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Independent But Not Alone: The Slice Story of the Unbundling of the Franchise

AUTHORS:

Dave Yuan

Founder and Partner, Tidemark

A pizza entrepreneur historically has two possible paths: be a franchisee with all-corporate branding, locked into Domino's recipes that taste like cardboard, or have creative freedom as an independent but have to figure everything out on your own. 

Slice is much more than another vertical SaaS company; it seeks to offer a middle path that enables the creativity of independent pizza entrepreneurs with the distribution and scale effects of a national franchise. At the time of this interview, Slice had extended to a branded consumer app as a wedge with 9M+ active consumers, a front office to help their merchants drive demand, supplier extensions to leverage the collective scale of their 15K+ customers on key supplies such as pizza boxes and delivery rates and even more services in the works.  

Slice is pushing the envelope of what it means to be a VSV in a big industry—there are 77,000 pizza shops (75% of which are independent) that process a total of $47B in revenue. It’s not just specialized software; it’s re-imaging the modern franchise. 

They are a case study of what happens when a Vertical SaaS company ignores the temptations of horizontal expansion and doubles, triples, and quadruples down on its existing market. To learn more about how they’re doing it, I interviewed Slice’s founder and CEO, Ilir Sela.

This interview took place on May 19, 2022, and has been lightly edited for brevity and clarity.

Slicing to the Heart of the Matter

Dave: Today, I’m really excited to host Ilir, founder of Slice. Slice is a remarkable emerging platform serving pizzerias that engage not only on the software side but also with demand, supply, and Fintech. Slice is a great example of our Vertical SaaS Knowledge Project; they’re really pushing the bounds of how to help merchants engage with their consumers. Slice is also building in network effects and product hooks to drive demand and help these pizzerias become truly proactive in digital-verse enterprises. 


I’d love to get started by hearing a little bit about your personal journey. Tell me about where you grew up, where you went to school… I feel like many of these great stories are started early.


Ilir: Yeah. I’m actually recording this from Macedonia, where I was born. It’s the southernmost state of former Yugoslavia. My family used to live in New York, then they moved back. 


We first moved to the US when I was ten years old. Imagine coming from a small town that has no traffic lights, then you’re on a flight, and you land in JFK. As a 10-year-old looking out the window, it’s incredible. It’s like magic. I remember my parents always instilling this idea, “We moved here for opportunity for you. Don’t squander it; don’t mess it up.” On the other hand, anything is possible. Anything is possible, looking out that window. 


We ended up moving to New York because my uncle and grandparents lived there. We all moved in together, and we lived together for the next few years. Those are the best years I remember of my life. We didn’t have much, but family was a very core part of growing up. I have two brothers and a bunch of relatives, and we were all living in the same apartment building. That was pretty cool.


Dave: That’s awesome. I am the son of immigrants as well. It’s a remarkable gift that they gave us—that perspective, the foundation, the strong starting point, and the tightness. Thanks for sharing.  


Tell us a little bit about how Slice got started. What was the origin story?


Ilir: My family lived in the US, and dating back to the ’70s, they owned a pizza shop. As many immigrant families do, they went into the hospitality industry. I’m Albanian by background, and Albanians have this cultural thing where when one family is successful at something, others sort of follow suit. When I moved back [to Macedonia], my uncle opened up another pizza shop. Today, I have a ton of family members who own pizzerias. 


My first business was a franchise model; that was my MBA in the franchise world. I learned one major thing: franchise models and larger companies have a natural advantage over independent operators in economies of scale. If you’re in our space, and looking to open up a pizza shop, you have two options. One is you can open up a Domino’s or a Papa John’s, one of these franchises. They solve so many problems: they give you a business in a box and an operating system. The probability of success is elevated. The trade-off is if you open up a Papa John’s, you forego your creative freedom. You can’t be yourself. The other option is the independent side, where so many people go it alone. I learned that the overwhelming majority of operators chose the independent path and gave up the significant up-side or certainty of success in order to do that—in order to remain authentic. 


When I sold my first company, that franchise model, I realized that there’s a really big missing component in the space, whether it’s the pizza industry or other fragmented SMB industries. There is an opportunity to provide a franchise-like platform—with the economies of scale, the technology, the marketing, the shared services, and the sense of community—but champion the authenticity of the independent brand. It’s this notion of being in business for yourself, not by yourself. I decided to open up Slice in 2010. It was sort of a bootstrap version of the current version of Slice, but the idea was to unite local pizza.


Dave: That’s so awesome. With the excitement around some of the vertical SaaS companies that have been successful, a lot of MBAs look at the problem from a top-down perspective and see that there’s an opportunity here. But the reality is that the heart of a vertical SaaS company is an understanding of the end market that’s better than the horizontal players. It’s not surprising to me at all that you guys were successful, given you’ve lived the problem, you own the problem, and you’re essentially iterating on the existing independent versus franchise models to come up with a better solution. I’m sure it requires lots of hard work, but it’s not surprising that you guys have been successful. 


The idea of creating a franchise model for independent pizzerias is interesting because the franchise model provides you with so much. There’s anything from plates and boxes to point-of-sale software. Of the various offerings that you could have started with, where’d you start and why?


Ilir: The first product that we offered was the vertical SaaS product. In essence, it was online ordering and websites: an online presence with e-commerce enablement for independent operators. At the end of the day, everything that we do is really about helping these independents move their demand from offline to digital. 


Pizza shops are phone-based businesses. The overwhelming majority of orders are placed in advance, typically via the phone, and the customer then orders for either pickup or delivery. There’s always someone at the shop waiting for the phone to ring. They answer the phone, take the order, and then away they go. This is a very reactive model. When was the last time you called a pizza shop, and a week later, someone called you back and said it was time to reorder? That doesn’t happen. 


Everything that we do is about this belief that small businesses need to be digital, e-commerce-first businesses. They need to free themselves from the phone. Our first product, as we bootstrapped for the first six years, was a very simple online ordering tool with a website and online presence management with Google, Facebook, and Yelp to help these independent operators have a great online presence. Because they had invested so much in their offline business, it was really important to get them to be just as prominent online. For six years, that was all we sold. Super focused, and only to pizza shops. 


I remember being asked—and I still get this question—why not just sell to the Chinese takeout/delivery shop or the taco shop [as well]? We really could have; the product would translate well into any other takeout or delivery shop. However, I thought that we would then be sacrificing this reverse-franchise model, as I call it. We would be sacrificing the overall vision that we set out to really accomplish.


Dave: Let’s spend a couple of seconds on that. I imagine that got debated pretty fiercely. It’s hard to turn down inbound demand. Is there something unique about the current product, or the long-term vision around a tech franchise in a box, that is different between a pizzeria and Chinese takeout, for example?


Ilir: There are absolutely certain nuances to each category that is different from the next. It’s not anything that really stands out, but it’s a collection of small things that, when you combine them, create a very different experience. 


I bootstrapped the company for the first six years. I’m the sole founder. We were incredibly profitable, but especially as a bootstrapped company, it’s difficult to say no to more revenue. But that was short-term revenue, and my entire approach has been grounded by the fact that this is a massive TAM. For context, about $47 billion in revenue passes through 77,000 pizza shops in the US alone. 75% of those shops are small businesses. It’s not “Why don’t we sell to those other verticals or categories?” The question is, “Why should we?” Tell me why I should go there when this space is completely underserved.


Dave: For sure. I think others have even described some of the product benefits when you reduce the number of use cases or end-market cases. You can really narrow it down and have a clean design and bespoke functionality. That’s awesome. 


The other thing that you mentioned – and this is where I’d love to spend a bit more time – is this idea of going from the reactive system, where you wait for the phone call, into the proactive, which is fundamentally digital. Then, once you have a digital presence, comes online ordering. It sort of stands to reason that the next step is actually trying to create that demand. Let’s talk about that. You’ve allowed pizzerias to take online orders and bookings. What happens next? How do you start driving demand?


Ilir: We have a multi-year focus on this one-to-one product: one shop and one set of customers, and you’re connecting them online. It’s super important for that transition to be made because now you have all these insights that you can empower the shop with. You can predict when demand is going to come in, you can predict what they’re going to buy, and you can predict where the delivery will be.


An example is Domino’s. (A lot of people assume Slice wants to crush Domino’s. I don’t want to crush Domino’s. The TAM is so massive I think there’s an opportunity for both companies to live.) Domino’s is a great business. When you place an order with Domino’s, it is very likely that the product you just ordered is already in the oven. They can predict demand because such a significant part of their business is online—that’s how they deliver faster. It’s not because they have more drivers; it’s that it takes them a lot less time to prepare the food.


Once we started gaining critical mass in terms of the number of shops on our platform, we realized we have a single view of the customer and that the consumer isn’t loyal to just one shop. A shop wants to be loyal to just one customer, but a consumer actually has three or four local favorites, and they rotate amongst those for various reasons. The tension point was that it’s very difficult to get a customer to come back and reorder on a platform where the other three local favorites don’t exist. And I think it would be somewhat unfair if someone buying from Billy’s Pizza were told to go order from Joe’s. Right? 


We realized that we needed to bring everyone into one room, onto one platform. So, in 2017, seven years later, we launched the Slice app as a way to reconcile the reality of the consumer wanting the optionality of local favorites. The strategy ends up being density. Even if you and I live next to each other and we have one or two common options that we’re loyal to, you may also have two others that are different, and I have two others, and therefore you need that density. In 2017, we decided that, while we would continue to enable online ordering, websites, and online presence management, we were now going to create more value for the consumer—but not in the form of new customers. It’s about driving more orders, repeat behavior, and higher average order values from existing customers.


Dave: You’ve gone from a merchant-facing offering, software for the pizzeria, to a consumer app. Merchants historically, across all categories, have been very suspicious of aggregation points. For example, hotels hate online travel agencies. Perhaps I’m throwing something controversial out there, but I don’t think so. I think it’s pretty well understood at this point. [Laughs] How did you get your pizzeria merchant customers comfortable with the Slice app and believing it was good for them? That your heart and soul was supporting the pizzeria?


Ilir: That’s a great question. I think this is where the nuances of each vertical, each community, or each category really matter. Having grown up in the pizza industry, I know that there’s an existing community that already lives in the pizza category. A lot of owners are separated by just one or two degrees. If I own a pizza shop, so does my brother, and so does our first cousin and her uncle, and so on and so forth. There’s already a community. And while there’s respectful competition, most pizza shops don’t necessarily view each other with these incredibly competitive dynamics. Maybe that exists somewhere like Manhattan, where there’s just incredible density, but the vast majority of the pizza space is in the suburbs, and these locations are incredibly connected already. It just happens to be offline. 


The other thing is that our product isn’t really designed to change the customer’s behavior; our product is about amplifying the existing behavior. Whether we like it or not, the consumer is already ordering from three or four other locations. They just happen to do it either on the phone or, maybe, these days, using one of these third-party delivery marketplaces. The economics of our products don’t change – the same economics exist whether the customer is ordering through a website of the pizza shop or whether they order from the Slice app. Different pizza shops don’t pay different economics for incremental demand. Our job isn’t to move a customer from one shop to the other; it’s to connect them with their local favorites. 


I think this level of transparency—we’re super transparent with our network, and they use the product themselves—has served us well. There are certainly, from time to time, questions about why the customer should use the Slice app instead of a shop’s own app. Well, we’ve empowered some individual restaurant apps with shops, and they quickly learn that while, as a pizzeria owner, it sounds great to have an app, the consumer isn’t going to use it because there isn’t enough value for them to install an individual app. These are the realities of the industry. You can either fight them and potentially lose, or you can be part of this community and understand that. It kind of works both ways.


Dave: Yeah, that makes a lot of sense. If I were to play that back: most merchants know that they probably don’t have enough mindshare or technical resources to have a relevant consumer app. You’d rather your customers work on a consumer app that doesn’t charge you 25% to get the benefits of frequency and repeat orders. That makes a lot of sense. That’s really helpful. 


This is probably not the case in pizzerias, but I’ll ask just because it is the case across a number of different small businesses. In empowering online ordering, did you feel like you also had to empower delivery? And for the pizzerias that didn’t have their own fleet, did you feel like you had to provide one?


Ilir: In our space, the overwhelming majority of pizza shops have self-delivery. About 90% of the order volume that passes through our platform is self-delivery. You can offer a sort of hybrid model—we recently turned on a delivery platform API so third-party delivery players, both local and national, can also plug in—but the reality is, for businesses where delivery is the primary form of revenue, shops are incredibly hesitant to offload that to a third party or someone that they don’t know where they don’t control the experience. It’s very different for restaurants that are full-service, sit-down, and that’s their primary source of revenue, where delivery is incremental. But for shops for whom delivery is such a big part of their business, self-delivery is the winning formula.


Dave: That makes a lot of sense. You and I have brainstormed about this in the past, going from SaaS to marketplace. Part of it is going from a single-player utility app to multi-player. You start out with a utility app for better engagement with the merchants that you like—either a single pizzeria or your three or four favorites. You’re going to get density on the supply side, the pizzeria side. If the patterns you see in vertical SaaS hold, as you get more density in a city, you become the dominant player.  How do you think about getting density on the consumer side? How do you create that multi-player, and then every-player, type of functionality?


Ilir: It’s a really good question. I’ll share a number. At Slice, we’ve got a little over 9 million active consumers on the platform in the last 12 months. Almost all of that came in at zero CAC. We don’t really buy the consumer. This may not necessarily be the approach I would take if we were playing in another industry or category, but in this category, the demand already exists. If you want most of the demand in an area, you need to understand who the popular shops in that area are. Once you get the really popular shops to adopt, then you’re likely to get density on the consumer side. At a high level, that’s how we think about it because it’s not about introducing demand or training the consumer on new behavior; it’s just moving the behavior from offline to digital. It’s more of a behavior change than a behavior introduction. I would imagine it’s different for Airbnb, who introduced a whole new way of booking hospitality, but in our space, it’s consistent.


Dave: I really love that framework. I think in the early days for some of the consumer marketplaces; it’s about getting super high-end, high-quality supply that creates a sort of brand halo. But what you’re describing is actually a great vertical SaaS approach: any time you enter a market from a sales standpoint, even on your software, you want to go after high quality and high volume because that gets the reference flywheel going.


So, you go after existing demand, and that’s what gets you the greatest quantity of consumers. A great app experience will keep them coming back and repeating usage. How do you think about creating multi-player hooks? What are the most natural network effects that you can create within the app?


Ilir: That’s a good question, Dave. We’re still so early on in this product experience, to be quite honest; I don’t know that we’ve really tapped into this multiplayer density opportunity. I think because we’re such a single-category, focused vertical player, there’s an opportunity to really unbundle the menus. This is the area that I get really excited by because today—and this is the way most other companies work—you search the location first, and then you search the menu of that individual location. I know there’s been some progress made with DoorDash and Uber Eats and whatnot, but that’s still the natural behavior: you choose the location, then you look at the menu, and then you order. What we really want to do is unbundle the menu and start introducing the consumer to new creations and new content from the supply side. As we give more and more time back to the shop owners, our goal is for them to spend more time innovating on products and the end experience and then creating some level of density and rotation in terms of the end cuisine. 


I’ve also started to think about community-level features, where you have pizza ambassadors and pizza reviews and profiles and all these things. But I would say this is an area that we haven’t even started to play around with much. The only thing we really do right now is allow consumers to find their favorites, save them, and then open the app and essentially replace the phone experience online. Two taps, and you’re done, in terms of placing the order and paying for it and all that good stuff.


Dave: That alone is a great experience. What I’m hearing from you is that over time, there might be some network effects, but you’re currently really trying to nail the initial single-player experience. As you get scale, you can do different things. You didn’t say this, but where my mind went when you described what you’re doing was, like, bespoke product. A cool new ‘pizza drop,’ for lack of a better term. [Laughs] A cool recipe that’s just for this community, limited time. That seems really interesting.


Ilir: Absolutely. My favorite pizza shop is Pizzeria Giove. Georgio is the owner, and he’s just a great pizzaiolo. And I was there one night, sitting down, catching up with him, and he brings out this tray of this Roman-style pizza. Square. It’s just delicious! I’ll send you a picture. If you can add it to this, that would be awesome. [Laughter]


Dave: You’re going to have to send me the cheat codes on Slice so I can get the local killer pizza in the Bay Area!


Ilir: So, Georgio is like, “ I made it this morning. It’s this product I’m innovating, but my staff didn’t tell anyone who came in, so there’s a bunch left.” And I thought, you created this thing, but no one that orders from you, even on Slice (and he’s got hundreds and hundreds of customers), was made aware of it. How awesome would it be if that product was introduced that day and there was a message that went out to the community that they’re invited to either come in and eat it, or order it for takeout and delivery? That’s something that I think is a very important problem that we want to solve as we continue to move forward.


Dave: Once you have a two-way connection between the pizzeria and the customer, you can describe the content, describe SKUs or products, and drive communication. That’s pretty awesome. 


The initial move is a single-player in-store remote control driving the bottom of the funnel that also serves as a communication link and all sorts of great stuff. Someone has decided they want a pizza that night. They’re purchasing; you’re pushing to repeat. Obviously, as you move into consideration and awareness, you’re driving more value to the merchants, and over time you can potentially monetize that. Tell me about your initial growth loops for repeat and then how you go into the consideration-awareness funnel.


Ilir: 90% of our focus are these 9 million active customers and all this data. We know who their local favorites are; we know their geography. We know the sporting events, the home teams, and the away teams. The weather also plays a role in takeout and delivery, especially for pizza. We know that the Oscar’s is a big pizza-ordering night. Halloween is the busiest night of the year. The night before Thanksgiving is big too. 


Traditionally, if all these customers were offline or part of some other platform, they wouldn’t hear much from you, a pizza shop owner. In the third-party world, they’re probably being rotated amongst big brands—the highest bidder and all that good stuff. In the Slice world, we know the consumers have a natural behavior with these shops. We want to drive communication to these customers to really accelerate order frequency. There’s an automated flow where we’ll set up push notifications, email, and texts to customers to remind them in advance of, say, a Warriors game coming up in the Bay Area or a Rangers game in the New York region. We’ve got this best-in-class data, analytics, and marketing team that’s helping drive order frequency from these 9 million customers. In the past, the shop owner would have to mail a menu as a reminder they exist. 


The other layer is introducing more and more channels that just would not exist for these shops if they were offline: Google Food Ordering, an integration with Tripadvisor or Nextdoor, and so on. That’s a little bit more demand generation; that’s more incremental demand. SEO is a big part of our experience.


We also drive up average order values. When a customer orders by phone, first off, a significant volume of phone calls are unanswered. We think shops have a phone capacity problem, and alleviating that is important. Giving the consumer access to the product without having to call in all these things is super important. Also, when you order by phone, no one’s upselling you on the next best thing. When you order online, specifically through our product, it’s curated. There’s a pizza builder where you can add toppings; there’s an add-on screen. The average order value on Slice is like $38, and the average order value on the phone is about $18. That’s a massive gap. I would say the overwhelming majority of our job is connecting with the customer through their natural behavior to increase both frequency and average order value. Those are the two worlds we play in, in order to increase order volume.


Dave: In some ways, you’re almost the revenue manager, the agency, the central reservation system, or the general manager for your merchants. Do you anticipate over time that they’ll essentially make Slice like a managed service provider, where you’ll create incremental demand for them for a certain business model? “Focus on the pizza; we’ll take the best of your product and the best of your brand and get it out there.” Is that the future?


Ilir: It’s something we think about. We have a program, Advanced Marketing Services, which is a little bit more like that business-in-a-box. Again, the inspiration is going back to the franchise model. If you’re a Domino’s franchisee, you don’t think about your website and whether it works or not. You don’t think about marketing, whether that engine is flowing or not. You have a world-class team of 1000+ behind you at the Detroit headquarters. You’re focusing on great operations at the local level—hiring great local talent and serving customers. That, I think, is the big opportunity. Most of my family members, when I talk to them, didn’t really realize that they were going to inherit so many business problems. My brother-in-law has no business advertising. But, collectively, local pizza shops in the US spend $600-$700 million a year on marketing. Inefficient, offline, unattributable marketing.


Dave: Yeah. Maybe we can switch gears here a little bit. You have obviously a big role to play in the operations of these businesses and in the supply and procurement. Let’s go to the supply side first. How are you helping your relatives and your customers think about procuring faster, cheaper, and higher-quality supplies?


Ilir: This goes back to the idea of independence. Independence is a blessing and a curse. It’s a blessing because you can be authentic, and you can bring that passion and those ingredients forward. It’s a curse because you’re buying alone, and you have no leverage. You have no leverage with DoorDash or Uber Eats. These independent restaurants carry the burden of the take rate. Newsflash for anyone who’s listening: McDonald’s and Papa John’s don’t pay much to DoorDash or Uber Eats because they have a lot of leverage. 


We think about how we can help these shops unite so that we can create economies of scale and buying power. A simple example is we have about 2,000 shops in the New York region. They all share some similar aspects of their supply side. They all use pizza boxes, and they’re probably all buying from the same vendor, independently. What we’ve done is say, what if Slice is the buyer of record? We have 2,000 partners. We’re going to bring our scale forward, lower the cost, and make the boxes available to these shops at a much lower cost. A bundle of pizza boxes in the New York area costs an independent shop about $30-$35 for 50 boxes. With Slice, it’s $20. We’ve lowered that cost by almost 50%, and we just pass it on. It’s a bit like the Costco or Amazon Prime model, where there are these value-added benefits as long as you remain a strong partner with Slice. My vision is to lower the cost of the supplies in a way that is greater than the cost of the software or the cost of doing business with Slice. 


Dave: Your business model is fundamentally built on helping your customers but also profiting from it. That’s fantastic. 


We talked a little bit about the hybrid between an independent and a franchise brand. On the supply side, is there also a hybrid opportunity where, in that example, boxes are $35 in traditional wholesaling, with Slice, they’re $20, and for $18 bucks you have a little Slice logo on the side to co-brand, from a CAC standpoint? 


Ilir: Yeah. Slice is hybrid across the board. We believe that the Slice brand really champions and elevates the independent brand. We want the Slice brand to be a seal of quality, digitization, and consistency. The analogy I use is, you know, the Intel Inside logo on a Dell or any other computer brand. When you see that Intel logo, you know exactly what that means. Slice is a container brand that lives across every aspect of the consumer experience and shop experience. The boxes do have “empowered by Slice” branding on it, but they will never dominate. Our branding exists on the boxes and websites, but it will always be the framing of the masterpiece, which is that local brand. We have debates about whether to put the Slice brand on these things because it is about the shop, but I truly believe that we can create some network effects with the consumer who starts recognizing that this is a Slice-powered shop and therefore the experience is going to be better than if they just order independently.


Dave: It’s interesting. What you’ve done is basically create CAC in different ways that benefit your merchants. I wonder if, over time, there could be explicit benefits where you arm your merchants to go advertise or have some sort of co-op associated with it? That’s a really powerful concept to start planning right now. 


We talked about the consumer. We went very quickly through the supplier, though I’m sure there’s actually a lot of depth there. How about the employee? Generally, a lot of pizzerias tend to be limited in terms of employee count, so maybe that’s less of an immediate opportunity versus the consumer and the supplier. But how do you think about the employee?


Ilir: We are working with independents. These are predominantly owner-operated shops where that have very few employees. Many of the jobs are done by the owner, who’s answering the phone, taking an order, and making pizza at the same time. There are certainly delivery drivers; there’s usually some staff in the kitchen. We haven’t found the management of employees to be a huge deal, but we do think that there is a big opportunity in financial services and payment reconciliation services for the employees. We believe this because every single one of these shops is going through a journey where they were predominantly-cash businesses even as recently as the last five or ten years. Now they’re moving to online and prepaid, but the delivery driver still needs to be paid their tips at the end of the night. 


The simple framing is, imagine all of my volume is credit card today. And you, as a delivery driver, delivered ten orders, and I owe you $38. Okay? Those payments haven’t been reconciled into my account yet. I don’t have that money. How do I give you $38? What’s happening today is owners are literally going into their pocket and fronting the cash to their employees—because a lot of it is part-time labor and whatnot—and then waiting for the settlement to happen two or three days later. It’s creating these massive cash flow issues. Now imagine, on top of that, DoorDash is paying you maybe once a month, and more and more of your volume is moving there. Or credit card settlements aren’t coming in on the weekend. Now you have no idea when cash is hitting your account or when it’s going out. 


One area I’m really excited about is reconciling those transactions in real-time as we become more and more the merchant of record for these transactions. Not only would we alleviate the cash flow issue, but also the work issue because the owners have to sit down at the end of the night and calculate what they owe to whom. It’s not directly about the employees as much as it is about removing another job, another task, from the plate of an owner.


Dave: Yeah, absolutely. You not only have to do the work, but you’ve often got to run to the bank, which could be a dangerous exercise at the end of the night, walking around with that kind of cash. [Laughs] 


I’d love to finish by talking about the small business economy and mission. One of the things that I felt very strongly about when starting Tidemark was that if we were going to go to the trouble of starting this new fund, we not only be a great investment firm—partner with great companies and support them with everything we have—but that we also give back to the communities that we invest in. So if we invest in great vertical SaaS companies and small businesses, we also have a foundation that will support small businesses; we give 10% of our profits to the Tidemark Foundation.


That’s a long windup for asking, how do we help small businesses that are coming off the pandemic and are perhaps heading into a recession? I personally feel very passionate here. As the son of immigrants, I think America is all about social mobility and being able to rise in station with effort, skill, and luck. And education is awesome, but it's becoming harder and harder to access, while small business is there in spades. It’s 45% of our employment; it anchors our communities. How should organizations like the Tidemark Foundation think about supporting pizzerias and other local small businesses?


Ilir: That’s a great question. This is obviously our mission, to keep local thriving. Small businesses are a segment that I’m incredibly passionate about. I think we’re in the early stages of an incredible small business renaissance. When people’s jobs become unpredictable, or if there are mass layoffs—whether more recently in the tech sector, or because of Covid—so many people who were working at different companies for decades are just suddenly out of work. When that happens, people want to control their own destinies in response. Between that and the fact that barriers to entry for small businesses continue to come down because of new software, capabilities, and financial services, I think we’re in for a really awesome ride over the next decade in terms of a small business renaissance. 


Now, how do we help them accelerate the probability of success? The issue isn’t that there’s a lack of small business formation. It’s retention that’s the problem. I think the way to think about it is that not all small businesses are created equal. You and I have spoken about this. We’re in the restaurant space; a full-service restaurant couldn’t be more different than a limited-service restaurant–-just two totally different operations with different needs. Segmentation and focus is so important, and it’s one of the things that I keep in mind any time somebody asks why I don’t do this for all these other restaurants. Segmentation: understand that each small business vertical is unique and has its own challenges. 


I would say the last part is, how do you now bring these people together? You can leverage technology. In the pizza space, there is the International Pizza Expo. It happens once a year in Vegas. Ten thousand owners and operators in the pizza industry come together, and they share knowledge, they share resources, and there are seminars. It’s a three- or four-day big event and celebration. Then they leave, and they can’t wait to go back the next year. Well, that’s an offline experience. Technology can make that perpetual. Technology can enable that community to live and communicate and connect in real-time, 24/7. It’s this idea of being in business for yourself, not by yourself. As startup founders, we create our own circle of other like-minded founders that have gone through different experiences. I just think that that’s super, super important.


From a general population standpoint, it’s “support the local business.” And the only way to do that is by patronizing them, visiting and buying local, and ordering from Joe’s Pizza instead of Domino’s.


Dave: That’s awesome. What a great way to end our conversation. Thanks so much, Ilir. This has been incredible. 


Ilir: Thank you so much.

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