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Pizzapreneurs Part II: Tom Monaghan, Delivering Success

Pizzapreneurs Part II: Tom Monaghan, Delivering Success

by Jay Miutz

In our last installment of Pizzapreneurs we looked at the Pizza Box Baron Mike Ilitch, a hometown hero of Detroit and the undisputed king of carryout. Today, we look at another Michigan money maker, one who grew up right in the back yard of Ilitch and took the same bold step into the pizza industry almost simultaneously.  Tom Monaghan grew up in a broken family outside of Detroit spending a good portion of his childhood in an orphanage, struggling in school and debating a life committed to the church as a priest. He got the boot from seminary school in 1956 and accidentally joined the Marines that same year – he had meant to join the Army. He left the service in 1959 (with an honorable discharge) and planned to pursue a career as an architect after getting a degree from the University of Michigan in Anne Arbor. Once again Monaghan fumbled however and his inability to pay tuition led him to purchase a pizza place with his brother for $900. The plan failed miserably at first and ended up costing him more time and money than his schooling was.

Monaghan was committed though, and made three crucial decisions that would eventually lead to the birth of Domino's. The first was to focus on his environment. The original Domino's was on the outskirts of a college town, a place where most people were short on time and mostly on foot – an ideal location for fast and cheap delivery. Monaghan was able to streamline his delivery service by employing a new style of insulated pizza box that allowed the pies to stay hot longer, be stacked without being squashed and eventually increased delivery rates. The plan was a success and Monaghan decided to trim the fat. He streamlined his services…and his staff. He traded his brother and business partner a Volkswagen Beetle for his shares in the business and then chipped the menu down to simply pizza with no sandwiches, chicken or pasta. What remained of the stripped down Dominoes was a company that focused solely on quickly creating pizzas, delivering them as fast as possible, and maintaining an image of reliable, delicious and easily accessible pizza – ideas that could be franchised.

Today Domino's is a billion dollar company that continues to grow as it successfully uses online service to keep its reliable delivery service relevant. Although Monaghan has become quite a controversial figure since the 90’s and has since given away almost his entire fortune, it goes without debate that he made some brilliant business decisions. When Dominoes began it was nothing more than just another pizza joint in an extremely saturated market, but Monaghan changed that. The key to his success early on was streamlining his process and business model, and then constantly improving vital aspects. In his case this meant cutting his menu down to simply pizza and then bettering his delivery service with sturdier boxes, reliable service and a timely guarantee. All small business owners should use these tactics in order to foster their own success. Many entrepreneurs get caught up trying to offer a thousand things to their customers, be it a plethora of goods or a cornucopia of services but often times focusing on a single element can create a better outcome. Being the absolute best at a certain field may limit your audience but it can increase your hourly rate or overall price. People enjoy quality today, as much as they did in the past but they expect it at a much greater speed and ease. That’s where Monaghan’s second tactic comes into play. Once you have chosen your focus or trimmed the excess distraction from your business strive to make certain elements the best they can be or held to the highest standard, be it the software you use, the ingredients you use or the employees you hire.

Domino's is without a doubt one of the largest pizza chains in the US today, and it got there through strong strategy and tactics. Next week we look at another master of the marinara – Papa John himself.

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