Ron Shaich: Lessons from Building Panera

Summary

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The Knowledge Project: Ron Shaich – Lessons from Building Panera

Host: Shane Parrish
Guest: Ron Shaich, Founder, Au Bon Pain, Panera Bread, Act III Holdings
Date: November 11, 2025

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Episode Overview

In this compelling episode, Shane Parrish sits down with Ron Shaich, a transformative force in the American restaurant landscape. They explore Shaich’s journey from a single cookie store to building powerhouse brands like Au Bon Pain, Panera Bread, and Act III Holdings. The conversation dives deep into long-term thinking, the real costs of entrepreneurial commitment, reimagining consumer food experiences, the mechanics behind industry-defining pivots, and timeless principles for lasting success in business and life.

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Key Discussion Points & Insights

1. The Power and Cost of Long-Term Thinking

• Long-Term Greedy, Not Short Term Stupid:
  • Shaich’s guiding philosophy: “I have an expression, I’m long term greedy, not short term stupid.” [00:14]
  • Long-term commitment means constantly asking what you'll respect in 5, 10, or 15 years, then building projects—and habits—to make that future possible. [02:30]
• Quarterly Personal Reviews:
  • Conducts self-assessments every quarter to check progress on chosen personal and professional projects, from health to innovation. [04:21]
  • Not just about where time was spent, but whether meaningful change was accomplished: “Time is a means, it’s not the end. I’m really looking at what did I get done?” [04:28]
• Health as a Metaphor for Business:
  • After a health scare, Shaich systematized his self-care—hiring trainers, using glucose monitors, pursuing a vegan diet—and applies similar annual/quarterly project-based discipline to business. [04:28]

2. Empathy and Customer Obsession

• Empathy as a Superpower:
  • “The most powerful skill that I have as a business person, and what I would challenge entrepreneurs to acquire, is the skill of empathy.” [16:04]
  • True insight—and innovation—comes from deeply feeling what customers want, not merely “selling” to them. [16:35]
• Building Experiences, Not Just Transactions:
  • Panera, and before it, Au Bon Pain, thrived by providing “real food environments” where people felt elevated, not depleted—a gathering place, not a fast food transaction. [09:31, 12:00]
  • “Food is about so much more than what you put in your stomach and how cheap it is. The idea that we could create environments that people actually wanted to sit in…” [12:00]

3. Transformative Business Moments

• Pattern Recognition and Market Timing:
  • Shaich describes the cycles of discovery that shaped Au Bon Pain and Panera, often involving major pivots every few years. [16:45+]
  • Notable example: realizing customers wanted sandwiches made from their French bread, not just the bread itself. [17:20]
• Betting the Company:
  • Bold decision to sell Au Bon Pain’s legacy assets and double down on Panera, risking everything for a shot at market leadership. [29:00]
  • “If I had any guts… I would monetize every other asset, take the financial capital… and I’d go down there and make this happen.” [29:42]
• Leading Industry Change:
  • Early removal of trans fats, introduction of antibiotic-free chicken, and the “clean food” movement—all examples of Panera leading with values and long-term bets, not just chasing trends. [11:00]
• What It Means to Build a Dominant Brand:
  • “My industry is an industry of winner take all. Think McDonald’s and Burger King. Think Panera and Corner Bakery.” [41:40]

4. The Discipline of Execution

• Concept Essence Document:
  • Every new venture starts with a detailed “concept essence” document—akin to a script for regional theater—that defines the environment, food, attitude, and emotional experience. [56:03]
  • Shaich spent nine months refining Panera’s before expansion. “I am much more concerned about getting it right in a really serious way and understanding it and then taking the right steps.” [57:36]
• Means vs. Byproduct:
  • Clearly distinguishes between ends, means, and byproducts. Strategy is meaningless without excellence in execution: “Do I want value creation? You bet… but the way I get value creation is by creating a better competitive alternative.” [71:11]
• Protecting Discovery from Delivery:
  • Shaich’s “life cycle of a business” sees most companies stifled by institutionalizing “delivery” (process, finance, scaling) at the expense of continuous “discovery” (innovation, empathy, creativity). A CEO must be “discoverer-in-chief.” [58:44–62:00]

5. Personal Cost and the Myth of Balance

• Work-Life Tradeoffs:
  • Honest reflection: “I’ve been married twice. It’s not something I’m proud of… The biggest fallacy of life is that you can have everything.” [77:37]
  • Entrepreneurship requires choices and tradeoffs; commitment “owns you, you don’t own it. I’ve never owned a business. The businesses own me.” [77:37]
• Do It for the Love, Not the Outcome:
  • “If you don’t enjoy the people… if you don’t enjoy the doing of the doing, you’re never going to get there. If you’re doing this to make money, you’re never going to make money. If you’re doing this for the glory… you’re never going to get it.” [80:45]

6. Act III Holdings and the Next Generation

• Founder-Friendly, Sherpa-Style Investing:
  • Act III focuses on founder-first investments, alignment (often as common stock), and long-term operational help—“Sherpa management, not venture capital.” [86:23]
• Building the Dominant Player:
  • Invests only in categories with tailwinds (e.g., Mediterranean with Cava, plant-forward with Life Alive, immersive entertainment with Level 99, and top bakery cafes like Tate), then aims to build the dominant, repeatable model. [67:23, 92:00]
• Backing with Operational Muscle:
  • Act III’s partners bring hundreds of years of C-suite and frontline experience—no pure financiers in the core group. [41:40, 87:00]

7. The Role of a Board

• Boards as Think Partners, Not Micromanagers:
  • Effective boards don’t run companies—they “ask good questions that make the people that are running it think.” [98:46]
  • Shaich’s relationship with Cava CEO Brett Schulman evolved from teacher–student to “we are really on his side. My role has been to challenge his thinking.” [98:56]

8. Defining Success

• What is Success?
  • Shaich’s answer is profound: “Self-respect. Success is looking at myself and knowing I have built the best life that I know how to build … knowing I was the best version of myself I could be.” [100:44]
  • Dismisses legacy as ego-driven: “There is no legacy. Things go on. What matters most is my kids and the things I show them that live on in their lives and in their hearts and in their souls and in their kids.” [101:26]

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Notable Quotes & Memorable Moments

• “When you’re doing anything that takes powerful commitment, that commitment owns you. You don’t own it.” — Ron Shaich [00:37, 77:37]
• “Empathy is about the ability to climb into somebody else’s brain, to feel what they’re feeling and to see what they’re feeling. And not sell them, but understand and appreciate them.” — Ron Shaich [16:04]
• “We want to be something special for somebody, not everything for everybody.” — Ron Shaich [62:36]
• “What matters more than anything else is genuinely having a concept, a vehicle, a business that… you’re the best alternative.” — Ron Shaich [52:39]
• “Means and byproduct is everything. Those that focus on the byproduct—the outcome—never get there.” — Ron Shaich [71:11]
• “If you don’t love the doing of it, you’re going to fail.” — Ron Shaich [80:45]
• “I like to think I’m willing to pay the price. And by that I mean I’m willing to do what it takes to do the hard work.” — Ron Shaich [80:22]
• “Obsessive isn’t enough unless you’re right. Being right isn’t enough unless you can get it done.” — Ron Shaich [85:19]
• “The job of a board is not to run a company. Our job is not to run it. It’s actually to ask good questions that make the people that are running it think.” — Ron Shaich [98:46]

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Timestamps for Major Segments

• [00:00–02:30] – Long-term thinking and the reality of personal tradeoffs
• [04:21–08:29] – Annual and quarterly reviews; health as a model for systematic self-reflection
• [09:31–14:00] – Reimagining restaurant experiences; birth of “fast casual”
• [16:04–32:00] – Empathy, pattern recognition, building category leadership, and bet-the-company moves
• [40:31–48:21] – Post-Panera, Act III Holdings: Building and buying dominant brands
• [52:39–58:44] – On control, concept essence, and the perils of focusing on outcomes
• [62:04–67:23] – Balancing innovation (“discovery”) with process (“delivery”); keeping operations simple
• [86:23–92:20] – The Act III approach: founder-friendly capital, Sherpa management, and next-gen concepts
• [98:46–101:26] – Ron’s perspective on boards, relationships with founders, and defining success

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Tone and Highlights

The conversation is candid, deeply reflective, and often bold. Shaich is open about mistakes, proud of risks taken, and eager to demystify the grind behind sustained business success. As a leader, his focus on operational excellence, relentless self-inquiry, empathy for the customer, and a willingness to pay the price for greatness come through in every answer. Shane Parrish guides with curiosity, inviting tangible lessons for experienced founders and newcomers alike.

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For listeners seeking more, Shaich’s new book “Know What Matters,” and the detailed story of each business inflection point, is recommended.

Transcript

[Ron Shaich]

I've done this now over half a century. I was part of building bakery cafes in America between Old Bon Pen, Panera. These were the dominant brands.

[Shane Parrish]

How do you develop the long term thinking that you've brought to all these different concepts?

[Ron Shaich]

I have an expression, I'm long term greedy, not short term stupid.

[Shane Parrish]

Now it seems so obvious, but how did you hit on this insight at the time?

[Ron Shaich]

I think that the most powerful skill that I have as a business person and what I would do, challenge entrepreneurs to acquire is the skill of it.

[Shane Parrish]

Talk to me about the difficulties of running a business, the family cost, the social cost.

[Ron Shaich]

When you're doing anything that takes powerful commitment, that commitment owns you. You don't own it. There's a very real personal price. I've been married twice. It's not something I'm proud of. Everything I believe in about business starts with three words.

[Shane Parrish]

What are you obsessed with lately?

[Ron Shaich]

My health actually.

[Shane Parrish]

What does that mean for you to be obsessed with that?

[Ron Shaich]

Well, I'm 71 and I look at my kids, I look at my relationships and there's so much to live for and so much to see. And I really want to do everything I can to give myself every opportunity to live and see how the world unfolds.

[Shane Parrish]

And how has that changed your behaviors?

[Ron Shaich]

I got more serious about it because I would say in my earlier years, 30s, 40s and 50s, I was probably more focused on work and relationships, family. And as I gain perspective on it, if I'm ever going to do it, now's the time. So I'm trying to literally work out every day in some serious way and really eat well, take the right medications, supplements, anything I can to help myself. But to me that's about an attitude towards life. And that attitude essentially starts with a view that it's our responsibility to figure out what it is that we're going to respect in the future. I tell it by way of a story. I watched my mom and dad pass away. Now, 30 odd years ago, one of them died, very much at peace, the other not so much at peace. And they really were second guessing some of the decisions they've made in their lives. And I began to realize there's a judgment day. I can't tell you Shane, it's up there. That's a personal spiritual decision. But I can tell you if you have a chronic illness and you have the opportunity, you have a judgment day, a self judgment as you go through the end of life and watching them die 30 years ago, I concluded for me I wanted that opportunity to have that judgment day, not in the ninth inning with two outs, but in the seventh inning, the fifth inning, the third inning, when I could really do something about it. And ever since I began, on an annual basis, sitting down and saying, what is it? In five years, in 10 years, I'm going to respect in the context of my relationships with my work, my relationships with my family and friends, my relationships with my body, and my own relationships with my own spirituality. And so that process of defining what I'll respect is where I began. And. And I would then basically codify those initiatives, those things I was trying to accomplish. I'd codify them into projects and then literally sit down with myself once a quarter and say, how am I doing? Am I actually full of baloney or not? Am I actually getting done what I signed up to do? And so increasingly, over time, bring it back. I have found myself realizing that I have to do a better job of caring for my body and that the power of exercise, the power of physical engagement really matters. And I think I feel better about that relationship today than probably at any other point in my life.

[Shane Parrish]

Take me through one of those quarterly reviews. What does that look like to you? Do you, like, pull up your calendar and look at how you're spending your time?

[Ron Shaich]

Do you? Yes, we look at time, but it's not so much about time. Time is a. Is a means. It's not the end. I'm really looking at what did I get done? Did I get done the things that I said I needed to do to create that condition that I'm trying to attain in 3, 5, and 10 years? So I give you a very specific example, and we're staying in the health domain. I think it was probably 15 years ago. I went to my doctor and I realized I was on the edge of becoming pre diabetic. I was also doing work at Panera, and I had a medical advisor helping me deal with how our food manifested itself. And we wanted to really serve people. We had done a clean food initiative, and he put me on a continuous glucose monitor and he wanted me to see how I was affected by Panera food. And that whole experience between my doctor and this work I was doing in Panera made me realize I needed to manage my own relationship with carbohydrates, my own relationship with my diet. And that led me to say, hey, if you're ever going to do this, I was at that time mid-50s. I said, if I'm ever going to do that, I got to get to work on doing it. And I then put that into projects, one of which was, in my case, to move to a more vegan diet. Another piece of that was to hire a trainer. And I hired a Ukrainian, former Olympic trainer, track and field coach, who would come to my house at 5:30 in the morning and did so for 12 years. And so what I'm really saying is I'm trying. Nobody knows where we're going to end up, but I'm trying to create a state. And then the question is, what are the projects, the things I can do to do that and then to sit down and say every quarter, how am I doing against that? So now we're 15 years later, I still wear that continuous glucose monitor. My blood sugar is low, normal. But it's a way in which I keep the data and I've become educated. It's an ongoing project. Same thing now with exercise. I have a different trainer. I've evolved, but I'm really trying hard now to push up my VO2 max as opposed to simply my strength. And I'm playing with a bunch of different things. But again, all of these are project against. An end of trying to recognize it's my responsibility to care for myself. And nobody knows how this is all going to play out and whether I will remain healthy or not, or any of us will. But I can do what I can do. And on a regular basis, I'm sitting there and I'm literally writing it down. I'm really saying this is where I'm trying to get to. And then I am literally writing it down.

[Shane Parrish]

It's controversial. When I talk to people about exercising every day, people are like, you're crazy, you need rest. And I'm like, it's easier to exercise every day than it is five days a week. For me anyway.

[Ron Shaich]

Yeah, I'm committed to it every day. And in fact, what I did, again, part of that project is I, I set an appointment for 8am every day and I either do it with a trainer or myself, but I'm there 8am and I get it done before the day begins, basically, yeah. And you know, I've, I've started to be a little more kind to myself. I'm not doing it 5:30am anymore, but I still, I want to get it done before the day starts because if it's really important, it's one of the key things. I'm trying to drive and it's one of the projects I'm focused on. Then I have to make sure I make time.

[Shane Parrish]

With the wisdom that you have now, looking back and building Au Bon Pain Panera, which I want to get into in detail. Do you wish you would have placed more of an emphasis on your health back then?

[Ron Shaich]

Yes, but I have to put that in context as well. Look it, I'm 71, I couldn't feel more blessed. I've had an amazing life, I've had great health. I'm still in the prime of my life. I have extraordinary family. I've had the chance to do really interesting work and impact hundreds of thousands if not millions of people. I've been able to engage my mind. I've had this opportunity to, to live a blessed life. I look backwards and there are certainly lessons I've learned and things I might do differently. But taken as a whole, I couldn't be more at peace and more pleased.

[Shane Parrish]

Does it change how you think about sort of food and the experience that you're creating for people in the restaurant? Like I think of something like True Food Kitchen, which is a very health conscious sort of restaurant. How does it change how you think about serving millions of Americans every day?

[Ron Shaich]

I've always come from a place of wanting to make a difference in people's lives. My way of approaching the world was essentially initially in a political context. And I discovered through some experiences in university, and we can talk about these, but I discovered that business is probably one of the most creative things you can ever do. And for a kid who couldn't dance and couldn't sing, I was, I was blown away by the power of business, both the creativity of it and it is a lever to change. I think I've been involved in more change as a business person, more positive change for the world than I ever could have been if I had done politics or gone into government or been a lawyer. I mean, you take Panera. Panera was one of the two first brands to introduce antibiotic free chicken in America. It led to changing the marketplace as the challenger brand. And doing so, we actually opened up the market, lowered the prices and in came everybody from McDonald's to chick fil A. We were among the first people to remove trans fats from our menu in the early 2010. 2012, the US government wanted to post caloric information. The industry was fighting it intensely, publicly said, look it, you know, what's the problem with this industry? If people are afraid of posting caloric information, what's in their food? Maybe the answer isn't trying to hide it. Maybe the answer is to actually change what you got in your food. If you think people aren't going to be too pleased with that we were in the lead and had the opportunity to be one of the first large organizations to remove all artificial colors, flavors, sweeteners, preservatives, really, to push for what is now called clean food, removing the ultra processing. And I know that we've made a difference. I also think we've made a difference in the food culture. When I grew up, the only choices were fast food and fine dining. In the early 90s, as I think you and maybe some of your listeners know, we really developed the ideology that became what is called today fast casual. Wasn't very complicated. We began to look around and could see this has been 92, 93, that one out of three consumers, one out of four consumers held their noses when they went into fast food. And you said, what is it that they're looking for? And I know we spent a year or two on the road listening to people. And what you heard was that so many of these consumers, what they really sought was real food environments that engaged them, served by people that cared, and they actually wanted an experience that elevated their sense of self, not depleted it, which is what they experienced in fast food. And we began to say if we could create that kind of environment, we could create something that actually elevated people, and that this was a powerful opportunity. Now, I was trying to figure it out for my own company, but that ideology, that view of the world, which in the early 90s, nobody thought would ever work, that became the ideology that fueled what's called fast casual today, which is a $350 billion business. Panera became the poster child for it. Howard Schultz and Starbucks played a similar kind of paradigm. Steve Ells and Chipotle and I think together you saw the evolution of food culture. I'm so pleased. One of the things that we did was just say food was about so much more than what you put in your stomach and how cheap it was. Food industry is the second oldest profession, and it's about hospitality at its core. You know, the idea that we could create environments that people actually wanted to sit in and invite them to come in and enjoy it and to find it as a place where you really did want to have an interview, gather the soccer moms, have a bible study group, write the great American novel. I mean, all of these were experiences that played out in environments that we created. And to me, that was a beautiful contribution to people's lives.

[Shane Parrish]

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[Ron Shaich]

I think that the most powerful skill that I have as a business person and what I would challenge entrepreneurs to acquire is the skill of empathy. Empathy is about the ability to climb into somebody else's brain to feel what they're feeling and to see what they're feeling. And not sell them, but understand and appreciate them. And I think that historically we've had those kinds of skills. I mean, when you talk about my career, you talk about often the financial results. You have. Kava, which has been the most successful food service IPO of the last five years. Arguably now a company worth $7 billion was worth as much as 15 billion, but it's up three, four fold from its IPO year and a half ago. You talk about Panera. Panera Was the best performing restaurant stock over two decades. Its last two decades produced 25% IRR. In fact, somebody told me we actually beat Warren buffett and berkshire hathaway. People talk about the financial performance, but that's not the part that gets me excited. That's not the part that I actually feel that's a byproduct or manifestation of what really was exciting, which is learning and transforming. And so over the course of our history, and I can take you through this, but there were three or four, maybe five key learnings that broke maybe every five years that led to massive transformation. And it was actually getting that and figuring it out and seeing it and tasting it that I loved. That, to me, was where the real work was to understand that with empathy, what the opportunity was, and then to have the discipline to go in, not just understand it, but actually build that into an organization and put that in place, and we can go all the way back to the initiation of my career. I started with a single cookie store in downtown boston. That cookie store led to an opportunity to become involved in another company called au bon pain. Essentially, there were 50,000 people a day walking by that store. The cookie store, the cookie store. Nobody bought cookies before 12 noon. So we made a decision to put in french baked goods. We became a licensee of this company called au bon pain. I didn't know at that time, but au bon pain was really a french bread manufacturer. They had opened 13 stores and closed 10 of them, had about 3 million in debt, and were functionally bankrupt. And I became their licensee in this one square block area in downtown boston. And I can tell you, as an operator, I know which of my vendors are any good and which aren't. They were so out of control, Sometimes they billed me, sometimes they didn't. Sometimes they delivered, sometimes they didn't. I'm sure to this day, I still own money. But the point of the story is simply to say they had a lot of issues. I saw the opportunity to apply what I'd learned in the cookie business to the french bakery business, and it led to a merger. We took 60% of the company, and they kept 40% and then split it up. That company, au bon pen co. Inc. Which we formed, was Was my cookie store. And their three french bakeries Was the company we ended up literally selling for $7.8 billion in 2017. But the point of the story is, the first thing that we actually really figured out Was the possibility, the opportunity of what au bonpens represented. And I would be working on the counter. And customers would walk in and say, I want that baguette. And I'd say, sure. And they'd say, slice it. I'd start to slice it. You know how you slice bread? You slice it like this. And they say, no, slice it from top to bottom. I'd do so. And I'd hand them the baguette chain and they'd pull out a little bag from a supermarket and they put some bours on and roast beef on or smoked turkey. And again, you didn't have to be a marketing whiz to say, wait a second. What they really care about the job they want is a sandwich. They want something. It's not the croissant of bread they want itself. It's how that forms a platform for something else. And we began to say maybe the opportunity, the job we wanted, that the customer wanted to hire us for, was actually to make them the sandwich, make them the salad, use the croissant bread as a platform, and straight up again, doesn't seem like a revelation now, but we began to rebuild this concept around that idea. And very quickly, this broken, bankrupt company, Au Bon Pen, started taking off. And when we were selling sandwiches and croissants, it was an elevated food experience. People loved it. And this broken down little company, in the course of six, eight years, took off. It became a category in malls across North America. We had everybody from Pepsi and Sara Lee attempt to take us on or buy us out or take us out. By 1991, the manifestation of that was we went public based on this model of a French bakery cafe as opposed to just a French bakery. That was one learning that observation, that empathetic observation of the power of the product, not as an end in and of itself, but as a platform that led to a powerfully successful concept. The same thing happened again. By 93, Au Bon Pen was beginning to run out of organic growth. And the one thing, if you're in a public company, and I've been involved in any number of public companies, most of its valuation is generated by its possibility of growth. And you have to actually deliver that. I know it was very clear to me in the early 90s that Au Bon Pen was limited in its growth. It was great in Boston, New York, D.C. chicago, but it didn't work in the malls in LA. It didn't work in the malls in Missouri. And we ended up backward integrating and we ended up building a big international business. We said, if we're the best in the United States at high density urban feeding, there's more Opportunities abroad than just the United States. We also began building a manufacturing business. We had always had manufacturing skills and built what was at that time the largest frozen dough plant ever built in the Midwest. And then I ended up buying a little 19 store chain in St. Louis called the St. Louis Bread Company. And I saw that again at that time as a gateway to the suburban marketplace. Old Bon Penh would be urban. This St. Louis Bread Company could be suburban. And it was interesting. And it was that point. This would have been 93, 94, 95. I ran it through an earn out. I began traveling the country with a guy named Scott Davis, another guy named Dwight Juson. These were people that worked with me, colleagues who I thought I learned from. And we began seeing these consumers who wanted something more. And it was very clear that there was this very distinct consumer niche out there that wanted something better. And we began to try to make sense of it. And again, you asked me how we did it. It was traveling into the west coast, the east coast, went up to Vancouver in Canada. Mike Lasky and Tara Breads, amazing bread he was doing up there. And we were trying to find out who are the best people that were meeting customer needs and why were people smiling when they came out of there. And it was from that that we essentially began to get it. And I can remember sitting in a bar with these two guys, Scott Davis and Dwight Juson. And Dwight was my researcher. And Dwight said, you know, you really want to understand today's consumer? Look at their beer bottle. That label on it is a mirror for who people perceive themselves to be. And our opportunity is for our food to do the same thing, to give people a sense of who they were and what they are. And, you know, I began to make sense of it. And again, for me, the powerful theme here, Shane, is trying to search for what is the signal versus the noise. You know, what really matters, because there's all this stuff coming at you. But what are the deeper trends? And what had become clear to me as I was traveling the country and watching people and their angst around fast food, Their need for speed, but their need for quality, Their need for an experience that elevated them. As I was doing that, I began to understand a deeper theme. Post World War II, all food was local. But you fast forward that to 1990, almost every major consumer category had been commodified. It had been turned into an oligopoly. You can take beer. It had all once been local beer. It was Anheuser Busch and Miller. You can take coffee. It was also Again, once local coffee roasters that had morphed into Folgers and Maxwell House. You can take soft drinks. Once had been local soft drink manufacturers. That had become Coke and Pepsi. And every action draws reaction. And that's the deeper trend. And we began to see in different consumer categories, people waking up and saying, you know, I don't want to be part of a mass market. I want to feel special in a world in which I don't. And you started to see the development of craft breweries in beer. Good friend of mine in Boston, Jim Cook, did Samuel Adams. You know, it was an answer to what had happened to the marketplace. We saw the same thing with coffee, with the growth of specialty coffee. I mean, back then, if you came to my house for dinner on Friday night, I'd serve you Folgers. Today, if I don't use an expensive espresso machine or an espresso, I'm somehow insulting you. That was the deeper trend. People wanted to feel special. You saw the same thing with beverages. Coke and Pepsi morphed into Snapple, into El Waldo. And now you walk into a convenience store, you're going to see a couple hundred different beverage brands. The point of it is, we saw the same thing, the same opportunity happening in food. At one time, all food had been local and had been commoditized into fast food. And the powerful opportunity was for specialty food, for food that was done the way it had been done, for food that people respected with ingredients. And we began to see the power of that and saw the same thing happening with bakery. One time, bakery had all been local in the consolidation, the commodification that had become three loaves for 99 cents. And by the early 90s, some consumers were waking up and saying, I want it done the way my grandparents did it. No chemicals, no preservatives, stone deck ovens. And we began to say the there's a powerful opportunity in, shall we say, specialty food. And there's no more powerful platform to compete with that than a specialty bakery. And putting those two together became our manifestation of what we could do as now called fast casual concept. And so again, same thing. I saw it, I could see it, I could taste it. And it was the opportunity to go put that in place. We should come back to what the objective of all this is in a second. But that led to that second transformation. And the second transformation ultimately was to apply those principles of a specialty food to one of our concepts. And I began to apply it to this one concept we held called St. Louis Bread Company and we literally completely rebuilt it. We took that unit, then was doing about a million dollars a year. It was basically a sandwich place in which the bread was the differentiator. And we added a breakfast business rooted in sourdough bagels. And the business popped from a million to a million 250. And then we came in and created a whole different environment for the store. A place that you wanted to sit. Wonderful, wonderful designer named Terry Heckler, who actually did our logo and did the original Starbucks logo out of Seattle, who's since passed away, but he was instrumental in that. And we created a kind of environment that welcomed you and invited you. I used to call it visual candy. Wherever you sat, you saw something. And we softened the environment. We made it comfortable. We made it a place you wanted to be. And we put that into place in our stores. Very quickly. Our volumes popped from 1,250,000 up to a million 7:50. And we began to understand that we were actually playing in another business. A gathering place business offering an opportunity for a place people could go to, to touch base, to see each other, to connect. Soccer moms, Bible groups, farmer reps, folks doing interviews, people doing their taxes. And we created these environments. And again, this is the manifestation of this understanding that people wanted to feel special in a world in which they didn't. And Pan Air became the poster child for that. And we built that out. And that led to third learning and transformation. By 98, 99, I was feeling some real frustration. I was running a big public company. We had four divisions at that time. Au Bon Pen, Au Bon Pen Manufacturing, Au Bon Pen international, and this fourth division, St. Louis Bread Company that we had renamed Panera. That's a whole nother story why we did it, but it was renamed Panera Bread. And I'm on a beach down in the Caribbean with a friend and I'm lamenting this friend. Everybody's fighting, everybody's angry at me. The guys at old Bon Pen are angry at me. Why am I trying to take their capital and shift it to this growth thing, Panera? The guys in international didn't want to call home. The guys in manufacturer were trying to figure out why they were in a retail company. Any rate, we had professional managers in everyone. And I said to this friend, you know the real shame here, this thing, Panera, even though it's the third biggest of our company, it's not the largest. It's not the name on the door. The name of the door was Au Bon Pain. That was the public company. I said, this thing has the potential to be a nationally dominant company. For every thousand people say it one ever makes it. And it was pretty clear that we had that opportunity. And I said, you know what? We're going to screw it up. We're not going to give it the capital. We're not going to give it the human resources to get it where it needs to go. And my friend looked at me and said, ron, what would you do if the name of the company was Panera? Panera owned everything else. How would that change the way you thought? And I looked at my friend and I said, wow, I never thought of it that way. If I had any guts, if it was really Panera, I would monetize every other asset, take the financial capital and I'd also take the human capital, the best people, and I'd go down there and I'd make this happen. Because the greatest gem in this company was that division. And the greatest risk to its possibility, its potential, was that we didn't give it what it needed to actually grow and become what it could be. You know, I thought about it. I'm this kind of guy. If I say I'm going to do it, I often go do it, want to live with myself. And I went off and came back two months later and went to my board with a proposal to sell every other business and bet the whole thing on this Panera Bread division. I didn't control the company at that point, and that was definitely a very tough situation. But ultimately they gave me the room to do it. I did it. It led to the worst year and a half of my life. I sold every other division. These aren't just businesses. These were, you know, old Bon Pen was my first child. My kids know that, you know, I mean, it was a part of me. These were people I had sweated with and bled with and I loved. The good news is most of them ultimately came back to work for us when their non competes were over. But we sold the, you know, Au Bon Pen in Au Bon Pen International. We sold the manufacturing business, and by 99, I ended up with Panera Bread and a whole bunch of cash and a business that had extraordinary potential. And then I went to work to help make that happen. And we took it from what, a couple of hundred stores up to 2000 restaurants. Very close to it by the end of that decade. And that led again to the next transformation because they come in waves. And by 2008, 2009, I personally was feeling that I wanted transformation. I wanted to understand if I could take these Powerful lessons I learned about long term thinking and actually apply them in a broader civic society. I had been involved with the Obama campaign and there had been some discussion of joining the administration and I was unable to give him my commitment to Panera. And I decided I wanted to go do this in some way. And I also had a desire to test out an idea I had been working on which was something called Panera Cares. Cafes of shared responsibility where there would be no set prices. It was a test of humanity. People come in and it's another whole story. But I wanted to test out these cafes of shared responsibility. And so in 2008, 2009, I stepped down as CEO. I tried to take that opportunity as jumping off a high dive board to actually learn what it felt to go in the water. And I spent about a year, a year and a half creating Panera Cares, doing a bunch of political things. I was one of the eight or nine people that co founded a group called no Labels here in the United States which is meant to reduce the hyper partisanship in dc, the polarization and focus us on long term thinking. Again, it's about seeing opportunity. I had the chance to return from the West Coast. I was still the executive chairman of Panera and the largest shareholder. And I did a lot of the M and A work and some of the consumer work. And I came back from a trip after a weekend and I essentially decided I wanted to write a manifesto for how I would, I would compete with Panera. If I weren't part of Panera, I would say how I would screw with Panera. But how would you take it on? How would you best it? And I essentially at that time called for complete digital access, which didn't exist in the restaurant industry. We can talk more about that. I called for something called loyalty, which again didn't exist. It's become prevalent in the industry. It had actually been developed in the UK with a company called Tesco and came through Kroger in the United States where your best customers were treated differently. I called for clean food, a different approach to eating and how you might eat. And I essentially called for Omnichannel. And I handed in this vision for radical transformation of Panera to Bill Morton who'd become the CEO. And Bill was my very dear friend, 20 year colleague and looked at me and said wow. He said, I don't have anybody to work on this. Would you go work on it? And I said yeah, I'll have some fun with him. And $25 million later in another year, the executive chairman is working 80 hours a week on this vision for how to have integrated technology. Change the guest experience, change the whole deal. I was loving it. I had none of the ceremonial duties of being a CEO. I didn't have to tell people what I just did. I don't have to tell them what I was going to do. I just was dealing with the product. And Bill came to me and said he personally had a problem. He couldn't travel, something had happened in his family. And he said, maybe we should make you CEO again and I should step down. And we debated it because it wasn't what I wanted necessarily, but it seemed to be necessary at a certain point. And maybe nine months or a year later we executed that. We just swapped positions. He became executive vice chairman. I became as CEO again. And I put this in place. And again, it all sounds lovely, but it led to the worst three years I can ever imagine. I had activist investors attack me. I spent $150 million on technology. I used to refer to technology as a Social Security of Panera. It was only a matter of time until it was 100% of our revenue. We were really investing in it and you didn't know where it would end. And we ended up having to transform everything. We transformed not just technology, but we transformed how we, how we dealt with the guest. What our, our, our concept essence was. We transformed much of the senior management team this company had had, growing in its needs and its requirements. Ultimately, this became one of the largest transformations in the industry and it took on a life of its own. And again, straight up, I could see the opportunity for a better Panera that was not competing the way it had competed for the prior 20 years, but was competing against what the possibility was of what the consumer wanted. And then came the hard work of actually putting that into existence. And by 2017, it was working. Our EBITDA was up 35%. Our com store sales were pushing double digits. And we had a European money manager, jb, who came along and fell in love with Panera and they wanted to buy it. And though I was never selling it, it wasn't my intention. You know, when somebody falls in love, who is it for me to deny them what they wanted if they were willing to pay for it and they paid for it. And what at that time was the largest or second largest U.S. restaurant deal ever done, $7.8 billion at among the highest multiples. And again, it seemed like an opportunity to harvest everything that we had worked on for a lot of people that had believed in us and we took that opportunity.

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[Shane Parrish]

And then what are the major clicks to get us to cava?

[Ron Shaich]

Now you know, it's interesting. So I, I, I left Panera. I had always had interest in a number of other little businesses and I was doing, after I left I was doing a lot of speaking on the pervasive short termism in the US capital markets and how not just our body politic but our capital markets and how that was essentially making us less competitive. It was not helping our GDP growth. If we're not thinking long term, we're not going to have innovation. If all we want is to pop the stock. It's short term cost cutting that drives it. One of my associates, guy named Keith Pasco, oh did work with me at Panera, said why don't you take your own money and put your money where your mouth is. And I ultimately took roughly $200 million of my own money. No LPs, no external folks, just my own money and a bit of money from some of my partners, some of the people that chose to join us and took some of the people I had worked with and decided to go do it. And essentially I created a investment vehicle because it's not a firm, it's called Act 3. You can figure out where that comes from. Au Bonpain, Panera and now Act 3 Holdings. And within eight weeks of leaving Panera had gotten involved in our first really real deal which was Cava. I had been an investor in Cava when it was two restaurants, just a little something. And after I left Panera, they asked me if I'd joined their board. Another company called Zoe's had asked me if I joined their board. Board. They were a public company. And it was very clear to me. Again, I could see and taste that opportunity. Mediterranean had power. It was the number one diet in America. It was bold flavors. It was different but accessible. And you could tell this was a powerful channel with lots of winds at its back. The channel. And I began to say, who has the potential to dominate? Is it Zoe Zerkava? And again, these folks were five times the size of Cava, but Cava was doing higher volumes and was a better concept. I started to think to myself, you know what. What I should do is buy the Zoe's. I think it was a three or $400 million public company at that point, from a billion dollars, you know, instead of figuring out for them, buy it and then merge it in with Cava. And the one problem is I had to tell that to Cava, who wanted me to join their board. And I broke the news to Brett Shulman, who was the. This wonderful CEO down at Cava, and Brent said, wow, okay, that's an interesting idea. And he said, before you joined the board, maybe you want to tell them about this? And I went and basically pitched their board on this idea. And in their wisdom, I must be straight, they understood it, and they understood the power of building a dominant brand in the Mediterranean category. And it helped that I agreed to essentially finance a large part of the acquisition and to help lead it. But what it amounted to was instead of me buying Zoe's, we decided to have Cava buy Zoe's, and then we would help them make that transformation. And here was the bet that by buying a company five times larger, we could apply our discipline, our skills, our culinary skills to end up with the dominant player in this category. And the thesis, step back. But the thesis behind Act 3 is we bet on categories that have tailwinds, and then we endeavor to build the dominant player in that category. My industry is an industry of winner take all. Think McDonald's and Burger King. Think Panera and Corner Bakery, Chipotle and Qdoba. All of the value creation tends to happen for those that are building something of large scale. And if you have that dominant position and you're a better competitive alternative, you win. And so we saw that opportunity in Cava, and that's what led us to make that acquisition. And at that point, Cava went almost overnight. So it took us six months to do the deal but from 50 restaurants to 350 and it led to a very, very tough 2019 because the company wasn't prepared or ready for it. And one of the things about Act 3 Holdings, we're able. I have seven or eight partners, not one of them is a financial guy. There's only one financial guy in the mix who was actually the activist who attacked me. I couldn't tell anybody at the time that I actually thought he was smart and liked him. But at any rate I did and he joined us as our cfo. And you know I have one partner that has been with me for 20 odd years who does all our deepest research and strategic thinking. He was the guy who was really helped me develop Fast casual and that ideology. I used to say from, from his brain to my lips I'd speak it but he was the guy who really pushed me hard on thinking he's with us. I have another partner who's opened 5,000 retail locations. I have another partner who came up through Darden, was the president of Dairy Queen, the president of Bruger's Bagels was my COO is a guy who really understands discipline, scaling and how you build these companies. We took out a number of people from Panera's technology function. The number three guy who built all that technology joined us and he brought a team with him. We have the capability of really doing technology. I have another partner who's a serial entrepreneur, great at food, great at design, great with ideas. We get into a smaller business. I mean he's superb in helping bring it all together. So the model for us in Act 3 was one to bet on a category and then have the ability to go in and help them build the dominant player in that category. And so at Cava we were able that first year to really provide a lot of technology skills that were needed help out in many ways as there wasn't an effective CFO until we brought that in and to actually help in multiple different ways to help that business grow. And it was a very tough year. I can remember Brett, our CEO, we used to go to breakfast every other week, walking back from breakfast in downtown D.C. and he looked at me wistfully and said Ron, I just wish we still had just our 50 stories, not these 300 that we bought. And I looked at him and I go Brett, we don't have that choice anymore. What we need to build is load bearing people and organization around you that can take on this opportunity. But if we can pull this off, Katie, bar the door. We're going to build an amazing company in a powerful category. And ultimately, Cava has been probably the single best IPO in the last half decade in the restaurant industry.

[Shane Parrish]

How many restaurants are you up to now?

[Ron Shaich]

About 400. But more importantly, I mean, it's perceived as a brand who's filling out a category, Mediterranean and dominating in that. And, you know, given its market cap market valuation, which has gyrated between 7 billion and 15 billion up and down, you know, the market perceives this as something very real with the potential to fulfill its destiny as the next Chipotle. And that's what they're paying for, that potential.

[Shane Parrish]

Let's go back to the Au Bon Pain IPO just for a second, because I remember you talking about how it changed everything for you, and you didn't anticipate having all these new constituents or people breathing down your neck. And the. The short termism that sort of comes with some partners, I guess, some capital partners.

[Ron Shaich]

I'd say it differently. I did a book called Know It Matters, and I did a chapter on the ipl, A Warning of Shane. I've counseled dozens of people on going public who are going public. And I typically start by telling people 90% of the entrepreneurs that go public live to regret it, because it's a very different enterprise now. For me, it was phenomenal. I've done it multiple times, and it's created great blessings in my life in many ways. But there are also difficulties that go with it. And I can remember the day we went public, my partner at that time, Luke King, was on cloud nine, and. And I had him stop the car. We were in the limousine and I got out and I walked through Central park here in New York. And I started thinking to myself, just the sense of responsibility I felt to all of these folks that were investing tens, hundreds of millions of dollars in this company. And the reality is, when you're running an enterprise, you have a responsibility. The people that believe in you and you want to deliver. I want to deliver for the people who are buying the stock, not the ones that are shorting the stock. There were any number of those investors. They all came from very different places. Some were with us and building something for the long term. Others were trading the stock for the short term. And you had all of these pressures, and it all played out in a very public way. You had very limited ability to protect whatever was going on in your company and develop it, and you needed to be ready for a prime time and so I'll tell you a story. When we decided to take CAFA public, I think people would consider it a very successful IPO today. Three and a half times from the IPO price, but considered very successful. What did we do? We helped Brett and the team get ready for an IPO For a year and a half before we went public, we did quarterly earnings calls in the company, simulated with our investors. They had to do press releases, they had to take questions. We worked, worked with great diligence in getting their narrative down so that when they went out, they knew what they were selling and they were selling to the Street. The possibility of participating in the growth of what would be the dominant player in Mediterranean. I think we really prepared this company. When we actually went to market. We didn't let the investment bankers control the distribution. We did. We brought in cornerstone investors like T. Rowe, who I had a long standing relationship with, had helped make billions of dollars for them. We brought in Capri, the capital group, which again, I had been part of helping make billions of dollars for them. We brought them in as early investors. We limited the distribution. None of us were selling stock on the ipo. This wasn't an opportunity for any of the existing investors or the largest ones like me, to get money out. It was an opportunity to support and fuel the company. And essentially we only allowed the investment banker 9% of the shares in distribution, which essentially went to their clients and the hedge funds. We protected 91% of it, of that distribution so that it ended up in the right hands. And I think that we serve that company very well in taking a long term view of the ipo. To me, an IPO is a little like a wedding celebration. It's the beginning of the marriage, it's not the end. And you know, having been married, I would say to you, you want to really contemplate that on your, on your wedding day. What, what is it you're going to have to do to have a successful wedding? That celebration will, will, will, will fall by the wayside if you don't.

[Shane Parrish]

Do you think about control differently now, with all your experiences?

[Ron Shaich]

I'd answer it differently. You asked me if I think about control. Look it, one of the lessons I've learned is to believe in yourself. When I was growing up and coming of age professionally, if you're smart, you're always going to say, that guy's leaning on me about this or that. What am I not getting? What should I do? And one of the lessons I learned as I look back is to trust myself. That I actually know what I'm doing and I have to believe in it. And I have to have the faith to get through the long march. I have to have the faith to go through the pain of transformation. One of the really interesting retrospective lessons for me is to actually trust myself. And that has led to a decision that generally when we like to be in a control situation in a company, by that I mean that we're willing to bet our own money, we're willing to bet on ourselves, myself and the Act 3 partners, but we don't want to be at the effect of somebody else who has a different idea. And straight up, when you have investment partners, the best way I can express it to you, it's a little like having a baby with someone. You take their money, they have legitimate rights. And if you're the kind of person I am, you want to listen and you want to be responsive. And so I like generally being in a control position because it allows us to take a long term approach to do the things that don't drive profitability in the short term, but actually build a far better company. There's one principle here that we haven't talked about, and I want to talk about Act 3 with you. Everything I believe in about business starts with three words. Better competitive alternative. The world doesn't need another business. It certainly doesn't need another restaurant. The whole objective of everything we do is to build something that for some target customer, this is the best alternative they can find. And what I mean by that, it sounds like fancy MBA talk. It isn't. All it means is that your target consumer is going to walk past all of your competitors, all the people doing something similar to you, and choose to come to you because you do it better than anybody else. If you're able to do that, you can win. And so I tell it by way of a story. I was in Vegas speaking, I don't know, a couple of years ago, and I walk through the casino at 11:30 and I see folks dumping chips into these slot machines. And I think to myself, Ron, the only way I'd ever be in a Casino at 11pm Is if I owned the casino and had the house Vic. It's the same exact thing. And for me, when I think about business, if I don't have a better competitive alternative, I don't have the house Vig. This is an ugly business and I don't want to be in it. What I've come to know and what I'm trying to make sure your listeners hear loud and Clear is that what matters more than anything else is genuinely having a concept, a vehicle, a business that in whatever your mini market is the physical one mile or the nation, if it's real estate, whatever it might be, that you're the best alternative. When you have that, then you have the possibility of growing and building something to scale.

[Shane Parrish]

Is that what you were trying to do with the concept ESSENCE Document is hash that out?

[Ron Shaich]

Totally. Concept ESSENCE was what we started. Every business and every business we're in today. And we should talk about the multiple businesses we're in today. Every business that we're in starts with a concept ESSENCE Document. What is a concept of Essence Document? It's essentially a script for regional theater. Think of it this way. If you're in a multi unit business, I'm running thousands of regional theater shows that are performing 18 hours a day. And so what is that script? What is the aesthetic of the environment? What is the food and the food attitude? What is the humanity? What are the people like? How do you experience it from a consumer's perspective when you walk in and we try to really go deep and use words that mean something in writing that script or that vision for how we're going to compete and that becomes an organizing tool. I mean, just imagine at Panera we had 125,000 people. How do you get them all aligned with what we're trying to create if you can't put it into words?

[Shane Parrish]

But you obsessed over this. You spent nine months working on this document before you started. And you were obsessed about all the details. And walk me through that a little bit, because a lot of other people, there's, there's sort of wisdom which is like, go fast and fail fast. And this is sort of the opposite of that. You took your time, you were methodical, you were in the weeds, you were watching people.

[Ron Shaich]

But you know, go fast and fail makes sense in technology where it's very much there. There's no fixed cost and you can repair completely. I'm in a business, I call it fashion, with fixed assets. You build a restaurant, you're going to spend a million And a half, $2 million, maybe more. You don't want to mess it up because fixing it is really difficult. So you want to get very clear what you're doing, what do you do first, second, third, and make sure you get it in the right order. So I am much more concerned about getting it right in a really serious way and understanding it and then taking the right steps from that than I am about getting out there and Getting market share first.

[Shane Parrish]

Because the cost of failure is so.

[Ron Shaich]

High, because the cost of failure is extraordinary. And oftentimes, once you bounce, you can't come back. And remember, we're talking about fixed assets. We're talking about, you know, building restaurants. If I don't understand what I'm doing, I'm going to build it wrong. I'm going to fail.

[Shane Parrish]

How often do restaurants turn around once they start losing sales?

[Ron Shaich]

Rarely. It's really hard because organizations, by their nature, don't like to change. In fact, I'll share with you something I've written about. I call it the life cycle of a business. It starts with discovery and ends with delivery. And think of it this way. When a business starts out, it's so hard to get off the ground and win so hard. Probabilities are very low. You have no capital, no scale, no competitive advantage. You have the highest cost you're ever going to have. And it requires something that really is powerful to break through with the consumer, to deal with all those forces working against you. But some people do, and people discover a better way to approach the customer, that touch the customer, a better experience. And they get off the ground and they start to scale. And it works, and it's doing well, and it's getting bigger. Along comes outside capital, and outside capital says, you know, we can help you grow even further. And pretty soon you have a board meeting of people saying, you know, this business is doing great, but. But you know what? It could do even better if we bring in some of these, I'll call them delivery people. Delivery people are financial planning and purchasing and a range of different disciplines. And the truth of the matter is, you bring in the delivery people, it makes the place better. The margins get better, the business gets more disciplined, it gets tightened. But here's what begins to happen. And not over six months, but over years and. And half a decade. The delivery people and the discovery people find they're talking different languages. The language of discovery is the language of poetry. It's the language of imagine if. If only we could do this. The language of discovery, of delivery is the language of prove it to me. Show me the numbers. Let me see the spreadsheet. I don't believe you. And quite frankly, these forces challenge each other. But the language of. But delivery, because it does add value, starts to push out discovery because discovery doesn't have oxygen. If you got delivery, pushing down on it. And over time, what happens in so many food companies is that discovery is pushed out by delivery. Delivery gets stronger and stronger, and Stronger and it becomes the dominant force in the company. And then these companies wake up after 15 or 20 years, they're billion dollar companies and they're really powerful about delivering what was wanted and needed by the consumer five years ago, 10 years ago and 20, and really terrible about discovering what's going to be needed and wanted for tomorrow. And so one of the things that I've always focused on is actually protecting discovery. And in fact, as the CEO viewing my role as discoverer in chief, innovator in chief, because that will, by the very nature of centrifugal force and size and scale, you will end up decapitating discovery in these companies.

[Shane Parrish]

One of the things that I see, and anecdotally, of course, I'm not in this space at all, is there's almost a trend when you have a concept that's sort of working and then you add onto it and you keep adding and adding. And I always think, well, the backend operations get a lot more complicated, the purchasing gets complicated, the inventory management gets more complicated. And then you look at something like In N out, which has basically a very simple menu. Privately held, Privately held, incredibly successful. How do you think through that? What's your reaction to that?

[Ron Shaich]

Well, my reaction to it is I know the polls, I've been there. Look at the world pays, the marketplace pays for something that's getting bigger, larger, better. So how do you do that? You add things, you improve things, you make it better. We all want that. I mean, we're susceptible to that by human nature. And the unfortunate truth is oftentimes, many times it doesn't make it better, it actually just makes it worse, more complicated. And so my view is we don't want to do, we don't want to be everything for everybody. We want to be something special for somebody. And that's the essence of what we mean when we say being a better competitive alternative to actually standing for something and being something better.

[Shane Parrish]

How important is marketing now in terms of getting traffic in? There's this concept of viral marketing for restaurants and people trying to break through. I can see the eye roll.

[Ron Shaich]

Yeah, marketing is the wrong phrase in my book. I think the right phrase is amplification. By amplification I mean if I've got something that actually touches people, then I've got to let them know it's available. But the idea that I'm going to somehow come up with something cute or better tactic or better technique, that may work in the very short term, but it doesn't sustain a business. And when you're building fixed assets as we are, you want something that sustains and lasts for years and decades. You want something that builds a competitive moat and is a better competitive alternative. So to me, marketing is never the end. To be cuter or better is never the end. The end is to actually sustain. Sustain is to build a better business that's sustaining and powerful in its own right and then figure out how to make sure its target customers actually know about it and it's on their short list.

[Shane Parrish]

Do you look at other restaurants and think that, oh, I would do this differently and they have a good concept but they haven't quite nailed it. And maybe you can give me an example and walk through one like True Food Kitchen or something.

[Ron Shaich]

Well, first I, I have a rule. I will not talk about competitors because that always gets me in trouble. But I would say this to you, doing this as long as I've done it, you know, I've done this now over half a century and I've been in this industry and the collective leadership of Act 3 Holdings, my group, we probably got two or three hundred years of history. There isn't a day that goes by that we don't have on our private chat some interesting commentary on what folks are doing. You can see these patterns over and over and over again.

[Shane Parrish]

What are the key metrics you look at without mentioning any sort of particular competitor? If it's a public company, what would be the two or three variables and the financial statements you look at? And if it's a private company, how do you.

[Ron Shaich]

First, the financial statements are a byproduct. They're not the end. So I'm often not looking at the financial statements as a leading indicator. I'm looking at the financial statements as the trailing indicator. What we always start with at act three is does that category, does it have tailwinds? Does it have power? Is this a category that's getting strong? Look at Mediterranean. It's the number one diet in America. Every time you go to the doctor or you read an article, they're giving you a commercial for our diet. It's bold flavors, it's ambitious flavors, and yet it feels safe. It's food that you can eat lamb and chicken. It's craveable wellness, it's healthy, and yet it's also tasty. That's a category that's got power. We have another business in Plant Forward. We call it positive eating. 3% of Americans vegetarian, but 40% are eating more plant Forward. They want that in their diets. Somebody's going to win in that category, we intend to be those people. You can think about bakery cafes. I was part of building bakery cafes in America between Old Bon Pen, Panera. These were the dominant brands. Well, I can tell you the future is in upscale bakery cafes, where you have real chefs, where you have food that's worth going out of your way.

[Shane Parrish]

For because it's part of the experience.

[Ron Shaich]

Part of the experience.

[Shane Parrish]

And how important is that experience?

[Ron Shaich]

It's everything. You don't just come for food. You come for the totality of that experience, the people that serve you, the environments that you're in, how you feel when you're there. But at any rate, I just want to continue with this. We're in immersive entertainment, powerful category. We're in healthy eating in Europe, another powerful category. So first at Act 3, we bet on the category. And I'm trying to take a forward look and say, what's going to be the categories that are going to be dominant in five or 10 years? I don't want to be fighting against headwinds. I want to be sailing with tailwinds. That's number one. Number two, I only want to invest, and I only want to play in that nexus of building the dominant player in that category, because the rewards fall to those that are the dominant players in these categories. Our goal is to build it. And the truth is we have a playbook. We know how to do it. Between me and my partners, we have built dozens of companies, any number of successful ones, and we know what works. And the mantra here at Act 3 is simply this. It's tougher to build a nationally dominant company than it is to climb Mount Everest. Nobody goes up Mount Everest without a guide because the risk of falling off the side is huge death. Our challenge is, why go up and try to build a nationally dominant company without somebody who's been there before, has done that route three, four, five times? And we basically practice what we call Sherpa management. When we're in the boardroom, we don't have financial people. We're not ever worrying about the liquidity event. We're in the business of building companies, not selling them. And we're not looking at the balance sheet, we're not looking at the numbers so much as really trying to help that management team know what's going to hit them and how to protect them. I would say, for example, we at Act 3 believe that financing, which is at the core of so many companies, should not be seen as a life cycle event. So many companies are raising money in an annual or more frequent basis as if it should be done every birthday. Our view is running a company is hard enough work without having to continually be out there selling. And so when we invest in a company, we're going to put an investment in it and then we're going to agree and take a right of first refusal on all follow on rounds of capital at a pre agreed to multiple. So we're all in alignment. It's an easy thing. And the truth is we have yet to ever turn down a follow on round of capital other up to an ipo. And for our companies, they've never ever worried about capital. They call, pick up the phone and we get there because we're of them and we're with them and we recognize that capital raising is not something they should be doing, but rather they should be worrying about building a better competitive alternative, similar kind of thing. With the many skills that my partners bring to it, whether it be strategy, whether it be real estate, whether it be technology, our guys are available to the companies we invest in. Again, we don't push it, but on a cost plus basis. And we want to protect our management team to focus on building a better company and not have to worry about scaling up so many of these different functions.

[Shane Parrish]

Well, let's talk about building a company. One of the phrases that you use over and over again is means and byproduct. How does that factor into building the company?

[Ron Shaich]

Well, I think it starts with life. So, so much of what I've learned about building companies starts with life. Shane. I think in much of our society, much of our lives, we've confused byproducts with ends and means. I have a friend who's a type 1 diabetic. His goal in life is to stay alive as long as you and me. But that is not something he can control. It's a byproduct. What is it a byproduct of? Of. Of a simple end. Keeping his blood sugar between 80 and 180. When he does that, the byproduct is life. What's his means? Diet, exercise and insulin control. It's literally the same thing in business. Do I want value creation? You better bet on it. But the way I get value creation is by creating a better competitive alternative. A place that people want to come visit you in that they're willing to walk past your competitors to come to you. What's the means? It's everything I do every day in a business. It's how I spend my time. It's focusing on the aesthetics, the operations, the structures. The processes, the way in which we engage with our team members, the way in which we engage with our customers. That's the doing of the doing that drives the end, a better alternative that actually creates the wherewithal to have the byproduct. Only thing I can tell you is Those companies, those CEOs, those leaders, those that focus on the byproduct, the outcome, never get there. It's rare because they actually miss the mark on what creates it. It's like saying, I want to be happy. You can't create happiness. You can create the conditions in your life that leads to a feeling of happiness. And if I were talking to my kids, I'd be telling them, do the things that lead to your own self respect, do the things that you will respect. And if you in fact do that as your end, your byproduct will be that happiness.

[Shane Parrish]

Go deeper or spend a couple clicks maybe on sort of how businesses go backwards when they try to get the outcome instead of the inputs, if you.

[Ron Shaich]

Will, it's the means versus the byproduct. So when you focus on driving the bottom line, you misunderstand that the most important thing is to drive the customer experience and the reason they want to come in. I'll give you an example. I was involved with a company that will remain nameless. They had a little E. Coli scare. Their immediate reaction was to cut labor. I looked at them, I said, you're nuts. If you do that, you're going to destroy what you've been working on for years, which is telling your people that what matters most is running great stores. In fact, when you run any enterprise, what you do is much more important than what you say. And so when you focus on very short term metrics, even though it seems like a desirable thing, it actually costs you far more in the long term.

[Shane Parrish]

How do you develop the long term thinking that you've brought to all these different concepts from Au Bon Pen to Panera to Cava.

[Ron Shaich]

It just makes sense to me. I mean, it just seems logical, right? Like if I want to start and figure out where I'm trying to be in five years and 10 years and what's it going to take me to get there. And that's what we mean by future back thinking. And what seems stupid to me is to do what's short term expedient and long term stupid. I have an expression, I'm long term greedy, not short term stupid. And I really want to build something of value. But the way you do that, whether you're talking about a Business or a relationship or your own life is to focus on those things that have meaning and self respect and those things that when you get down, get to the other side of it, will have touched other people and most importantly, touch yourself.

[Shane Parrish]

Spend a few clicks on that. Is there an example that comes to mind in the short termism versus long termism? And I love the idea of being long term greedy.

[Ron Shaich]

I've publicly spoken to this. You can look at the difference between the way Kava went public and Sweetgreen went public. These were two companies that emerged out of the D.C. market about the same time. One was out there with a ton of press and a ton of built up expectations. That was sweetgreen. Cava was slower, more disciplined. I think sweetgreen went in one direction with its real estate. Kava stayed much more disciplined as it went forward. Ultimately, they both went public. I think that in the sweetgreen IPO we see a case where a number of the investors sold fairly quickly. It was a different headset. Let's get this thing off the ground. You saw a lot of very instant gratification for some of the folks involved in the ipo. I think you see in Cava a very different approach. We took a slower approach to that ipo, a much more disciplined approach to it. And I think we were much more disciplined in the consistency of the brand and the brand integrity, concubescence as we call it. I think that you see the byproduct of it today. I would gather that Kava is going to market cap five times what Sweet Greens is worth, something in that order, four or five times depends on. But it's stayed in that range. And I think that value creation is a byproduct of the very real decisions we made in Kava about staying disciplined, staying focused on concepts, building something that really delivered for us, our team members first, for our guests second. And by doing that, that our investors would end up doing well and always taking the long term approach.

[Shane Parrish]

One thing that I don't think gets enough attention, and this is something I think you're open to talking about, is the difficulties of running a business, the costs of running a business, the family costs, the social costs. Talk to me about that with Au Bon Pain in particular and Panera.

[Ron Shaich]

And when you're doing anything that takes powerful commitment, that commitment owns you. You don't own it. I've never owned a business. The businesses own me. It's with me in the shower, it's with me on vacation, it's there with me. In fact, some of my best work is done when I'm on vacation. I'm not actually thinking about it in a conscious sense and I have the ability to extract and understand. But listen, doing anything in the world, whether it's working out every morning, whether it's being in a relationship, requires commitment and it requires a commitment to the long term and it requires responsibility. I would simply say I've been committed to these businesses. I've been committed to the people that have believed in me. I've been committed to my team members, to my investors and I want to give them something worthy. I want to build something equality and there's a very real personal price. I've been married twice. It's not something I'm proud of. I feel like it's a failure. Is that a failure because I was committed to my business? I don't know. But I sometimes I think about that. The biggest fallacy of life is that you can have everything and that all there are are choices and that you want to make your choices with a clear head and your open eyes as to what you value, what you respect. And then you want to build your life around that. Just as I try to build a business around what it is we try to a conservescence and what we expect. I try to build my life around what is it I'm going to respect. And that's why I really try to think through on a regular basis what is it I need to do for my own self respect in the context of my relationship with my body, my relationship with my family and my spouse, my friends, my relationship with my work and what does it mean to do that? Well, and a relationship with my own spirituality and my own personal integrity. You take all of that and you try to put that together and you try to build a life understanding there is no balance. You can't have it all. You've got to. You make choices and they're trade offs and you try to do that as well as you can. I just encourage your listeners to be clear what it is that they want and what it is that they're going to respect. What you don't want to do is wake up one day and say I wish I had and miss it.

[Shane Parrish]

How important do you think that focus was in your success?

[Ron Shaich]

I'm pretty focused and you know, I work hard, I always have. I love it, I enjoy it. I love when we figure things out. I like to think that I protected the people around me and that I'm. But I like to think I'm willing to pay the price. And by that I mean I'm willing to do what it takes to do the hard work.

[Shane Parrish]

Most people aren't willing to pay that.

[Ron Shaich]

Price and they don't understand you're not going to get the byproduct if you don't build something that's a better alternative and that's hard work. And I would share with you this too. I'll share with you two things. One, I often say to entrepreneurs, I said it yesterday, was it a Tony Robbins event? And I said to the folks, I said, listen, if you don't enjoy the people in your business, the people in your life, if you don't enjoy the doing of the doing, you're never going to get there. If you're doing this to make money, you're never going to make money. If you're doing this for the glory of it all, you're never going to get it. If you don't love the doing of it, you're going to fail. And for me, it was never about the end. It was about the doing. I love the figuring it out. I love the people that I work with. To this day I'm not doing Act 3 because it's going to change my life or my kids lives in any way. I'm doing it because I actually love the process of having challenges and figuring it out. So I would say to you, and I say to people all the time, don't do it for the outcomes, do it because you actually love it. We should talk about another concept about entrepreneurship. I think it's often misunderstood. Here's what entrepreneurs do. This is what my business life's been about. Entrepreneurs see a better opportunity and they're not risk takers, they're actually risk avoiders. They see that opportunity, an opportunity to serve somebody, to make a difference, to do a job better for somebody. And, and in the context of that, they're risk avoidant. They don't want to take risks that get in the way of their getting there. And for me, when I can see a better way to do something, when I can see a way to make a difference in somebody's life, be it a guest or even a team member, I want to do that with all the energy I can and I want to protect it. And that to me is what an entrepreneur is. It's somebody who sees opportunity and then seizes that opportunity. I'll share with you something else that I think is important. You have to be both strategic and detailed so I can operate out of what are we trying to accomplish in five Years level. But again, I can then get down into a discussion on is that floor material working in a way that it's bouncing sound around and the sound is the wrong thing thing for the experience. We imagine it's the totality of both sides of it in these complex businesses that's essential. Some people want to just be strategic, others can't get out of the detail. It's the ability for both. You get a strategy from the detail and frankly, no strategy is worth anything if it can't be executed.

[Shane Parrish]

I find that fascinating in particular the detail. There's such an aversion from a lot of people to get in the weeds of things, to understand things deeply. And so they're often reading, reading information that's filtered or synthesized or wrong, and it could be completely wrong and they'd have no idea. Somebody told me this and I don't know if it's true or not, and it's somewhat provocative, but they said you can't rely on somebody who doesn't know to filter information for somebody who does know. And they used more provocative terms than that.

[Ron Shaich]

But I think there's some truth to that.

[Shane Parrish]

I think there.

[Ron Shaich]

Yeah.

[Shane Parrish]

So the ability to go between these levels from high, you know, 30,000ft to the 1 inch level and anything in between is the sign of somebody who's really involved in the details getting firsthand information. But I think that's what creates the pattern recognition that you can see when you spot these transformations that we've talked about, from Au Bon Pen to Panera to Panera, Act 2. And I think if you're not in the weeds on that stuff and you're not in the details, you'll never be able to spot that.

[Ron Shaich]

Totally true. I think that you can't have an effective strategy if it's not informed by an understanding of what actually is going to touch your customer and how it's going to get executed. On the other hand, the most powerful strategy in the world means nothing if it can't be executed. And so the ability to understand how you're doing on both levels simultaneously has been an essential characteristic that served me particularly well in my career.

[Shane Parrish]

Some people would call it obsessive. How would you respond to that?

[Ron Shaich]

It's thoughtful as opposed to simply obsessive. Being obsessive isn't enough unless you're right. Being right isn't enough unless you can get it done. And I guess what I'm trying to argue for is not micromanaging, not getting into the detail, because that's the only place you know how to operate but being able to use the detail to extract and learn. Like I'll tell you a story, Shane. I go to visit restaurants we own all the time. I'm not going to check out the people who work there. They all think I am, but I'm not going to catch somebody doing something wrong. I'm actually going to check out myself and our senior management and how are we doing in projecting a vision of how we compete and then delivering that down through an organization and a group of people to actually get it done?

[Shane Parrish]

That's a great way to look at it. I want to come to Act 3 for a second here and let's spend a few clicks on what you're doing and what you're trying to do and why you're doing it.

[Ron Shaich]

What we're trying to do is build the next generation of great companies. And we're doing that based on an understanding that building better competitive alternatives is everything. And we want to enable and help companies become the best competitive alternative in categories that have extraordinary power. We have a couple of principles. Number one, we believe in founder friendly capital. So when we go in, we hope it's the last investment capital that gets taken before an ipo. Generally we will come in as common stock, not preferred, same place as the management team. And we will typically take a right of first refusal on all follow on rounds of capital, have never turned it down and essentially have enabled our founding teams to feel confident that they have unlimited capital behind. Secondly, we practice what we call Sherpa management, not venture capital. When we're in the boardroom, we're not looking at the next liquidity event. When we're in the boardroom, we're actually in there helping solve real problems. Typically and most often we're saying you need to put more overhead here, not there. What comes first, second and third. And each of my partners are serious C suite operations folks that have experience. In our 25 people, we have only one that's really financially driven or thinks financially.

[Shane Parrish]

That was the activist investor. That was the activist, what's his name?

[Ron Shaich]

Noah El Bogan. Yeah, I had 300 people chanting, you know, F U Noah. And later I ended up respecting the guy, but I couldn't tell anybody I liked him. I made an investment in a hedge fund he had and ultimately asked him to join me in this endeavor. But he says he's now a reformed activist. We don't practice activism, we help people. And then obviously third, we only at Act 3 invest where we have competitive advantage. What does that mean? We invest where we know something and we know how to build dominant players in very specific categories. We're now Act 3, as you know, is the largest independent investor in Cava. I serve as the chairman there. We're also in a company called Tate, which is in Boston and D.C. and now the New York market. It's 50 restaurants doing about $5 million a unit. 250 million. It's a powerful cafe. It's got a bakery there. It's got artisan third wave coffee. And it also has authority with real chefs. It's a fascinating concept because it brings the attitude and voice of the Levant, the Middle East. The founder woman names Ridor, Israeli. Powerful, powerful chef. And our baked goods are really third wave. They're differentiated. They're worth actually eating.

[Shane Parrish]

Why New York? Isn't that like. I don't know. I don't know the restaurant space. But isn't that the most competitive market in the.

[Ron Shaich]

The single most competitive market? We're not yet in. We'll be in New York next year. We're in Ridgewood, New Jersey. We're in. We're going to Scarsdale, Garden City Summit, Milburn. Because we started in Boston, we built out substantially in Boston. We went to dc, did great in dc. New York is in the middle of it. You're absolutely right. New York City is about as competitive a market as ever. But this is a concept that's good enough to really compete.

[Shane Parrish]

Is New York a good barometer then? Like, if it works?

[Ron Shaich]

No, it's the funniest thing. People come from Europe all the time. They all go to New York. It's the worst market because the rest of the country, it's not representative. I'll tell you a quick story and we'll go back to the Act 3 thing. One of the first discussions I remember having with Brett Shulman, our CEO down at Cava. I said to him, brett, right. You and the sweet green guys, you all went out, you started in D.C. and then you went out to LA as your second market. I said, here's the deal. I said, what really matters is not how you do in la, in Malibu and West Hollywood. What matters is how you do in Fredericksburg, Virginia. You make it in Fredericksburg, Virginia, you do 2 to 3 million a unit. I'll show you a thousand locations in America. That's the key. And I will tell you that if you're building a business of mass scale, it isn't New York City that matters. It is in LA that matters. It's everything in between. And can you Offer people something of quality and substance. It's a different environment to compete. In New York City, costs are three to four times higher. If you're really good, you can make it, but it's very difficult.

[Shane Parrish]

Why did Au Bon Pen not work? You mentioned that earlier when you went west. It didn't work out there.

[Ron Shaich]

Didn't work in the malls, it didn't work in suburbia.

[Shane Parrish]

So it worked like downtown la.

[Ron Shaich]

If there was a downtown la. Yeah, I mean, back then, there is today. It would, it worked in a major office building in downtown because it was.

[Shane Parrish]

About high density, urban, quick.

[Ron Shaich]

Yes.

[Shane Parrish]

Where people pay a premium for quality and quickness.

[Ron Shaich]

Yeah, it worked in Eaton center, in, you know, in Toronto kind of thing.

[Shane Parrish]

Right, okay, so come back to the act.

[Ron Shaich]

So act three. So, you know, we, we start with, with Tate. You know, it's got authority in bakery. It's got authority in Third Wave Coffee. It's got chefs in every store. It's got real food. We're doing breakfast, we're doing lunch, we're doing gathering place. It's rooted in this powerful aesthetic. It's, it's, it's, it's. They're beautiful. They're a mix of antiques.

[Shane Parrish]

That's twice you've mentioned the experience of having a chef in the. The actual unit as a differentiator. Or talk to me a little bit more about that as a concept or how it creates the experience.

[Ron Shaich]

And then we got to get back to Act 3. But yes, every one of these businesses are defined by their structure. Structure matters. For example, I can't tell you how many conversations over the years I had with Howard Schultz about Starbucks and their desire to do better food. But they could never. Why couldn't they? Because they have a frozen food system. They manufacture in one place, they freeze it, they ship it into the store and they defrost it. They spend $100 million on an acquisition boulangerie. Great little bakery. Could they bring it to Starbucks? No, because the system defines what they're capable of doing. Similarly, at Panera, we were an assembly business. We started as a sandwich place. We put together sandwiches. We didn't have real culinary skills in the stores. Our ability was simply to assemble. So we were limited. We took on Tate, and I originally bought Tate for Panera. I saw it as a better version of Panera in certain neighborhoods. I then converted one of our stores in Harvard Square. Actually. We popped the sales volume by more than twofold. Yeah, exactly. And materially changed the ebitda. It left me in a place where I said, wow, this is powerful. And when I sold Panera, I negotiated the right to take Panera's interest in Tate. At that time, it was a dozen stores or whatever to take that interest with me as part of my package. And I ultimately did take Tate with me. That's how it became part of Act 3. Similarly, another business life alive again. Plan Forward Positive eating. I love this business. We've been in it eight years. I can tell you that Plan Forward is a, is a tailwind that is powerful. Somebody is going to win in it. We've now produced stores in Boston and D.C. producing very high volumes, surprisingly high volumes for positive eating for this kind of food and a really powerful team and concept. And we have a ton of excitement in that. We have another company called Level 99. This is a guy who I was introduced to, had an idea he'd come out of MIT and had been involved in the entertainment business for many, many years. Engineer and he had a vision for taking a space 40,000 square feet, all kinds of different things. We said to him, let's drop a farm to table restaurant in the middle of it, a brewery. We opened the first one in Natick, Massachusetts at the Natick Mall. Mall. I have never been involved in a business as powerful as this blew me away. We've since opened in Providence, Rhode Island. We're opening in Tyson's Corner in D.C. in four weeks. We're opening in Disney World down in Orlando in the coming year. It's going to be at a location close to you anytime soon, but sometime soon. But this is another one of these powerful businesses. Businesses. Last year we made an investment in a business in Barcelona, Spain called Honest Greens. Again, very high volumes. It's basically chefs in every restaurant. Real vegetables, greens, salmon, chicken put together in a way that lots of young Spaniards have found exciting. That business is now 30 odd restaurants in Spain and Portugal on its way to the UK and France next year. Again, we think that there's a powerful opportunity to bring some of these disciplines to Europe, but to do it right. We also have another business that we're involved in with Act 3 came out, began in Covid, but we have lots of connections with institutional capital and the capital has asked us to get involved in companies and. And typically we can't with public companies, we can't take a carry, we don't get paid. So we do a deal with the company with the support of their investors to take a percentage of the company warrants. So we have an interest with a company called BJ's out on the west coast, where we provide some strategic guidance, we have another involvement with a company called PAR Technology, which is trying to really be the source for unified commerce in restaurants. These are all strong public companies where we've been able to help them. And in the case of BJ's, the stock is more than doubled since we got involved. In the case of Bar, it's held very strongly. And so, again, what we really are in the business of doing is doing what we love to do, help figuring out where the future is going to be, making sure we arrive at that future before the rest of the world gets there, figuring out what those categories are, and then helping wonderful management teams build the dominant player in those categories. And, you know, it started as a $200 million investment, is now a nearly. You know, it's a $2 billion portfolio, and it's delivered 55% returns. And mostly we're just having fun. I mean, we are not. Yeah, we work hard, but it isn't like running a company. The guys that are running the companies are doing the heavy lifting, and we're there trying to make people think. I love it. Shane, we talked about something before. I just want to mention, I sit on any number of boards. I lead the boards of most of these companies. I was on the board at Whole Foods when we sold it to Amazon. To me, one of the things that people misunderstand about boards, the job of board is not to run a company. Our job in Act 3 is not to run it. It's actually to ask good questions that make the people that are running it think. And that's where the power comes. It's in the quality of the question and the quality of how it helps impact other people's brains that actually matters. The discipline is not in micromanagement. The details is not a micromanagement. The detail is an actually helping drive, a powerful and profound understanding that allows you to do a better job.

[Shane Parrish]

I think that is an incredibly profound misunderstanding about boards and the value that people bring, especially when you're on the board with a founder who's the CEO instead of professional.

[Ron Shaich]

Yeah, we can take cava. I think, you know, if Brett Shulman, who is the CEO, we're here, he would say our relationship has evolved and grown over the six, seven years we've known each other. I think there were times along the way, you know, that were really hard. I think he's come to know we are really on his side. We're really with him. And I think he would say the most powerful thing we brought to him and our relationship changed for the better when basically my role has been to challenge his thinking and let him deal with the implications of it as opposed to be directive.

[Shane Parrish]

Yeah.

[Ron Shaich]

And, you know, he's grown immensely. He started as my student and, you know, I learn from him all the time watching him do it. But we share the same value system. We share a common thought process about what's going to work. And so the way you get there is through taking the time to think about things in a deep way. And, and again, goes to my book, Know what Matters, Knowing what Matters. I think that the board in cava, which I chair, would say we understand our role, which is certainly to ensure financial integrity, to ensure risk assessment and, and, and, and, and to fill that. But most importantly, we don't help that company flying in on some basis and telling them what to do. We help them by bringing to bear our experiences and helping make them think in such a way that they have a better sense of what's going to hit them in the future and they're prepared to handle that today.

[Shane Parrish]

This has been an incredible conversation. We always end with the same question, which is, what is success for you?

[Ron Shaich]

Self respect. Ironically, to me, success is looking at myself and knowing I have built the best life that I know how to build, whether it be my role as a father, my relationship with my kids, my role as a spouse in relationships, whether it be the kind of boss I've been and the difference I've made in the lives of people very important to me, the lives I've touched all over this country and many parts of this world, guests who've come up to me and said, thank you for what you did. I love being in your places and knowing I was the best version of myself I could be. I'll say something to you, Joanne. People always say to me, what's your legacy? Or somebody said to me yesterday at this Tony Robbins event, what do you want your legacy to be? And I think about it and I realize there is no legacy. Things go on, they change. I don't think 50 years from now, people will be talking about me. I think what my legacy is, frankly, what matters most is my kids and the things I show them that live on in their lives and in their hearts and in their souls and in their kids. And those are the kinds of things that matter. And as I look back at this, my 71 years on this earth, I just feel so blessed to have had the chance to do work that I've loved to love, to touch people and I hope in some small way I've done this in a way that is worthy of all those blessings.

[Shane Parrish]

I love that answer. Thank you so much for the time today.

[Ron Shaich]

Good. This was fun.