Food for Thought: Analyzing the Pizza Industry for Startup Ideas
Jun 9, 2011
Last week, I hit a new pizza place in town that was fantastic, and it struck me how something as old pizza can continually get better and better. After all, as the comparisons go, “Even when pizza is bad it’s still pretty good”. For all the startup practitioners out there who are always on the hunt for that brand new idea, thinking about the pizza business is a nice reminder that sometimes the best businesses can simply be a tweak of an existing business or concept. Here are a few comparisons to the pizza industry that come to mind:
The user experience of pizza chains greatly affects the success of those chains. Many of you may remember how popular Pizza Hut was back in the 1980s. In the U.S., the brand’s reputation has fallen, as it hasn’t updated its décor and general customer experience.
However, if you travel abroad, you will see a stark difference in the Pizza Huts overseas. The interiors are well-lit and have an inviting presence about them which actually makes Pizza Hut a respectable restaurant for those looking to treat themselves and others to a nice meal.
Thus, for those tech startups out there, keep in mind that a fresh user experience could potentially serve as a meaningful change to an existing business. Think about all the Flipboard type news apps out there today.
Remember the Noid? Domino’s changed the playing field for pizza delivery when they guaranteed 30 minutes or less. It was a clear differentiator for them that resonated well with their customers and propelled their success in the early 80s.
Another example of a tweaked distribution scheme are the Take-N-Bake shops like Papa Murphy’s that allow consumers to have a customized pizza made fresh in the store and taken home with them to bake. The model is interesting as it eliminates the delivery costs for these chains and passes along cheaper prices to consumers. It’s like a cross between frozen and delivery pizza. The cheap price of frozen pizza and the freshness of delivery pizza.
Maybe the most obvious of these, but rather than throwing out a bunch of features to differentiate a product, sometimes finding the one signature change is all that’s needed.
Recently, I went to a pizza shop that predominantly used gouda cheese rather than mozzarella. While the use of gouda may not fly with many people, there are certainly a niche of people who enjoy the use of this less popular cheese. The place was packed, and while I still personally prefer mozzarella, the place is making a lot of money by challenging a pizza’s traditional ingredients and offering up new alternatives for pizza aficionados.
Next time you and your buddies are in a garage or sitting around a table dreaming up new business ideas, think about how you might be able to apply the historical changes of a totally random industry to your brainstorming sessions.