> with new features like a virtual Pizza Builder that brought pizza toppings to life on users’ screens.
Ha! I worked on the first version of that! It was actually launched in 2002, not the 2007 indicated on the timeline.
To be fair, their designer gave us a flash file of what they wanted, so my part was implementing it along with their new CMS when it that launched, and writing a vanilla JS version to go alongside the flash version... but it still holds up today as the most visible of all my projects, even though the builder itself was mostly a one-day job.
Cool project, well done. Not a bad thing to be known for! I'm pretty sure I used it in Australia or Thailand as well as the US. Imitation is the sincerest form of flattery, and we briefly considered something similar for our current venture's UI - http://8-food.com/ - but have decided against it as we do too much variety to make the same approach easily viable.
I just can't get behind the article. Starting with headline.
It just tacks on the word - "startup". Companies re-orient and re-brand themselves routinely. Some companies are more adventurous than others but that doesn't make them a startup. They have a lot of legroom to make a mistake and still come out. But, if we follow the advice of this article - Google also acted like a startup when it created Alphabet. Or Coco Cola acts like a startup every time it tries to rejig the formula.
Secondly, Stock Value as a KPI is just wrong. There are many ways to manipulate the price - optimistic outlook, buybacks and dividends even if earnings aren't that great. Sure market does come around to the truth eventually. But as Keynes said - "The market can remain irrational longer than you can remain solvent." So, finding out might take time.
The only thing which works for me is a description of Domino's digital strategy. The Pizza tracker has worked in Dominos favor. Though I am a fan of the tracker, over time it has become increasing clear it is just a psychological trick. Show some progress bar to make people happy. Many times I find the tracker stuck at "preparing" and only to update delivered directly.
> Though I am a fan of the tracker, over time it has become increasing clear it is just a psychological trick. Show some progress bar to make people happy. Many times I find the tracker stuck at "preparing" and only to update delivered directly.
I haven't delivered in over 5 years, but when I worked there it was 100% real. It was worked into the inventory and time tracking system. At each step an employee had to key their employee # to move the pizza to the next step on the in-store computer. Generally after saucing the dough, after applying other toppings, after removing from the oven, and then when the driver finally takes it.
Of course, there's no physical limitations preventing you from just passing a pizza along the toppings table and going "This one is pepperoni", so that does tend to happen during peak-hours and things get cleared in batch whenever there's a moment to breath. Usually by a manager because you need an override code when keying in too many items at a time. At least in my store, we tended to prioritize getting too many orders over too few, so this was pretty common. During big sports events and stuff we'd sometimes just pick up the phone and say "the oven is broken" to 50% of callers because we were so slammed with orders. It's better to just not take an order than deliver it an hour late. In the first case, they'll still try another order next week.
I delivered at a few other stores afterwards. Mostly small Mom & Pop style places, but I also tried Burger King when they launched delivery. And all I can say from that experience is Domino's really had their shit together technologically. Burger King specifically was the worst. Domino's had a great mapping system that would plot orders. At Mom&Pop shops the owner or manager would just work it out in their head. But at Burger King, it was some crappy naive implementation where orders were assigned to drivers chronologically. So I would frequently get 2 orders on opposite sides of town, meaning one of them will be arriving cold and late.
Don't specifically know where I was going with that anecdote... but while I agree Domino's isn't run like a startup at all they really had their tech together during the time I worked there, and felt much "younger" than other companies in that regard.
Sanitized at opening and closing every day. And my store was really strict about washing your hands in between things like that. Caught not washing hands once? It's a scolding. Caught twice? Go home. Actually all the fast food and delivery places I worked at were very strict about this, which was relieving.
Technically we were supposed to wear gloves while touching food but no one did. Makes it too slow when you need to key your next order or pick up the phone (even though there were specific job titles, everyone just did every role). Maybe at OP's store the reason the tracker is never updated in real time is because they actually wear gloves :P
> I just can't get behind the article. Starting with headline. Stock Value as a KPI is just wrong.
For a quantitative measure of a company's success in creating good pizza, stock value is a functional KPI. It shows that investors are optimistic about the company, as you said, and it does reflect the company's expansion to the world's largest pizza chain.
> Secondly, tacking on the word "startup".
It's true they aren't a startup, but are definitely startup-like in the move-fast-and-break-things department, especially relative to their peers. They're even testing autonomous robots! I know that on HN we reserve "startup" to mean "taking a big financial risk and having a core industry other than ads", but most of the public still views Google, FB, etc., as "startup" companies due to their corporate culture compared to, say, TJX or Pizza Hut or Merrill Lynch.
> Many times I find the tracker stuck at "preparing" and only to update delivered directly.
I've ordered at least half a dozen times in Boston and I've never seen that. Maybe it's human error responsible rather than Domino's system?
They also generated startup-style returns for investors. Startups use stock chicanery practically by definition to create giant returns on paper for early investors with comically inflated valuations.
I thought this was an unusually heart warming success story about how a company used technology and the 'damaging admission' sales technique to a happy result.
The 'damaging admission' is the sort of technique a seminar speaker person uses when she tells you have how 13 years ago to the day she was licking spilled cocaine off the bathroom floor while the cops were breaking down the door to arrest her, and that now she enjoys a successful career in real estate.
The ovens are as close to robotics as you can get, the stages are all automatic and the time the pizza takes through the various stages is determined by the speed of a conveyor belt. The dough is prepared in bulk (as are all the other ingredients). There is very little left to chance in large scale pizza generation when it comes to ingredients and process. The biggest effects that humans can still have on the final result is the speed of delivery and whether or not they followed sanitation rules.
That will have a huge effect on repeat business and local marketing and advertising, but successful pizza chains live by the fact that they take the human out of the equation as much as possible.
But your point is valid in that a bad manager will likely be able to screw it up completely no matter what HQ comes up with in terms of quality control and process.
Yeah, it's a bit of a puff piece. The app, the social media push, none of that would have worked if their pizza still tasted like unwashed feet. The biggest thing Domino's did to turn the company around was to start making better pizza.
The article mentions something that always fascinates me: the extent to which branding and presentation influence taste perception:
"As complaints got louder, this became more obvious. Domino’s ran consumer tests and discovered that people actually liked pizza less if they knew it was Domino’s than if they thought it was a random unbranded pizza."
They 100% absolutely did start using better ingredients, etc. but if they'd failed to rehab their brand I wonder if it would have taken off.
I was just talking with my wife about this the other day. I've had Domino's a few times in the last ~2 years, and it's okay pizza, but I would never go out of my way to purchase Domino's pizza.
It's not 'taste perception' that is affected. It's literally taste. People aren't lying or tricking themselves, the pizza literally tasted worse if they knew it was Dominos in those studies. They've done similar studies with wine. They took professional sommeliers and gave them cheap wine in bottles with expensive labels, and expensive wine in bottles with cheap labels, and had them try them while lying in fMRI scanners. The bottle it came out of had monumental effects on the taste centers of the brain.
The book 'How Pleasure Works' goes over a lot of this sort of research and is quite interesting. The 'American Association of Wine Economists' (which isn't what it sounds like) also does tons of research on things like this. It's thanks to them we know that people can't actually tell the difference between expensive patte and wet dog food.
Taste perception would be "I like this, it tastes good", the opinion the person has of their taste experience. The taste itself is the actual experience. It's the taste itself that is very heavily determined by context and unrelated to objective reality.
Yeah, it's noticeably better. Then again, the bar was so low that this isn't much of an achievement.
It's not my favorite pizza, but if you live in an area with a Papa Johns, a Pizza Hut, and some local crap-pie joint, then it's going to be your best option.
They still sell "cheap" pizza, so there's an upper limit to how good it can get. Their cheese quality can only be so high (since it's such a large portion of the cost) and their offerings need to appeal to like 90% of customers.
They honestly made it worse. The crust is like bad bread. I didn't used to mind eating Domino's if someone ordered it, but now I won't touch it. It's the only type of pizza my son actually won't eat.
That opinion really depends on where one grew up. Those who didn't grow up in Chicago or a similarly-benighted locale know that even though pizza crust may be arbitrarily thin, there is a definite maximum for pizza crust thickness.
I kind of disagree with that though. They knew their core product was bad and that it was severely hurting their business.
That's a lot less difficult to find the courage to take a risk on changing than when your core product is decent/good but not as great as it "could" be.
There's always risk in changing a product that has more than zero existing customers. You risk losing them and not getting any new ones. And the change itself costs money, which may be lost.
It depends on why you have those customers. They kept some things constant. If you like Domino's because they're cheap or because they have fast delivery at decent hours, then maybe changing the pizza recipe is not so much a risk.
Plus, they did A/B tests across the nation [0] to further reduce the risk.
The app, the social media push, those things DID begin making a difference, even when their pizza DID taste like unwashed feet. But I agree that a better product was the most significant innovation they made.
I'm a fan of Dominos since their re-making, but I don't think they really deserve much credit for it. My understanding is that the USDA spent millions working with Dominos to basically come to the conclusion 'yeah, use more cheese'. The tracker has always made me curious. At least according to the delivery drivers I have questioned from my local place, the names which appear are indeed accurate, and the timing advancement is not fully automatic (so if your pizza is sitting there not getting any attention, it shouldn't move forward on its own). But, in talking to a friend whose wife works part time in a Dominos in a different part of the country, she says at least for her store the names are all fake and the progress bar has nothing to do with whats going on in the store.
Also, not sure if this is commonly known but I went to the Dominos site a couple weeks ago to order... got a blank page. Thinking it strange, I viewed the page source. The source had loaded, there was just some screwup with the js I presume. But I noticed a comment block in the source that was the Dominos logo in ASCII art... except it was clearly base 64 encoded text. Upon decoding it, it presents a little js coding challenge and tells you to tweet a solution to their careers account. Pretty neat.
> The only thing which works for me is a description of Domino's digital strategy. The Pizza tracker has worked in Dominos favor. Though I am a fan of the tracker, over time it has become increasing clear it is just a psychological trick. Show some progress bar to make people happy. Many times I find the tracker stuck at "preparing" and only to update delivered directly.
Back when we were ordering pizza semi-regularly (university), one factor in choosing Domino's was that they were the only place that could give a reliable delivery estimate (+/- 10 minutes). Regardless on whether or not the tracker itself works, they clearly had the basics of that down.
Domino's is an interesting example for many reasons, but one that hits particularly close to home is: it's become a pretty canonical case for the kinds of 'digital transformations' that large consultancies sell to big lagging enterprises.
The reason I think that's interesting is 'digital' has only been an ancillary or enabling factor in their turn-around (e.g. better converting channels + lots of good marketing). The key has come from making a _better product_. In effect the consultancies that use it as an example, are (deliberately or not) misunderstanding the significance that digital played.
How Headlines Cherry Pick Numbers to Sound Dramatic
If the absolute difference is not impressive, use the percent difference.
If the percent difference is not impressive, use the absolute difference.
In April 2007 Domino's share price was around $32 before it went to $2 (which I can't even find in the stock price graph, the lowest I see is around $3)
If you go from a stock price of ~$20 to ~$180, that's a 9x increase in stock value.
So the secret of 90x growth is to first drop from a reasonable value to trash, then grow again.
---
Nitpicking aside, Domino's really has had an amazing turnaround, and it seems to be driven by focusing on the customer, not on share price and cost cutting.
Not really sure how stocks work, but isn’t the percent difference the only thing that matters? If I invest X when it’s $2, I get 90X now. That’s all I care about.
On the other hand, the absolutes are somewhat meaningless right? If they wanted the absolute numbers to be bigger/smaller they can just split/coaelece accordingly.
Sure, if you happened to buy in at the absolute lowest price, you would see a 90X change, but most people would have bought either before or after the absolute lowest. I will leave it as an exercise to the reader to figure out the volume/value calculations.
The headline comments are just something to look out for. If you are told one, check the other. For stocks, check the context and history.
"Chefs tested over ten types of crusts, fifteen types of sauces, and dozens of cheese. They mixed and matched different combinations to understand what flavors worked best together. In the end, they ended up with a completely new crust, sauce, and cheese recipes. The entire pizza was new."
Not to undermine the turnaround but they had terrible pizza for 40 years. I guess I'm just surprised they survived this long when the above could have been done in a long weekend. Perhaps the hard part was just deciding to do it and rolling it out, as the product was so well known.
> the above could have been done in a long weekend
I would guess that retooling the machines, processes, training, and supply chain for over ten thousand locations worldwide, without disrupting operations and losing customers or reputation, took more than a weekend. Even planning it might take a little time.
The surprising part to me is that the new recipes were designed by the old chefs. At least the video gives that impression. Impressive to have individuals pivot that well after 20+ years on the job.
About a Dominos mascot... I dont think they are even going to bring back a mascot after what happened with their last one.
Many here might be too young to remember but they used to have a creepy man in a bunny suit called The Noid as their "mascot." It was more of an anti-mascot though because the Noid ruined all other pizzas except Dominos, hence the slogan "avoid the Noid."
Bizarrely a man named Kenneth Lamar Noid was so distressed by this mascot he entered a Dominos and held the employees hostage demanding a getaway car and a copy of a novel about Freemasons!
>On January 30, 1989, a man wielding a .357 magnum revolver stormed into a Domino’s in Atlanta, Georgia and took two employees hostage. For five hours, he engaged in a standoff with police, all the while ordering his hostages to make him pizzas. Before the police could negotiate with his demands ($100,000, a getaway car, and a copy of The Widow’s Son -- a novel about Freemasons), the two employees escaped. In the ensuing chaos, the captor fired two gunshots into the establishment’s ceiling, was forcefully apprehended, and received charges of kidnapping, aggravated assault, and theft by extortion.
>The assailant, a 22-year-old named Kenneth Lamar Noid, was apparently upset about the chain’s new mascot. A police officer on the scene later revealed that Noid had “an ongoing feud in his mind with the owner of Domino’s Pizza about the Noid commercials,” and thought the advertisements had specifically made fun of him. A headline the following morning in the Boca Raton News sparked a talk show frenzy: “Domino’s Hostages Couldn’t Avoid the Noid This Time.”
I'm surprised at some of the numbers from early on in their history. The brothers bought the business with a $900 loan (maybe they had some of their own money) and had $99 in sales (not profits) their first week, with _profits_ rising to $750 a week rapidly [0]. I can't imagine making that kind of return that quickly in any business these days.
Spend $500 on some old machine that does something, sell your service as a side business, go full time, scale to be dominant player locally, acquire competition, scale regionally, become national brand, don't screw up along the way. In most states you'll probably have to skirt the rules in the beginning until some point at which you can afford to play by the rules.
Someone with a tire mounter bought at a liquidation sale, and a whole lot of luck could start a business that eventually competes with Jiffylube.
Someone who starts off with a clapped out old engine welder could eventually wind up owning a company that winds up being the dominant regional player for bridges, steel buildings or something.
No, those kinds of businesses don't have the kind of growth models that SillyValley VCs want but scaling in that manner is quite possible (with lots of luck, obviously).
What, you mean by loading up with debt and using the cash to buy back stock to goose earnings-per-share? (the question uses data from their 2015 buybacks, but they did a billion $ moar in 2017 and have more scheduled this year)
a 90x increase in stock value, but only a 2x increase in revenue 2010-2018. that's just about what the average company did. that's compared to 10-100x increases in revenue at these startups it's being compared to.
the only reason for the 90x increase is because the stock was basically worthless, assumed eventual bankruptcy, liquidation of assets style valuation.
then they successfully turned it around and doubled revenue in a reliable and sustainable fashion, which made it actually worth something (90x more than almost-zero)
About 5 years ago my wife and I actually started ordering from Dominos because Pizza Hut and Papa Johns routinely took 60-90 minutes to deliver us cold pizzas in our area (a DC Suburb). I was half-joking when I told her "nobody ever eats Dominos anymore, I bet they'd have no queue and get us pizzas fast".
I had heard that they reinvented their pizza. We were pleasantly surprised and really liked the pizza. Plus I was right, we regularly got our pizzas hot and fresh within 30 mins. So we were Dominos customers for a while before we moved (to another DC suburb). Now nobody delivers to us, which is crazy given that we're not exactly in the boonies!
Maybe part of fast delivery is that they're selective who they deliver to. I'm about 4 miles from the nearest Domino's but I'm across the border in the next town and can't get delivery.
Exactly this. If I go to the Domino's website, it tells me that I'm out of the delivery zone of the two closest stores. I think "corporate" is setting the delivery range/route algorithms.
However, if I call the store directly, they'll take the order and are usually here within 35 minutes.
I think what is interesting here is how often do you see a room of executives (the ones who actually make product decisions) watching what their users are saying about their products? Fluff piece aside, working in tech is tough because there is a level of "How do we deliver something new and innovative" mixed with, "What do our users actually need." In this instance, they needed one, fix their flagship product and two, they needed to innovate in the delivery space. If more companies did this type of user-centered retrospective, we would better products across the board.
April 1st story with a video with a bad render shown as an example of how they are beating tech companies. Not sure about the reliability of the rest of the article...
I'm old enough to remember when we would joke that "you could order a pizza using the Internet" -- hahahah. Initially you would get a GIF of a pizza but it seems now you can get an actual edible pie. Amazing progress in 25 years.
... I remember ordering pizza on the internet in the late '90s or perhaps early '00s, much less than 25 years after the first GIFs. "None pizza with left beef" was from October 2007, so ordering pizza on the internet was well-established by then.
Issue is that again by overly focusing on convienence they might lose in pizza taste as their competitors like Pizza Hut are focusing more on different things and can overtake Dominos.
I know its parody, but the idea of Sliceline is objectively not a bad business model - lots of small pizza franchises could benefit from similar app-based delivery services, and would pay to be able to compete with Domino's on that front. I met a guy who manages an Indian restaurant that does dev work on the side - he's operating an online ordering/fulfillment service for 3 other small restaurants, and claims to take 7% commission from every order that comes through the system. Not bad if you ask me.
And the moral of the story is that, if you can successfully industrialize some process, you can make lots of money even if the resulting product is thoroughly mediocre.
I was just watching Ugly Delicious[0], and there is an episode about pizza. David Chang reveals that his FAVORITE pizza in the world is actually a thin crust dominos pizza with a strange array of toppings.
He shares a pie with a brooklyn based pizza chef and another guy, and while everyone agreed it was delicious, they said it wasn't pizza.
I live in NYC and eat a lot of pizza, and while I obviously wouldn't consider Dominos in the class of a Robertas, Emily, Di Fara, etc, whatever it is they're making is pretty damn good. And their numbers seem to indicate that as well.
I live right next to a Joe's pizza, often touted as one of the best classic American pizza slice in NYC. I would take a dominos deep dish or thin crust over Joe's any time.
The two people he shared it with didn't say it was delicious, the just awkwardly tried to say it wasn't as nasty as they feared. You could tell it was 100% Dominos being some sort of sponsor. The pizza chef at the end even threatened Chang about making him eat it again.
I was probably being too snarky. I admit I haven't had Domino's in a while. I can't get delivery and I haven't bothered to seek them out given a couple of local alternatives that I like. As the article says, they did reformulate their pizza at one point.
Ha! I worked on the first version of that! It was actually launched in 2002, not the 2007 indicated on the timeline.
To be fair, their designer gave us a flash file of what they wanted, so my part was implementing it along with their new CMS when it that launched, and writing a vanilla JS version to go alongside the flash version... but it still holds up today as the most visible of all my projects, even though the builder itself was mostly a one-day job.