04 May 2016
Ugly truths: not every cool business idea is worth the trouble
Almost any new idea looks cool—until you start implementing it. Our cool idea was to sell milkshakes at Dodo Pizza. And back when we first started, the logic seemed cogent. Americans love milkshakes. Nobody in the pizza delivery business sells them. And most importantly, milkshakes perfectly fit our trendy concept.
We are hell-bent on selling products made with high-grade ingredients only. And we felt thrilled to imagine that Dodo Pizza’s milkshakes would be made with premium ice cream, real chocolate with no vegetable oil, and grade-A milk. So we gave it a go.
We added milkshakes to our menu. We put them on our website. We found the suppliers. We bought expensive equipment.
Finally, we opened the pizzeria. Then we put the equipment up for sale. Deleted the milkshakes from the website. Cut them off of our menu. And we apologized to all our customers who had been waiting for them.
Call us amateur or dumb, but trying new things and failing is part of the job when you’re launching a startup. That doesn’t mean we can’t learn a few lessons from this milkshake gaffe.
Now, we are hell-bent not to repeat these mistakes while working on our menu in the future.
1. Don’t underestimate the task’s complexity
How do you deliver a milkshake with a pizza? Pizzas have to be hot. Milkshakes need cold. Tricky, right? Half a year ago, we were so overwhelmed with the quantity of tasks we were tackling that we didn’t have time to think it out. We just assumed that we’d come up with the solution (as we always do). Unfortunately, a new type of cooling bag we invented wasn’t doing its job as planned. Milkshakes still melted too fast because we used natural ice cream and milk.
2. Don’t pursue an idea that makes your life more difficult
Milkshakes and pizzas have nothing in common (surprise surprise!). So we needed to set up an entirely new process in the kitchen that had zero overlaps with our primary procedures. During rush hour, every pizza kitchen is a mess—we realized that we don’t want to make it even messier.
3. Adding more ingredients isn’t a great idea
Dodo Pizza’s mission is to run a super-efficient business. That’s the only way to keep the best quality/price ratio for our customers. But while making milkshakes, we couldn’t use a single ingredient we put into our pizzas. Adding more and more items to our SKU list didn’t look super efficient at all.
4. You don’t need a product that drives your labor cost up
Making milkshakes isn’t as simple as you might imagine (it definitely takes more time than grabbing a bottle of soda from the fridge). When it’s busy, we would need to put a member of the crew on making milkshakes only. It looked like we were driving our labor cost up instead of reducing it.
5. “Coolness” can’t be a purpose on its own
Every extra item you put on your menu has to serve some business purpose. And it can’t be just “coolness”. Usually, these extra options are supposed to drive your average check and help you make more profit. But we had some doubts that milkshakes would make us more profitable (see points 1–4). Moreover, during the first month after opening, it occurred to us that we don’t have any problems with our average check (it’s now $24—not bad at all). So, from a business perspective, there is no point in adding milkshakes to the menu.
Now we have a formula that can help us make the right decisions while thinking about adding new stuff to our menu.
Anything we add should serve a clear business purpose and has to be an organic part of our general workflow (i.e., use the same equipment and ingredients that we already have and buy).
It looks like many people who placed an order at Dodo Pizza love our pizza. Cutting milkshakes allowed us to focus on our core product and come up with a few more ideas on how to make our pizzas even better. I’ll share them with you in the next post in a day or two.
You’ll see that they’re pretty cool. :)