In the past year, restaurateur Danny Meyer and his team have opened two new restaurants in New York City and relocated another. That might sound like a lot to handle, but Mr. Meyer also managed a still bigger debut: the initial public offering of stock in Shake Shack,the international chain of eateries that he started 14 years ago as a hot dog cart. Shake Shack went public in January at $21 a share; the first day of trading ended with shares at almost $46, giving the company a market valuation of $1.6 billion. Shares have gone as high as $97, but the price has dropped lately, closing at around $55 on Thursday amid fears that they have become overvalued.
A few weeks ago, sitting at a back table at Blue Smoke, the barbecue restaurant he opened in Manhattan in 2002, the 57-year-old Mr. Meyer was sampling a series of desserts that the pastry chef had brought out, including chocolate layer cake, blueberry shortcake with sweet corn ice cream and blondies. Starting Shake Shack, he says, has given him a new perspective on dining. (The success of its IPO has also given him—and employees who bought shares—new wealth. As of Thursday, he owned 17.5% of the company, a stake valued at about $350 million.)
“In the early part of my career, we just lived in different worlds. We had chain people, and we had fine-dining people, and they just didn’t want to be seen in the same ZIP Codes,” he says. But fashion companies such as Ralph Lauren have long mixed different lines at different price points, he notes. “Why can’t restaurants be like so many [fashion] brands that have couture and casual?”
He isn’t the only one asking that question. Tom Colicchio, owner of Craft in New York City, opened the ’wichcraft sandwich chain in 2003, while Chicago chef Rick Bayless parlayed his high-end Frontera Grill into the quick-service shop Tortas Frontera, with locations in Chicago and Philadelphia.
Mr. Meyer says that Shake Shack is also an example of how dining is increasingly heading into what he calls “fine casual.” He expects to see more casual chains and restaurants focused on good food and service. “What Shake Shack taught me was that you can actually do something more than once and have all sorts of creativity,” he says.
The hospitality industry is in a far different place from where it was when Mr. Meyer got started more than 30 years ago. Born in St. Louis, he graduated from Trinity College, followed by a brief stint working in politics as a field director for Rep. John Anderson’s independent 1980 campaign for president. But he had always been interested in hospitality through his father, who started two travel companies that arranged tours.
Mr. Meyer gave up politics to work in restaurants and opened his first, Union Square Cafe, in New York at age 27. Ten years later, he opened his second, Gramercy Tavern.
Today, his company, the closely held Union Square Hospitality Group, has nine restaurants as well as a consulting business called Hospitality Quotient, which advises companies of all kinds on leadership and management. (He believes that other types of businesses can learn from hospitality—about, for instance, attracting talent and winning customer loyalty.) He lives in New York with his wife, Audrey, an actress and singer. They have four grown children. Their eldest, Hallie, followed him into the food industry; she has her own dining startup, an app called Umi Kitchen that connects home chefs with local customers.
Mr. Meyer started Shake Shack as a hot dog cart in 2001 as part of a community art project to support New York’s Madison Square Park. It seemed like an obvious idea: “What else would you put there but a hot dog cart?” The offerings expanded to hamburgers, fries and frozen custard, and Shake Shack now has more than 70 outlets in nine countries. Though Mr. Meyer is no longer involved in its day-to-day operations, he still consults regularly with CEO Randy Garutti (their two companies share a building).
With all of his restaurants, Mr. Meyer has aimed to create a consistent feeling. He uses the composition of wine as a metaphor. Wine is 97% water, he says, and the remaining 3% might be the difference between Two Buck Chuck and Château Lafite Rothschild. While most people focus on that 3% difference, “at the end of the day, I’m looking at our restaurants, and I think they are 97% the same thing, which is hospitality and good food and drink.” He aims for a homey ambience, achieved in part by hiring people as much for their emotional sense as their technical skill.
He’s also a big believer in promoting from within. The former general manager of Blue Smoke, for example, just opened Mr. Meyer’s new bar in New York, Porchlight. Shake Shack’s Mr. Garutti was once general manager at Union Square Cafe.
That first restaurant turned out to be a good proving ground for employees, he says. “It’s on five different levels, and there’s never enough room,” he says. “The bartenders don’t have quite enough room to make drinks, the coat checkers don’t have quite enough room to hang coats, and the patrons don’t have quite enough room to go to the bathroom.” He adds, “I guess I just feel like the people who choose to work in that environment and be champions despite a kitchen that’s too small, despite locker rooms that are coed and completely cramped, is somebody who is a hospitality athlete.”
Union Square Cafe will soon have more room. Last year, Mr. Meyer announced that, this fall, he would close the popular restaurant at its longtime location because of rising rent. It will reopen next spring three blocks to the north.
He isn’t worried. In his 2006 book, “Setting the Table,” Mr. Meyer wrote that the restaurant industry used to be thought of as “location, location, location,” but he thinks it is actually more about context. “It’s not ‘Where is it located?’ but ‘What does its location suggest about what it should be?’ “
In the case of Union Square Cafe—along with Untitled, his new restaurant in Manhattan’s Whitney Museum, which moved downtown earlier this year—he doesn’t think the new locations will take anything away. “There are restaurants that are more about the spirit that lives within those four walls.”
Another element that’s changed the industry is the smartphone. These days, everyone can serve as reviewer, promoter and customer through her phone. This fall, Mr. Meyer’s company will host a conference for the food industry called TechTable, to discuss how to use technology to enhance dining for customers and restaurateurs alike, such as through mobile payment systems and apps that aggregate customer feedback. One service, Venga, gives restaurants details on guests’ previous visits, preferences and spending habits.
One early online service was the restaurant-reservations site OpenTable, a company in which Mr. Meyer has invested and on whose board he sat. The site, he says, has allowed restaurateurs to more easily track tables and reservations—leaving them more time to manage their restaurants. Mr. Meyer has made a number of other personal investments in the food industry, such as in the salad chain Sweetgreen. His Union Square Hospitality Group just invested in an outside food company for the first time, a healthy fine-casual chain in California called Tender Greens.
When asked if he’d consider starting another chain, Mr. Meyer says he’s taking it “one step at a time.” For now, he’s looking forward to the reopening of Union Square Cafe and hanging its familiar neon sign outside its new space. His goal is to make diners feel at home, only better: “We’re going to hopefully do some fun stuff that...makes you say, ‘I never knew home was quite this nice,’” he says.
Corrections & Amplifications
Danny Meyer is no longer on the board of OpenTable. An earlier version of this article incorrectly said he is a current board member.