Oct 30, 2017 · 50m · how-i-built-this
Chipotle: Steve Ells
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of NPR's How I Built This, host Guy Raz speaks with Chipotle founder Steve Ells about how a classically trained chef accidentally created a multi-billion-dollar fast-casual dining empire. Ells shares the story of Chipotle's humble beginnings in Denver, its high-stakes corporate partnership with McDonald's, the 'Food with Integrity' philosophy, and how the company navigated a severe food safety crisis.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 30.1% of the talking time here. How this is scored →
Guy as informed peer 3.7 Guest teaching 3.9 Guest disagreement 1.7 Guy pushing back 1.3
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 37:52 Pushback on 'freaking out' during the E. coli outbreak
Ells immediately rejects Raz's colloquial framing of 'freaking out,' reframing the crisis as an all-encompassing, serious institutional challenge.
Hardest push from Guy ▶ 26:40 Raz presses Ells on running stores without a business planRaz halts the narrative to incredulously challenge how Ells had expanded to multiple operating units before ever writing a formal business plan.
Biggest teaching moment ▶ 39:06 Masterclass on pathogen contamination and produce blanchingElls walks Raz step-by-step through how pathogens enter produce skin through micro-abrasions and details Chipotle's precise hot-water blanching intervention.
Guy holds their own ▶ 1:11 Raz analyzes menu constraints using Barry Schwartz's choice theoryRaz demonstrates academic and industry mastery by linking Chipotle's four-item menu design to behavioral psychology research on the paradox of choice.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| The Paradox of Choice and Chipotle's Accidental Empire | 6 | 2 | 1 | 1 | Guy Raz opens with an authoritative framing, connecting Barry Schwartz's 'Paradox of Choice' to Chipotle's concise menu and quoting company valuation statistics before seamlessly transitioning into Steve Ells' early culinary memories. | |
| From Art History to the Culinary Institute of America and Stars | 5 | 3 | 1 | 1 | Raz demonstrates strong culinary industry knowledge by referencing Stars, Jeremiah Tower, and the chefs who trained there like Mario Batali, prompting Ells to recount his formative kitchen experiences. | |
| Mission District Inspiration and the Burrito Business Model | 3 | 4 | 2 | 2 | Ells walks Raz through how San Francisco Mission-style burritos differed fundamentally from Colorado's smothered plate burritos, clarifying his initial napkin economics model. | |
| Securing the First Location and Initial Family Financing | 3 | 3 | 1 | 1 | Raz asks practical operational questions regarding lease rates and startup financing while Ells recounts pitching the broker and securing family funding. | |
| DIY Industrial Design and Open-Kitchen Philosophy | 2 | 5 | 2 | 1 | When Raz asks if Ells had a natural design instinct, Ells clarifies that the industrial aesthetic was purely born out of frugality and exposed raw materials. | |
| Naming the Brand and Educating Early Customers | 3 | 4 | 2 | 1 | Raz shares his own early confusion over pronouncing 'Chipotle', and Ells explains the deliberate choice behind the name and how customers had to be educated on the assembly line format. | |
| The Rave Review and the First Big Rush | 3 | 4 | 1 | 1 | Ells describes the transformative Rocky Mountain News review by Bill St. John that caused instant sellouts, emphasizing his focus on culinary technique over standardized written recipes. | |
| Mid-Episode Break | 3 | 3 | 1 | 1 | Covering mid-show housekeeping and the immediate post-review scaling, Raz probes the sudden profitability while Ells recounts his father's skepticism until meeting the bookkeeper. | |
| Expanding Beyond Colorado and Formulating the Business Plan | 4 | 4 | 2 | 2 | Raz expresses surprise that Ells operated multiple stores without a formal business plan, leading Ells to describe creating his first financial model as his informal MBA. | |
| The McDonald's Partnership and Capital Infusion | 4 | 3 | 1 | 1 | Raz and Ells discuss the significant capital injection from McDonald's and how their patience allowed slower markets like California time to mature. | |
| Food With Integrity, Price Increases, and the McDonald's Split | 4 | 5 | 2 | 1 | Ells details the counterintuitive success of raising prices by a dollar after transitioning to Niman Ranch pork, contrasting Chipotle's Food With Integrity model with traditional fast-food discounting and franchising demands. | |
| Rapid Scaling, Impostor Syndrome, and Leadership Growth | 3 | 3 | 1 | 1 | Raz validates Ells' self-doubt as a chef unexpectedly leading hundreds of restaurants, with Ells discussing personal growth and his core skill in hiring strong talent. | |
| Public Offering, the 2015 E. Coli Crisis, and Food Safety Reforms | 4 | 7 | 4 | 2 | Ells pushes back on Raz's 'freaking out' characterization, then thoroughly educates the host on food safety protocols, detailing microscopic pathogen contamination and the five-second blanching technique. | |
| Corporate Purpose, High Valuation, and Mise en Place | 4 | 5 | 3 | 2 | When Raz asks if the multi-billion valuation feels abstract, Ells briefly rejects the premise before explaining that mission purpose and kitchen 'mise en place' discipline drive him rather than financial figures. | |
| How You Built That: Alexander Harik and Zesty Z | 5 | 3 | 1 | 1 | Raz hosts the 'How You Built That' segment with Alexander Harik of Zesty Z, demonstrating cultural and culinary familiarity with za'atar while narrating the startup's journey. |
Statements from this episode (18)
Raz: Chipotle expanded from 20 stores in 2000 to 2,300 worldwide
“On the eve of the millennium, the company had just a bit more than 20 stores. And today, Chipotle has nearly 2300 locations across the U.S. And in four other countries.”
Ells: Chipotle combined Stars' culinary approach with Mission taqueria service format
“Well, the idea for Chipotle is a sort of a combination of food borrowed from stars and sort of a technique and a service format borrowed from the taquerias.”
Ells: Chipotle was originally intended to fund a fine-dining restaurant
“These burrito shops, these taquerias were small the investment would be low the rent certainly was low, and there were lines out the door, and I thought that, that I could make enough money to fund my full-scale restaurant.”
Ells: The first Chipotle was 850 square feet and $800 a month
“This was the first site we saw near the university of Denver campus. It was 850 square feet. It was in terrible condition. It needed a lot of work. I think the rent was 800 dollars a month or something like this.”
Ells: Chipotle's open kitchen mimics how people gather at dinner parties
“Every time you have a dinner party, people are in the kitchen. People want to be in the kitchen. And so, so Chipotle was designed to invite people in, to bring them close to where the action is.”
Ells: I developed Chipotle's original menu the day before we opened
“The menu was developed the day before I opened.”
Ells: In 1993, no other fast food chain had cooks taste food
“Probably when we opened, I can't imagine there was another fast food restaurant Where the crew actually taste the food. I just don't think they did that, right?”
Ells: The first Chipotle location was profitable within months
“Oh, I was profitable in the first few months.”
Ells: Chipotle funded its second location mostly from cash flow
“So I think maybe he put in a little bit more money, but it was mostly cash flow that opened the second restaurant, and that opened about a year and a half later, and it opened up much busier than the first one.”
Ells: Cheap strip mall leases and assembly lines drove unprecedented ROI
“With Chipotle, we were going into strip malls. Often in the inexpensive center units, not the more desirable end caps. This was early on. So the investment was very, very modest. And our production system or that our service format really was an assembly line.…”
Ells: McDonald's invested around $360 million in Chipotle over seven years
“Over a seven-year period, I think they put in three hundred and sixty million dollars or so, but the majority of that was in the last couple of years.”
Ells: Chipotle sold more carnitas after raising prices to use premium pork
“So, you know, I remember when I put Naiman ranch pork on the menu, I had to increase the price of the carnitas burrito, and I think it increased by about a dollar or something. And so in the world of fast food, that was just not understood. I mean, gotta remem…”
Ells: We refused McDonald's franchisees because our unit economics were too good
“Well, so McDonald's has a very strong franchise system, and their franchisees obviously wanted, wanted a part of Chipotle. And, you know, certainly they would have been capable of operating Chipotle. There are a lot of good operators in the McDonald's system. …”
Ells: 52 people contracted E. coli during the 2015 Chipotle outbreak
“Over, over a one month period from basically mid October to mid November 52 people got sick with E. Coli.”
Ells: We blanch avocados and peppers in boiling water for five seconds
“And so what we do with this avocado now is after we wash it, we plunge it into boiling water for five seconds. This is called blanching. And it's not long enough to cook the avocado. But just long enough to bring the temperature of the skin and the area under …”
Ells: Chipotle's peak market valuation reached $21 billion
“Yeah, 21, twenty-one billion, I think, was the highest.”