Shake Shack's next era
Shake Shack's next era
Outgoing CEO Randy Garutti got nostalgic during our interview. So did I.
Ten minutes before our scheduled entry time into the American Museum of Natural History on the Upper West Side of Manhattan, I was begging my 7-year-old to please, please finish their grilled cheese. This was a few weeks ago, inside the second-ever location of Shake Shack on the corner of 77th and Columbus. It was meant to be an efficient stop; we ordered ahead via the Shake Shack app and crammed into the busy restaurant between rain showers, though nothing kills efficiency quite like a first grader enamored by a bag full of crinkle-cut fries.
Once upon a time — well before my kid showed up — we were not conditioned to immediate gratification, even at the sort of restaurant that might have screamed “convenience” like Shake Shack does now. Instead, we waited.
In 2006, Shake Shack installed a webcam atop its only location in Manhattan’s Madison Square Park. At the time, I was a young editorial assistant at a magazine with a robust (for its time) website. The Shack Cam felt like a tacit endorsement of burgeoning web culture in New York. In the glass towers I worked inside, online content was still an afterthought, but plenty of us could see how important a real-time internet would be.
Lines at the original Madison Square location of Shake Shack, then part of restaurateur Danny Meyer’s Union Square Hospitality Group, routinely stretched to hours-long waits for burgers and hot dogs. To commit to the line was an event, as immortalized in the New York Times in 2006:
"The brilliance of the Web cam is that it shows actual time," said Mr. Meyer, explaining that the idea had come from an architect who has an office overlooking Madison Square Park. "It's just a fun snippet of New York life, a snippet and a snapshot. Now that it's up I have no idea if it's going to be of any use for anyone besides those who work or live on the park."
Shake Shack’s real-time line cam got 14,000 hits over its first three days. It was an early example of restaurant technology that fueled my earliest coverage of the business, even though I wouldn’t start doing it in earnest until five years later from my new home city of San Francisco. Funny enough, we didn’t get a Shake Shack of our own until February 2020.
I was thinking about the Shack Cam (and the rest of the company’s technology) as I walked into Shake Shack’s downtown Manhattan HQ two weeks ago. I was there to interview its founding CEO, Randy Garutti, for Fast Company. Garutti will retire at the end of May — his last day is May 24, he told me — and hand over the reins to incoming CEO Rob Lynch, who’s wrapping up his five-year tenure at Papa John’s. Garutti’s office is a few floors above the restaurant’s test kitchen, inside a space that’s housed the Shake Shack team since it outgrew its initial portion of the USHG office. It’s across the street from a McDonald’s and a Wingstop; a new location of Taïm, a Mediterranean chain that started in New York, will open soon on the ground floor.
Shake Shack feels like an anchor in that particular spot, but the city has always been a huge part of Shake Shack’s story. “It needed to be from New York,” Garutti said, explaining the excitement and pride local residents have any time a Shake Shack opens nearby. Having waited years for one in the Bay Area, I get it, even if I can’t totally explain what “it” is.
As I wrote in Fast Company, Garutti likes to contextualize his memories of business growth with pop culture references.
This context is important. There were no iPhones during most of Shake Shack’s long-line days, he reminds me; those showed up a full year after the Shack Cam. Then, the whole operation seemed more like a side project for the primarily fine-dining restaurant group; Garutti laughed recalling the team wheeling large amounts of meat through the dining room at Eleven Madison Park on its way to the kitchen to become Shack Burgers.
He swings between sounding surprised about major milestones from the company’s growth and confident that a relatively young and inexperienced team, at least by corporate restaurant standards, knew exactly how to build a lasting brand. He describes this cohort with admiration, as "a whole bunch of naive young people who were kicking ass.”
To add some of my own context to Garutti’s, as it grew Shake Shack got good at rolling out tech that could solve formerly IRL problems.
It once had a “C line,” or cold line, a special, shorter line in the park that offered beer, among other things, to make the long waits more bearable. I don’t remember this, but I do remember its next iteration, the “beeline,” which offered a few popular items quickly. In today’s vernacular, that’s a “hack.” But the beeline is gone now, replaced by the ability to order ahead for pickup on Shake Shack’s app, a real convenience when you consider the days of lines and table buzzers.
About the time New York’s minimum wage climbed to $15 per hour, Shake Shack introduced a cashless, cashier-less store in the city. It was, at the time, somewhat controversial; the vibe was very “Shake Shack is replacing humans,” even as the company’s leadership insisted it wasn’t. The great kiosk experiment was obviously a success, bolstered by Covid-era social distancing. Eventually, the company hastened kiosk rollout to all its stores, finishing ahead of schedule last year. When I asked, Garutti described the in-store touch-screens as modern hospitality. He described the more recent decision to introduce drive-thrus in some suburban locations the same way.
Shake Shack was relatively late to third-party delivery, debuting a Grubhub partnership in 2019 after testing integrations with various delivery partners for a year. Even this process feels dated; the fact that Grubhub has been demoted to #3 in market share behind younger competition DoorDash and Uber Eats aside, testing and choosing an exclusive third-party partner is hardly considered best practices in the year 2024.
As Garutti talked through the company’s history, I got nostalgic, too.
I thought about the last decade-plus of this newsletter, chronicling new tech — like kiosks and mobile apps — that’s become table stakes in modern restaurants. I also thought about what it was like before the tech took over.
I like to think of myself as a young and naive person kicking ass as I built my early career, just as Garutti described his decades-ago colleagues. I thought about that particular time in restaurant history when people started caring more about ingredients and experiences and less about star ratings and stuffiness.
In those days, my best career networking happened outside the office, over cheap wine and snack mix at the Magician on the Lower East Side. Later, we’d move across the street for late-night fries at the now-defunct Schiller’s Liquor Bar. The Magician is still there (whew) but it turns out Schiller’s was just passing through. The space it once inhabited, on the well-trafficked corner of Norfolk and Rivington, is now a Shake Shack.
On the Pass podcast: the Expedite edition
It’s an honor to be featured this week at On the Pass, a podcast about the restaurant business hosted by Gabriel Ornelas. We talk through a few recent stories I loved, plus more about what makes Expedite so special.
