For a local pizzeria to compete in mobile app deliveries against the leading national pizza chains like Domino’s, Pizza Hut and Little Caesar is no easy task—if not impossible. That’s why Ilir Sela launched Slice, a technology platform (www.slicelife.com) that enables the local pizza joint to go head-to-head against the big pizza chains.
Sela grew up in Staten Island, a borough known for excellent pizzerias such as Denino’s Pizzeria, Tony’s Brick Oven, and Joe & Pat’s. Indeed his grandfather and dad ran a pizzeria in Manhattan.
Having majored in computer science and launched and sold Next Force in 2008, Sela, an expert in mobile technology, established Slice to help pizza joints compete with mobile order deliveries.
It started out in 2010 as mypizza.com, bootstrapped by Sela, without any outside investment, and then after six years, morphed into Slice.
Slice charges pizzerias $1.95 per order, no matter how small or large. Extending its reach, Slice now offers its service in 8,500 cities nationwide and has driven $600 million in sales for more than 12,000 pizzerias.
So far, Sela has raised $20 million from venture capital firms such as GGV Capital and Primary Ventures.
Here’s what New York City-based Sela said about Slice’s growth:
How did you get the idea to launch Slice?
Sela: I come from a large family of small business pizzeria owners. I had a technology background and started the business in 2010. I helped them with online ordering, website and the digital world. At the time, there was a clear inflection with big chains Domino’s and Papa John, making long strides with technology. For me it was about bridging the gap between the large chains and the small business owners in terms of technology, marketing and data.
What happened in 2015?
Sela: We had accomplished significant scale. We were working with around 3,000 locations nationwide. We did $40 million in gross managed volume. And the founders of Seamless—Jason Finger, Paul Appelbaum, Todd Arky and Wiley Cerilli—invested in the business after they had already sold Seamless. In 2015, they invested $1 million for a minority equity stake.
How did you market it when you were starting out?
Sela: Initially the first 30 or 40 locations were friends and family members, whom I knew personally. They had reached out for help with websites and online ordering. They made up the original pizza network. I drove around to different pizzerias, walking in and introducing them to the service. Originally I started in Staten Island, as far as I could drive, then the five boroughs, and then New Jersey and Connecticut.
You were hustling?
Sela: I was hustling 100%. In fact, a consumer would place an order on the website, and that order would come to my phone, and I’d call the pizzeria and give them the order.
How does Slice enable the local pizzeria to compete against the big chains?
Sela: Domino’s has about 5,700 locations, around the country. Slice has 12,000 pizzerias. We’re double the size of Domino’s in terms of locations. We’ve invested millions of dollars in technology and marketing in terms of our product. The moment a small business joins Slice, they get access to millions of dollars of technology and development. This is past the quality of a Domino’s mobile app.
How is it superior?
Sela: In many ways. It’s incredibly easy to use. You can place an order with less than three taps. The pizzeria delivers the pizza through their delivery people, but our technology informs the status of delivery. You get order tracking. It’ll tell you when the food is in the kitchen and out the door and notify you about delivery time.
Who does these mobile apps appeal to?
Sela: We have two core demographics: the millennial and families, typically moms who order for three people, whether its kids or not. Our customers lean female and can be broken into young millennials and moms.
Most pizzerias set minimum order fees. Can actual slices be ordered online?
Sela: You can order a slice online and then pick it up and skip the line. The minimum order is set by the restaurant owner. It varies, and we educate them to lower the order, but the minimum is usually $10 or $15.
But most of other delivery services charge 20% of 30% of a delivery order, you charge $1.95 to the pizzeria per order? Do you compete by volume?
Sela: We’re fundamentally a different business model than delivery services. We keep our prices down because we want to be a core partner to the small business partner. We’re not promising new customers at a steep price. We partner with them to manage their existing business, and we’re much more a loyalty-first platform. We’re perfectly fine with a more reasonable fee because our job is to make sure they’re successful.
How does charging $1.95 per order enable you to grow?
Sela: On a per order basis or transaction basis, we’re a much lower fee than Grubhub. We mostly don’t have the same cost structure as Grubhub. We don’t spend millions of dollars on customer marketing and focus in on partnering with small businesses. We’re focused on scale with volume and have positive unit economics.
What other services do you offer?
Sela: The biggest component is our ability to do customer retention marketing. When you call a pizza to order, you don’t ever hear back. There’s no way to communicate with them to reorder or introduce them to specials. When you place an order with Slice, we have the ability to remind you about reordering or about deals sent by individual pizza restaurants, such as a large pizza and two-liter soda deal. We have the ability to distribute those orders in scale. The only fee is $1.95 for these deals. Our system leverages data to consumers who haven’t come back to order, all automated.
Are you concerned that DoorDash or Seamless will target pizzerias and put you out of business?
Sela: No, not concerned. In order to only focus on tackling the pizza industry, they’d alienate the vast majority of their network.
What would it take if DoorDash or Uber Eats wanted to acquire you?
Sela: It doesn’t interest me; we’re mission-driven. I don’t think the business model proposed by Gurbhub or Uber Eats is advantageous to small businesses. Our focus in on building up Slice. Today we’re in 12,000 pizza restaurants, and there are more than 40,000 pizzerias we have yet to partner with.
What are the next steps for growth?
Sela: There are two main levers: growing the number of pizza restaurants in our network and growing the number of consumers that order digitally for these pizzerias. We’re focused on how you shift consumer behavior from order by phone to digitally.