
Get in the KNOW
on LA Startups & Tech
X'Sweetgreen is Not a Tech Company': The Company's CEO on How He's Adapting to the Pandemic
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

Jonathan Neman, the 35-year-old co-founder and CEO of Sweetgreen, wants to make one thing clear.
"Sweetgreen is not a tech company," he says. "If you want to make that the headline, you can."
With a lofty $1.6 billion valuation, a sleek headquarters in Culver City down the street from Apple and Amazon, and talk with Kara Swisher about becoming a "food platform," one could be forgiven for thinking Neman has aspirations that go way beyond serving salads, bowls and now plates in 108 stores. These days everyone wants to be a tech company, even if they are just renting office space or selling stationary bikes. Neman certainly has lofty goals – wanting to expand to what he says is "well over" 1,000 locations. But he says he is trying to grow Sweetgreen in the mold of Starbucks, not Snapchat.
"We see ourselves as building the Starbucks of real food," Neman said. "We're actually not even valued like a tech company. If you look at the valuation it's much more like a high-growth food company. We leverage technology to build a better experience and make smarter decisions. And I think it is an accelerant to how we can grow and scale and build our model. However, at the core of what we do, we are a consumer brand."
Sweetgreen's origin story is decidedly techie. Neman hatched the concept with classmates Nicholas Jammet and Nathaniel Ru in a dorm room during their senior year at Georgetown University. Three months after graduation, they opened their first location in Washington D.C. in 2007. In 2016, they relocated to Los Angeles after opening their 39th location.
Last year, Sweetgreen reported $300 million in revenue and $3 million per store, well above Chipotle or Starbucks, which generated $2.2 and $945,270 per location, respectively.
The company would not disclose its numbers for this year but in an April blog post Neman and his co-founders described revenue being "dramatically affected" by the coronavirus. That month, Sweetgreen laid off about 10% of workers at its headquarters and furloughed nearly 2,000 store employees after deciding to return a $10 million PPP loan.
"As soon as we found out that they had run out of money, we decided to give it back, which we think was the right thing to do," Neman said.
Now 75% of the furloughed workers have been brought back and Sweetgreen has reopened all but 11 of locations. All dining rooms in California remain closed though some locations with outdoor seating can accommodate diners. Headquarters is officially open, though it is mostly empty as the company is not requiring anyone to come in for the foreseeable future. Despite some permitting delays because of COVID, Sweetgreen is planning to open 20 new locations this year and considerably more next year. And in late April, it introduced its first new major menu category since adding bowls four years ago – nine different plates, ranging from Hot Honey Chicken to Shroomy Asada, designed to increase dinnertime sales. On Wednesday, Sweetgreen will hold its first-ever $5 Greens Day where it will offer select bowls and salads for well under half the normal price.
Sweetgreen introduced its first new major menu category since adding bowls four years ago – nine different plates, ranging from Hot Honey Chicken to Shroomy Asada.
dot.LA spoke to Neman about how the company is adapting to the COVID era, why he ended an exclusive partnership with UberEats, and when Sweetgreen might IPO.
A lot of your business has been centered around offices. How are you adjusting since people aren't coming into offices?
To your point, we have a very high penetration in some urban areas and those are the ones that have been more severely impacted. Our restaurants that are more suburban-based are actually doing really well. Many of them have fully recovered to pre-COVID levels through just delivery and pickup. So really the impacts we're seeing are primarily only from the true demographic shifts rather than from changing consumer behaviors.
Jonathan Neman hatched the concept of with classmates Nicholas Jammet and Nathaniel Ru in a dorm room during their senior year at Georgetown University.
Does COVID change where you anticipate opening stores in the next few years?
Yeah, a little bit. We were already on a path of expanding beyond our current markets. This year, we have already opened in Denver and Miami and we're opening in Austin. And so we already penetrated a lot of the larger cities, and we're on our way to going into other markets that are more suburban. If you look at the makeup of the United States it's much more suburban than urban. So there was a lot more suburban growth coming, but I think this has accelerated a lot of that as our suburban model has done better. But we have not given up on the cities. We're going to continue to open in New York. We are very confident people will come back to work, although it may be different and we'll be well positioned for it.
Now that we're in a recession do you worry that people will see your menus and think of it as an indulgence to spend $14 on a salad?
Our prices are different by market. Definitely very top of mind for us is affordability. We like to balance all stakeholders when we think about price. So you have to think about how we pay our team members and our farmers.
This is why food is really complicated. I could charge less, and then pay my team members less and pay my farmers less and then I'd get heat for that as well. But having said that, I do think that Sweetgreen will do more over time to address different consumers and price sensitivity. Over time we will think about different menu items and formats and ways to make it more affordable. One way is when you think about our plates, $12 for lunch may be expensive but $12 for dinner is actually pretty affordable. Another way we do this is through things like Outpost [a central drop off shelf in buildings where Sweetgreen couriers drop off orders.] You're not paying the delivery service fee that you would for a lot of other places.
You had signed an exclusive deal with Uber Eats last year and then canceled it. What was the decision behind that?
We have a great relationship with Uber but I think we've realized over time that different consumers use different platforms and they're more incremental to each other than they are cannibalistic. Especially in a post-COVID world where delivery will be a bigger piece of the pie, we wanted to get in front of as many consumers as possible. We also are very focused on our native delivery which is which is by far our biggest delivery channel,
I'm curious how you think about delivery. Because for a lot of restaurants they're sacrificing huge margins...
Correct. Not only are they sacrificing huge margins, but they don't have a direct relationship with their consumers. We have a direct relationship where we can tell you when new menu items come out and we can personalize the experience to you.
So why not just have it all be native?
I think there's certain customers where the marketplace becomes a great place of discovery, it becomes, you know, almost like a customer acquisition marketing tool for us a way to amplify our message and reach more people.
Have you ever thought about doing brunch or breakfast?
We definitely have. Sweetgreen is an ethos, which is connecting people to real foods. Eventually we'd like to take that ethos and expand way beyond salad, bowls and plates, whether it be brunch or otherwise. The vision is to go much, much broader.
That's a perfect segue to my last question. What's your current thinking on a possible IPO?
There's no current thinking right now. We're just very focused on expanding the brand, delivering a great product to consumers and strengthening the business. Sure, one day, but not not anytime soon.
- sweetgreen - dot.LA ›
- Sweetgreen Reopens Stores and Brings Back Workers - dot.LA ›
- Sweetgreen Lays Off 10% of Staff at Its L.A. Headquarters - dot.LA ›
- Sweetgreen Files for an IPO - dot.LA ›
- Sweetgreen CEO Deletes Vaccine Hot Take After Backlash - dot.LA ›
- Sweetgreen's IPO Filing Reveals Recent Revenue Gains - dot.LA ›
- Sweetgreen Offers New Salad Discount Subscription - dot.LA ›
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
Subscribe to our newsletter to catch every headline.
Activision Buys Game Studio Proletariat To Expand ‘World of Warcraft’ Staff
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Activision Blizzard intends to acquire Proletariat, a Boston-based game studio that developed the wizard-themed battle royale game “Spellbreak.”
VentureBeat first reported that the Santa Monica-based publisher was exploring a purchase, noting its ongoing mission to expand the staff working on Blizzard’s hit massively multiplayer online game “World of Warcraft,” which launched in 2004.
Proletariat’s team of roughly 100 people will be merged into Activision’s “World of Warcraft” team to work on its upcoming expansion game. Though there’s no release date as yet for the title, “World of Warcraft: Dragonflight” is expected to debut before the end of this year.
Activision did not immediately return a request for comment. Financial terms of the deal were not available.
This Proletariat deal is Activision's latest push to consolidate its family tree by folding its subsidiary companies in under the Blizzard banner. More than 15 years after it bought out New York-based game developer Vicarious Visions, Activision merged the business into its own last year, ensuring that the studio wouldn’t work on anything but Blizzard titles.
The deal could also have implications for workers at Activision who have looked to unionize. One subsidiary of Activision, Wisconsin-based Raven Software, cast a majority vote to establish its Game Workers Alliance—backed by the nationwide Communications Workers of America union—in May.
Until recently, Activision has remained largely anti-union in the face of its employees organizing—but it could soon not have much of a say in the matter once it finalizes its $69 billion sale to Microsoft, which said publicly it would maintain a “neutral approach” and wouldn’t stand in the way if more employees at Activision expressed interest in unionizing after the deal closes.
Each individual studio under the Activision umbrella would need to have a majority vote in favor of unionizing to join the GWA. Now, Proletariat’s workforce—which, somewhat ironically given its name, isn’t unionized—is another that could make such a decision leading up to the Microsoft deal’s expected closing in 2023.
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Snap Officially Launching ‘Snapchat Plus’ Subscription Tier
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Snap is officially launching Snapchat Plus, a paid subscription plan on Santa Monica-based social media company’s flagship app.
Snap is now the latest media company to tack a “plus” to the end of its name—announcing Wednesday that the new service will provide users with “exclusive, experimental and pre-release features” for the price of $3.99 a month. The first features available to paying subscribers include the ability to customize the style of app’s icon, pin a “BFF” to the top of their chat history and see which users have rewatched a story, according to The Verge.
The new product arrives after Snap confirmed reports earlier this month that it was testing Snapchat Plus—though the version that it has rolled out does not incorporate the rumored feature that would allow subscribers to view a friend’s whereabouts over the previous 24 hours.
Snapchat Plus will initially be available to users in the U.S., Canada, U.K., France, Germany, Australia, New Zealand, Saudi Arabia and the United Arab Emirates. While certain features will remain exclusive to Plus users, others will eventually be released across Snapchat’s entire user base, Snap senior vice president of product Jacob Andreou told The Verge. (Disclosure: Snap is an investor in dot.LA.)
The subscription tier introduces a new potential revenue stream for Snap, which experienced a “challenging” first quarter marked by disruptions to its core digital advertising market. However, Andreou told The Verge that the product is not expected to be a “material new revenue source” for the company. He also disputed that Snap was responding to its recent economic headwinds, noting that Snap had been exploring a paid offering since 2016.
Despite charging users, Snapchat Plus does not include the option to turn off ads. “Ads are going to be at the core of our business model for the long term,” Andreou said.
Snap is not the first popular social media platform to venture into subscriptions: Both Twitter and Tumblr rolled out paid tiers last year, albeit with mixedresults.Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Bling Capital’s Kyle Lui On How Small Funds Can Better Support Young Founders
On this episode of the LA Venture podcast, Bling Capital’s Kyle Lui talks about why he moved earlier stage in his investing and how investors can best support founders.
Lui joined his friend—and first angel investor—Ben Ling as a general partner at Bling Capital, which focuses on pre-seed and seed-stage funding rounds. The desire to work in earlier funding stages alongside someone he knew well drew him away from his role as a partner at multi-billion-dollar venture firm DCM, where he was part of the team that invested in Musical.ly, now known as TikTok.
Bling primarily focuses on entrepreneurs looking to raise around $1 million to $3 million who are often early in their careers as founders. Lui said Bling evaluates companies on characteristics that go beyond whether they like the founder or feel that the market looks good. Instead, he said they take a hard look at the available company data, and quickly respond.
“And we send it back to them and say, ‘Okay, this is what's working, what's not working’,” Lui said. “And then create the playbook for them on how to find product market fit and get to like, ‘These are the milestones you actually need to hit’.”
When considering companies, Lui said Bling looks at the founder, the market, the company’s current traction and differentiation while asking the founder the questions they would expect to get at Series A and Series B funding rounds.
“One thing that I really admire about what [Ling’s] built with Bling is the consistency and the processes and playbooks— everything from the way that we evaluate deals to the way that we work with our portfolio companies,” Lui said. “Everything is kind of around playbooks and operationalizing things and also iterating to do those processes better.”
As part of its work to support founders, Bling maintains an extensive product council, which connects tech executives with the founders in Bling’s portfolio. Bling also has created numerous self-serve resources for founders so they can easily tap into the fund’s network and shared knowledge.
“We have a bunch of playbooks that we introduce to companies around how to hire efficiently, how to negotiate with counterparties, how to think about the founding team, business development…We just have these different things that we start to train our entrepreneurs on,” Lui said.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.