Sweetgreen: How to make a $1b farm-to-table restaurant chain, with Founder Jonathan Neman

0:03The people that are best in the world kind of find the thing they love early and just do it forever. that is the exception not the rule most of the people who are at the top of their game actually did a bunch of different things until they found their thing and then when they found their thing it was how they actually combined what they had learned in different disciplines to bring that unique approach to what they did. Jonathan Neiman is the co-founder and CEO of Sweetgreen a farm-to-table restaurant chain making fast food healthy. Unless you're one of our American listeners, you probably won't be familiar with Sweetgreen, but they are a staple of the LA, New York, and Washington food scenes.

0:43They've got over 200 sites across the country, and I wouldn't be surprised to see them in the UK one day soon. Their menu consists of salads that rotate based on factors like location, the season, and general availability of ingredients. You probably don't think of salad and technology in the same sentence, but Sweetgreen love a bit of tech. Before COVID, half their food orders, half, were taken by the app, which was market-leading. But then, of course, the rest of the market was forced to catch up by the pandemic, which eroded their strategic advantage. They've run pilots to test the viability of blockchain technology to track and trace their ingredients in stock.

1:21And, having acquired a robotics startup in 2021, they're now creating an automated restaurant where robots will prepare ingredients which which are then assembled by human chefs. Pretty wild. It's clear where Jonathan gets his curiosity from. He was surrounded by entrepreneurship as a child of parents who fled persecution. My parents immigrated to the United States in around 1979 from Iran. So they were Persian Jews that had to leave pretty much overnight from their homes due to religious persecution. And so I was very lucky. I was born here in 1984 in Los Angeles. You know, a whole community of people kind of moved over here and had to restart life.

2:01Being an immigrant to the United States, watching my parents and this whole community kind of rebuild their lives. And I think that had a lot to do with my entrepreneurial itch as well as watching my dad and, you know, his brothers and really the whole community kind of come here. And not a lot of them had jobs. Everyone was in some way a small business owner in some, you know, in some capacity. And that was always ingrained with me in me is starting a business, creating something out of nothing and the value of hard work and hustle. I feel very grateful, actually. Very beautiful childhood. Not a lot of traumas.

2:35You know, I have a big, huge family. I'm one of the oldest of four boys. All my brothers are actually also entrepreneurs. And that way we're all very close. I spent, you know, went to went to public school here and was always had that again, that entrepreneurial itch across, you know, every part of life. And then I ended up when I was 18, I went to school in Washington, D.C. OK, lots of lots of comparisons. Not not a Persian Jew, but can relate to a lot of what you've just said, because my family business was indeed schmutter trade. Oh, very nice. What is the dynamic, the psychological dynamic with having parents who came over to a country or certainly, you know, grew up with less?

3:14It's impossible to have someone tell you how you're meant to be feeling and necessarily actually feel it. right because you know in my experience certainly I was growing up middle class and my parents kept trying to make me understand how lucky I was but I was a child so taking everything for granted and not spending enough enough time gratitude is only really since I hit my mid-20s to early 30s and making my own money my own way in the world do I really start to reflect and understand how much privilege that was compared to what my parents grew up with so yeah I'm just wondering how you related to that growing up you know I think there was the stories were always that we used to be upper class.

3:47We came here and we lost everything. And now, you know, how fleeting things can be. So one, just understanding that money comes, money goes, and life could change really, really quickly. The actual Persian parable, this too shall pass. Yeah, this too shall pass. And just the importance of education and the value of education, the value of community, it like was really ingrained in me. So there was always that like immigrant like hustle mindset taught how to negotiate at a very young age like almost like you know i think we did grow up middle class but i think it was almost a trick ingrained in us that it was we we had less than that than we actually did and you know looking back after like we lived a very you know charmed life but from where it came from it was less than what they were used to and had because they had to start over i think it was a different mindset coming and being an immigrant and being different than others.

4:40I remember from a very early age, there was always me wanting to almost like prove myself, you know, being the kid that was different. You know, there's me, I think that led me to always try to like overachieve at a very young age. And I think I actually didn't realize that until much recently that that was such a big part of my personality. Because of because of my upbringing. Also interesting, if I may ask, but you know, growing up in America, interesting attitude towards immigrants. So does the UK. I'm not preaching. I'm just saying, reflecting Arabic and anti-Semitism combined. Did you ever find that one worse than the other, or were you othered in general?

5:21Our community was, there was a lot of Jews, so I didn't feel anti-Semitism until much older, because it was a heavily Jewish population where we grew up. But the anti-Persians were viewed as like Arabic. You know, there was a lot of anti-Semitism towards that in the 80s and 90s. I think even today, I mean, just until recently, I think the brand around Persians has almost changed. Finally, as they've become more successful, and I think the culture of old Persia has been rediscovered by so many people, that now it's like, you know, you know, even Persian food is having this like renaissance. And I have my non-Persian friends that like really like look at that culture with admiration.

6:03But for so long, I remember almost being like ashamed. For me, it was to be clear, it was like I had to like intentionally assimilate, very clearly wanted to prove that I could have non-Persian friends. And I was a normal kid like everyone else. And you want it to be, you know, just a white kid. Part of that was great because I, you know, I know a lot of kids in my community that only stayed in the community. and only had Persian friends. And for me, it was, you know, I had that community, but I also forced myself to get out and meet people from all around the world. And I think that helped give me kind of like a broader worldview that I still maintain today.

6:36What you were reflecting on, you know, your parents' entrepreneurial nature, that you can't just get jobs, so you create your own jobs. You know, that's sort of like the culture that you've been brought up with. But you're the first to go to university. You are the first to finish school. You are technically the first, essentially, the first child in your family to finish childhood and start adulting and therefore taking on the responsibility of what it means for your family to be a Persian Jewish immigrant in this country representing the name. So I'm curious, like, did you ever feel that as that part of your identity?

7:09Absolutely. You know, not only was I the oldest in my family, but in the broad, with all my cousins, I was also the oldest boy and one of the, you know, one of the oldest cousins out of 20 of us. So I definitely felt, you know, from a very early stage, I think a lot of my like natural leadership came from that position in my birth order in my general family. My mom, you know, I give it to my parents. They were just, they were amazing in our upbringing, really helping us, letting us be ourselves and finding our own passions and seeing us who we were for who we were and promoting the strengths in the strengths in each of us that are obviously different and really like actually looking for what was best for us.

7:47And so for me, it was my mom really obviously, you know, had a little bit of that tiger mom mentality, trying to, you know, make sure that we prioritize education and learning and personal growth. But it wasn't one of those, I've heard this, have you heard this term, like the snowplow? Oh, no, no, go on. I've heard tiger mom, but not snowplow. Okay, so there's the helicopter mom, which is like kind of like always hovering. The snowplow is the parent that wants to snowplow all of the challenges in front of you so that you never actually feel those challenges. You know, you never experience those struggles and pains.

8:20And so you just kind of go through life like in this kind of like smooth way. I think my parents did a really good job of giving us everything we needed, but also letting us feel challenges, you know, letting us fail, letting us actually like go through life's challenges and feel those things. And, you know, as a relatively new parent now, I think it provided a really good example of how to lead. Leadership and being a parent, know, there's a lot of similarities, right? And you just can't tell people what to do. You got to get them to want to do something intrinsically. And I think my parents did a good job of that.

8:52You know, even with when I wanted to start my business, I think my parents thought I was crazy when I was looking to start a restaurant company while I was graduating from Georgetown. But their old thing was like, okay, so you do it and you'll probably fail and you'll learn something from it. And then that lesson alone will be super valuable. And I think that was a constant theme of like letting us go try things, letting us fail on our own and getting ourselves back up on our feet. I cannot wait, by the way, to find out the stories of you trying to force feed your kids vegetables and salads. It's going to be a thing for you to hear.

9:23And if that doesn't make sense to anyone listening, yeah, it's about to. I had a really nice upbringing. Fortunately, I believe that my daughter will have, you know, in theory, an even nicer upbringing. How do you get that right because somehow I ended up as a person being very ambitious and hungry. So how do I make sure that I create the right environment for my daughter, not just so she doesn't grow up a little annoying brat that everyone hates because she's spoiled, but actually more importantly, so she's hungry. These are actually things, even though she's 20 months old, that I think of almost every day.

9:56I'd love to know how you're thinking about those things before we get onto the meaty conversation. I also think about this almost every day. It's a very big topic in my household as well, because my wife is also Persian Jew, and we had a very similar upbringing. And I think in a lot of ways, you know, it's very similar to what you said, whereas we had everything we wanted, but it wasn't unlimited. You know, a lot of the in a lot of ways that that constraint that we had, which was real, do we have to now create an unnatural constraint to create that hunger for them and how do we do that and how do you create humble kids that are curious and really appreciative of things and just quite honestly, like you said, hungry and not spoiled brats and people that can actually like really enjoy the true joys of life.

10:43So I think a lot about this and I think it's going to be in some ways my biggest parenting challenge is how to do that. The simplest way I've been able to solve this, so I have two kids. I have a two and a half year old and I have four months today, a baby girl, so I have Because I think nature is the great equalizer. It's accessible to everyone. And for me, it's like the happiest place you can be. And you're in California. And I'm in California. So it's like, I really try to focus on those things. So finding not joy for going to these things that may cost money, but like instilling joy in just going on a nature walk and going hiking, just going to the beach and playing in the sand.

11:25And I think like finding that joy or the other thing has been like listening to music and finding a deep love for like listening to music. But I think there's other things that you got to do. And I think that those things are going to get harder as we get older. Right. I think I'm in the easy stage today. So I think things about decisions about what schools do you go, you know, get your whole education on YouTube today. So when I'm thinking about schools, I'm thinking more about the community and the people and the social exposure that I want my kids having less so about the fancy school with the fancy teachers.

11:53I think there is a lot about the value of work. And, you know, I think a lot of parents are scared to teach their kids about money at a young age. I, you know, my kid already, you know, my two-year-old knows that, you know, I have brought him to work with me. I take him to school every morning and he knows that every morning I get up and I go to work every single day. And that's what we do. And there's a value in work and that it's, I look forward to it. You know, he's like, Daddy, what are you doing? I'm like, I'm going to work because it's fun and it's my purpose. and instilling that the joy of work in building, I think is another piece of it.

12:29And I think that's another thing my parents did well is as long as I remember, I had to have a job. I had to learn what it meant to make a dollar and how hard it was to make a dollar. So I wanted to like, when I saw the price, when I wanted to buy something, I was like, oh my God, that thing's$5. It's like, wait, do you know how hard it is to make$5? Five hours? Yeah, it's like, that's what it takes. It's not these things that just don't show up. I had a really interesting conversation on our last interview with the founder of Waze. We were talking about AI and technology and the education system.

13:00So what he's really interested in. For him, the idea of education in the next 10 years is, you know, there's no point teaching most of the things I'll be teaching in school because it's kind of a pointless thing to learn if a computer can do it for you. So like, therefore, what do you learn in school? Like what is important is learning how to be kind, learning how to be generous in a community, learning how to be a real human, how to cook, like all of these things that were thought of previously as whatever, those are wishy-washy, artsy things that don't matter. These are actually some of the important things that can bring human beings together.

13:32He was really focused on like sort of the going back to like EQ and emotional intelligence being taught in school and really diving deep in that because a lot of these academic things just don't matter. And I thought that was really, really profound. I totally agree with that. You know, I think, you know, you see what AI is doing and it's going to change the world very quickly. And I already see how my son interacts with technology. We don't let him use screens, but the way he knows how to talk to Alexa, it's like crazy. He's got this Alexa in his room and he knows how to use that thing totally natively.

14:04For me, it's really about creating a joy for learning, that curiosity, learning how to learn. Yeah, meta learning, it's the way. Yeah, and so there's that. And then I think there is, it's everything you said is the EQ. It's learning about compassion and gratitude and just that, you know, being connected to your feelings, I think is going to be so much more important because I do believe the most successful people, the creativity is going to be more valuable in the future than ever. I think truly like original thought and creativity is going to be so valuable. And so is leadership. And leadership is all about relationships.

14:38It's about building trust and building followership. followership. And I think that those are the things that are going to be most valued, not these super specific technical skills. So you mentioned you went to Georgetown University in Washington, which I know well, because one of my best friends from school went there as well. Tell me how you started Sweetgreen then? Why would going to university there encourage you to start a business like this? Sweetgreen started in, the idea was formed in 2006. So I was a senior at school. I had just gotten back from a year abroad in Australia. It really started with this problem in our own life where myself and my co-founders were sitting around discussing.

15:21And we all had a similar story with our parents all being immigrants to this country and all being entrepreneurs. And so all were friends that talked about business and wanted to start something. And we're talking about this problem that was just so obvious in our lives. We're like, we cannot believe that we can't find a place to eat that is delicious, but also healthy and also convenient. Because it's America is the answer. I mean, it is America. And it was honestly sad. It's like our greatest export is McDonald's. Think about that. Coca-Cola and McDonald's. Like that's what, that's the food we serve.

15:54How is that possible? And you looked at other verticals, you know, whether it be like, you know, you look at Nike and Disney and it's like, wow, these are incredible brands that tell great stories and have great products. And in our food space, we're just making people sick. And so the idea started just in our own life. Why don't we just open one tiny restaurant as a little project? We knew nothing about food, but we love food. We love this idea of creating a brand. We were just foodies ourselves and we loved business. And quite honestly, we thought it would be pretty easy. We're like, how hard could it be to start a restaurant?

16:26We're going to open a tiny little salad and bowl shop. We found a spot right off campus and we signed a lease and we think we're going to open it in a couple months. As we start doing the work, writing the business plan, we're like, whoa, first of all, this is way harder than we expected to open a restaurant. There's a lot more that goes into it. But secondly, as we started doing the work, we realized the opportunity wasn't one restaurant in D.C. It was maybe much, much bigger than that. The opportunity was maybe to create the next McDonald's or the next Chocolat in the United States and then eventually globally.

16:58We wrote a business plan. We raised some money. And then right after graduating, we opened that very first restaurant. And I think even when we opened the first restaurant, we weren't sure if that's what we were going to do with our lives. Still figuring out if that is, you know, was going to be a project or something we were going to continue to do. And it took a few years. You know, I actually, you know, after opening when you when you're at these schools, they have all these banks and consultant companies come recruiting. My parents were like, you go to Georgetown to get this like good job and go get trained at one of these great institutions.

17:27And so you're applying in like September of senior year for the next year. And so I applied to a bunch of jobs and I got what I thought was my dream job. It was a consulting at Bain. And so I accepted the job. I accepted my like, they give you like a sign on bonus of a few thousand dollars. Like super excited. My job was supposed to be in Boston. And I was supposed to show up November of the following year. So like 14 months later. We go open Sweetgreen in August of that summer. I'm happy we're opening and running this restaurant. And then I have to go report to work in Boston. And so I tell my co-founder, I'm like, I guess I have to go do this.

18:01So like, I'm going to, you know, I'll call you every single day. I'll come on the weekends, but I'm going to go do this job and we'll see what happens. I lasted about six months in the job. So the job was really hard for me. I think being a consultant was really hard for me, not having control and just giving advice, especially after having run a business really hard. But I did learn a lot from that experience and met some great people. I then came back, came back to D.C. as we were opening our second and third restaurant. And I think as we opened our second and third restaurant, we really started to form what the brand would be and the lifestyle and the mission and the purpose around the brand.

18:38Then we started to realize, wow, this is something that we can go the distance with. That's when we started to really think longer term about what we were building. And I can't believe it's now been 16 years I've still been doing this. To your point, I think I'm very lucky. I have a lot of friends that are still figuring out what their purpose is. And I think I'm really lucky that very early on, I found something that I love to do, a mission that I'm very passionate about, which is around health, all while getting to run a business that forces me to learn every single day. And, you know, the thing about the restaurant business is there's so many disciplines.

19:09When you run a consumer brand, you know, we have to be great at brand and marketing. We have to be great at food and product. We have to be great at real estate, design and construction. technology is a huge component of what we do both on the software side and now hardware and automation and that piece of the business and of course just like leadership and finance and so it's something that kind of brings together all these disciplines and forces me to continue to learn and it's kept me challenged for 16 years my job gets harder every single year as the scale compounds but again I'm very lucky that I found what I do and and to answer your question uh so So Sweetgreen, our mission is to build healthier communities by connecting people to real food.

19:50And what we are is a farm-to-table restaurant chain. So essentially think about it as healthy, fast food. We have almost 200 locations around the country serving local and organic craveable food at affordable prices. In the early stages of Sweetgreen, you start it up. You're one of the co-founders. How many of you are there? There's three of us. So talk to me about how this dynamic works, speaking founder to founder. Your co-founders, there's three of you. have this idea of we're starting basically a salad bar in Georgetown because we think this is a good idea. You raise some money from friends and family, I assume, etc.

20:26Like the classic early round. And then you actually leave and go to Bain. And by the way, fun fact, I also went to a very similar type of university in the UK called Nottingham. Exactly the same feeder schools. You go apply for L 'Oreal, and McKinsey and Bain and I got rejected from Bain and that was my dream job as well. One up on me there. You lucked out. I lucked out. Yeah, a lot of my friends told me that as well. You skipped a step. I know this is 16 years ago of memory, but can you dust off the cobwebs and remember what was it actually like as a co-founder going away from a business and then coming back to the business?

21:02We've had this from a few guests before, actually usually in a much more complicated circumstance. Like I came back four years later and the thing was a beast already and it's way more complicated. Was that a difficult conversation to navigate at the time? And like, how did you navigate it? You know, I think I'm very lucky. I have two co-founders that are also my best friends. We have a lot of trust for each other. And in the very early days, that first restaurant was 500 square feet, tiny. It actually couldn't even fit three of us in it. At the time, it was just, you know, the one restaurant.

21:30We got it up and running. We had hired teams to run it. And I think the idea was I was going to go, I was going to learn these skills. I was going to meet a bunch of people to help us raise money in the future. I didn't stop working when I left. So I was kind of moonlighting, you know, maybe not the best employee at Bain. So I'm sorry, Bain. You know, we joke that I spent a lot of time hiding in the bathroom on the phone with my founder, you know, on the phone with my co-founders. And my job was really helping to write the business during that time, helping to write the business plan. I was kind of like leading finance and finance and fundraising.

22:01And it was writing the business plan for the second and third restaurant and helping to raise the funding. I was also going back and forth, you know, like pretty much every other week back to visit. And then it just got to a point where like, I couldn't, you know, I couldn't do it anymore. And I remember at Bain, there's a few things, a few projects that were like light bulb moments for me. One project was, you know, we were working for a struggling voice over IP company. They were hired and the job was how do you reduce churn at this company? So the job was when people try to call to cancel, what do you offer them?

22:37Have you ever tried to cancel anything? It's like, it was like, our job was to make it harder to cancel, to be like, hey, I know you want to quit, I'll give you three extra months free to stay on. And like, how do you just like, stop the bleeding? Like, first thing I said, and it was like, blasphemy. I'm like, maybe the product is bad. Like, maybe we should like consult on fixing the product, not just like stopping the bleeding. Well, that's not our job. Okay, well, this is stupid. Next job, it was, you know, it was an insurance company and we had, you know, we had a, we get the project, we look at it, we go in a room, we know the answer within a day.

23:08We're like, we're not going to give them the answer. We're going to kind of like lead them to the answer over the next three years. And I was like, why are we doing that? Like we have the answer in one day. They're like, well, we don't get paid if we give them the answer in one day. We need to give them, we need to help them get there because, and then what I learned is, you know, and I see it's from the other side. Oftentimes the answer is obvious, but sometimes the consultant's job is actually not the answer, but being a change agent inside of the company and getting that buy-in inside. And so there was a lot more that I actually didn't understand at the time thinking it was as simple as like, here's the answer to present.