3 Tech Startup Growth Lessons from Shake Shack’s IPO
Anyone who has tasted a Shack Burger with a Shake at the Shake Shack in Madison Square Park should not find it surprising that the Danny Meyer-owned burger behemoth has filed for an IPO, valuing the company at $1B. Wherever you rank the Shack Burger on your NYC top burger list, there is no denying that there are a few key takeaways that spurred on Shake Shack’s massive rise from kiosk to Wall Street that any [tech] startup can use to grow their own company:
- Keep it simple, stupid. Let’s keep it real. Shake Shack (thankfully) doesn’t reinvent the burger wheel with their product offering. The burger is a “good burger”, the fries work well with it, and the milkshake is pretty damn delicious. But this isn’t a food review. For under $25 you can walk away with a “three-course meal” of a burger, fries and milkshake and leave satisfied every time. Even with offerings now such as the “Poocini” — an ice cream combo for your dog — Shake Shack largely remains true to its original menu and delivers the customer with a great MVP. A visit to Shake Shack is a consistent, relatively inexpensive solid burger experience, with the only true entry barrier being a line if you go to the Madison Square Park location. It’s generally well-worth the wait.
- Keep overhead low. Ever wonder how Shake Shack has gone from 1–3 restaurants in NYC to now airports and outposts all over the world? Besides having a product that is easy to move into nearly any market, it has kept its overhead relatively low compared to most of the restaurant industry. With little need for front-of-house staff, Shake Shack is as lean and efficient as it gets when it comes to employee headcount. This ensures quality employees that are easy to train and, like Starbucks, become the brand ambassadors behind the grill.
- Build a fantastic brand behind a great concept. Danny Meyer is a genius and maybe the best way to put it — the Steve Jobs of the restaurant industry. The Shake Shack brand has grown at exactly the right pace, remaining a hometown favorite while expanding into international territory. Taking a burger stand and turning it into a burger conglomerate without losing cult status is extremely difficult. Through effective and creative partnerships, great logo and restaurant design, innovative social media and technology integration (the Shack Cam lets you see how long the line is at all times), and a commitment to authenticity, the Shake Shack brand has maintained its edge while reaching new customers every day.
I once compared the meatball to an API. When you look at the success of food (restaurant) brands, it is easy to take away applicable lessons for any small company, especially tech startups. We are what we eat after all, aren’t we?