The Hospitality Principles That Build Billion-Dollar Startups

The Hospitality Principles That Build Billion-Dollar Startups Speaker 2: Alright, this episode is with Will Guidara. Will is the author of a book called Unreasonable Hospitality. He also is one of the writers for a TV show called The Bear, which is very popular, and there's an episode in The Bear. It's called Forks. I think it's in season two, and it's an amazing episode. You guys have to watch it. And it's basically all about excellence, so how to have unreasonable hospitality. There's a lot of people listening to this, a lot of the MFM audience. You guys run internet companies. And so this book that he wrote, it's about his restaurant called 11 Madison Avenue and how they went above and beyond to treat their customers amazingly and how it actually helped their customers and helped their business. Maybe this book hasn't come across your table because it's not about the internet stuff and that's one of the reasons why I wanted to have Will on. So give the episode a listen. I loved recording this and one of the big takeaways other than going above and beyond for your customers, it's about being excellent, being excellent in life, in business, in fitness and family. I hope it inspires you. I loved it. I loved recording this episode. It inspires me. Speaker 3: So give it a listen. Speaker 2: Man, I'm happy to talk to you. I read a lot and there's probably two books that are not meant to be business or at least my type of internet business books. One of them is The Inner Game of Tennis. It's a book about how to be great at tennis, but it's sort of like how to be good at sports psychology or life psychology, how to handle stress and not be down on yourself. And then the other one is Unreasonable Hospitality because when I read the book, I sort of wanted to become unreasonable at the rest of my life. I remember reading the book and I was like, this guy's an animal. He's really uptight about things that I am not uptight about. And to be the best that I can be, I need to be relentless. Speaker 1: It's interesting. I think that the dichotomy of what's in there is to accomplish what we did there, Require this relentless pursuit of excellence, right? I mean, that's kind of an inevitability when you're trying to become the best at anything. What's wild was it wasn't the pursuit of excellence that actually took the restaurant over the top. It was the relentless, unreasonable pursuit of hospitality, right? Like, you push everything to get every detail so unbelievably perfect, and then you do these messy things at the end to make people feel so very seen, whether that's obsessing over every single garnish on a plate of crazy, uber fine dining food, And then recognizing that the thing that people will actually remember is a hot dog or whatever other random thing we did for people. And so it's this quest for perfection and the acknowledgement that the most human moments are perfectly imperfect. And those are the stickiest of all. Speaker 2: And what's that story again, exactly? Speaker 1: So it was a busier than normal lunch service. I was clearing tables to help out the team. And I was at a table of four. They were foodies from Europe in New York just to eat at fancy restaurants. And so they've been to, like, you know, Le Bernardin and Daniel and Jean-Georges and Perse, and for anyone listening who does not know what those restaurants are, just trust in how fancy the names sound. They're the very good ones. And this was their last meal. They were going straight to the airport from the restaurant to go back home. Speaker 2: And you just overheard that? Speaker 1: And while I was at the table, they were raving about the trip. And then one woman said, yeah, but we never had a New York City hot dog. And it was just one of those light bulb moments. And I ran out to the hot dog cart, bought a hot dog, brought in, then came the hard part, convincing my fancy chef to actually serve it in our restaurant. But he cut up the hot dog, put one little piece on each plate, a little swish of ketchup, one of mustard, a cannella sauerkraut, one of relish. He like topped it off with a micro herb or something to make it look fancy. Speaker 2: It looked all cool, yeah. Speaker 1: And then before their final savory course, which at the time was our honey lavender glazed Muscovy duck, I brought out what we in New York call the dirty water dog, and I explained it. I just said, hey, I overheard you before. We didn't want to let you go home with any culinary regrets. Here's that New York City hot dog. And Sam, they freaked out. Like, I'd been working in restaurants my entire life. I had, to that point, served tens of millions of dollars worth of Wagyu beef and lobster and caviar. I'd never seen anyone react to anything I'd served them like they did to that hot dog. Speaker 2: And this was at 11 Madison. Speaker 1: This was at 11 Madison. Speaker 2: And for the non-New York, non-foodie audience, 11 Madison, I think you guys won an award that was like the world's World's Best Restaurant, was that what the title was? That's a crazy thing that that even exists, but you won it. You won such a ridiculous award. And the book, I think, got a huge bump in the TV show The Bear because of the episode Forks, where the kind of loser cousin goes to one of your restaurants, and he learns how to be great. And he learns how to be great in the most strange way when you're watching the show, which is you polish the forks. And if you polish the forks really well, you're going to be great at this other thing, which means it's going to lead to this other thing and this other thing. And then eventually it goes to when you're talking to a customer and you overhear them saying, I love this restaurant and my visit to New York has been amazing, but I would really just love a hot dog. I still haven't gotten one of those yet. And if you overhear a customer say that, you run outside and you get them a hot dog and you present them in such a way that brings memories. And that's the point of the book and also a little bit about your background. Were you at Eleven Madison as uptight or as hardcore as the show The Bear made it seem? Do you have to perform and sort of be a dick to your staff in order to make them buy into this stuff? Speaker 1: Listen, I think to succeed in a restaurant As a leader, the same lessons are true when it comes to succeeding in any other business. I think the greatest leaders are those that when they walk into the room, the people that work for them, like, check themselves a little bit. They want to make sure that everything is as it's meant to be, and they smile because they're happy that person's there. Right? Like, when you're a leader that acts like a dick, people are just scared of getting yelled at. When you're an attentive leader that is thoughtful in holding people accountable, people don't want to make a mistake because they don't want to let you down. Speaker 2: But can you walk me through a scenario? Because as a leader, I have a bunch of employees. I have this weird feeling of like, well, I don't want to be like disliked too much. And I don't know if I should call this person out on this particular thing. I don't know if I want to pick that battle right now. And so for all the listeners who I think I'm pretty average in terms of a lot of people feel that how I feel. Speaker 1: Yeah. Speaker 2: Can you walk through like a conversation as to like a productive leader conversation that relates to holding people accountable? Speaker 1: Yeah, well, first of all, yeah, I think too many leaders focus on wanting to be liked. The people that work for us don't need another friend. They need actually someone who's willing to step up and lead them. And if you focus on doing that consistently, they will invariably like you. It's not dissimilar to when you I try to build any sort of business. If you focus so much on making money, you're probably going to do something mediocre. Whereas if you just focus on building something great, you're going to end up making money. I believe that the great cultures are those where feedback is normalized. And when I talk about feedback, obviously I'm talking about praise. When you set crazy expectations for people on your team, you better be there to celebrate them when they meet or exceed those expectations. Well, because it's the right thing to do. But B, because praise is addictive and when you receive some, you want to receive more. But sometimes I fear that we focus so much on praise and think that that's the only way to build a great culture that we forget about how powerful criticism can be. Because if praise is affirmation, criticism is investment. The people that work for you Definitively are there because they want to grow and become better versions of themselves. And that means that if you aren't there to hold them accountable when they are not being the best versions of themselves, you're not actually doing right by them. I don't think there are many things a leader can do that are more beautiful than being willing to step outside of your comfort zone. For long enough to invest in someone else's growth. Now, the only way it's an investment if it's done thoughtfully, and I have rules of criticism. Speaker 2: Before you say those rules, just so I understand, how much staff did you have in sum across all the restaurants? Speaker 1: Oh, 1,800. Wow. Speaker 2: Okay. And was your retention better than industry standards? Speaker 1: Dramatically so, yeah. Speaker 2: So you killed it there? Speaker 1: Yeah, we did well. Speaker 2: Okay. And what are the rules for criticism? Speaker 1: And by the way, any of these individually, They're pretty simple, right? A, criticize in private. You can praise in public, but criticize in private. The moment you criticize someone in front of their peers, a wall of shame goes up. They're not going to receive the information you're delivering them. Two, criticize the behavior, not the person. People inadvertently end up talking about the person's shortcomings as opposed to just focusing on the behavior itself that they're trying to correct. Three, criticize consistently. Too often, we don't have the energy to call someone out for having done something. And so we wait until the moments that we do. But when that's the case, two things become true. One, people aren't sure what right looks like because you only call them out every other time they do that thing. Or perhaps even worse, people think you only criticize them when you're in a bad mood, which brings a negative stigma to the exchange. Never use sarcasm and criticism. A lot of younger leaders do that. They think that if they make a joke out of it, it'll be easier to swallow. But joking around about something as beautiful as investing in someone else's growth, I think, makes a fool of both of you. Speaker 2: So, like, what's an example? Speaker 1: You know, like when people are like, Hey, maybe stop being so lay, like whatever, trying to like... Speaker 2: Yeah, so what would you say instead? We said we were going to be here at 8. You weren't. I don't like that. Can you please be here at 8 tomorrow? Speaker 1: Exactly. Without emotion. Speaker 2: Yeah. Speaker 1: Which brings me to the next rule. There's no place for emotion in criticism. It's unemotional. The moment you bring emotion into it, you're eliciting emotion in the other, and the more someone is emotional when receiving criticism, the more they shut down. And then finally, you better be praising everyone on your team more than you are criticizing them. Because if you're not, one of two things is happening. One, you are just the person that has a tendency to see all the things that are wrong more than you have the ability to see the things that are right. Or you have someone in your team that's just not doing enough things well to praise and in that case you failed as a leader by letting them stay there as long as they have. Speaker 2: Alright, so a lot of people will talk about how you need a million dollars and three years of experience to start a business. Nonsense. Speaker 3: If you listen to at least one episode on this podcast, you know that is completely not true. Speaker 2: My last company, The Hustle, we grew it to something like $17 or $18 million in revenue. I started it with like $300. My current company, Hampton, does over $10 million in revenue. Speaker 3: Started it with actually no money, maybe $29 or something like that, nothing. Speaker 2: And so you don't actually need investors to start a company. You don't need a fancy business plan. But what you do need is systems that actually work. And so my old company, The Hustle, they put together five proven business models that you could start right now today with under $1,000. These are models that if you do it correctly, it can make money this week. Speaker 3: You can get it right now. You can scan the QR code or click the link in the description. Speaker 2: Now, back to the show. What were some early stories when you were figuring out unreasonable hospitality and then you implemented it and you're like, oh man, actually something is here. Not only does it make them feel good, it actually might make me more money. Speaker 1: Yeah. I mean, the hot dog was the origin story. You know, you always hear of athletes going to the tapes when they've made a mistake to see what they did wrong to make sure they don't continue to do that thing. What I don't think anyone does often enough is go to the tapes when they've done something right to make sure that they continue to do that thing. That's how you put intention to intuition. And in the hot dog, we did something as silly and simple as it was that was significant. And it required being present enough to actually pick up on that. It required realizing that we should stop taking ourselves so seriously because sometimes the silliest things can be the most connective. And it required acknowledging this idea That the gestures that are specific to an individual will always have the greatest impact. And I say one size fits one. And with that, we put a system behind it. So we hired an additional person to our team, someone who was in the dining room with only one responsibility, to be there as a resource to help everyone else bring their ideas to life. Speaker 2: And what was their budget? Tell me everything. This is what I want to know, is the operations. And in particular, a lot of people listening, we own internet companies or some type of digital-y company, not necessarily traditional, like a restaurant or traditional service industry. So this is actually what I really, really want to know, is operationalizing this. So tell me. Speaker 1: Yeah. So listen, in the beginning, we didn't put a budget to it. It was just like, hey guys, just start doing it and be reasonable. Don't get like, Be unreasonable with the thoughtfulness, but we're not spending $1,000 on an idea for someone. Speaker 2: And what was this person's title? Speaker 1: The Dreamweaver. Speaker 2: The Dreamweaver. Okay. And what were they making? I don't know what restaurant salaries are. Speaker 1: They were probably making $25 an hour. Speaker 2: Okay. And their whole goal, you said, I don't know if you wrote out in a memo or in the job description, you said, help everyone. Speaker 1: You're just there because, okay, so here's the thing, having nothing to do with unreasonable hospitality, like everyone has great ideas. The difference between Like the people that I think crush it in life and those that don't are the ones that actually decide to bring their great ideas to life, right? Now, the reality is, is in the workplace, in most high-functioning organizations, people don't have a ton of bandwidth. This is especially true in a restaurant. It's not like people have an extra 30 minutes in the middle of Saturday night service to go work on a little art project. This person was just there to create bandwidth, so they were there. Anyone on the team had an idea, they could go to the Dreamweaver and be like, hey, I need you to go out to the store and get a DVD for the movie Seven on the fly, or hey, we need to find sleds immediately, or hey, we need to go get the cotton candy machine from downstairs, or hey, does the toy store sell super soakers? Can we get any of those right now? Whatever it was. And that person was just there to execute. Now, over time, we started hiring the Dreamweavers from art school so they could actually do their own craft work in the moment. And we just let it fly. There was one Dreamweaver. The Dreamweaver was responsible for execution. Everyone on the team, though, was in their own way a Dreamweaver because they were the one responsible for ideation. It's the people on the front line that are actually connecting with the customers. They're the ones that are picking up on the little things that you can run with. The Dreamweavers were never given a set budget, although every once in a while, like one, two months a year, I would look at the Dreamweaver line item in the P&L and I'd say to the team, hey guys, let's reign it in a little bit. Speaker 2: What was the most expensive thing? Speaker 1: Gosh, the most expensive thing we ever did? I don't know. Like, we had these pictures of Miles Davis, these giant photographs of Miles Davis in the kitchen. One time, a guy who actually worked for us, because I always wanted to spend the most money on our own people, because if they received this stuff at the highest level possible, they were going to be more inclined to turn around and come up with these things for other people, right? Until you know how good it feels to receive something, you're not necessarily as inclined to want to put in the work to give it to others. And he loved Notorious B.I.G., so we like reprinted all these giant framed photos in our kitchen of Biggie, which, I mean, that was probably 600 bucks or something. Speaker 2: Okay, so it's not that much money. Speaker 1: No. Speaker 2: Okay, and what was the average, I don't remember what it cost, what was the average table spending, two grand? Speaker 1: Yeah, it was like 400 a person. Speaker 2: Okay. And how many a night were you doing? Or how many per customer, maybe? Speaker 1: Well, so here's the thing. I distill unreasonable hospitality, the gestures of the philosophy into three categories. One size fits all, one size fits some, and then one size fits one. And I think it's important just to explain this because we'll frame the conversation. One-size-fits-all meant that we looked at the entire experience, every single touchpoint, and identified how we could make as many of them as possible just a little bit more awesome. So I'll give you an example. The check, right? The check. In millions of restaurants in the world, at the end of every one of those meals, someone is bringing you a bill. And yet, in spite of the fact that everyone shares that touchpoint, I've never seen it approached with any creativity or intention. Yeah. And it's a hard part of the meal to get right because, A, everyone gets really impatient the moment they ask for the check. If it takes you too long to give it to them, you've ruined the meal. At the same time, I can't drop it on your table before you've asked for it. Otherwise, you think I'm trying to rush you out. It's especially hard in a fine dining restaurant because Those are big checks. The moment you realize how much it costs, it's a little bit harder just to love what you just had. For that reason, no innovation. But we saw that as an opportunity to do something, an overlooked touchpoint. So when I knew you were done with your meal, you hadn't asked for the check, but I knew you were done, I'd go over to your table with a glass for each person at the table and a bottle of cognac. We'd pour just a splash of cognac into each glass and I'd say, this is with my compliments. In fact, I'm going to leave the entire bottle here. Please help yourselves to as much as you'd like. And then I'd put the check down and say, your check is here, ready whenever you are. It's a small change with a profound impact. One, no one ever had to wait for the check again. B, no one could ever think we were trying to rush them out. I just gave you an entire bottle of free booze. It didn't cost very much. Rarely did people drink more than that splash. And yet, at the moment where we brought over that big bill, we matched it with a gesture of profound generosity. And by the way, I've talked to people who dined with us back then. We were serving some of the best food on the planet. They don't remember a single thing they ate. But they'll never forget how we made them feel when we gave them that bottle of cognac. Speaker 2: Have you read the book Influenced by Robert Ciaudini? Speaker 1: No. Speaker 2: Oh, man, it's like... Speaker 1: I feel like I'm gonna end this podcast with like an entire reading list. Speaker 2: It's like considered the gospel when it comes to like influence, which is related to marketing. But like, I read it as like a 14-year-old trying to meet girls. But like... And in that book, Robert Ciaudini tells a story where he's basically like says like a variety of principles for persuasion. And he has studies and experiments to verify or tell the story of each one. And one of the stories is basically he had a waitress give someone the bill. He had waitress B give someone the bill and a piece of chocolate. And he had waitress C go, here's your bill. Walk away five steps. Speaker 3: He goes, oh, I almost forgot. Speaker 2: I got this chocolate for you. Welcome to my show. My name is Sam Parr. This may not apply because I don't think you accepted gratuity. But if you did, did you notice gratuity for the wait staff went up to the roof because of this gesture? Speaker 1: For sure. For sure. And by the way, that's well documented. Cornell did a study. They did one where they compared a thousand diners that give that little mint with the check to a thousand diners that didn't. And the ones that did, on average, had 18% higher tips. I just think generosity begets generosity. Speaker 2: That is the rule of reciprocity, by the way. It's called the rule of reciprocity. And here's how it states. It basically, if I do a favor for you, you will do a favor for me. And it can be significantly out-proportioned. But because you now feel like you owe me, and humans hate owing someone. And so I remember reading about this, and I went and bought a motorcycle. Back then, it was a very cheap motorcycle. I think they wanted $3,000 or $2,500 and I showed up with two cans of Coke and I go, hey, yeah, I'm ready to look at your motorcycle. I met the guy in Craigslist. By the way, there was a gas station here. I got myself a Coke. Speaker 3: Do you want one? Speaker 2: I thought you might want one. And I, uh, we had, he had basically said like, it's, it's $3,000. That's the firm, you know? And I was like, look, the best I could do is $2,500. What do you say? And he's like, well, you're a nice guy. You got me a Coke. Speaker 1: I'll do $2,500. So that was a $499 win on that. Speaker 3: Yeah, yeah, yeah, yeah. Speaker 2: And that's sort of what it appears as though you did with the cognac. And that's why I was asking about gratuity, if it went up because of that gesture. Speaker 1: I was just on a Zoom with, do you know Rory Sutherland? Do you know who that is? Speaker 2: The marketing guy? Speaker 3: Yeah. Speaker 2: Ad agency executive. Speaker 1: Yeah, we were talking about this exact thing earlier today. He was talking about how he ordered a new mattress and pillows from some company. They just included like a duvet set or something. And he's like, honestly, I'd feel guilty if I ever ordered a mattress from anyone else again. But we're juxtaposing that against, had that same company said, if you order a mattress and two pillows, we will give you a duvet set. Because then now he thinks he'd earned it by virtue of having done what they said he needed to do. And it's the, I think it's reciprocity combined with surprise and delight. You need to do it without saying you are going to do it in advance for it to have the impact you want it to have. Speaker 2: Did you call it unreasonable hospitality back then? What was like your mantra within the company? Unreasonable hospitality? Speaker 1: Yeah. Speaker 2: Did you notice that profits and revenue went up? And do you think that it was because of that? Speaker 1: Yeah, I think this is the, okay, yes, profits and revenues went way up. I think the, Everyone I've ever seen embrace these philosophies have seen financial benefit and yet There are some that are reticent to, because it's that old adage, what gets measured gets managed. And it's hard to measure the impact of these things in the short term, right? You need to be willing to commit to ideas for long enough to see them really truly come to life. Because A, the more of an emotional connection people have to what you're doing, the more likely they are to return. B, whether it's the hot dog or sleds or all these different things we did, you are giving people stories to tell. And every dollar ever spent on unreasonable hospitality was far more impactful than any dollar I ever spent on traditional marketing. Because when you give them those stories to tell, What do you think they're going to do? They're going to tell them over and over and over again. Speaker 2: Were you guys seeding those stories? The hot dog story, it got out. Were you the one who told everyone? Because if I'm going to do this, I'm telling everyone I've done it. Speaker 1: No, we never told anyone we did the things in the moment. The hot dog story got out when I wrote the book. Got it. But I think if you do these things, you can be pretty sure that people are going to tell the stories themselves. Speaker 3: Listen up. Unknown Speaker: The old playbook is slowing you down. AI broke the funnel. Loop marketing fixes it. It's a new era for marketers. AI is capturing search traffic, channels are fragmented, and generating leads feels less predictable than ever before. Hubspot's loop marketing playbook will guide you through this unprecedented disruption. It's the system your marketing teams should use to move faster, connect deeper, and grow smarter. The modern growth playbook for the AI era. Built by Hubspot, designed for today's marketer. Get the Loop Marketing Playbook at hubspot.com slash loop-marketing to find out more and leave your competition behind. All right, back to the pod. Speaker 1: Okay, so that's one size fits one. One size fits some is effectively using simple pattern recognition. The reality is in every single business, there are things that happen over and over again. They're not touch points. They don't happen always for everyone, but they happen sometimes for some people. If you've ever gone to a casual dining restaurant with a kid and they give you the little pack of crayons and the coloring mat, that is effectively pattern recognition. They've realized kids come in, if we have these on hand, It will result in a better experience for the families as well as the children. Speaker 2: Did you have a unique twist on that particular one? Speaker 1: We did so many different things. We had Lego sets for a while. We had like Etch-a-Sketches for a while. We just cycled through different things. But we did like full proper exercises where alongside the entire team We'd come up with lists of these recurring moments and then get creative on how to make our reactions to them more awesome. And by the way, you can't do these things effectively unless you do indeed involve the entire team. There's the, I call it famous because I think it's famous, but the quote by David Marquet that in most organizations, the people at the top have all the authority and none of the information, while the people on the front line have all the information and none of the authority. In order to brainstorm truly significant things within this space especially, you need to bridge that gap between authority and information. Speaker 2: So were you holding like weekly all-hands with all 1,800 people or sending emails? Speaker 1: No, so 1,800 people was across the company. We would do strategic planning restaurant by restaurant, quarterly. We did one big one a year, but then there were all sorts of little meetings that would kind of be scattered through the... But at the end of the day, the number of ideas that came out of one day long strategic planning at the beginning of the year, Would generally take us about a year to implement all those ideas. So you could get enough out of one day to really keep you going for a year. Speaker 2: And so one size fits some. That's the second one? Speaker 1: Yes. I'll give you an example of that. This is my favorite. A lot of people got engaged at a restaurant. Um, if anyone's ever gotten engaged at a reasonable restaurant, they poured you free champagne. If they didn't, you got engaged at the wrong restaurant. But that's a reasonable hospitality. Now that we had identified this, we had an opportunity to make it as well more awesome. This is what we came up with. Tiffany and Co. had their offices across the park. Speaker 2: Oh, my God. Speaker 1: One day I went over there and knocked on doors until I found the chief marketing officer, convinced her to give us 1,000 of those iconic Tiffany blue boxes, each with two champagne flutes in them. Put them in the back. Next time someone got engaged, we poured them free champagne like we always would have, but they wouldn't notice that their glasses looked a little bit different from everyone else's. And at the end, we'd give them the glasses they toasted their engagement to. Again, three things on that. One, was it less special for them because we had a bunch more in the back? No. Two, I have talked to people who got engaged with us who don't remember a single thing they ate, but they will never forget that. And three, that one didn't even cost us anything. I mean, it cost Tiffany a reasonable amount of money, but I guarantee they've more than made up on that investment with all the Tiffany things that have ended up on registries. Speaker 2: Dude, that's so good. Speaker 1: And then, of course, there's One Size Fits One, which is the Dreamweaver stuff. The reason I say all of them It's because at Eleven Madison, we would serve 110 people a night. I couldn't do a Dreamweaver thing for every single person that came in there. But between One Size Fits One, One Size Fits Some, and One Size Fits All, you better believe that everyone was walking out of there having had an experience that, well, felt at least a little bit magical. Speaker 2: I used to run this company called The Hustle. It was the first company that I sold and it was a pretty amazing company. And I'm a self-taught copywriter. That was my passion. And the company was built on copywriting. And one of my philosophies was to alter what I called the forgotten text. And what that means in practice is a very specific example is when you would sign up like for your conference website, when you enter your email, More often than not, in 99% of cases, a customer will get an email from MailChimp or Beehive or ConvertKit, whatever, and it's going to tell you, thanks for subscribing, click here to confirm, and that's it. It's just like the stock email. Speaker 1: Yes. Speaker 2: I wrote the world's greatest welcome email. And I'll have to remember it, but it said, the subject was, look what you did, you little jerk. And the body, it said, I don't think you realized what just happened. You just signed up for the best business newsletter on earth. And immediately after doing that, a bell went off in our office in San Francisco. And when that bell went off, Sarah went and did 25 push-ups because she was so excited. David went and took a shot for some reason. And Kevin is outside right now hugging an old lady because he's so excited. Look, I got to go stop Kevin, but I just want you to know how excited I am that you gave us your email. We are tirelessly working on tomorrow's edition. I hope you love it. And just know that we are working really hard to please you. And it went viral. That went viral. And then we took it a step further. So when you unsubscribe from an email, you often just see you are now unsubscribed. Speaker 3: And I stole this one from Groupon. Speaker 2: I'll tell you what Groupon was. But Groupon, which was an email newsletter company, there was the intern sitting right there and it says, here's what just happened when you unsubscribed. And it was the CEO fake throwing coffee in the intern's face. And it said like, our intern Kevin must have done something bad to make you unsubscribe. I'm punishing him. Don't worry, I'm on it. If you want to resubscribe and give us another chance, that would mean a lot. Click here. And so the point being is that we worked really hard. So our pop-ups that, oh no, not another pop-up. Well, look, while you're here, The situation is this. This company, it's called The Hustle. It's my company. Speaker 1: I run it. Speaker 2: We do this newsletter. Give us your email if you want to get it the next day. And so the whole website, Forgotten Text. I worked really hard to do Forgotten Text, and we got so much backlinks or press because of it. Speaker 1: First of all, that's brilliant. And the way I see the world, There's two reasons why I think it's especially brilliant. One is obvious. The one is, well, they're probably both obvious. One is I believe the smallest enhancements to the most overlooked touch points in a guest experience can have the greatest impact on the experience as a whole because it is you saying very clearly to the people you serve, we're willing to care about things that no one has ever paused for long enough to consider. I spent time with an auto dealer group in California right when the book was coming out and I was talking to them about touchpoints and they thought I was, you know, when you think about like a classic car dealer and then I'm talking about unreasonable hospitality, it was like oil and water in the beginning. And I was like, all right, I have a question. What happens A week after someone buys a new car when they open the glove compartment for the first time, what's in it? And they're like, nothing. I was like, it's a touchpoint. That's a part of the experience. They did something super small. They started after that putting a Starbucks gift card In the glove compartment of every card that just said, thank you so much for your business. If you ever need anything, give me a call. And then whatever, Kevin. Speaker 2: Oh my gosh, that's great. Speaker 1: They call me a year later. They're like, we have never seen a return as big on any marketing investment in the history of our company. Was it just like $5? It was a $15 gift card. Oh my gosh. So the smallest things to the parts that no one has ever thought about really make a difference. And then B, What I said about the hot dog, like, so many companies have become so focused on perfecting brands that they've stopped pursuing people. Everyone is taking themselves too seriously. And the moment you just let yourself be a little sillier, a little more human, a little more connective, it never fails. Speaker 2: That's so good. Speaker 3: I think you guys like this podcast for two reasons. One is if you are building a business, it's lonely. And listening to Sean and I, we're sort of like your friends. And the second reason is you know that we are builders. We love building companies. It's kind of our life's vocation. So if you have a business that does at least $3 million in revenue, I think I know exactly what you're experiencing. You've built a great business, it's working, and you finally have a second to look up. You're young. You probably run an internet company. In your town, there's potential that you're a freak, that you have no one else to talk to about growing your company. In fact, when you even go out in public, you probably don't even like telling people what you do for a living because you don't feel like explaining it. If you fall in this category, that means you're making the biggest decisions of your life, 10, $20 million decisions all by yourself alone. And without that push, in my opinion, the risk is not blowing up. It's drifting into good enough territory, into becoming mediocre. And the worst thing that can happen to you is 10 years from now, you look back and you realize, I missed this amazing opportunity. I didn't grow. I plateaued in life and in business. My company, Hampton, we changed that. If you're running a company that does at least three million in revenue, you can apply at joinhampton.com. We vet you, we curate you, and we give you eight hand-picked founders who have similar businesses, similar sizes as you, who will challenge you, who will hold you accountable, and who will give you perspectives that you cannot get anywhere else. And this all happens in real life. So check it out. Joinhampton.com slash network. Speaker 2: What are some other interesting stories of people who have implemented this and had almost like a turnaround? You're telling me these stories. I'm sitting here taking notes and I'm not taking notes for this podcast. I'm taking notes on what I need to tell my team because I'm like, I'm so bought in. I get so fired up whenever I hear about this. But the discipline of following through and making it part of our culture, it's quite challenging because you said you don't see results necessarily right away. It might take a minute. You're taking a little bit of a leap of faith. Speaker 1: I mean, here's another one that I heard recently, and this has been one of the One of the most fun things for me over the past two years is getting notes from like people that run funeral homes and prison systems and insurance companies and banks and NFL teams and everything in between about all the various ways in which they've manifested the ideas. But I think this one's quite brilliant, and it focuses on the beauty of making things mandatory. Just like the word criticism has been given a bad rep, and I think it should be de-stigmatized, so has mandatory. We feel like if we make something mandatory for our people to do, that it's a bad thing. But I think when you make something mandatory, it's just a meta-signal to everyone that works for you that this matters. So, there's a guy who owns two UPS stores in Sarasota, and he read the book, really fell in love with it, tried to figure out how to bring it to life in his space, and I don't think anyone's ever woken up saying, you know where the most hospitable people in the world work? UPS stores, right? Speaker 2: But that's a big opportunity, right? Speaker 1: Exactly. Exactly. So, he made a rule. He mandated that everyone on his team, all the people that work the register at the UPS store, had to One time per shift, comp a customer up to, call it $40 worth. They had to. And they had to write it when they were clocking out who they comped and why. It was like a win, win, win in the most profound of ways. A, if you're a customer, you go to a UPS store and randomly you get comped for like shipping something or copying something. It's going to blow your mind, right? You're going to tell that story a bunch. B, It ended up being really good for the people that worked there. Like, when you're working at a place like that, you are not accustomed to being on the receiving end of profound appreciation and enthusiasm. And yet, we are all human beings. Those feelings energize all of us. And when you get them, it makes your day better. Full stop. I don't care how too cool for school you present yourself as being. But third, and this is what I thought was so fascinating, and when he explained it, it made sense. Because it was good for the team, they went from having to do it to getting to do it. But they only got to do it once. So now they started engaging and getting to know everyone that came into the store so much more deeply to decide who deserved it the most. Who was having a hard day and needed something to go right? Who was having a great day and needed a cherry on top? So even all the customers that did not receive the comp started having genuinely enjoyable experiences in those stores and I'm hearing about things like this all the time, and it's just awesome. Speaker 2: That's great. A lot of the people who listen to this, maybe they own an e-com store, so they run like a Shopify site, or they have a small software company. It's only two or three guys. Do you have any examples of, in particular, a website that you've gone to And you're like, they nail it. Speaker 1: I mean, I think the story of Chewy and what they do is This is just my favorite. Do you know what I'm about to say? Speaker 2: Yeah, so like Chewy, you know, it's funny, Ryan Cohen, the founder of Chewy, he's now more famous right now because of GameStop and he's this crazy investor, but he started Chewy and the premise was like amazing customer service. And I think an example would be like if they heard that your dog died, they would send you flowers or something like that. Speaker 1: Yeah, well, I mean, this is how it works. You go into Chewy, you subscribe for your dog food, right? You set it up, recurring order. You never have to think about it again. But eventually your dog is gonna die. And the first thing you think to do is not to go on Chewy.com and cancel your dog food order. So invariably, a couple weeks later, as you're mourning the loss of your dog, now another bag of food comes. Speaker 2: Yeah, the worst. Speaker 1: The worst. So now you call Chewy, then you cancel it. And this is what they do every single time. They obviously apologize for your loss. They credit your account for that last bag of dog food. They can't take it back for health code reasons. They encourage you to give it to someone else who needs it. And then two days later, you get a bouquet of flowers saying sorry for your loss. Now, that's pattern recognition. Speaker 2: Which would be what one size fits most. Speaker 1: Some, some. Speaker 2: Some. Speaker 1: And maybe those flowers cost them 15 bucks. The thing about dog people, when they lose a dog, it's normally just a matter of time before they get another one. And the same way that Rory is never going to buy a mattress from anyone else, I'd be hard-pressed to imagine anyone ever buying dog food from anyone else ever again. Listen, I think that unreasonable hospitality, it happens at the intersection of creativity and intention. It's being intentional enough to pursue relationships, um, to seek out opportunities and to, well, care enough to find them and then to do something with them once you do. And then creativity to Just to try to figure out what is the most awesome way you can possibly come up with to respond. I think it's just as much about creating an environment where your team feels energized and rewarded and appreciated as well because. It's a two-way street, at least for me anyway. There is nothing that energizes me more than when I get to see the look on someone else's face when they receive a gift. I am responsible for giving them and when you create a culture like this, you're giving everyone on your team the gift of just being able to give gifts and they don't always need to be lavish or expensive. They just need to be thoughtful. Speaker 2: Are there any other digital brands that I can go to and document or become a customer of and see how this is implemented well? Speaker 1: I am consistently drawn to The in-person examples. But you asking me this makes me... I feel like you're asking me what is a good movie that I've seen recently. I never have the ability to remember them off the cuff. Speaker 2: Yeah, I'm putting you on the spot. And I can give you an easy out if you want an easy out. Let me think. Are there any that I have? The fact that we can't come up with any off the top of my head is kind of insane, I think. Which, if I'm listening to this, I'm like, oh, so the bar's low. Because, by the way, I would call you out, actually. I would say, so you run this thing called The Welcome Conference. Okay, I'm going to go to thewelcomeconference.com. I'm going to go to your website. I feel like we can make this unreasonably hospitable and make this even better. Speaker 1: It's funny. We're like two weeks away, unreasonablehospitality.com, thewelcomeconference.com, of releasing an entire new website for both of them. Because our websites kinda suck right now, I'm not gonna lie. Speaker 2: When I'm thinking about all this, I'm like, alright, I gotta go implement all this stuff, but it's like, shoot, I gotta go design the site and write. It's hard. Speaker 1: It's a marathon. Speaker 2: It seems a lot more fun to give someone free UPS. Speaker 1: No, but this is what I'll tell you. I use the word magic a lot because I do believe when you do these things, you're creating magic. And there's this quote, you know, Penn and Teller, my favorite quote about magic comes from Teller. He says, sometimes magic is just being willing to invest more energy into an idea than anyone else would deem reasonable. Nothing about this stuff is hard. It does, however, require being willing to work harder. I was talking to a buddy of mine who's a magician and he was doing training for... Speaker 2: He's like the greatest friend ever to hang out with. Speaker 1: Dude, I have a lot of magician friends. Do you really? Yeah, I do. Speaker 2: They must have read the pickup artist books that I used to read, because back then all those pickup artist books, they tell you to learn magic tricks. Speaker 1: Everyone says that works, but I don't think for many of these guys it worked until more recently. But he was hired to go train Paul Rudd magic, I think for Ant-Man. And so he goes to the director's house, he and his assistant go to hang out for a day with Paul Rudd. And the director. And they go through a bunch of magic tricks. They're showing him, teaching him how to do it, the whole thing. And at the end, they're about to leave and the director's like, come on, show me your best trick. He's like, well, I kind of just showed you all my stuff. And the guy's like, no, no, no, come on, your best trick. And he's like, all right, do you have a backyard? And they go in the backyard. And he says to Paul, he goes, hey, can you just point into the yard, any direction in this yard, kind of like gesturing behind the house, and name a card. Ace, 2, 3, 4, 5, 6, 7, 8, 9, 10, Jack, Queen, King, and the suit. So Paul said like eight of hearts and pointed. So they walk out in that direction. They says to his assistant, hey, give me the shovel. The assistant reaches into his bag, gives him the shovel. He digs into the ground, pulls out the eight of hearts out of the ground. Speaker 2: Oh, my God. Speaker 1: Now, he's not just there to do magic tricks for Paul Rudd. He's there to show him how to do magic. So he shows him a video of them at the guy's house the night before digging holes and burying all 52 cards in the lawn. Speaker 2: No shit. Speaker 1: And he did it as a grid. So no matter where Paul pointed, he could figure it out. That was a lot of work. But Paul's reaction when he pulled an eight of hearts out of the ground made all that work worth it. That's what magic is. And that's what I think hospitality, when pursued unreasonable, has the capacity to be. Speaker 2: Man, that's awesome. Do you love being an author significantly more than running a restaurant? Because one sounds way easier than the other. Speaker 1: It's interesting. I don't know. I mean, I loved what I did. Like, I loved it. Like, I love I'm working like a maniac to build a world and then getting to stand at the front door of that world and welcome people into it. It's one of my favorite things. I don't get the gratification now. Like sitting in someone's living room and watching them read the book. Like there I got the gratification of watching people experience the thing that I built. Speaker 2: But I bet you it's been a nice season of life. I mean, I don't know the finances. I bet you it's made a really good living and it's been nice to know. Speaker 1: So that's my point. And I love this. It's hard for me to compare which one I love more. But I certainly don't miss it. Like, I don't miss what I did because I'm so loving what I'm doing now. Speaker 2: And what are you doing now? You wrote the book, I imagine you're speaking, and you have the conference. Speaker 1: So I have Welcome Conference in New York. We do an Unreasonable Hospitality Summit in Nashville. I write a newsletter called Premeal that comes out every other week. Speaker 2: So you own a media company? Speaker 1: Kind of, yeah. I'm also a writer and a producer on The Bear now, which is fun. Speaker 2: I didn't know. I thought it was just for that one episode. Speaker 1: I started writing and producing the following season. Speaker 2: Is that awesome? Man, that sounds awesome. Speaker 1: Dude, it's so fun. That whole team is just the best. Speaker 2: What's the actor's name? Speaker 1: Jeremy Ellen White. Speaker 2: I mean, he seems awesome. Speaker 1: He is, A, awesome, and just be wildly talented and exceptionally humble. Speaker 2: So do you get to hang out with all these guys and just see how it's made? Speaker 1: When my schedule aligns, I'm in Chicago on set with them. Speaker 2: And Matty Madison, I think he's fantastic. Speaker 1: Dude, he's the best. He is a ridiculous and incredible human being. Speaker 2: That's so cool. There's a whole, there's all these Instagram, there's this idea in men's fashion or menswear and the idea is like for certain people, if you try too hard, it's like the clothes are wearing you. You're not wearing the clothes. Speaker 1: Yeah, yeah, yeah. Speaker 2: And there's all, and it's called Sprezzatura. Speaker 1: Yeah, Sprezzatura. And then there's Manny Matheson who's always wearing the clothes. Speaker 2: And he's the example. So Sprezzatura, I've talked about this pod, it's an Italian word. It basically just means effortlessly cool, which is like, it's like I have a $2,000 beautiful suit, but you're wearing dirty boots. And because of that, you're cool. Speaker 3: I'm not. Speaker 1: I don't have that, by the way. I don't have that grasp on menswear. I wear a t-shirt and jeans at this point. Speaker 2: Yeah, but you kind of had it in a way because of your company. And Matty Madison, if anybody's listening, in The Bear, he's... What's his name in The Bear? And he is kind of they kind of portray him as this kind of silly, goofy, doofus guy. But in reality, he is like a like a very gregarious guy. And he's huge. He's a big person, but he's got tattoos all over his face. And he wears the coolest clothes on Instagram. But it doesn't look like clothes that he went and bought from a thrift shop. It looks like clothes that he's owned for 20 years. And they got this beautiful like wear on it. Speaker 1: And it's like he just wakes up and magically a new outfit was like draped upon him in the middle of the night by some ethereal Yeah, he's got it. Speaker 2: So he's like that in real life? Speaker 1: No, yeah, he's amazing. He's so sweet. Speaker 2: Well, and what's crazy is, I'm sure you could speak to this, and I would like to hear some stories in this, but people in the restaurant industry, if you own a restaurant, it seems like most of them who are quote successful, they're actually still kind of broke. And they're working their asses off. Speaker 1: Yeah. I mean, here's the problem. I think there's a couple problems. A lot of people that open restaurants didn't like work their way up through the business in a way to make sure they really understood the business side of restaurants. It's like anything. I don't think you can succeed financially unless you are willing to be as creative in pursuit of making money as you are in pursuit of the experience you're building for people. I think a lot of restaurants are just too small and the economics of a small restaurant are just hard to really Make work until you start opening so many restaurants that you're running around like crazy and you're so distracted that the quality of the restaurants start to suffer. Now, there are some people that have done it extraordinarily well and have figured out how to balance art and commerce. Speaker 2: Who do you put in that bucket? Speaker 1: I mean, Kevin Boehm and Rob Katz, they have a company out of Chicago called the Boca Restaurant Group. I think they have like 36 restaurants or something. Here's the reality. Okay, you need a good general manager to run a restaurant. You need someone that's great at taking care of the guest and managing the team. And honestly, the skills that are required to do that well are not that different, whether you're working at a 40-seat bistro or a 60-seat, three-Michelin-star restaurant. And yet, and then the cost of that person these days is somewhere between, depending on what market you're in, $90,000 to $180,000. It's not that big a swing. And so you can be doing $5 million a year paying that or $20 million a year paying that, right? And the margins just become really, really, really hard when you're not doing enough volume. And so, like, you can do volume if you're doing fast, casual, Chick-fil-A, McDonald's, over the course... Speaker 2: Well, when you say volume, do you mean, like, the number of seats at a table? Like, literally just the number of customers? Speaker 1: Number of seats and times average check. Speaker 2: Got it. So just the AOV, so like the average customer value. Speaker 1: And so, and like it doesn't take that much more work to run a $15 million a year restaurant than it does a $5 million a year restaurant. So like... Speaker 2: What's the difference? So like you're saying it doesn't take that much work to get the average customer order to be $100 versus, or the difference between running a $100 head restaurant versus a $20 head restaurant is not significant? Speaker 1: The amount of work that goes into it is not that different. Nor is the amount of work that goes into running a 20-seat restaurant versus an 80-seat restaurant. You need the same number of general managers, the same number of chefs. You need some more Obviously, your variable expenses are going to be higher, but most of the fixed costs are relatively the same. Your rent's going to be higher on a bigger restaurant, but these are all such small percentages compared to the top line that I always encourage people when they say they want to open a restaurant to work in one for long enough to actually make mistakes on someone else's dime before they go to open one, and then to open one that's big enough that it actually is worthwhile doing. Speaker 2: If I had to guess, you have a notes on your iPhone where you have all of these interesting restaurant concepts or angles or sound bites that are interesting to you and you don't want to do them now. And you may never do them, but they fascinate you. Is there any, is that true? And if yes, is there anything on that list that you could talk about? Speaker 1: I mean, listen, I think that the fashion of restaurants is not dissimilar to the fashion of jeans, right? Like, we want skinny jeans, then fat jeans, then skinny jeans, then fat jeans, and it kind of pendulum shifts back and forth. I think for a little while there, restaurants started getting way too complicated. And I'm excited about the return to simplicity that's happening right now, where people are realizing that with everything going on in the world, the human moments need to be as human as humanly possible. And the places I'm drawn to, like there's a restaurant in New York City called Res Dora, and it's just unbelievable pasta in a beautiful room served delightfully well. I'm drawn to more The kind of restaurant that creates the conditions for genuine connection. I was just with my wife and six friends and we rented a house in Mykonos in Greece last week. And the people that own the house, every morning we'd wake up and they'd set this long table for us with breakfast. So there's Greek yogurt and fruit and some bacon and eggs and a fresh loaf of bread every morning. And we'd sit down and no one had to order anything. And it was like this beautiful moment. I feel like that's a restaurant that doesn't exist yet and I would love to see it exist. Like where you just sit down with the people you love and the food's just there and you just get into it. I want, I'm drawn to go to and perhaps in my imagination when I don't have to deal with the realities of actually doing it, dream about building restaurants that are less about impressing people by what you can do and more just extending an invitation for them to reconnect with one another. Speaker 2: Last couple questions. Did you, um, I've heard stories and I am, um, I respect, uh, the food industry, but like I, that's not my passion. You know, I, I'm a very, I'm a much simpler eater. And what little I do know is like, I've read stories about like the, the Michelin star thing and, um, and how like some chefs will like end up giving it back because they play to the critics sometimes and it kind of becomes overwhelmed, overwhelming for a variety of reasons. When you were building your restaurants, did you ever feel the tension of playing for critics and awards and playing for customers and also doing things that you just think because they're dope? Speaker 1: Yeah. It was a tension that I felt more acutely earlier in my career and in our journey towards success than I did later. I think in the beginning, listen, you have to play the game a little bit. Speaker 2: Of course. Speaker 1: I think it's the same no matter what industry you're in. You can't get people to pay attention to you unless you've achieved some level of critical success. And that means Doing the things that you aren't necessarily inclined to want to do in order to get to where you need to get. So I'll give you an example. My first big goal was I wanted four stars in the New York Times. There's only seven restaurants in New York with four stars. We needed to get that. That was the starting point. Once you're a 4-star restaurant, then you're going to be full all the time. And if you want to be the best at something, that's the first stop along the way, especially if you, well, not especially, if you are in New York. Now, when I looked at the 4-star restaurants at the time, they were all in like the Upper East Side. They were all in Midtown. They were like fancy places. And so, I don't believe there should be a dress code in a restaurant. I think that you're there to invite people as they are, but we had to have a dress code. We never wore jackets required, but there was like a proper dress code. No hats, no t-shirts, whatever it was. The day we got four stars, the dress code went away. There were certain things we had to do in order to get a seat at the table, and then once we were there, we had the freedom and the confidence to start doing things our own way. Over time, what I learned was that If I consistently was delivering the thing I wanted to receive, it was always going to resonate more with the world. And so playing the game got us to a pretty good level. Starting to just do what I wanted to do and not what I thought other people wanted us to do was the thing that ultimately got us to the top. Speaker 2: One of my kind of joys of this podcast is finding people who our listeners don't already know and we kind of like, you know, we put our stamp, we're like, this person's amazing and hopefully in some way we're like a little bit of a tastemaker because we have shown them something new. You're already a huge deal. And you've been circling around the business circle and everything for a while. We definitely haven't discovered you, but it would give me so much joy if someone listens to this and feels inspired because they hadn't previously heard about you and now know about Unreasonable Hospitality just for the sake of excellence, of pursuing excellence and that's something that I'm very passionate about right now. I wasn't always passionate about that and now I don't think that comes naturally to me. For a long time my attitude was it's good enough. Move forward. Speaker 3: Aggressively move forward. Speaker 2: And I'm trying to fight that. I'm trying to be more excellent. And I hope that the listener, because I know I feel this way, whenever I talk to you, whenever I read about you, whenever I listen to a podcast with you, I feel that. I feel the need to be more excellent than I've currently been behaving. Speaker 1: Thank you, man. Thank you. Speaker 2: And I hope we've given that to our audience. Speaker 1: Well, to anyone out there listening who this is the first time we've run into one another, it's good to meet you. Speaker 2: What do you want to promote? Do you have anything? What's your social media platform of preference, if any? Speaker 1: Yeah, the two things I'm excited to promote are A, the newsletter, Premium, which is one of my favorite things to do. It is the stories that I shared today. It's me sharing one of these stories every couple weeks, just things I'm seeing out in the world that inspire me. You can sign up for that at unreasonablehospitality.com. And then second, my next book, Unreasonable Hospitality, The Field Guide, which is like my version of a workbook to really like go through with a team and bring these ideas to life. It comes out April of next year, but is available for pre-order now. And I'm so excited about it. Speaker 2: I just sent it up to pre-mail and I'm absolutely going to buy that. I would love that. That seems to be the thing now in the book industry is having like a workbook to accompany the book. Speaker 1: We made it much harder on ourselves than we needed to. It's like this four color. It's almost like a graphic novel version of a workbook. I did it with this design firm called Invisible Creature. They've done work with like NASA and Pixar. Speaker 2: I love the, I love workbooks. I fall for it every time. And by the way, I just had it for pre-mail. Your welcome email, I'm actually not, I don't even want to say what it is because hopefully you'll get more subscribers. Your welcome email is fantastic. Speaker 1: Thank you. Speaker 2: I'm like, I've only, obviously I'm doing this, I can't read the whole thing, but like I'm seeing like the, I've read the first sentence, I'm hooked and I'm scrolling. I'm like, oh, this is a whole story. Here's the background. This is awesome. Speaker 1: There we go, dude. That's high praise. Yeah, the website sucks, but the welcome email is okay. Speaker 2: The website absolutely does not suck. I would just mess in with you. This is awesome. We appreciate you. Thank you so much. That's it. That's the pod. Unknown Speaker: I feel like I can rule the world. I know I can be what I want to. All right, let's take a quick break because as you know, we are on the HubSpot Podcast Network, but we're not the only ones. There's other podcasts on this network too, and maybe you like them. Maybe you should check them out. One of them that I want to draw your attention to is called Nudge by Phil Agnew. And whether you're a marketer or a salesperson and you're looking for the small changes you could make, the new habits you could do, the small decisions you could make that will make a big difference, that's what that podcast is all about. Speaker 3: Check it out. Speaker 2: It's called Nudge, and you can get it wherever you get your podcasts.