20VC Sweetgreen Founder Jonathan Neman on Leadership Lessons from Managing Through COVID, The Importance of Failing Fast and Iterating & How the Best Leaders Bring Together Brand, Capital Allocation and Strategy

In a candid conversation on "20vc" with host Harry Stebbings, John Neiman, co-founder and CEO of Sweetgreen, reflects on his entrepreneurial journey from launching a single healthy fast-food restaurant during his senior year at Georgetown University to scaling it into a major U.S. brand with over 140 locations and significant revenue. Neiman, also an active board member at Meundies, credits his immigrant background and his co-founders Nicholas and Nathaniel for their shared vision and perseverance. Despite challenges like near bankruptcy during early winters and an executive team overhaul four years ago, Sweetgreen's digital-first strategy and commitment to a mission-driven brand have been pivotal. Neiman emphasizes the importance of resilience, embracing risks, empowering teams, and balancing profitability with social impact. He envisions Sweetgreen as a transformative force in the food industry, eventually surpassing McDonald's while maintaining its core values and culture.

• Harry Stebbings hosts John Neiman, co-founder and CEO of Sweetgreen, on the 20vc podcast.
• Sweetgreen is a mission-driven restaurant brand offering healthy food at scale.
• John Neiman has scaled Sweetgreen from one small restaurant to a leading US food brand with significant revenue and locations.
• John is also an active board member of Meundies.
• Sean Maguire from Sequoia facilitated the introduction to John Neiman for the podcast.

"And so I'm so thrilled to welcome John Neiman, cofounder and CEO at Sweetgreen, the mission driven restaurant brand that serves healthy food at scale." "John's also an active board member of one of my other favorite brands, Meundies."

The quotes highlight John Neiman's significant role in the growth of Sweetgreen and his involvement with another successful brand, showcasing his entrepreneurial success and influence in the food and retail industries.

• Squarespace is an all-in-one platform for building an online presence and running a business.
• Key features include mobile-optimized websites, easy-to-use email campaigns, and SEO tools.
• Squarespace offers a free trial and a discount code for purchases.

"Squarespace is the all in one platform to build a beautiful online presence and run your business."

The quote underlines Squarespace's comprehensive services for online business management, emphasizing its role as a one-stop-shop for entrepreneurs and businesses.

• Mozart Data offers a modern data stack for startups.
• The service enables data stack setup in under an hour without engineering.
• Companies can centralize, clean, and prepare data for analysis, delaying the need for data engineers.

"Mozart data helps you achieve this with their out of the box modern data stack." "You'll get the tools you need, including a data warehouse, ETL and transformation tools to centralize data from all of your sources."

These quotes describe Mozart Data's offerings, highlighting the ease and efficiency of setting up a data stack for startups, allowing them to manage their data needs without immediate investment in engineering resources.

• Angelist is a platform for managing investments and fund management.
• It offers solutions for SPVs, traditional venture funds, and rolling funds.
• Angelist Stack is a new product designed to help founders with incorporation, banking, cap table, and fundraising.

"I love using the angel list platform because it abstracts away all the complexity and operational burden of fund management." "With Angelist Stack, you can create a fundraising ready startup in just a few clicks."

The quotes emphasize Angelist's role in simplifying the complexities of fund management and startup creation, providing a valuable tool for investors and founders.

• John Neiman met his co-founders at Georgetown University.
• They shared a vision for accessible, healthy, and delicious food.
• The founders were inspired by their immigrant parents' entrepreneurial spirit.
• Sweetgreen was founded to address the lack of healthy fast food options.
• The first Sweetgreen location was a 500 sqft space near their campus.

"We really bonded over two things. One, a shared vision for food and a problem we had in our lives where we couldn't find a place that was healthy, nutritious, delicious and accessible." "We looked around the world and we couldn't understand why there was not a healthy fast food restaurant."

These quotes explain the motivation behind Sweetgreen's inception, highlighting the founders' shared vision to fill a gap in the fast food industry with healthy options, driven by personal experiences and a desire to create a meaningful brand.

• John had accepted a job offer before deciding to focus on Sweetgreen.
• After opening the first restaurant, he chose to leave his job and return to the business.
• Sweetgreen faced seasonal challenges and financial difficulties in its early stages.
• The founders displayed resilience and commitment to their mission.

"I could see what we could do. I remember I had a conversation with one of my bosses at Bain, and he said to me, he said, you can either do this now or you can wait till your kids are in college." "Sweet Green is not an overnight success story. We've been at it for 15 years and we've had so many failures."

These quotes reflect the pivotal decision-making moments for John Neiman and the long-term perspective required for entrepreneurial success, emphasizing the journey and resilience needed to build a successful brand like Sweetgreen.

• John Neiman advises that passion and belief in one's venture are crucial.
• He emphasizes the importance of resilience and taking multiple chances.
• The advice is grounded in his own experience of overcoming challenges with Sweetgreen.

"You really have to love it. And I think the biggest thing that the people that I've seen be most successful. Resilience is key in success." "It's how many shots do you get on goal? If you are willing to take thousands of them, eventually you're going to get your lucky break."

The quotes encapsulate John's advice to aspiring entrepreneurs, focusing on passion, resilience, and perseverance as key factors in achieving success and overcoming obstacles in the startup world.

• Sweetgreen experienced a pivotal moment when shifting focus to technology.
• The executive team turnover and skepticism within the company presented challenges.
• John Neiman and his co-founders had to reassess and rewrite the business plan.
• This period was a test of resilience and vision for the future of Sweetgreen.

"Within three months, the whole executive team is gone. We're sitting there almost running out of cash, trying to pivot the company and wondering, are we suited to do this?" "We rewrote the business plan, and we had to start over."

These quotes reveal a critical moment in Sweetgreen's history, where the company had to navigate significant internal changes and refocus its business strategy, highlighting the resilience and strategic thinking required to steer the company through adversity.## Company Reset and New Vision

• Sweetgreen underwent a significant change, resetting operations and company direction.
• The transition was challenging, with substantial team loss and personal struggles for leadership.
• The company redefined its identity and goals during this period.

So it was a complete reset of how we operate the company and where we were going. And for a moment there, it was very, very scary.

This quote highlights the daunting nature of the company's transition and the uncertainty faced by leadership.

• Sweetgreen was initially run by co-founders acting as CEOs, which was successful due to trust and shared vision.
• The three CEOs had complementary skill sets and a shared office, emphasizing collaboration.
• After eight years, the structure changed, with one becoming the CEO and the others taking significant roles.
• The approach set a precedent for treating leadership as partners rather than subordinates.

We ran the company as co-founders and CEOs for the first eight years, and it worked phenomenally well.

This quote emphasizes the initial success of the multi-CEO structure due to the strong partnership among the co-founders.

• The partnership model among co-founders extended to the broader leadership team, fostering a non-hierarchical camaraderie.
• Sweetgreen's culture and values stem from the co-founders' collaborative work style.
• The company documents these principles to maintain culture across a large employee base.

You don't treat your co-founders like they work for you, you treat them like partners.

The quote underscores the philosophy of treating co-founders and leadership team members as partners, which influences company culture.

• Sweetgreen balances brand and business, integrating art (branding) with science (data and technology).
• Capital allocation decisions focus on unit economics and customer-level economics, influenced by digital order penetration.
• Investments in technology, brand, and team support are measured for ROI against unit economics and customer acquisition costs.

Sweetgreen, we think about capital allocation really in two ways, and it's all about these KPIs that drive our business.

This quote reflects the strategic approach to capital allocation, focusing on key performance indicators that drive business growth and efficiency.

• Sweetgreen finds efficiencies by densifying markets, with increased customer frequency and data capture.
• Unlike other restaurants, Sweetgreen's model allows for growth without cannibalization as more stores are added in a region.
• The company's digital investments have improved the payback time and return on invested capital for each restaurant.

The more stores we put in a region, they actually all grow.

The quote highlights the unique aspect of Sweetgreen's expansion strategy, where additional stores in an area lead to overall growth rather than competition among them.

• Physical retail stores are key for customer acquisition and brand experience.
• Customers often transition to digital ordering after an initial in-store experience.
• Sweetgreen's omnichannel approach integrates retail with digital experiences, optimizing the use of physical stores.

There's no better way to really illustrate what we're all about than a retail.

This quote emphasizes the importance of physical retail stores in conveying Sweetgreen's brand and quality to new customers.## Digital-First Approach to Physical Infrastructure

• The concept involves designing restaurants to operate across multiple channels without disrupting the customer experience.
• Modern stores have separate production lines for in-store guests and additional lines for digital business, such as delivery.
• Thoughtful design includes separate pathways and pickup windows for couriers to avoid interfering with the in-store customer experience.
• The goal is to enhance the customer and courier experience while efficiently managing all business channels.

"Today we have a line for in store guests, but then we have in some cases one, two, up to six lines in the back or in the basement or upstairs somewhere. That is essentially our dark kitchen."

This quote explains the operational strategy of having multiple production lines to cater to different service channels, emphasizing the importance of a well-organized physical space for efficiency and customer satisfaction.

• Branding starts with a mission and is more than just aesthetics; it's about consistently delivering on promises to customers.
• The brand has evolved from making healthy food appealing to scaling up and using the brand as a force for good.
• The evolution of the brand has focused on community building, accessibility, and creating systemic change in the food system.
• Core values and the mission are central to the brand, guiding decisions and actions.

"Brand is really your promise to your customers, how that promise is consistent across all of your touch points. It's really walking the walk every day in a truly authentic way."

This quote highlights the essence of a brand as a promise and the importance of authenticity and consistency across all interactions with customers.

• Leaders must genuinely believe in their mission to keep their message fresh and engaging.
• The belief in creating a positive impact through business helps maintain enthusiasm and drive.
• The alignment of social good with profitable business is emphasized as a key motivator.

"I think you really have to believe it. You just can't fake. This is where I get down to. It has to be so much a part of you and something you so believe in deep down in your heart."

The quote underscores the necessity for leaders to have a deep, genuine belief in their mission to effectively inspire and lead others.

• Being direct can be a strength, but it may also be a weakness if not managed properly.
• Tailoring communication to the level of trust established with individuals is crucial.
• Empowerment and buy-in are essential for effective leadership, which involves creating trust and making people feel valued.

"I think one thing I've learned as a leader is it's not just what you say, but it's how you make people feel."

This quote reflects the understanding that leadership is not only about the message but also about the emotional impact of communication on team members.

• As a company grows, leaders should make fewer decisions and instead focus on creating systems for others to thrive.
• Empowering leaders at all levels to own their decisions is crucial for scalability and resilience.
• Leadership principles serve as a common language and guide for empowered decision-making.

"What I've learned is that I should be making almost no decisions. I need to think about creating the system, whether where are we going, what's the vision, what are we measuring, what's the team?"

The quote emphasizes the shift from hands-on decision-making to system creation, allowing for decentralized and empowered leadership within the company.

• Creating an environment that balances ambition with psychological safety is key to innovation and growth.
• Celebrating failures and learning from them is part of the company culture.
• Leaders should exemplify this approach by sharing their own mistakes and learnings.

"We celebrate failures as long as we learn from those. And it's not just writing that principle, but then it's acting and sharing those."

This quote illustrates the proactive approach to embracing and learning from failures as a means to foster innovation and growth within the company.

• The challenge of scaling is maintaining the agility and innovation that often characterizes startups.
• Intentionality and a proactive approach are required to prevent reverting to inefficiencies typical of larger organizations.

"As a founder, I think some of the things that keep you up are definitely becoming that which you are trying to disrupt."

The quote acknowledges the inherent risk of losing the startup's agility and innovative spirit as a company grows and the importance of actively working against this tendency.## Cultural Impact on Business Strategy

• The importance of company culture in shaping business operations and long-term strategy.
• Measurement and accountability are central to business execution, especially for public companies with shareholder responsibilities.
• Balancing innovation with the execution of core business functions is critical for sustained leadership and relevance in the market.

"it really does start with the culture, but it is also the things that you measure, it's how you set up the company and it's the time horizon in which you're working on."

This quote highlights the multifaceted approach to business success, emphasizing culture, measurement, company structure, and strategic time horizons.

• COVID-19 presented unique challenges, especially for consumer-facing businesses like restaurants.
• Digital adaptability was crucial for business continuity during the pandemic.
• Communication, morale, and setting long-term goals were key leadership strategies.
• Taking care of employees and community engagement strengthened brand loyalty and company culture.
• Investments made during the pandemic in people, culture, and customer experience are seen as long-term benefits.

"The biggest lessons for me around Covid, one was around communication, how we keep morale up even though the business is getting obliterated."

This quote underscores the importance of effective communication and morale maintenance as a lesson from managing through the COVID-19 crisis.

• Personal brand management for business leaders in the age of social media.
• Balancing public visibility with personal well-being and business support.
• The decision to engage or abstain from platforms like Twitter and Instagram can be strategic for leaders.

"I'm not on Twitter or social media, I've found can be kind of toxic to the brain."

The speaker expresses a personal choice to avoid certain social media platforms for mental health reasons, while also considering the impact on their leadership role.

• The temptation of new opportunities and the importance of maintaining focus on core business.
• Recognizing the potential of scaling the existing business model as a priority over pursuing new ventures.

"There's so many times where I would have narrowed the focus."

This quote reflects the speaker's hindsight on the importance of focus and the potential pitfalls of being distracted by new ideas.

• The role of mentors in personal and professional development.
• Learning from family, especially from immigrant experiences, about humility, patience, and balancing life priorities.

"I'd say my closest mentor is definitely my father."

The speaker credits their father as their closest mentor, emphasizing the personal and professional values learned from him.

• Public company CEOs face increased scrutiny and accountability.
• The need to maintain a long-term vision and innovation while meeting short-term commitments.
• Going public offers opportunities for storytelling and capital raising for mission expansion.

"I've been very conscious and intentional about making sure we do not lose what got us here."

The speaker discusses the conscious effort to retain the company's founding principles and innovation drive despite the pressures of being a public company.

• Expansion plans for Sweet Green across the U.S. and internationally.
• Aiming to change public perceptions of healthy eating and make it more accessible.
• Leveraging technology and automation to reduce the cost of healthy food options.

"We're on our way to overtaking McDonald's as the fast food player in this country and eventually globally."

This ambitious statement outlines the speaker's vision for Sweet Green's growth and impact on the food industry in the next decade.