Adapting Episode 1 Canlis



In a time of global crisis due to the coronavirus pandemic, Seattle's iconic Canlis restaurant, led by Mark Canlis, has boldly adapted its business model to meet the needs of the community while keeping its staff employed. Transitioning from a fine dining establishment serving a limited number of patrons to launching three new ventures—a drive-through, a bagel shed, and home delivery—Canlis demonstrates leadership and innovation by leveraging its location and culinary expertise. The drive-through utilizes the restaurant's unique geography for contactless service, the bagel shed taps into the team's baking talents, and the home delivery offers family meals, all while ensuring the continuation of the business. This pivot not only sustains the staff but also serves as an inspiring example of adaptability and optimism during uncertain times.

Summary Notes

Emergence of New Phrases

  • The conversation begins with Speaker A and Speaker B discussing the recent emergence of the phrase "pick six" in sports commentary.
  • They note that this term was not used a decade ago but has now become a common part of the sports lexicon.

"It's kind of like the word pick six. I don't. That just, like, happened a few years ago, and now everybody says it, watch now, like ESPN. It's like, pick six. Pick six."

The quote from Speaker A indicates the sudden popularity and widespread use of the term "pick six" in sports broadcasting.

Adapting to Change

  • The hosts of the Acquired podcast, Speaker B and Speaker C, discuss the significant changes brought by the coronavirus pandemic.
  • They announce a temporary shift in their podcast's focus from technology companies to leadership stories relevant to the current crisis.
  • The new series, named "Adapting," will focus less on history and more on current and future responses to the pandemic.
  • They emphasize the importance of adapting and taking risks during these times.

"So we're changing. Acquired. For the first time ever, we're taking a pause from normal episodes. The world doesn't need acquired right now."

Speaker C explains the decision to pause their regular content to better address the needs of their audience during the pandemic.

Community Engagement and Support

  • The Acquired podcast is making changes to its community engagement by promoting their Slack channel and introducing a new community component to their Limited Partner (LP) program.
  • They hosted a group Zoom call for LPs and plan to make it a monthly event.
  • Speaker B and Speaker C express their commitment to inclusivity, offering financial assistance to those who cannot afford the LP subscription during the pandemic.

"And lastly, David and I feel very strongly that money should never be a reason that a single person can't become an acquired LP."

Speaker B conveys the podcast's dedication to ensuring that financial barriers do not prevent individuals from joining their community during these challenging times.

Pilot: Accounting Services for Startups

  • Speakers D and E discuss Pilot, an accounting firm that provides comprehensive financial services to startups and growth companies.
  • They highlight Pilot's growth, its backing by prominent investors, and its focus on allowing companies to concentrate on their core business by outsourcing accounting tasks.
  • Pilot offers a range of services, including bookkeeping, tax, and CFO services, to startups of various sizes and industries.

"Pilot both sets up and operates your company's entire financial stack. So finance, accounting, tax, even CFO services like investor reporting from your general ledger all the way up to budgeting and financial sections of board decks."

Speaker E describes the extensive financial services that Pilot provides to startups, emphasizing their role in handling the entire financial operations of a company.

Canlis Restaurant: A Case Study in Adaptation

  • The episode features Mark Canlis from Seattle's Canlis restaurant, which has adapted its business model in response to the pandemic by offering delivery services.
  • Canlis's adaptation is seen as a beacon of hope and innovation, demonstrating that businesses can find new ways to operate and serve their communities during crises.
  • Mark Canlis's background is shared, highlighting his family's long history in the restaurant industry and his own experience in both hospitality and military service.

"All right, listeners, most of you are aware that restaurants are among those hit the hardest from our current health crisis. Canlis is leading the way in adapting to provide a product in need, delivery, food saving jobs, and ensuring the continuation of the business through trying times."

Speaker B introduces the story of Canlis restaurant as an inspiring example of how a business can pivot and thrive during a global health crisis.

Origins of Canlis and Entrepreneurial Spirit

  • Canlis, a restaurant, initially started in Honolulu after Pearl Harbor.
  • The founder, Speaker A's grandfather, left Stockton, not wanting to be in the restaurant business.
  • In Hawaii, he was selling dry goods when Pearl Harbor was attacked.
  • The grandfather showed entrepreneurial traits by taking over the USO food services during the war.
  • After the war, he opened a restaurant in Waikiki called The Broiler and then moved to Seattle in 1950.

"So the first iteration of Canlis, the restaurant was on Honolulu, grew out of the USO after Pearl harbor. Right?" "And then right after the war, opened a restaurant on a beach that was a little less known before the war and certainly then before now called waikiki. So he had that restaurant in 1947. It was called the boiler. And then he came to Seattle in 1950."

These quotes explain the origins of the Canlis restaurant and the entrepreneurial journey of Speaker A's grandfather from taking over USO food services to opening a restaurant in Waikiki and eventually moving to Seattle.

Fine Dining Defined and Operational Details

  • Canlis is a fine dining restaurant in Seattle, serving a limited number of guests with a large staff.
  • Fine dining is seen as a highly considered form of food service and hospitality.
  • Canlis is large for a fine dining establishment, with 33 tables and serving 150-200 guests at most.
  • The restaurant operates with 115 employees, only for dinner, six nights a week.
  • There is a significant amount of preparation involved, with the kitchen being used for 20 hours to prepare for 5 hours of service.

"We consider fine dining just to be the most considered form of caring for somebody with food and hospitality." "We are a model of inefficiency, and that's just six dinners a week. That's all we're doing."

The quotes convey Speaker A's view of fine dining as an elaborate and caring experience, and the operational intensity and inefficiency involved in running Canlis as a large fine dining restaurant.

Adaptation and Innovation in Response to Crisis

  • Canlis has been running for 70 years and had to adapt quickly due to a crisis.
  • The crisis prompted the realization that inaction was as risky as radical change.
  • The restaurant introduced three new concepts: a drive-through, bagels for breakfast, and home delivery, to maintain staff hours.
  • The adaptation was based on the restaurant's location and assets, like being on a busy road.
  • The team realized the need to change strategy, akin to sports teams maintaining offense rather than switching purely to defense.

"And then pretty quickly, we realized that it would be just as risky to do nothing as it would to do something really radical." "We started with the drive through. For those that don't know, we're a fine dining restaurant looking this direction. But if you turn around, we're on a really busy road."

Speaker A's quotes highlight the rapid strategic pivot Canlis made in response to the crisis, utilizing their location advantage and shifting from fine dining to high-volume service models like a drive-through.

Realization and Decision-Making During Crisis

  • The crisis's impact was felt during a trip to New York for the James Beard awards.
  • There was a live stream announcement that emphasized the severity of the situation.
  • The Canlis team held a meeting to strategize and realized they needed to adapt to the changing conditions.
  • The decision to adapt was seen as a necessary response to uphold the team's values, despite the risks.
  • The staff volunteered to continue working, which boosted morale and commitment to the new direction.

"And at first, you just kind of have. It's like the sucker punch to the system." "And I think we had all gone in with this sentiment of helplessness, if we're honest, maybe hopelessness."

Speaker A describes the initial shock of the crisis and the emotional response of the team, which eventually led to a decisive action plan and a collective commitment to adapt and continue operations.

Leadership and Team Dynamics

  • The leadership credited their board of directors, advisors, and spouses for their support and perception during the crisis.
  • The team considered the possibility of failure but decided to explore every option, including radical changes.
  • The staff's willingness to adapt and recommit to their roles was crucial in moving forward with the new concepts.

"But really, when we launched this with the executive team, we said this thing could work." "And every one of them saying, we're in, put me in, coach."

These quotes reflect the leadership's approach to addressing the crisis, involving the executive team and staff in the decision-making process, and the collective resolve to adapt and innovate.

Role of Statsig as a Sponsor

  • Statsig is introduced as a new sponsor for the podcast, following the appearance of their CEO on ACQ.
  • Vijay, the CEO of Statsig, has a history with Facebook and has developed product engineering tools for continuous experimentation and feature rollout.

"Our sponsor for this episode is a brand new one for us, Statsig." "Before founding Statsig, Vijay spent ten years at Facebook where he led the development of their mobile app ad product."

The quotes introduce Statsig as a sponsor and provide background on Vijay's experience, relevant to the podcast's audience interested in entrepreneurship and innovation.

Statsig: Feature Management and Experimentation Platform

  • Statsig is a platform designed for product teams to enable faster shipping of features, automate A/B testing, and evaluate the impact of features on core business metrics.
  • It provides visualizations powered by a robust statistics engine to observe product performance in real-time.
  • The platform connects new features directly to business metrics, allowing instant assessment of their influence on customer product usage.

"Statsig is the modern version of that promise and available to all companies building great products Statsig is a feature management and experimentation platform that helps product teams ship faster, automate a b testing, and see the impact every feature is having on the core business metrics."

This quote explains the purpose and capabilities of Statsig, highlighting its role in enhancing product development and feature testing for companies.

Customer Base and Use Cases for Statsig

  • Statsig is used by a wide range of customers including Notion, Brex, OpenAI, Flipkart, Figma, Microsoft, and Cruise Automation among others.
  • It is particularly beneficial for managing and testing AI product features, as demonstrated by Notion's use of generative AI features.
  • Statsig can integrate with data warehouses, making it versatile for different company data storage solutions and feature flagging systems.

"Customers include Notion, Brex, OpenAI, Flipkart, Figma, Microsoft and Cruise Automation. There are like so many more that we could name."

This quote lists some of the prominent customers of Statsig, indicating its widespread adoption across various industries and company sizes.

Canlis Restaurant's Innovative Concepts

  • Canlis has introduced three main concepts: drive-through breakfast, the bagel shed for drive-through lunch, and delivery for dinner.
  • The drive-through concept was seen as a major revenue generator, leveraging the restaurant's geographical layout for contactless service.
  • The bagel shed concept arose from the team's expertise and resources, including a bread oven and a baker skilled in making bagels.
  • The dinner delivery concept offers family meals, which are the same meals prepared for the staff, simplifying the menu for delivery.

"We were embracing our inner drive through as a fine dining restaurant. It was just like, yes, this is us. Come on, let's just let it out of the bag."

This quote captures the innovative spirit of Canlis in adapting to new service models, such as a drive-through, while maintaining its identity as a fine dining establishment.

Pricing Strategy and Ethical Considerations

  • Canlis designed its new concepts not primarily for profit but to keep staff employed during challenging times.
  • The bagel concept is not profitable due to labor intensity and equipment limitations, while the burger concept may generate a small profit.
  • The goal is to break even and not lose money over the next few months, preparing for a strong position post-crisis.

"I don't think there's anything unethical about making money in this time. In a certain sense, we have a duty to do so, but mostly as a means of protecting the staff."

This quote reflects the ethical considerations Canlis is balancing in pricing their offerings, emphasizing staff protection over profit maximization during a challenging period.

Logistics and Operations for New Concepts

  • Canlis sold out bagels quickly, considering using another bakery's space to scale up production.
  • The restaurant adapted its family meal into a delivery service, offering a single menu item each night.
  • Canlis collaborated with the reservation system Tock to convert it into a delivery system, enabling any restaurant to adopt delivery services.

"The guys at talk were awesome. We called them early on, and we're like, we have this crazy idea, and we're actually trying to hack the system."

This quote describes Canlis' proactive approach to adapting their reservation system to facilitate their new delivery service, showcasing their innovation and partnership with Tock.

Canlis' Adaptability and Restaurant Industry Guidance

  • Canlis' adaptability is attributed to the restaurant's scrappiness and the willpower to make necessary changes.
  • The restaurant emphasizes simplicity in transition, using social media and a basic website for promotion.
  • Canlis encourages other restaurants to adopt delivery services, stressing the importance of communication with customers and a straightforward approach.

"It takes a little guts, and it takes just that kind of good old fashioned restaurant scrappiness that every restaurateur already has."

This quote encourages other restaurant owners to leverage their inherent resourcefulness to adapt their business models to new circumstances, such as offering delivery services.

Continuous Improvement and Innovation

  • Embraces the philosophy of continuous improvement, believing there's always a better way to do things.
  • Recognizes the importance of earning the right to matter through consistent hard work.
  • Acknowledges the ease of becoming complacent once a system is working well.
  • Stresses the need for careful consideration when updating systems to avoid dismantling useful ones.
  • Views business as a delicate balance between innovation and maintaining effective systems.

"The idea is that there's probably a better way to do it than the way that we're doing it. We just kind of believe that. And so I think if you want to matter, you need to earn that right."

This quote emphasizes the belief in the potential for improvement and the necessity of earning significance through continuous effort and innovation.

Hospitality and Customer Experience

  • Discusses the importance of creating memorable events for both staff and customers.
  • Describes how a staff party evolved into a highly successful public event, reflecting innovation in hospitality.
  • Highlights the use of creative ideas to enhance the dining experience and inspire both staff and customers.
  • Believes that pushing boundaries in hospitality can lead to improvements in the core business.

"So we like to test things out on staff parties. And the goal of a staff party is to throw one that the staff would willingly come to if they had no association with the restaurant."

This quote illustrates the commitment to ensuring that events are genuinely appealing and enjoyable, which is a testament to the restaurant's dedication to creating an exceptional hospitality experience.

Environmental and Cost Efficiency in AI Computing

  • Crusoe is a clean compute cloud provider that specializes in AI workloads.
  • Partners with Nvidia and utilizes stranded, clean, or wasted energy for data centers.
  • Offers better performance per dollar than traditional cloud providers due to energy efficiency.
  • Data centers are located at energy sites, which benefits the environment and reduces costs.
  • Crusoe's unique approach allows them to operate in remote locations, unlike traditional hyperscalers.

"Crusoe's cloud is purpose built for AI and run on wasted, stranded, or clean energy they can provide significantly better performance per dollar than traditional cloud providers."

This quote highlights Crusoe's niche in providing cost-effective and environmentally friendly AI computing solutions, setting them apart from conventional cloud services.

Unity and Resilience in Adversity

  • Expresses hope that the adversity faced will remind people of their common humanity.
  • Emphasizes the importance of mutual encouragement and realizing the untapped potential of individuals and communities.
  • Reflects on the transformative power of shifting from a sense of helplessness to one of hope and purpose.
  • Encourages gratitude and proactive thinking in the face of challenges.
  • Aspires to inspire people to turn toward each other, fostering a sense of unity and collective strength.

"I hope that what comes out of this is a visceral reminder of how alike we all are."

This quote conveys the speaker's desire for people to recognize their shared experiences and to find strength in unity during challenging times.

Empowerment and Optimism

  • Urges listeners to recognize their ability to make a difference, despite feeling otherwise.
  • Encourages optimism and positive actions, such as smiling at neighbors, even while maintaining social distance.
  • Stresses the importance of embracing one's potential to contribute positively to society.
  • Views the current situation as a story that extends beyond individual experiences to encompass national and global narratives of similarity and resilience.

"I think they have the ability, even though it doesn't feel this way, to make a difference."

This quote is a call to action for listeners to believe in their capacity to effect change and to maintain a hopeful outlook, recognizing the impact of individual contributions.

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