The Pizza Strategy: 5 Tips for a Successful Business

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A Coffee shop opened on the corner near our office. What they are doing to launch their new business amazingly applies to most companies. It’s brilliant and common sense. The Coffee shop illustrated to me lots of attributes of how to think about starting a new business, and how not to do it…

1. The New, New Thing vs. the Pizza Strategy

Mistake #1 in Silicon Valley is the obsession with the New, New Thing. The opposite is the Pizza Strategy. It’s practical, you could eat it every day (if you work with engineers), it’s both lunch and dinner food. It serves a lot of purpose, but it’s common and a bit boring. Innovation is wonderful, yet not enough technology companies go after crowded industries where an unmet need still lies.

Coffee Bar, which opened last month in our neighborhood is an excellent example of my kind of entrepreneurialism. They opened one block away from Starbucks. People asked why they would do that? Dumb question. Starbucks is an Unholy Blasphemous Sacrilege to those of us religiously devoted to the Sacrament of Coffee.

I call JIRA our Pizza business. It’s the sincerest form of flattery because Mike and Scott chose a software product with tons of competitors yet found an unserved need: a useful, practical issue tracker for $1200 – $4800. Five years later, it still sells like hotcakes. There were lots of pizza shops, but JIRA pizza has a strong following.

2. Marketing vs. Product

It’s not that marketing is bad. Hell, I’m recruiting for a VP Marketing. The question is: what do you lead with? If you can’t win folks with the product first, pack it up.

Coffee Bar has sitting next to their menu a ranking of all the best, generally boutique coffee shops in San Francicso. This takes cojones because San Francisco has some great coffee shops in the North End that are historic with the Beat Generation. Coffee Bar ranks #1. The point is: they are proud of their product and determined to be the best. They lead with Great Product.

Coffee Bar does something else we try to do at Atlassian which is give customers fewer choices, but give them good ones. We apply this rule to pricing to keep things simple. The first time I heard about Coffee Bar’s food, Jonathan Nolen said “The menu is limited but everything is great.” Bullseye. Apple figured this out a long time ago: compare the number of add-on options available on a Mac to those on a Dell. With Dell, the choices are agonizing and confusing.

Lead with product and keep things simple.

3. Free Trials vs. Hassle

What’s the biggest problem with test driving a new car? The hassle from an annoying salesman. Why do software companies do this when all you want is a whitepaper…

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Why don’t more companies just let you try their products with the least intrusion and hassle? During lunch when I normally don’t have coffee, Lindsay at Coffee Bar asked me if I wanted to try the coffee for free. Just the act of offering me a free coffee warmed me to the place. When I asked for a double espresso, she said, “Perfect”, because she wanted me to taste the undiluted essence of the core product: coffee. She handed me the espresso with a pride and belief in her product. She expected nothing in return.

The more questions you get asked when you evaluate a product, the more you ought to run for the hills. Businesses need to be willing to trade bad customer information for engendering trust.

4. Marketing vs. Word of Mouth

When I told Lindsay at Coffee Bar lunch was excellent, she asked if I could tell my co-workers. I was more than happy to oblige. Lindsay led with great product, she has visible pride in her restaurant and product, she is happy to be a few feet away from the Starbucks, and she understands my recommendation is much more important than an advertisement.

Ask yourself what can you do to promote word of mouth? Advertising is no longer what it once was.

5. Branding only matters so much

Too many tech and Internet companies obsess over names. Granted, consumer companies have a greater challenge. If you are taking on, say Coca-Cola or Cheerios, I would support an intense effort on naming.

What I like about Coffee Bar is that it is imperfect but it works. It stands for Coffee in the daytime, Bar at night. “Oh, that’s cool”, was my first thought. I’ll remember that. Is it a boring, generic name? Sort of. But so what if the product is excellent, and they concentrate on what customers really want?

There are a few common, useful rules for naming from Rob Gemmell, a friend and Marketing God:

  1. Own-able — The name is unique and you can own it. “Accenture is ow-nable; “Pacific Lumber” is not. Any name becomes own-able over time if you either spend a lot of money on marketing, or you establish a large market of customers who know you.
  2. Spell-able — The one weakness of the “Atlassian” name. Sometimes related is Pronounceable, which is another Atlassian imperfection.
  3. Memorable — Related to uniqueness, but very different: will people remember the name?
  4. Relevant — “Reliable Roofing” is highly relevant: it includes the benefit. It is relevant to the customer. “Apple”, on the other hand is completely arbitrary and not relevant. It’s cute, but it’s not relevant to the customer. “International Business Machines” was extremely relevant at the time.

The other two useful, secondary rules are: 1) Start with a letter high in the alphabet, a strength of Atlassian or Apple, and 2) Try to keep it as short as possible.

“Coffee Bar” is imperfect. Once you understand it, it might be memorable. But it is too generic to be own-able, without a lot of marketing money behind it. It doesn’t matter as much as the product, the customer service, the ambiance, and of course, a motivated, smart owner like Lindsay.

14 responses to “The Pizza Strategy: 5 Tips for a Successful Business

  1. Sage advise of great common sense not so commonly followed. “If you can’t win folks with the product first, pack it up.” So very true and often overlooked on the quest for riches and fame. I liken it to the band who is an overnight success, their one hit burning like lighter fluid on coals. Once the fluid burns up, there’s nothing left to sustain the flame, no base. It’s the band that slugs it out for years that steadily builds a solid fan base that can withstand the ups and downs of “overnight” success. They had a product (a collection of songs) not just a flashy feature (one catchy song) that people liked and told their friends who told their friends, etc. This type of loyal ground swell is many times the value of the viral flash in the pan.

    Thanks for the morning coffee read…
    Mike

  2. Great advice — Thanks

    BTW – I found JIRA invaluable when I started with OATSystems — an 8 person startup in Boston/Hyderabad — we grew to 40+ people prefundraising. JIRA was a life saver when trying to manage all those different projects at the time and the Atlassian support was fantastic.

  3. Good common sense advice

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  6. Those were some great tips. Thanks.

  7. Hi Jeffrey – love the post. Why are big companies missing the point in so many ways. I love simplicity. I love earthy products and earthy people that just do things the way they were meant to be done. Better to sell a great hamburger that a great hamburger and 48 other products that rank average or worse. For a snapshot of what my day is like every day, this is a great article from click Z. Go to click dot com slash showPage.html?page=3628445. Also – could one of your sydney reps email me to talk online colaboration. I would like to hear more about your products and see if there are any that suit medium sized online publishers. Our empire is growing online rather fast. (TShirt – Atlassian with two ss’s – or it that now 3) Cheers Paul

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  9. I really enjoyed your article. My wife and I love small business. I think the coffee shop guy next to the Starbucks would be laughing with starbucks closing stores and that LOL

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  11. thank you for the information!

  12. Nice articles and a nice site

  13. Hi! I’ve been reading your site for a long time now and finally got the courage to go ahead and give you

  14. this article might be written on 2008. but i hope this will be helpful for the one who is gonna run coffee shop/pizzeria.🙂

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