Book review: Setting the Table: The Transforming Power of Hospitality in Business by Danny Meyer.

As usual, this book review is more for myself to make sure at least something sticks. I have now written a checklist of how to do these reviews and I am stopping the time to write each one to see if this is worthwhile. 

I read Setting the Table: The Transforming Power of Hospitality in Business by Danny Meyer on kindle. I learned about the book on twitter. I believe from somebody at Union Square Ventures, the VC firm. Like most people I am interested in food and the restaurant business - if you have not read stuff like “kitchen confidential” and are interested in food, that is a good starting point. 

This book is an autobiography by and about Danny Meyer, the founder of Shake Shack and a major restaurant group. I am aware that “by and about” is redundant because I already said it is an autobiography but I am not sure how to do the sentence otherwise. 

Recommended or not and why?

Highly recommended because it is an easy and entertaining read but still highly informative.

What was interesting on a technical/science/business level?

Another example of somebody starting in business early and just slugging it out until eventual success. Danny Meyer was fat and average in school. Studied politics and organised a senator campaign, while his parents divorced and his father succeeded and failed in businesses. So, this is all pretty average. 

Than, at age 26, he quits his sales manager job where he had saved money to do a cooking course and starts working in low positions in a restaurants. He drops a 125k annual salary to 12k salary to do what we wants. 

From this point onwards he just consistently works on making the first restaurant successful. What is interesting here is that according to his figures, lunch should be about 40% regulars and dinner 25% - higher than I would have expected. 

Note also that finding the space for the first restaurant was done the following way: he walked around to places that he liked and asked the owners to take his card whenever they thought about selling. Simple as.

Noteworthy is his focus on mistakes and slip-ups: essentially the argument is that all good stuff is long term. Therefore, in the short term after a mistake you can spend as much as you’d like because you are building an asset. So, drastic focus on making everything good for the guests - removing food that was not eaten from the bill.

A lot about hiring - attitude is given a 51% importance over technical skill. Interesting. 

What was interesting on a personal level?

The most interesting and sad part is the short but intense description of early birth and shortly following death of two twin babies. It especially impressive as Danny is clearly points out that this challenged their lives and marriages and that both would most certainly have fallen apart - had he not “resolved to use every form of therapy available - and in my case additional intense work with a men’s group. 

Time taken to write this: 40 minutes.
 

Book Review - The Snowball - Alice Schröder

I have gotten back to consuming more content in 2018. This includes books because I was lucky to hit a string of good books. These include More Money Than God: Hedge Funds and the Making of a New Elite", "More than you know: finding financial wisdom in unconventional places",  "Memories of a Nation"

The latest book I finished is "The Snowball: Warren Buffett and the Business of Life " Alice Schroeder. Summary: extremely good book if you are interested in how investing looks like in practice and have an interest in business history. Highly readable (the author is both a subject expert and a journalist) for those interested. Style-wise between a Michael Lewis book and Memories of a Nation or Postwar by Tony Judt. I would have estimated it at 400 Pages but as I just checked it is 832 pages (I read on kindle). 

Themes: 

1) Extreme Focus required for extreme success in on domain
The books shows effectively how extrem the focus, or in other words, sacrifice of things that are not in the focus is: relationships of Buffet to his wife and children. Very few experiences in travel outside of the US, no desire for other foods. Scences with Buffet not touching Sushi or things other than the plain items he normally eats are very entertaining. 

2) Behaviour
Interesting to note that both Michael Munger and Benjamin Graham where apparently known for just leaving conversations that are not interesting. I want to do that from time to time and should probably do that more.

3) What is a good company
From a business perspective (defined as making more money out of money) the definition of a good company was extremely interesting to me.

The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine. So if you had your choice, if you could put a $100 million into a business that earns 20% ($20 million) on that capital, ideally it would be able to earn 20% on $120 million the following year and so on. You could keep redeploying capital at [those] same returns over time.

Thats because the combination of generating capital and then using that capital in itself to generate more is a case for a capital allocation type job that makes sense. It is obviously also exactly what Berkshire Hathaway is. 

4) Business history
A number of interesting things, including that Warren Buffet was the CEO of Solomon Brother and later invested in Goldman Sachs as well even. 

I recommend to read this book.