The CEO of $2.2 billion pizza chain Papa John's shares his 5 'unexpected ingredients' for startup success

John Schnatter has always had an entrepreneurial spirit and a thing for pizza.

In high school, he worked at a pizza and sub shop in his hometown of Jeffersonville, Indiana, where he first fell in love with making pizza. He got through college by working at a place called Greek’s Pizzeria and even considered dropping out of Ball State University to open a franchise, but his parents wouldn’t allow it.

“That’s when I got the idea,” Schnatter tells Business Insider. “I’d finish college and open my own restaurant. I had the recipes, I knew the equipment, and I had a store layout.” After consulting a marketing major who lived in his dorm, he even had a name.

He took the leap of faith in 1984. He sold his beloved Camaro Z28 for $2,800 to buy $1,600 worth of used restaurant equipment, and then turned a tavern’s broom closet into a pizza business.

It has since grown into the empire known today as Papa John’s Pizza — the third largest pizza chain in the world, with 4,800 restaurants around the globe and a market capitalisation of $2.2 billion. Papa John’s is also the official pizza sponsor of the National Football League and Super Bowl 50.

Schnatter says these were the five “unexpected ingredients” for his startup success:

Courtesy of John Schnatter.
A young John Schnatter.

1. Patient ambition

'You have to keep looking until you find work that's meaningful and purposeful,' Schnatter says. 'Then work it to the bone, and you'll never work a day in your life.'

As a young man, Schnatter worked all sorts of odd jobs, including driving a forklift for a local package store, painting gutters, mowing lawns, welding barges, and flipping hamburgers at Wendy's. 'I bounced around until I fell in love with making pizzas: I was good at it, I enjoyed the process, and loved making people happy,' he explains. 'I'm not sure I would have lasted as long as I have running my own business had I not been doing what I felt like I was put on Earth to do.'

Picture: Getty Images

2. Unconventionality

'Back in the early days of Papa John's, I dove into a competitors' dumpsters to find their sales sheets and sent personal letters to their customers asking them to give our pizza a try,' says Schnatter. 'Unconventional, sure, but to be a successful entrepreneur, you need to be tenacious and scrappy. And you have to truly believe your product is the best and personally vouch for it.'

3. Failure

Contrary to what some people might tell you, failure is an option -- and not always a terrible one, he says.

'Perfect example: Years ago, we offered a Sweet Chilli Chicken Pizza and were convinced it would be a huge hit. Boy, were we wrong,' Schnatter adds. 'We were left with a massive surplus of Sweet Chilli Chicken sauce.

'So, since we encourage curiosity and tinkering, instead of throwing it out, we used the principle of optionality to find ways to make it sell. With a little creativity, we developed our wildly popular Sweet Chilli Chicken Wings, proving that even in the face of failure, a successful option is somewhere to be found. But you can't be afraid of failure.'

Business owners often find some of their best ideas when they're looking for something else, he says. 'It's all about turning a negative into a positive.'

4. Commitment

'In the food-service industry, your customers are your barometer for quality,' Schnatter explains. 'When I was 15, one of my first jobs was making pizzas and washing dishes at Rocky's Sub Pub in my hometown of Jeffersonville, Indiana. I quickly learned that if we made the pizzas right, the tray would come back empty. And if the tray came back with pizza on it, I knew it wasn't made right.

'If you truly want to be successful, you have to be attuned to your customers and commit to getting better every single day. Can't say it enough.'

5. Small-scale thinking

'Papa John's has always operated with a small business mindset, like a mum and pop, independent pizzeria,' Schnatter says. 'We see our business as one store, 4,800 times.'

He says that means always putting the customer first, not wavering on quality, being nimble to course correct when needed, and hiring quality people who are looking for an opportunity, not just a paycheck.

'As you're trying to grow your business, it's easy to get distracted by size and scale, and lose sight of what made your business successful in the first place,' he says. 'To truly grow big, keep that small business mindset; you'll set yourself apart from the competition, and the sky's the limit.'

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