One former Starbucks exec's big gamble on pizza

Cramer: This business gives pizza a purpose

For entrepreneur Scott Svenson, it all started with a cup of a coffee — actually many coffees.

Living in London but missing the vibe of their hometown Seattle, he and his wife Ally Svenson started the Seattle Coffee Company, a coffee chain with a hint of Northwest flavor.

Starbucks sniffed out the well-brewed idea and bought the U.K. division of the company in 1998 for $85 million, making him president of Starbucks' European division. But the entrepreneurial urge persisted.

Scott and Ally Svenson, co-founders of MOD Pizza
Source: MOD Pizza

"In my heart of hearts, I knew I really enjoyed building things, having a hands-on role in a company's culture and future," Svenson said in a phone interview.

He decided to take a risk and leave Starbucks to pursue entrepreneurship.

"There's just that fear that whatever you're going to do is not going to work, and that's a healthy fear, but a fear, nonetheless," he said. "And there was another fear, which was new for me, that I had success, and I didn't want to come across as just having been lucky, of not being good at what I do."

Since then, they have gone on to build multiple companies, including Carluccio's, an Italian restaurant and deli.

MOD Pizza sets itself apart from others in the food business, offering perks like competitive wages, paid time off and free meals.
Source: MOD Pizza

Now, the Svensons are rapidly expanding their next venture — transforming the world of pizza as co-founders of MOD Pizza, which they claim is the first fast-casual customizable pizza company.

With 114 stores and operations in 16 states, MOD Pizza has grown quickly since its 2008 opening. The company has raised more than $107 million in funding.

What's Scott's recipe for success?

Stay nimble

"We view ourselves very much as a scrappy start-up. We've sort of moved past being a start-up, but we still try to hold onto that culture," he said.

He hasn't let success get to his head.

The entrepreneurial duo pictured in a Seattle Coffee Company location back before they sold the chain to Starbucks.
Source: MOD Pizza

"When that money is sitting in your bank, it's really easy to become complacent," he said. "There's this vigilance you have to have when you're growing so quickly, a mindset so that you don't become complacent on allocating resources."

If we take care of our people, we know that business will take care of itself.
Scott Svenson
co-founder and CEO of MOD Pizza

Invest in your employees

"There are a lot of great companies that focus their attention on their customer and on their product. And our customers and our products are super important, but they're not as important to us as our team," he said.

That attention to the team goes beyond inspiring messages and into employee pockets.

"If your objective is to make sure your employees are feeling engaged, and happy and inspired at work, ... they've got to be paid fairly, they have to be paid well," he said.

MOD Pizza has a base hourly salary of $10.50 per hour, well above the federal minimum wage of $7.25. All employees working an average of 26 or more hours per week are eligible for vision/dental benefits, which goes beyond the mandates of the Affordable Care Act. In addition, workers accrue paid time off.

"That's our focus at MOD — taking care of our people. And if we take care of our people, we know that business will take care of itself," he said.

The company has other perks, like an emergency fund that employees and executives can contribute to, in order to help an employee experiencing a life crisis. The fund, called "The Bridge Fund," has helped employees who have suffered from domestic violence, the sudden death of a family member or other troubling circumstances.

Have a mission

For the Svensons, the opening of a new MOD Pizza is as much about the community as about profit.

The money made from all pizza sales on a location's first day go to a local charity that the store team picks. Almost all organizations are youth or family-oriented organizations, and the donation usually ranges from $2,000 to $5,000.

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"People who are entrepreneurial minded, I think, sometimes get caught up on finding the business idea or opportunity where they can make the most money. And, as a result, they compromise on the thing that that most inspires them or where the passion lies," Svenson said. "I think that's dangerous."

For every pizza sold during Thanksgiving season, the company donates $1 to a nonprofit organization.

"The more we can send the message to the next generation of entrepreneurs that giving back is not only good living, but it's good business, I think it'll help make the world a better place," he said.