Two Legends Talk Shop
Panera Bread’s Ron Shaich and Kind’s Daniel Lubetzky discuss creativity, control, and the future of entrepreneurialism.
The setting was spare: a small table and two chairs in an otherwise empty conference room in Kind’s New York City headquarters. The discussion was anything but. In the first installment of a new series called Icons and Innovators, Inc. has paired well-known but not necessarily like-minded entrepreneurs to talk about their work. Ron Shaich, the force behind Au Bon Pain and Panera Bread, also started Act III, an investment firm that provides what he calls “venture management” and eschews the traditional VC model in favor of long-term investment. Over a 36-year career, Shaich has made high-stakes decisions as his businesses have evolved, including dumping Au Bon Pain. He sees his job as studying consumers to find out how to solve their problems. It’s allowed him to anticipate trends such as fast-casual dining, which led him to Panera.
Daniel Lubetzky is the classic, from-the-ground-up entrepreneur. An immigrant from Mexico, he veered away from a law career to pursue and create an all-natural, minimally processed snack bar that would change the market for healthy treats. He turned Kind into a multibilliondollar, purpose- driven company. Along the way, he learned how to do every job needed to make Kind a success, like showing up at stores at 5 a.m. to meet buyers, and handing out samples on planes. He is the customer, but now must operate within a much larger corporate environment.
Despite different approaches to their businesses— Shaich is more analytical, Lubetzky more intuitive—the two found a lot to share about the state of innovation and entrepreneurship in their hourlong conversation. You can read the highlights in the following pages or view the entire conversation at Inc.com.
RON SHAICH
One of the things we share is this experience of building innovative companies that need to do innovation to keep driving forward. How do you think about innovation now that Kind has become a large and serious company?
DANIEL LUBETZKY
For me, it’s a very intuitive, gut process. For me, it’s much more
How do I feel? What do I think is missing? Where does my gut tell me there’s an opportunity?
It’s much more instinctive than the more formalized process that exists in an organization. Now that Kind has grown up, we have smarter people who need to do a lot of data analyses and go through a very thoughtful process.
RS
When I think about innovation, I want to start by understanding whom I’m innovating for. Who’s the target? If I don’t understand who it is, I have a problem. And then I want to spend as much time as necessary to listen, to do it with empathy, to understand, to brainstorm with others, but to understand what matters to that target market or that target consumer. What’s going to make a difference in these people’s lives? And once I’ve resolved what matters—and I can put that on a single piece of paper—then what I like to try to do is what I call a rendering: Can I paint a vision of what this innovation will look like?
DL
Entrepreneurs tend to have a slightly different language but
similar process. For me, I divide the process of launching things into a skeptic space and a creative space. And you start with absolute creativity. You cannot allow the skeptic to enter at that point, because then you’re going to shut down all ideas before they’re allowed to breathe. But then, after you come up with your idea and you really, really like it, then you need to introduce that absolute skeptic who really, really does a lot of research, who really challenges the idea and makes sure it makes sense. And, only at that point, you enter a third phase, which is the execution phase, where you press a button. You say, “All right. Now I’m gonna make it happen.”
RS
In the early ’90s, I think Howard Schultz at Starbucks, Steve Ells at Chipotle, and I came along, and we said, “There’s like a whole bunch of people, one out of three, who go into fast-food places and hold their noses. They want real food, environments that engage people, customers served by people who care.” And I came along and said, “You know what? We’re going to create Panera from a different paradigm,” which was food that you felt respected you.
DL
And there’s a big parallel between what Panera has done to revolutionize the food-service space and what Kind has done in the consumer-goods space. Both of them trying to challenge this conventional wisdom that you need to sacrifice quality, that you need to use refined or artificial or overly processed ingredients, and trying to bring it to a more rebellious challenge about “No, let’s put in our body stuff that we can feel good about.”
RS
So, another way to think about innovation, the way I’d like to think of it, is just starting by understanding what jobs those consumers are hiring you to do. It’s not that we’re offering a product; we’re actually solving a problem. And customers are, frankly, hiring Kind, they’re hiring Panera,
People often refer to entrepreneurs as risk-seeking. I’m the most risk-avoiding human being you’ve ever met.