What Pizza Can Tell Us About the New Economy
(Totonno’s, Great Lake, and Domino’s)

(image: timkang on Flickr)

Totonno’s is one of the first (and best) “New York Style” pizza places in the US. Founded by Anthony “Totonno” Pero in Brooklyn NY in 1924, Totonno was the original pizza-maker at his friend Genarro Lombardi’s grocery store in Little Italy of NYC.  Due to the incredible demand for these pizzas, Genarro opened the now the famous Lombardi’s Pizza in 1905. When the subways arrived in NYC, Totonno went out on his own, all the way down to Neptune Avenue of Coney Island.

NOTE: A the time of this writing, the shop is closed due to a fire, it’s expected to open again “soon.”

A vital aspect of Totonno’s, beyond the deliciousness of the pies, is the way he chose to run the shop: it opened at 3pm, they made a certain amount of pizza dough for the day, and when it ran out they closed up shop, no matter how long the line of potential patrons remained. The business did not go out of business, nor did it balloon into a national brand (which seems to be the progression of most food enterprises these days). The place has remained  a vibrant business for nearly 100 years, buzzing along merrily. They made the pizzas fresh, clients were happy, the owners were happy, a nice balance.

Recently the New York Times ran an article (and a blog post) about a new pizza place in Chicago that rang familiar to the Totonno’s lore, Great Lake. (It also reminded me of Lucali and DiFara, but Totonno’s is the best example).

At Great Lake, a professional couple quit the rat race and opened a small pizza shop with a simple mission in mind; be friendly &local, offer a hand-made & affordable product, and have the business itself be manageable & productive enough to live comfortably. The place sits 14 people, does not deliver, and is only open 4 days a week. Their goal is to run a business that balances life with business, a place you can enjoy working for, all while providing a high-quality and affordable product. They make the pizzas fresh, clients are happy, the owners are happy, a nice balance.

For all the MBAs out there, yes, the above examples could fall into the economic rule of scarcity, but it doesn’t appear that these proprietors thumbed through economic models to determine their business goals.

What if the New Economy (which I define as the Lace Economy) is about balance, a market correction pulling the economics of abundance (Free, or Freemium?) away from the revenue-less precipice and towards a method of fairness and sustainability? It appears these newly hatched nodes of the New Economy might be less focused on wealth creation (a buzz term of the past decade) and more about finding the balance between work & life. This could be a way to rebuild the middle markets (middle-class, goods and services). This could be a way out of the recession; new businesses that create and promote fair priced and well-made goods and services managed/run by  balance-minded owners/proprietors.

Domino’s Pizza, through their newest advertisements, is letting us know they are hip to this shift. They’ve changed their recipe! Instead of TV ads displaying you the customer (and their delivery driver) all smiles within the vestibule of your front door, they show us their kitchen, their offices, their sensitive human-side. They are providing us an entrance into their world through an apology for how bad their pizza has been and offer a correction to make it better. They are identifying the real people who make the pizzas (sort of ) while telling us they will now focus on the flavor, to essentially make a better, more genuine product using “real cheese” and other (ideally) real ingredients.

From a marketing perspective, the larger business has taken up the vibe of the New Economy as a method to prove the genuine goodness of their product, to show its value as crafted by hard-working empathic souls who care more about the quality of the product than the cost. The success of this method will be whether this message resonates with their market and/or if it gains them new customers. In Domino’s model, it always seemed to be about price and convenience and not about the flavor or quality of product. None of the small pizza shops I’ve mentioned are about price or convenience; there are always long waits for the products and at a much higher price than a Domino’s pizza. How can smaller shops compete with a big enterprise like Domino’s? They don’t. They don’t need to, they wont.

What’s the answer then for those of us not interested in opened a pizza joint? The opportunities of the New Economy lie somewhere in between these two business approaches. Businesses that will thrive in the New Economy will offer genuine products and services that engender a business/life balance while offering great value and relative convenience. If that sounds right to you, you’re on the crest of a new wave, OR, if we look at Totonno, the wave has been here for over 100 years, but maybe now is the best time to ride it.