like, what a great place to get my feet wet.
Yeah, exactly. So how do you make sure that the mushrooms don't get flooded out if there's king tides?
Well I haven't run into that problem yet.
I mean that's probably the impetus to move to my next space.
This space right now is kind of a proof of concept.
But I've already become profitable and I love what I do, so I just want to take this to the next level.
What are you doing in sales right now?
So, the cost of production is actually pretty cheap.
I can produce one of these substrate blocks for only $6, and I'm getting about a $40 return on that investment.
How many mushrooms in a block?
It's about two and a half pounds of mushrooms per block, and not only is it the cultivation of mushrooms, but I actually sell at -home grow kits that I can ship anywhere throughout the country.
I also do tinctures that I sell at farmers markets and Yeah, what's the final product?
Are you turning it into is it more functional mushrooms like the lion's mane ashwagandha those sorts of things Yeah, or is it?
Tell me a little bit more how it shows up for the consumer Yeah, less of that more of just the gourmet angle.
Oh, gourmet. Okay. Gourmet mushrooms. Yeah.
Yeah I studied a sustainable food systems and college and worked on farms and I got into mushrooms primarily because it's the most sustainable food out there.
I mean because they're decomposers, they take sawdust which otherwise would be wasted and creates a viable healthy food source.
Wow, so you're selling to restaurants mainly.
Yeah, yeah, high -end restaurants in the area.
That's awesome. So the idea is to create a, I'm thinking here in LA for example, we have a famous farmer named Alex weiser is like you want to be that The guy known where the best restaurants are serving your mushrooms, and they're putting your name on the mushroom On the menu they're putting your mushroom name on the menu as a selling point.
Yeah, you got it I mean I get a real thrill from seeing my name on a menu and the way that I go about selling these mushrooms I really just knock on the back door or restaurants and I get a real kick out of talking with chefs and and explaining you know, different recipes that they can incorporate my ingredients into.
And you said you're at the farmers markets as well?
Yeah, I am. And I'm a one -man show right now.
So I haven't hired anybody, but I'm able to hold it down, all the spinning plates I can do myself.
Before I forget, what question do you need help with?
What's your question for us?
Yeah, so the question has to do with scaling, but not just scaling to scale.
I think one of the ways that a lot of people fail in this industry is that they grow too big, too quickly.
Mushrooms have a limited shelf life.
And yeah, as a result, I would rather people start finding me through virtuous food choices.
So I was wondering, you know, since Sweetgreen really prides themselves on people making healthy food choices, how do you go about that?
How do you how do you shift people's perception of choices they make and what you're putting out you know it's interesting because you know what with Sweetgreen when we started the business was very much positioned around healthy you know around the fact that it's healthy and that's still a core part of the brand what we've learned is well a lot of people say they care about health when it comes down to making a decision about what they're gonna eat its taste convenience and value.
The health is kind of there right you know, right in the number four range.
And so where we've shifted a lot of what we talk about and I think this is going to be very true for you, is all the things that we do around our supply chain and our made -from -scratch is really to make it taste better.
And yes, it happens to be really good for you and good for the environment, but in terms of like what we're trying to kind of position more so is we do this because it creates better flavor and I think for you that's super true and I think that's that's why for example we do these partnerships with these chefs it sounds like you're already on it to kind of be the mushroom farmer to the greatest chefs yeah and I think if you do that for a little while you will build an amazing brand and the second thing I would do is figure out how to build a little bit of a brand around yourself you know I like
you how do you become Kind of like what Joel Salatin was or what Al Wiser is kinda you become a little bit of a famous farmer I don't know if you've seen farmer tick -tock There's a lot of cool stuff going on and I think I have it Yeah, if you could go just really authentic.
Here's how we do it on, you know and kind of Honestly, you know, there's a lot of people that talk that there's no brands anymore It's just really people Right and it sounds like, you know Give in your education background and what you're doing if you can take people behind the scenes on how you do these things kind of show them your personality.
I think that plus the positioning with chefs and then being at the farmer's market, I think is a really kind of cool winning combination.
Yeah, thanks, Jonathan.
What are your constraints, Matt?
I mean, it seems like the business is, you don't need a whole lot of money to grow.
I mean, it seems that the cashflow can kind of help you fuel the growth of the business.
Is that true? Do you have any, are there any resource constraints?
Yeah, I mean, I raised $50 ,000 initially through a company called MainVest. It's like a crowdfunding, not like a GoFundMe but there is a rate of return that my investors are expecting.
I got a hundred and six investors.
MainVest I think went out of business, right?
That's correct, yeah.
Now it's on me to allocate those funds back to my investors.
The platform was doing it for you but now they're not doing it.
Correct. I have to find another platform when I get to that point.
But between all my expenses and trying to keep myself afloat, I've yet to be able to pay back my investors, but that's the next hurdle, that's the next goal.
And I don't know if it would be foolish for me to go out and do a second round of investing, having not started paying back my initial investors, But that would certainly speed things up getting into a second location.
Are you supply constrained, or is it like if you had more supply, you'd be selling?
Oh, yeah. Certainly.
I mean I'm selling out everything I produce.
Wow. Well, that's a great sign.
I think, absolutely.
Yeah, so here I've survived the winter.
We're coming into the spring.
Tourism's coming back to Gloucester, Salem, Beverly, the whole area.
I just bought a second sterilizer, so I'm going to be doubling my output and that'll free up some cash and hopefully I'll be able to hire someone to help me, but money helps everything.
So yeah, I could certainly expand with added capital.
Well, it seems like you have some really interesting opportunities especially now that – I mean here's – you're selling everything you can grow which is a good sign.
It means that you have to figure it out, right?
You got to figure out a way to expand your footprint and whether you can do that through cash flow or whether you can take a loan out.
I mean it's possible you might be able to get an SBA loan and that could be another interesting way to go but I mean it's a great sign.
It means that you're producing something that people want.
You might have some racing power.
Yes. Yeah. I do sell my product for three, four dollars over what distributors are selling theirs for.
But it's because the quality of my product, my chefs want to purchase something local.
And I'm nervous right now, I can hear it in my own voice.
But when I'm face -to -face with the chef, they trust me and want what I have to sell.
So not only can I grow them, I can sell them, and I take that as a point of pride.
Yeah, it's awesome Matt good luck, man.
The business called underground mushroom Co company co.
Yeah. Congrats. Good luck Congrats Matt.
Can't wait. Thanks so much guys Yeah, pleasure chatting with us.
Take care of you. Yep.
Bye. Bye. I Just now man to grow mushrooms tonight.
I'm gonna sauteed mushrooms You could take a Portobello hidden it's like a burger.
It's so its so good so good for you I mean it's an amazing amazing plan All right, we're gonna take another quick break we'll be right back with one more caller.
Stay with us, I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.
Welcome back to The Advice Line on how I built this lab.
I'm Guy Raz and today I'm taking your calls with Jonathan Nieman, co -founder of Sweetgreen.
So Jonathan, let's get back into it and take another call.
Hello, welcome to the advice line you're on with Jonathan Nieman of Sweetgreen.
Welcome to the show.
Please tell us your name, where you're calling from and a little bit about your business.
Hi, Guy. Hi, Jonathan.
My name's Joey Cornell.
I'm calling from Villa Park, Illinois.
My business is Dak Dak Wings and we specialize in crispy double fried wings, fresh cut fries and unique house made sauces.
Yum. Awesome. Welcome to the show, Joey.
And where is Duck Duck wings located?
Yeah, so we currently have one brick and mortar location about 10 miles outside of Chicago in Villa Park, Illinois, and it's a late night place open like super late night or what are your hours?
Yeah, so we're lunch and dinner.
Mostly and we're open for the suburbs fairly late 10pm on weekdays and Fridays and Saturdays till 11pm and you've got a brick and mortar and tell me a little bit how you give me some back.
Are you a chef or is that your background?
Are you cook? Did you work in restaurants?
How did you? How did you start this?
So I got super involved with our high schools culinary program when I was about 15 years old, and I just dove into it and so on top of spending all the time I could in the culinary department, I was working at a local restaurant and kind of in tandem was doing cooking competitions and you know some illegal catering perhaps for people in my community but quickly decided to go to culinary slash hospitality school so I briefly attended Johnston Wales in Providence Rhode Island.
There's culinary school there yeah yep yeah I thought to meet like -minded people is a good place to go so I was working full -time and I tried Korean style wings for the first time and was blown away with the texture it's uniquely crispy, sticky.
The chicken is mildly flavored versus being heavily seasoned and it's just a amazing experience.
And then when the pandemic hit, I came back home to the Villa Park area and was upset that we didn't have anything close to it for Wing.
So yeah, started writing a business plan and looking at spaces to lease, Finally, after about touring 70 locations, I was trying to keep it small, takeout only, almost a COVID -proof concept.
And I found a former Little Caesars that I was able to retrofit into what I envisioned and yeah, just with my own cash.
And I was able to get a small SBA loan and that's what started our retweeting.
Wow. How did you get the cash to do it?
I'm asking for a friend, people listening.
How'd you get the cash?
No, for sure. believe it or not guy when I wasn't recipe testing or working on the business plan I was driving Uber Eats and DoorDash.
Nice. Nice. I was. That's how you saved the money?
Yeah and when people were at home the roads were clear I was driving a little fast trying to go from order to order and that's how I saved most of the money.
It's a great story you probably learn a little bit about part of your business.
Thank you Jonathan yeah.
How much did you save from Uber and DoorDash?
It ended up being close to fifty fifty thousand Amazing yeah, so I was able to then get a SBA loan for a little more than that and When I say, you know opening a restaurant on a shoestring trust plus building out everything, you know website online ordering that's about as tight as you can do a Restaurant for most people I talk to say, you know a restaurant of similar sizes three to five hundred thousand I can attest to that.
That is Yeah, that is I we made it work and came close to running out of cash.
But here we stand today almost three years, a little over three years later.
So wow. And tell it tell us about what's your challenge?
What's your question for us?
Yeah. So the question that I had with future restaurant expansion in mind, how much should Should I focus on our primary product of crispy wings and fresh cut fries?
And how much should I lean into potentially leaning into trends, whether that's frying and beef tallow, offering a chicken sandwich, chicken tenders, etc. Interesting.
Interesting Jonathan.
I think it starts where I was going to ask you is understanding who your customer is and a little bit on where the brand is positioned.
Is it positioned kind of trying to compete with Wingstop, trying to be a healthier, more premium version?
Cause I think a lot of the way I'd answer some of those questions depends on which part of the market you're trying to capture.
Yeah, definitely not healthier.
Sorry, Jonathan. Chicken wings and fried food in general is indulgent, so I kind of take the Todd Graves approach is that the day someone wants a salad, they're gonna get a salad.
If someone wants fried chicken, and they're gonna get that either way.
But with that said, the product is definitely a premium.
We use all natural, you know, antibiotic free chicken, our coleslaw, our pickles, our sauces, everything we're making at house.
So we're definitely chef driven, especially with one restaurant, it's definitely easier.
I know that gets tougher as you grow.
So yes, we are slightly premium, but really with the focus on just a better chicken wing experience in general.
The question to me is like, could you offer a chicken sandwich?
Could you offer a salad?
And what I wonder is whether, because I think the answer is yes, but I don't think it's a yes and this is the way it is.
To me, it's more like a pop -up kind of approach. Like, hey, there's a great pizza place that I go to in Sonoma County and they do Roman style pizza, right?
But now and again, they'll on their on their instagram they're like hey we're doing new york style pizzas just today but it's a the place is a roman style pizza it's you know the big square dishes of pizza but on those days people get psyched because it's like something else that is just new and different and i wonder whether you could just try that pop -up approach like we're doing korean like boneless wing chicken korean chicken sandwiches definitely guys so We've had really good success with LTOs, limited time offerings that we've done.
Now with a decent sized email list we've done in the past, chicken and waffles, chicken sandwiches, we even did a funnel cake and fried chicken special last summer.
And just like you say, you send out an email, put it on Instagram, and those always go over incredibly well.
But again, those are one time, you have to get it now or it's gone, of course those work well.
But I guess to take a step to fully integrate a new trend like Jonathan knows, if you add one menu item it completely changes the flow of your line, your prep schedule, walk -in storage.
These are things that I like to have as tight of a menu as possible.
We do one thing very well.
But sometimes in the back of my head, I get the constant people saying, oh, you should add a chicken sandwich, you should add tender.
So we offer those as LTOs when we can, but something like frying and beef tallow and eliminating seed oils We are actively trying to switch over to that So I guess just how do you know when to make those decisions?
Do you trust your gut?
Do you trust Industry data?
Yeah, it's an interesting one because we've been going through this transition ourselves and evaluating the cost -benefit of it My gut is to stay focused, and stay focused on wings, and be known for the best wings in the world.
Eventually, you will, you know, as you grow, you'll want other growth levers.
And so, keeping that for, you know, another day, I think is a good thing.
I wouldn't go into it yet.
Wingstop didn't introduce sandwiches until like two years ago.
And by the way, the reason they did it was not from a customer perspective, it was from a supply chain perspective.
because they realize that if they introduce sandwiches, now they can buy whole birds instead of just buying the wings because there was such demand for the wings and now they bought the whole birds and brought their costs overall all of their chicken down.
So I will say that a lot of it, I keep going back to who's your target customer and where you're positioning the brand.
My view on health is health is less about calories, it's more about the underlying ingredients, not having processed stuff and crap in it.
So I think the way you're doing it, handmade, you know, no preservatives, no processing, and potentially removing seed oils could have a very cool positioning of a better -for -you wing.
But if you do that, make sure the whole brand is aligned towards that.
And then, in terms of this you know, moving to beef tallow.
I think it's really interesting.
I'd evaluate what's the additional cost?
How much more would you have to sell to fund it?
What I can tell you, and we've spoken about this publicly, is we did We started a journey of removing seed oils about two years ago out of our restaurant.
We just introduced fries cooked in avocado oil, and generally I'd say it's been worth it.
The response has been really good for our customer.
People did care, and we saw a noticeable shift. However, I will say that we saw it very different by market.
So places like LA or New York reacted much more positively to it than certain other cities.
Again, this was about two years ago.
I think the awareness has shifted a bit around seed oils.
So, speak to your customers.
I think that even today at our scale with millions of customers, I spent a lot of time talking directly to customers.
And I think at your scale, I would just talk to them.
That's the beauty of kinda start being small.
Do you care about this?
Would it make you wanna come more?
Is it something that you would tell your friends about?
And that'll help you get an, kind of sharpen your gut feeling on what the right decision is.
Agreed. Agreed. Joey Cornell, the business is called DakDak Korean Wings.
Good luck. Keep at it, man.
Thank you, guys. Jonathan, guys, it was a pleasure to be here.
Thank you very much. Good to meet you, Joey.
Good luck. Thanks for calling in.
Jonathan, before I let you go, just a quick question.
Now that you have all this experience—I mean 2007, man, you were a baby.
And I still think of you as a baby, but you're a grown -up obviously today and running a really significant national business.
if you could go back to you in 2007 and just give you some encouragement or advice, what do you think you would say to him?
I'd probably say enjoy the journey, that it will be more challenging than you expect, but more rewarding, and the key is not giving up.
And don't take anything too seriously.
This too shall pass.
You think back on all those existential moments and we still have them today.
I think I talked about this on your podcast. One day, you think you're on the verge of world domination, on the verge of bankruptcy.
You still feel that and you just do your best to maintain that equanimity.
That's what's crazy when you think it's been 18 years.
It's been half my life pretty much. It's incredible.
If you're not having fun while you're doing it, it may not be worth doing.
It's awesome. That's Sweetgreen co -founder and CEO, Jonathan Nieman.
Jonathan, thanks. Guy, thanks so much for having me on.
This was fun. And by the way, if you haven't heard Jonathan's original How I Built This episode, you gotta go back and check it out.
We'll put a link to it in the podcast description and here's one of my favorite moments from that interview.
You went to your executive team and you present this plan and within a year, they all left. Basically, your entire top level execs are gone.
yeah I remember like the last one where we thought it couldn't get any worse and I get the text from someone and it's always like the worst text when someone says hey can you talk and then so the last person quits and we're just like oh God what are we gonna do hey thanks so much for listening to the show this week and by the way please make sure to check out my newsletter you can sign up for it for free at guyrozz .com or on Substack.
And of course, if you're working on a business and you'd like to be on this show, send us a one -minute message that tells us a little bit about your business and the questions or issues you are currently facing, because we would love to try and help you solve them.
You can send us a voice memo at hibt at id .wondery .com or call us at 1 -800 -433 -1298.
You can leave a message there and make sure to tell us how to reach you.
And by the way, we'll put all of this in the podcast description as well.
This episode was produced by Iman Mahani with music composed by Ramteen Ereblui.
It was edited by Casey Herman.
Our audio engineer was Neil Rausch. Our production team also includes Alex Chung, John Isabella, Elaine Coates, Chris Mussini, Catherine Cypher, Kerry Thompson, Sam Paulson, Jaycee Howard, and Neva Grant.
I'm Guy Raz and you've been listening to the advice line on how I built this lab.
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