Every Startup is a Pizza Shop at Heart

It was in the late 90’s and I was on my first day as a delivery driver for a local pizza shop.  As the owner walked me around and showed me everything we stopped at the toppings station and he went over the toppings that they offered.  They were all the normal topping you’d expect.  There was pepperoni, sausage, black olives, and the pineapple was in the fridge below the station.  I looked at the toppings and asked why they didn’t offer anything fancier. It was the 90’s and it seemed liked people wanted fancy toppings, not the same ones that had been around for decades.  The owner looked at me, took a moment, and then just said having the limited number of toppings was easier.  The churn for minimum wage pizza shop employees was huge, and having a hundred types of pizza was too hard to train people to do properly in a short amount of time. He then commented that by using the same ingredients essentially every other pizza shop was using that it drove down the price of them.  Fancy ingredients would be purchased by fewer shops which would then mean that their per unit cost would be higher.  Then taking a moment he shrugged and said, “frankly none of our customers ask for anything else…”

Over the years I have learned the invaluable lesson that pizza shop owner offered me.  The concept of creating the best product possible, for a reasonable price and profit, and streamline the hell out of production.  If you think about it this is how business used to be.  You owned a gas station, hair salon, plumbing company, pizza shop, for VCR repair center and you did what you did as best as you could, and didn’t worry about trying to offer everything else in the world.

The thing is every product or service you offer will require its own resources.  The customers will have to be dealt with in specific ways, and the workflows for production will be much different.  I could see this when I had my company and we offered numerous different IT services.

We did in shop computer repair, on site systems services, telephone systems, websites, surveillance systems, and generally anything technical we could get paid for.  I was under the mistaken impression that this was a good way to expand a business.  My thought was all technology is basically the same, so offering the most services possible would allow us to fully mine the relationships that we had already created.  The problem was all of these products required different workflows, and the clients dealt with them differently.

Websites seemed great because clients would literally pay the full amount when they accepted the proposal before any work had begun, but.. then they would never get around to supplying the text and graphics that we needed and they had agreed to.  Surveillance systems were an easy sell, but with their price everything revolved around the businesses fiscal year. You’d have an owner say they were definitely going to buy, but then have to wait 4 months after some specific time in their year when they’d have free cash flow.  Computer repair was good, but some of the customers needed a ridiculous amount of hand holding and customer service skills that many geeks don’t do so well with.  What seemed like a great idea of offering all of these services was killing me because the per unit cost of offering those services ended up being much larger than if I had simply specialized.

I’ve been thinking about this a lot with Failed Normal.  I can have written posts, vlogs, video interviews, maybe do some in person meet up type thing, but then I keep thinking back to that pizza shop. Creating blog posts is functionally different than creating vlogs, which have a different work flow than taping interviews, which has little to do with Meetups. All of these extra services I could offer would bring revenue, but the question is would it kill profit by increasing the per unit production cost?  Every time I have to go from thinking about writing, to thinking about vlogging, to lining up an interview I have to mentally shift gears. Real time is wasted as I try to remember where I left things at, and what I’m trying to accomplish now. Beyond that as I think of scaling different types of people are good at different things.  Someone good at writing may be piss poor on camera.  Some one good on camera, may be self conscious in a live environment.  Which means to scale I don’t have to look for one type of employee I have to look for different types at the same time. This doesn’t even get into things like liability an insurance. (Because I did surveillance systems and computer repair my insurance broker was only able to find a single insurance company willing to offer coverage because all of the other insurers were scared of liability from a surveillance system failure.)

So think about this as you decide on the path for your business or startup.  In the beginning you may have to flail a bit to figure out what people are willing to buy, but once you land on a profitable offering that you have the ability to scale focus in on that and just grind a way.  It’s always exciting to figure out new products to offer, but every moment you’re spending not delivering to your customers is a moment you’re not making money.  Find your 10 toppings, 3 sizes, and if you’re feeling motivated possibly your version of thin crust and then work your ass off.

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