January 19, 2023 • 26 mins
Ilir Sela is the co-founder and CEO of Slice. His problem: How do you bring the technological revolution to thousands of tiny mom and pop pizza shops?
Most local pizza shops haven't adapted well to consumers' appetites for online ordering. Ilir's mission is to make sure that the technology powering Big Pizza can also benefit smaller businesses.
This is the first episode of What's Your Problem's four-part series on the future of food.
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Episode Transcript
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Speaker 1 (00:15):
Pushkin. Here are two ways of thinking about technology and
the pizza business. One, technology creates a wiener take all
game with economies of scale and network effects. The bigger
a company gets, the better and cheaper its product gets,
(00:35):
and so it just runs away with the game. This
is the story of Domino's Pizza, which, underneath the hood
is a really smart tech company that has used data
and algorithms to drive incredible growth. Investors know this. Over
the past ten years, Domino's stock has risen more than
the stock of Amazon or Google or Facebook. On the
(00:56):
other hand, technology can also benefit small businesses by lowering
barriers to entry and creating powerful new efficiencies. But we
haven't seen much of this side of technology in the
pizza world, least not yet. Most mom and pop pizza
shops haven't changed in decades, and if they don't change soon,
they may get destroyed by the tech juggernaut of big pizza.
(01:25):
I'm Jacob Goldstein, and this is what's your problem. My
guest today is Elier Sella. He's the co founder and
CEO of Slice, a tech company that works with thousands
of small pizza shops across the United States. The Elier's
problem is this, how do you bring the technological revolution
to thousands of tiny mom and pop pizza shops, the
places where they don't even have time to answer the
(01:47):
phone every time it rings to start. I asked Elier
to talk me through all the things that can go
wrong at a pizza shop every time somebody calls in
an order. So when you dial in, you'll either get
a busy signal. If you don't get a busy signal,
very likely you'll be put on hold for sure. All right,
the guy's got to somebody who can hear people screaming
(02:07):
in the background right exact phone. The guy disappears exactly.
And so what we know is, you know, twenty plus
percent of phone calls go unattended. And then they will
take your order, but they will mishear you because it's
very loud on the other side. And that means that
either the quantity of something that you ordered will be wrong,
(02:28):
maybe a topping will be forgotten, but there will be
something wrong with your order. Sometimes then you have to
read out your address. That's a whole other issue, so
they might get the address wrong exactly exactly. Your neighbor
gets a free pizza and I get nothing. You're there
two hours later waiting for your pie to arrive. That
kind of stuff. The bottleneck isn't the pizza oven, it's
(02:50):
the telephone. It's the telephone. So what Elier's company, Slice
is trying to do is to get small pizza shops
out of the world of telephones and orders scrolled on
paper and into the world where customers use an app
to order and where the pizza shop runs on a
computer system designed by Slice. There is a Slice app,
and when you open it, it looks like Seamless or
(03:11):
Grubhub or Uber Eats, but Slice is really different than
those companies. Those are basically delivery services that charge a
fee of around twenty five percent. Slice does not provide delivery,
and its fee is typically around five percent. What Slice
is really trying to do is to bring Domino's level
technology to the mom and pop pizza shop on the corner.
(03:32):
These are pizza shops that are about as far from
Dominoes as you can get and still be selling pizza.
These are independently owned and operated. I call them micro businesses.
They're not even small businesses. They don't have a staff
of ten or twenty. They are usually a team of
two or three people, most often a family, and they're
(03:53):
working alone. They're responsible for making the pizza, answering the phone,
serving the person who's walking in at the counter, making
sure perilous processed. Sometimes they run out of inventory and
they have to run out and pick up inventory. But
it's a very reactive, unpredictable, lonely job. So that's that's
(04:16):
your client. That's what it's like, sort of behind the scenes.
That the pizza shop on the corner, which everybody has
right wherever you live, there's some neighborhood pizza shop. And
then on the other hand you have Dominoes. Right, Dominoes,
which you know you think of as a pizza company,
Buddy is actually like a really savvy, big tech company essentially,
(04:38):
right it is. And so I mean it seems like
in fact Slice is not so much about you know,
Uber eats or a door dash, but he is really
more like a Domino's alternative. Is that right? It's fun on.
So Domino's made the decision about fifteen years ago to
(04:59):
focus on becoming a technology first company because they realized
that those inefficiencies that we spoke about earlier exist and
they all to realize that they can create much stronger
consumer relationships customer relationships if the customer was online. Remember now,
(05:20):
you know for a Domino's, seventy five percent of their
orders are being placed digitally through their own native channels.
That was a brilliant call by Dominos, right, like incredible.
They made a really smart call, you know, kind of
at the beginning of the iPhone era. They saw what
(05:40):
was coming and they did it exactly. And tell me
all the ways that's paid off for them. So they
were the first to first national chain to invest in
a best in class native mobile ordering experience. They were
the first company to have a nationwide rewards program that
(06:01):
is tied to the online mobile ordering experience. So you
get all these rewards if you ordered online. And in fact,
they're the first company to stop advertising phone numbers. Interesting,
Dominos does not want you to call them. They don't
want you to call that's the user point of view.
Tell me all the reasons that's good for Dominoes. So
why is that good for Dominoes. Let's fast forward and
(06:24):
look at it today. And as I mentioned, seventy five
percent of the volume is digital. When that happens, you
tip a scale when it comes to insights. Because most
of the customer base is now digital, I can now
predict using data, data science, and insights, I can predict
what will happen at a Domino's location every single day.
(06:46):
So Dominos for a Friday, they know how many sales
they will have. So one, the experience for the consumer
becomes much better because when you order a pizza for Dominoes,
most likely that pie is already in the oven. They're
anticipating its super sides are very powerful. They knew I'm
going to order that pizza right now, and so they
started cooking it five minutes before I ordered it, exactly,
(07:09):
and I would say that's fun. Two, there's no food waste,
so they don't have to they don't have to remake
a pizza or throw it away. Three, it's directly connected
to their entire sort of workflow, and so there isn't
a ton of inefficiencies in terms of which driver is
(07:31):
going to take which order and where it's going to
be delivered. All of this data feeds into their team
and gives them insights, gives them direction into how they
need to handle every single customer. So when you talk
about all those things that Domino's does, and how smart
they are because of it. It's sort of amazing that
(07:52):
there's so many mom and pizza shops still in business. Ah. Yes,
and this is the this is the AHA moment for me.
Domino's has solved a lot of the business challenges and
inefficiencies of running a pizza shop. However, it asked for
one major tradeoff, and that is your creative freedom. You
(08:13):
cannot have you know, Elier's pizza shop in my own
family recipe. You know, you can't bring that forward when
you open up a Dominoes. You have to trade that off. Sure,
I mean that's true from the point of view of
the entrepreneur, but from the point of view of the customer,
I mean I don't prefer Domino's pizza, Like does the
shop around the corner just stay in business because people
(08:35):
prefer the pizza there, or they like, like, why hasn't
Dominoes just wiped everybody out? It's kind of the question. Well,
they've they've done a great job and they've taken market share,
but it's clear that the consumer loves the authenticity and
the variety that comes with local. There's you know, closer connections,
better connections with that local operator. And in many cases,
(08:57):
the consumer is forging a more convenient mobile experience for
better quality product. And you know, I think there's a
there's an opportunity to solve for both. Okay, remember Domino's
has six thousand locations. Yeah, Slice works with eighteen thousand locations.
So team Slice is bigger than team Dominoes in terms
(09:17):
of revenue, in terms of number of pizzas sold, without
a doubt. Our goal and my vision is to help
that independent operator to be in business for themselves, but
not by themselves. How do we create a community around
this industry and empower it with the similar sort of
operating system and tools and technology that Dominoes brings to
(09:40):
their franchisees. So there's an idea that's interesting to me
that is bigger than just pizza. Pizza's big. But this
is not just a pizza idea, and it's about technology
and how it seems like sometimes technology drives us toward
a winner. Take all. Right, you know, certainly we've seen that,
(10:03):
say with a Google or even with social media. Right,
you have these very powerful network effects, but it also
seems like there are instances when technology can lower barriers
to entry and create efficiencies for you know, smaller businesses.
And I don't know what quite the right analogy is,
but I was thinking, like it reminds me a little
(10:25):
like Dominoes, and Slice reminds me a little of like
Amazon and Shopify. Right. Amazon is this giant, centralized, brilliant
e commerce company, and then you have Shopify, which is
very clever and lets anybody who wants to sell stuff
online with a lot of like powerful smart technology. It's
as well said, we get a lot of analogies and
(10:47):
a lot of examples are sort of similar to that,
you know, specifically to our customers, there's a major difference
even with Shopify that that is an incredible company that
has built all of these tools, and then the entrepreneur
goes and leverages those tools to be to be successful
and to have an online presence. The challenge in our
(11:11):
industry is if we just built the tool and then
made it available to these operators, well, that's just another
job for them to do. And what the mistake a
lot of people make is they say, Okay, hey, independent operator,
small business owner, you can go and compete with Dominoes.
(11:31):
And they're still gonna lose. They're still gonna lose because
they're because they're alone and they don't have that experience.
So the difference between even a Shopify and Slice is
that Slice takes on the responsibility of partnering closely with
these operators and managing the online economy, the online experience,
(11:51):
and the digital tools on their behalf, and then giving
them all the insights back so that they know exactly
what's going on in this online world. So why only pizza? Like,
your app looks just like a you know, a Grubhub,
happ or whatever, but I open it in its own
pizza and like, I mean, I like pizza. I know
people love pizza, but like, why only pizza? Why not?
(12:17):
It's a big market. It's a forty seven billion dollar
industry in the US, and that's just revenue that passes
through seventy seven thousand pizza shops. What share of those
are independent shops? Seventy fivest most most most? Why does
everybody love pizza? Why does everybody love pizza? Asking the
(12:41):
tough questions on what's your problem? No, no, I think it.
I think it brings us back to happy, celebratory times
in our life. If you remember growing up, when did
you have pizza? Soccer games, football game, Yeah, birthday parties,
moments where you typically came together with other people. So
(13:02):
pizza is the ultimate social food. It has eight slices.
I mean, I'm sure some people will eat all eight.
I've done it before and it's it's great. But it's
meant to be shared. And so there's this incredible positive
feeling that you get when you order a pizza. I
would say two, it is um delicious, It travels well,
(13:27):
and it just tastes really good. I mean, it's a
nice combination of you know, a Doughey based sort of protein.
You know, obviously that's sauce, and it's it's a really
bad balanced problem. Fat is so good. You didn't say fat.
That's really what's doing the lifting. Let's be honest, right,
And I would say the last part is this matters.
It's incredibly affordable. Yeah. For many families and many households,
(13:52):
pizza is the night out in Yeah. And so I
would say for those reasons, um, it has become a staple.
It's an American institution. American is an interesting word there,
not Italian, like the thing we eat is not even
it used to be, but not not the pizza we
consume is very American, very much in an American product.
(14:17):
After the break, how Slice may soon be solving problems
in the physical world, including how to deliver cardboard boxes
to thousands of pizza shops. Now back to the show.
Elier was born in Macedonia, moved to Staten Island when
(14:38):
he was ten, and kind of grew up in the
pizza business. I have a lot of family members that
owned pizza shops, so hung out at my uncle's pizza shop,
it was called John Anthony's in Brooklyn. You know, would
make pizza's if we needed to. We did a bunch
of deliveries. But most of my teenage years, whether it
(14:59):
was the weekend or some weeknights, we would spend at
a pizza shop. Elia went to college in Staten Island
and started a tech support business that he later wound up.
So I had that business. Because of that, family members
saw me as the tech guy, and they wanted me
to build them websites and online ordering for their shops,
for their pizza realized for their pizza shops. And then,
(15:20):
you know, I kind of realized that all these pizza
shops were very similar, they just had a different recipe.
The first version of Slice was called my Pizza dot Com.
I bootstrapped the company for six years. We didn't raise
any any money. Um So in the beginning, it was
mostly the consumer was placing an order online. The order
(15:40):
would make it to my telephone and then I would
phone the pizzeria. I would call the pizzeria with your order.
What year was this, by the way, it was it
was twenty twenty ten, so the people had there was
there were iPhones, it was an app store. I'd go online.
I'd think I'm doing this high tech thing ordering on
my phone. It turns out there's just a guy namely
You just you read it and then you called the
(16:01):
pizza shop. That's right, presumable you had to call it
in because it was twenty ten, Like, they probably didn't
even have iPhones, a lot of them, right, Like all
they had was a telephone and a pizza oven and
cheese at a cash register. Right. There would be no
way with a lot of these shops in twenty ten
to send them a digital order. Absolutely, And even if
you had a way, they were not going to adopt
that just because they were old fashioned, basically old fashioned.
(16:24):
They didn't want to change the way that they operated,
that they worked every day. Great, Remember it's it's an
individual operator. Any changes to the workflow is a huge
disruption to your day. You don't have the time, right,
it's a big disruption. So tell me sort of where
you are in the arc of figuring all that technology
(16:47):
stuff out. Like clearly your app lets me order online
from the corner pizza store, right, so it it at
least provides the opportunity to move customers off of the
phone and you know, off of to move customers away
from calling in their order and toward placing the order digitally,
(17:07):
which is clearly better and more efficient for everybody. Where
are you on on all of the other like the
pizzas in the oven before I even order it, because
you knew I was going to order it? Like, are
you doing that? Do you want to do that? Absolutely?
Now we're on this journey to make sure that all
of these locations have very similar, a very similar tech
stack across the board. Once we have this consistent tech
(17:31):
stack across all these independent shops, we now have community level,
network level data and insights, and we can use that
information those insights to empower the individual shops, right, so
they can they can collectively now know what to charge
for a large pizza, what is the expected delivery time
(17:54):
from the consumer in that city or town? How do
menuse you know, how are they evolving? What are the
most popular items? So, in essence, they are not they
are no longer just m you know, alone and looking
at the data just from your own customer base. But
they kind of know what's happening industrywide and what kind
(18:16):
of data, if any, are you sending back to the
shops now, Like what can you tell them now based
on what you already know today? It's super I would
say high, high level basic data about consumer insights. So
we know tipping point or the threshold for the consumer
delivery fee, so we know what the consumer expects for
(18:36):
a delivery fee in a town. Is there a secret
number that's the most people will pay for delivery? I
know it varies from town to town. So if you're
in New York, you have to have free delivery that
is the expected delivery fee from the consumer. If you're
in LA you can probably get by with three or
four dollars delivery fees. It literally varies town to town
(18:56):
or cities a city. What else do you know already
we know what is the threshold for delivery time, so
what is the optimal ETA estimate time of arrival? And
that is all so geography based, but it's also time
of day, day of week based. So we know that
on a Friday night the consumer is a little bit
more tolerant for you know, a wider delivery time, but
(19:20):
if it's lunchtime on a Monday, they expected really really fast,
and that also varies by geography. What else you know?
We know what is the average price of a pizza,
of a large cheese pizza by town. We know when
the price is super high. We know when the price
is probably on point or when it's too low, especially
relative to the quality score of the shop. So what
(19:43):
do you what do you not know yet that you
hope to know in the future. What are some of
the data sort of problems you haven't solved yet. We
don't have a ton of visibility from the shop side.
So what are they paying for different supplies? What are
they paying for cheese? What are they paying for you know,
dough and all these things? And so how does that
(20:03):
differ from from location to location. So we really want
to do better is connect the insights and the data
from the from the seller, from the shop side, so
that we can sort of create a closed loop of
insights and information. You give any pushback from shops who
are like, wait, I got my secret cheese, guy, give
(20:24):
me a great deal on cheese. I don't want my
rival across town to know about it. I'm not going
to tell you that, not really, because every single independent
is being price gouged because they don't have the leverage.
You mean, they're paying more than Dominoes anyway. So if
I got, if I got a corner shop, my competition,
who I care about is not the other corner shop
(20:45):
across town. It's Dominoes. Is that what you're saying? Exactly?
Or to be quite honest, if I can, if I
can band together with the other shops in town and
lower the price, I'm willing to do that. Mom and
pop pizza shops of the world unite. You have nothing
united but your expensive mazzarella. Exactly exactly. And so I'll
give you an example. We launched a pilot to bring
(21:09):
packaging supplies two pizza shops. We filled a warehouse, a
ten thousand Squareford warehouse with a bunch of pizza boxes
to an order of magnitude. How many pizza boxes is that?
It's a good question. Is it a million? Not quite
a million, but some are in the tens of thousands
or hundreds of thousands, okay, And there's more orders coming
(21:31):
because it's it's like the first first order that we placed.
But what we did was we went to the largest
pizza box manufacturer in the US and we negotiated a
rate that is similar to what Dominoes negotiated for their franchises.
And do you think, I mean, are you going to
get into the cardboard box business? Like? Is that going
to be part of what Slice does? It's looking really
(21:52):
really promising that there's an incredible demand in an appetite
from pizza shops to pay twenty dollars for a bundle
instead of thirty five. The reason why I love it
is because then we can pass that saving back to
the consumer. By the way, that's that's the secret of
Dominoes is because of their efficiencies, they didn't raise prices
(22:13):
for fifteen years, dominos has kept the same prices. So well,
that's I mean, technological change, driving efficiencies and making things
cheaper is good, right. That is the long term story
of how the world gets richer. Exactly so will we
get into it at scale to be determined, but it's
certainly looking promising, and we will do anything that is
(22:33):
necessary to help independent operator small businesses succeed. I gotta
say I love the story of the startup tech Unicorn
getting into the cardboard box business, partly because it's just
so physical and real, but also because it's a reminder
that this story is really all about slice trying to
(22:55):
bring the benefits of scale in every dimension. In order
to compete with dominoes, the mom and pop pizza shops
need to use the same tech stack and aggregate their
data so they can use analytics to accurately predict custom
or behavior. But also they should bend together and buy
cardboard boxes in bulk because they're cheaper that way. In
(23:19):
a minute, the lightning round with lots of questions about pizza.
That's the end of the ads. Now we're going back
to the show. Okay, let's do the lightning round. Great
anchovy or pineapple neither neither very good. What's one piece
(23:43):
of advice you'd give to somebody trying to solve a
hard problem. Hard problems take a long time to solve.
Be really passionate about solving the problem. But don't just
do it because you want to make money or for
some other reason, because then you will not have the
(24:03):
patience to stay with it long enough to actually solve it.
What's the most overrated pizza topping? Mushrooms? What's the most
underrated pizza topping? Hot honey, hot honey. That's right. I
never even heard of it, that's how underrated it is.
(24:24):
There you go, Chicago Pizza or New York Pizza. Just kidding,
obviously New York Chicago pizza is a pie. It's not
even pizza. It's not even pizza. Thank you. What do
you understand about the world Because you grew up in
Staten Island, people have to work really, really hard for
(24:45):
a long time to earn more than fifty or sixty
thousand dollars a year, and for most people, ordering takeout
or delivery is a luxury and not, you know, not
something that they can do every single day of the week.
Do you think Slice will always be a pizza company? No?
(25:09):
What's next after pizza? We're looking at bakeries, We're looking
at like taco shops, Mexican takeout and delivery is a
really big deal. So those are the areas we're kind
of trying to learn more about. What's the best pizza
You've ever had? Best pizza I've ever had? On a
Midsummer day, let's call it around four or five pm.
(25:31):
You're in Brooklyn. You go to LMB Simoni Gardens. Ah,
I know it. You get the LMB you know, square pie,
You get a you know, three or four cans of
pepsi with a couple of friends, and you sit outside
and the sun is setting and it's kind of hot,
and you're having a Slice with a with a cold
can of of pepsi or cooke. Very nice, Thank you
(25:55):
for your time. Thank you. This has been one of
my favorites because it's been a combination of fun and
challenging at the same time. Oh great, fun and fun
and fun and challenge, fun and interesting, fun and thoughtful. Yeah,
we're going I like the thoughtfulness exactly. Elier Sella is
(26:16):
the founder and CEO of Slice. Over the next few weeks,
we're going to be doing some more shows about the
future of food. Coming next week is an interview with
Pat Brown, the founder of Impossible Foods. His problem, how
do you make meat without animals. Today's show was edited
by Robert Smith, produced by Edith Russolo, and engineered by
(26:36):
Amanda ka Wong. I'm Jacob Goldstein. You can find me
on Twitter at Jacob Goldstein, or you can email us
at problem at Pushkin dot fm. We'll be back next
week with another episode of What's Your Problem
Pushkin. Here are two ways of thinking about technology and
the pizza business. One, technology creates a wiener take all
game with economies of scale and network effects. The bigger
a company gets, the better and cheaper its product gets,
(00:35):
and so it just runs away with the game. This
is the story of Domino's Pizza, which, underneath the hood
is a really smart tech company that has used data
and algorithms to drive incredible growth. Investors know this. Over
the past ten years, Domino's stock has risen more than
the stock of Amazon or Google or Facebook. On the
(00:56):
other hand, technology can also benefit small businesses by lowering
barriers to entry and creating powerful new efficiencies. But we
haven't seen much of this side of technology in the
pizza world, least not yet. Most mom and pop pizza
shops haven't changed in decades, and if they don't change soon,
they may get destroyed by the tech juggernaut of big pizza.
(01:25):
I'm Jacob Goldstein, and this is what's your problem. My
guest today is Elier Sella. He's the co founder and
CEO of Slice, a tech company that works with thousands
of small pizza shops across the United States. The Elier's
problem is this, how do you bring the technological revolution
to thousands of tiny mom and pop pizza shops, the
places where they don't even have time to answer the
(01:47):
phone every time it rings to start. I asked Elier
to talk me through all the things that can go
wrong at a pizza shop every time somebody calls in
an order. So when you dial in, you'll either get
a busy signal. If you don't get a busy signal,
very likely you'll be put on hold for sure. All right,
the guy's got to somebody who can hear people screaming
(02:07):
in the background right exact phone. The guy disappears exactly.
And so what we know is, you know, twenty plus
percent of phone calls go unattended. And then they will
take your order, but they will mishear you because it's
very loud on the other side. And that means that
either the quantity of something that you ordered will be wrong,
(02:28):
maybe a topping will be forgotten, but there will be
something wrong with your order. Sometimes then you have to
read out your address. That's a whole other issue, so
they might get the address wrong exactly exactly. Your neighbor
gets a free pizza and I get nothing. You're there
two hours later waiting for your pie to arrive. That
kind of stuff. The bottleneck isn't the pizza oven, it's
(02:50):
the telephone. It's the telephone. So what Elier's company, Slice
is trying to do is to get small pizza shops
out of the world of telephones and orders scrolled on
paper and into the world where customers use an app
to order and where the pizza shop runs on a
computer system designed by Slice. There is a Slice app,
and when you open it, it looks like Seamless or
(03:11):
Grubhub or Uber Eats, but Slice is really different than
those companies. Those are basically delivery services that charge a
fee of around twenty five percent. Slice does not provide delivery,
and its fee is typically around five percent. What Slice
is really trying to do is to bring Domino's level
technology to the mom and pop pizza shop on the corner.
(03:32):
These are pizza shops that are about as far from
Dominoes as you can get and still be selling pizza.
These are independently owned and operated. I call them micro businesses.
They're not even small businesses. They don't have a staff
of ten or twenty. They are usually a team of
two or three people, most often a family, and they're
(03:53):
working alone. They're responsible for making the pizza, answering the phone,
serving the person who's walking in at the counter, making
sure perilous processed. Sometimes they run out of inventory and
they have to run out and pick up inventory. But
it's a very reactive, unpredictable, lonely job. So that's that's
(04:16):
your client. That's what it's like, sort of behind the scenes.
That the pizza shop on the corner, which everybody has
right wherever you live, there's some neighborhood pizza shop. And
then on the other hand you have Dominoes. Right, Dominoes,
which you know you think of as a pizza company,
Buddy is actually like a really savvy, big tech company essentially,
(04:38):
right it is. And so I mean it seems like
in fact Slice is not so much about you know,
Uber eats or a door dash, but he is really
more like a Domino's alternative. Is that right? It's fun on.
So Domino's made the decision about fifteen years ago to
(04:59):
focus on becoming a technology first company because they realized
that those inefficiencies that we spoke about earlier exist and
they all to realize that they can create much stronger
consumer relationships customer relationships if the customer was online. Remember now,
(05:20):
you know for a Domino's, seventy five percent of their
orders are being placed digitally through their own native channels.
That was a brilliant call by Dominos, right, like incredible.
They made a really smart call, you know, kind of
at the beginning of the iPhone era. They saw what
(05:40):
was coming and they did it exactly. And tell me
all the ways that's paid off for them. So they
were the first to first national chain to invest in
a best in class native mobile ordering experience. They were
the first company to have a nationwide rewards program that
(06:01):
is tied to the online mobile ordering experience. So you
get all these rewards if you ordered online. And in fact,
they're the first company to stop advertising phone numbers. Interesting,
Dominos does not want you to call them. They don't
want you to call that's the user point of view.
Tell me all the reasons that's good for Dominoes. So
why is that good for Dominoes. Let's fast forward and
(06:24):
look at it today. And as I mentioned, seventy five
percent of the volume is digital. When that happens, you
tip a scale when it comes to insights. Because most
of the customer base is now digital, I can now
predict using data, data science, and insights, I can predict
what will happen at a Domino's location every single day.
(06:46):
So Dominos for a Friday, they know how many sales
they will have. So one, the experience for the consumer
becomes much better because when you order a pizza for Dominoes,
most likely that pie is already in the oven. They're
anticipating its super sides are very powerful. They knew I'm
going to order that pizza right now, and so they
started cooking it five minutes before I ordered it, exactly,
(07:09):
and I would say that's fun. Two, there's no food waste,
so they don't have to they don't have to remake
a pizza or throw it away. Three, it's directly connected
to their entire sort of workflow, and so there isn't
a ton of inefficiencies in terms of which driver is
(07:31):
going to take which order and where it's going to
be delivered. All of this data feeds into their team
and gives them insights, gives them direction into how they
need to handle every single customer. So when you talk
about all those things that Domino's does, and how smart
they are because of it. It's sort of amazing that
(07:52):
there's so many mom and pizza shops still in business. Ah. Yes,
and this is the this is the AHA moment for me.
Domino's has solved a lot of the business challenges and
inefficiencies of running a pizza shop. However, it asked for
one major tradeoff, and that is your creative freedom. You
(08:13):
cannot have you know, Elier's pizza shop in my own
family recipe. You know, you can't bring that forward when
you open up a Dominoes. You have to trade that off. Sure,
I mean that's true from the point of view of
the entrepreneur, but from the point of view of the customer,
I mean I don't prefer Domino's pizza, Like does the
shop around the corner just stay in business because people
(08:35):
prefer the pizza there, or they like, like, why hasn't
Dominoes just wiped everybody out? It's kind of the question. Well,
they've they've done a great job and they've taken market share,
but it's clear that the consumer loves the authenticity and
the variety that comes with local. There's you know, closer connections,
better connections with that local operator. And in many cases,
(08:57):
the consumer is forging a more convenient mobile experience for
better quality product. And you know, I think there's a
there's an opportunity to solve for both. Okay, remember Domino's
has six thousand locations. Yeah, Slice works with eighteen thousand locations.
So team Slice is bigger than team Dominoes in terms
(09:17):
of revenue, in terms of number of pizzas sold, without
a doubt. Our goal and my vision is to help
that independent operator to be in business for themselves, but
not by themselves. How do we create a community around
this industry and empower it with the similar sort of
operating system and tools and technology that Dominoes brings to
(09:40):
their franchisees. So there's an idea that's interesting to me
that is bigger than just pizza. Pizza's big. But this
is not just a pizza idea, and it's about technology
and how it seems like sometimes technology drives us toward
a winner. Take all. Right, you know, certainly we've seen that,
(10:03):
say with a Google or even with social media. Right,
you have these very powerful network effects, but it also
seems like there are instances when technology can lower barriers
to entry and create efficiencies for you know, smaller businesses.
And I don't know what quite the right analogy is,
but I was thinking, like it reminds me a little
(10:25):
like Dominoes, and Slice reminds me a little of like
Amazon and Shopify. Right. Amazon is this giant, centralized, brilliant
e commerce company, and then you have Shopify, which is
very clever and lets anybody who wants to sell stuff
online with a lot of like powerful smart technology. It's
as well said, we get a lot of analogies and
(10:47):
a lot of examples are sort of similar to that,
you know, specifically to our customers, there's a major difference
even with Shopify that that is an incredible company that
has built all of these tools, and then the entrepreneur
goes and leverages those tools to be to be successful
and to have an online presence. The challenge in our
(11:11):
industry is if we just built the tool and then
made it available to these operators, well, that's just another
job for them to do. And what the mistake a
lot of people make is they say, Okay, hey, independent operator,
small business owner, you can go and compete with Dominoes.
(11:31):
And they're still gonna lose. They're still gonna lose because
they're because they're alone and they don't have that experience.
So the difference between even a Shopify and Slice is
that Slice takes on the responsibility of partnering closely with
these operators and managing the online economy, the online experience,
(11:51):
and the digital tools on their behalf, and then giving
them all the insights back so that they know exactly
what's going on in this online world. So why only pizza? Like,
your app looks just like a you know, a Grubhub,
happ or whatever, but I open it in its own
pizza and like, I mean, I like pizza. I know
people love pizza, but like, why only pizza? Why not?
(12:17):
It's a big market. It's a forty seven billion dollar
industry in the US, and that's just revenue that passes
through seventy seven thousand pizza shops. What share of those
are independent shops? Seventy fivest most most most? Why does
everybody love pizza? Why does everybody love pizza? Asking the
(12:41):
tough questions on what's your problem? No, no, I think it.
I think it brings us back to happy, celebratory times
in our life. If you remember growing up, when did
you have pizza? Soccer games, football game, Yeah, birthday parties,
moments where you typically came together with other people. So
(13:02):
pizza is the ultimate social food. It has eight slices.
I mean, I'm sure some people will eat all eight.
I've done it before and it's it's great. But it's
meant to be shared. And so there's this incredible positive
feeling that you get when you order a pizza. I
would say two, it is um delicious, It travels well,
(13:27):
and it just tastes really good. I mean, it's a
nice combination of you know, a Doughey based sort of protein.
You know, obviously that's sauce, and it's it's a really
bad balanced problem. Fat is so good. You didn't say fat.
That's really what's doing the lifting. Let's be honest, right,
And I would say the last part is this matters.
It's incredibly affordable. Yeah. For many families and many households,
(13:52):
pizza is the night out in Yeah. And so I
would say for those reasons, um, it has become a staple.
It's an American institution. American is an interesting word there,
not Italian, like the thing we eat is not even
it used to be, but not not the pizza we
consume is very American, very much in an American product.
(14:17):
After the break, how Slice may soon be solving problems
in the physical world, including how to deliver cardboard boxes
to thousands of pizza shops. Now back to the show.
Elier was born in Macedonia, moved to Staten Island when
(14:38):
he was ten, and kind of grew up in the
pizza business. I have a lot of family members that
owned pizza shops, so hung out at my uncle's pizza shop,
it was called John Anthony's in Brooklyn. You know, would
make pizza's if we needed to. We did a bunch
of deliveries. But most of my teenage years, whether it
(14:59):
was the weekend or some weeknights, we would spend at
a pizza shop. Elia went to college in Staten Island
and started a tech support business that he later wound up.
So I had that business. Because of that, family members
saw me as the tech guy, and they wanted me
to build them websites and online ordering for their shops,
for their pizza realized for their pizza shops. And then,
(15:20):
you know, I kind of realized that all these pizza
shops were very similar, they just had a different recipe.
The first version of Slice was called my Pizza dot Com.
I bootstrapped the company for six years. We didn't raise
any any money. Um So in the beginning, it was
mostly the consumer was placing an order online. The order
(15:40):
would make it to my telephone and then I would
phone the pizzeria. I would call the pizzeria with your order.
What year was this, by the way, it was it
was twenty twenty ten, so the people had there was
there were iPhones, it was an app store. I'd go online.
I'd think I'm doing this high tech thing ordering on
my phone. It turns out there's just a guy namely
You just you read it and then you called the
(16:01):
pizza shop. That's right, presumable you had to call it
in because it was twenty ten, Like, they probably didn't
even have iPhones, a lot of them, right, Like all
they had was a telephone and a pizza oven and
cheese at a cash register. Right. There would be no
way with a lot of these shops in twenty ten
to send them a digital order. Absolutely, And even if
you had a way, they were not going to adopt
that just because they were old fashioned, basically old fashioned.
(16:24):
They didn't want to change the way that they operated,
that they worked every day. Great, Remember it's it's an
individual operator. Any changes to the workflow is a huge
disruption to your day. You don't have the time, right,
it's a big disruption. So tell me sort of where
you are in the arc of figuring all that technology
(16:47):
stuff out. Like clearly your app lets me order online
from the corner pizza store, right, so it it at
least provides the opportunity to move customers off of the
phone and you know, off of to move customers away
from calling in their order and toward placing the order digitally,
(17:07):
which is clearly better and more efficient for everybody. Where
are you on on all of the other like the
pizzas in the oven before I even order it, because
you knew I was going to order it? Like, are
you doing that? Do you want to do that? Absolutely?
Now we're on this journey to make sure that all
of these locations have very similar, a very similar tech
stack across the board. Once we have this consistent tech
(17:31):
stack across all these independent shops, we now have community level,
network level data and insights, and we can use that
information those insights to empower the individual shops, right, so
they can they can collectively now know what to charge
for a large pizza, what is the expected delivery time
(17:54):
from the consumer in that city or town? How do
menuse you know, how are they evolving? What are the
most popular items? So, in essence, they are not they
are no longer just m you know, alone and looking
at the data just from your own customer base. But
they kind of know what's happening industrywide and what kind
(18:16):
of data, if any, are you sending back to the
shops now, Like what can you tell them now based
on what you already know today? It's super I would
say high, high level basic data about consumer insights. So
we know tipping point or the threshold for the consumer
delivery fee, so we know what the consumer expects for
(18:36):
a delivery fee in a town. Is there a secret
number that's the most people will pay for delivery? I
know it varies from town to town. So if you're
in New York, you have to have free delivery that
is the expected delivery fee from the consumer. If you're
in LA you can probably get by with three or
four dollars delivery fees. It literally varies town to town
(18:56):
or cities a city. What else do you know already
we know what is the threshold for delivery time, so
what is the optimal ETA estimate time of arrival? And
that is all so geography based, but it's also time
of day, day of week based. So we know that
on a Friday night the consumer is a little bit
more tolerant for you know, a wider delivery time, but
(19:20):
if it's lunchtime on a Monday, they expected really really fast,
and that also varies by geography. What else you know?
We know what is the average price of a pizza,
of a large cheese pizza by town. We know when
the price is super high. We know when the price
is probably on point or when it's too low, especially
relative to the quality score of the shop. So what
(19:43):
do you what do you not know yet that you
hope to know in the future. What are some of
the data sort of problems you haven't solved yet. We
don't have a ton of visibility from the shop side.
So what are they paying for different supplies? What are
they paying for cheese? What are they paying for you know,
dough and all these things? And so how does that
(20:03):
differ from from location to location. So we really want
to do better is connect the insights and the data
from the from the seller, from the shop side, so
that we can sort of create a closed loop of
insights and information. You give any pushback from shops who
are like, wait, I got my secret cheese, guy, give
(20:24):
me a great deal on cheese. I don't want my
rival across town to know about it. I'm not going
to tell you that, not really, because every single independent
is being price gouged because they don't have the leverage.
You mean, they're paying more than Dominoes anyway. So if
I got, if I got a corner shop, my competition,
who I care about is not the other corner shop
(20:45):
across town. It's Dominoes. Is that what you're saying? Exactly?
Or to be quite honest, if I can, if I
can band together with the other shops in town and
lower the price, I'm willing to do that. Mom and
pop pizza shops of the world unite. You have nothing
united but your expensive mazzarella. Exactly exactly. And so I'll
give you an example. We launched a pilot to bring
(21:09):
packaging supplies two pizza shops. We filled a warehouse, a
ten thousand Squareford warehouse with a bunch of pizza boxes
to an order of magnitude. How many pizza boxes is that?
It's a good question. Is it a million? Not quite
a million, but some are in the tens of thousands
or hundreds of thousands, okay, And there's more orders coming
(21:31):
because it's it's like the first first order that we placed.
But what we did was we went to the largest
pizza box manufacturer in the US and we negotiated a
rate that is similar to what Dominoes negotiated for their franchises.
And do you think, I mean, are you going to
get into the cardboard box business? Like? Is that going
to be part of what Slice does? It's looking really
(21:52):
really promising that there's an incredible demand in an appetite
from pizza shops to pay twenty dollars for a bundle
instead of thirty five. The reason why I love it
is because then we can pass that saving back to
the consumer. By the way, that's that's the secret of
Dominoes is because of their efficiencies, they didn't raise prices
(22:13):
for fifteen years, dominos has kept the same prices. So well,
that's I mean, technological change, driving efficiencies and making things
cheaper is good, right. That is the long term story
of how the world gets richer. Exactly so will we
get into it at scale to be determined, but it's
certainly looking promising, and we will do anything that is
(22:33):
necessary to help independent operator small businesses succeed. I gotta
say I love the story of the startup tech Unicorn
getting into the cardboard box business, partly because it's just
so physical and real, but also because it's a reminder
that this story is really all about slice trying to
(22:55):
bring the benefits of scale in every dimension. In order
to compete with dominoes, the mom and pop pizza shops
need to use the same tech stack and aggregate their
data so they can use analytics to accurately predict custom
or behavior. But also they should bend together and buy
cardboard boxes in bulk because they're cheaper that way. In
(23:19):
a minute, the lightning round with lots of questions about pizza.
That's the end of the ads. Now we're going back
to the show. Okay, let's do the lightning round. Great
anchovy or pineapple neither neither very good. What's one piece
(23:43):
of advice you'd give to somebody trying to solve a
hard problem. Hard problems take a long time to solve.
Be really passionate about solving the problem. But don't just
do it because you want to make money or for
some other reason, because then you will not have the
(24:03):
patience to stay with it long enough to actually solve it.
What's the most overrated pizza topping? Mushrooms? What's the most
underrated pizza topping? Hot honey, hot honey. That's right. I
never even heard of it, that's how underrated it is.
(24:24):
There you go, Chicago Pizza or New York Pizza. Just kidding,
obviously New York Chicago pizza is a pie. It's not
even pizza. It's not even pizza. Thank you. What do
you understand about the world Because you grew up in
Staten Island, people have to work really, really hard for
(24:45):
a long time to earn more than fifty or sixty
thousand dollars a year, and for most people, ordering takeout
or delivery is a luxury and not, you know, not
something that they can do every single day of the week.
Do you think Slice will always be a pizza company? No?
(25:09):
What's next after pizza? We're looking at bakeries, We're looking
at like taco shops, Mexican takeout and delivery is a
really big deal. So those are the areas we're kind
of trying to learn more about. What's the best pizza
You've ever had? Best pizza I've ever had? On a
Midsummer day, let's call it around four or five pm.
(25:31):
You're in Brooklyn. You go to LMB Simoni Gardens. Ah,
I know it. You get the LMB you know, square pie,
You get a you know, three or four cans of
pepsi with a couple of friends, and you sit outside
and the sun is setting and it's kind of hot,
and you're having a Slice with a with a cold
can of of pepsi or cooke. Very nice, Thank you
(25:55):
for your time. Thank you. This has been one of
my favorites because it's been a combination of fun and
challenging at the same time. Oh great, fun and fun
and fun and challenge, fun and interesting, fun and thoughtful. Yeah,
we're going I like the thoughtfulness exactly. Elier Sella is
(26:16):
the founder and CEO of Slice. Over the next few weeks,
we're going to be doing some more shows about the
future of food. Coming next week is an interview with
Pat Brown, the founder of Impossible Foods. His problem, how
do you make meat without animals. Today's show was edited
by Robert Smith, produced by Edith Russolo, and engineered by
(26:36):
Amanda ka Wong. I'm Jacob Goldstein. You can find me
on Twitter at Jacob Goldstein, or you can email us
at problem at Pushkin dot fm. We'll be back next
week with another episode of What's Your Problem
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