While attending Georgetown University in Washington, D.C., Jonathan Neman, Nathaniel Ru, and Nicolas Jammet had a craving for something that didn’t yet exist. So they decided to create it.
“We all lived a healthy lifestyle,” says Neman, “but we couldn’t find food that fit our values—and our budget.”
It was 2007, and nothing in Washington provided “an easy, affordable, and cool way to eat.” The three friends, all children of entrepreneurial first-generation immigrants, had just returned from semesters abroad, and each had an urge to start a business. A healthy and inexpensive restaurant, they realized, could solve two problems at once: It would provide them with a great place to eat while scratching their “entrepreneurial itch.”
Rather than spend their senior years applying for jobs or attending parties, the three friends got together in their free time to write a business plan. They weren’t entirely sure if their restaurant would be a success, what it would look like, or what it would be called. In fact, in the early days, they had only one guiding principle.
“We wanted our restaurant to be simple,” says Neman. “We didn’t need anything fancy or expensive. We wanted to showcase real ingredients from real people.”
And to the friends, there was nothing more simply beautiful than a salad. In Neman’s hometown of Los Angeles, eating a salad for a meal was par for the course, but Neman noticed that Washingtonians often scoffed at the notion. So he and his friends began to create different kinds of salads, putting together unusual combinations of ingredients, and performing taste tests in their friends’ dormitories. They soon developed a comprehensive salad menu—but one thing was still missing.
“When people eat healthy,” Neman says, “they want to reward themselves with some sort of dessert.” So the founders—who had decided to call their venture Sweetgreen—added a small frozen yogurt section, with locally produced yogurt and organic toppings.
With their business plan in hand, the founders began raising capital and chose a location: an abandoned storefront just off Georgetown’s campus. They raised the money quickly enough to open their first store the summer after graduating. It was a smash success, and the founders began scouting locations to expand.
Then the recession hit, capital dried up, and the budding business faced its first crisis.
“Getting a loan in 2008 or 2009 was out of the question,” Neman says, “and we had just begun building our second and third locations. Raising money was incredibly challenging, and every decision we made had the potential to make or break us.”
Faced with a spiraling economy and an unstable market, the founders needed to tighten their company (and trim their expenses) as much as possible. How could they stay true to the company’s principles while raising money and cutting costs? The answer lay in Sweetgreen’s most competitive edge: its culture. Sweetgreen, its founders say, is about “passion and purpose,” about making an amazing product and having a positive impact on the world. So long as the company retains those values, its founders believe, it will find success, even as it competes in an increasingly crowded marketplace. And that process began with hiring the right people.
“We switched our philosophy,” Neman says, “from hiring for skills to hiring for beliefs, for personality, for values. You can teach skills. You can’t teach values.”
Armed with a new focus on personnel, Sweetgreen emerged from the recession with several new locations, easily outcompeting the many new salad-and-yogurt-store copycats. Today, Sweetgreen continues to expand, with the same goal of making an impact on the way people eat—and live. The company’s founders open stores in neighborhoods where they believe their restaurant will make a positive contribution, helping people eat better while spending less money. And Sweetgreen has become an integral part of Washington’s cultural scene as well: The founders, who once blasted their favorite music out into the street from store windows to attract customers, sponsor SweetLife, a massive annual music festival held just outside the city.
Opening restaurants in developing neighborhoods and sponsoring giant music festivals might seem like risky endeavors for such a young company, but it’s all in keeping with Sweetgreen’s foundational purpose.
“People see that we’re more than a salad and yogurt restaurant,” Neman says. “There’s a soul behind Sweetgreen that people can get behind. We connect to our community, we help our customers. That’s what Sweetgreen is all about.”
Luckily for the company, sticking to those principles isn’t just good etiquette. It’s good business.