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Staff post about: Tom Monaghan Become an Author

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Monaghan is fond of saying, “I owe all my success to stupidity.” In reality, the emergence of Domino’s as a global pizza empire owes itself less to the fact that Monaghan didn’t know what he was doing, as to the fact that he was willing to take risks and gamble on ideas he couldn’t predict the odds or the outcome of.

It was 1960 and Monaghan was falling deeper into debt by the day. Going back to school was out of the question as he had sunk almost all of his savings and energy into this pizza project. How was he going to make this venture a profitable one? “Cut out the six-inch pizzas,” said one Domino’s employee. “Most of our business was the six-inch,” Monaghan thought to himself. It made sense from a financial viewpoint – the larger the pizza the more they could charge for it – but how would customers react? Would they be upset at the change or would they be happy to eat more pizza? There was only one way for Monaghan to find out.

On an extremely busy Sunday evening, Domino’s informed its customers that they would no longer be offering six-inch pizzas; four larger sizes would still be available, however. Monaghan’s gamble had paid off. Sales increased by 50 percent and for the first time ever, Domino’s was making a profit. “The next night I cut out the nine-inch pizza, and all the bills caught up,” says Monaghan. “I learned then that keeping things simple could be more profitable.”

Monaghan had taken a chance in eliminating his most popular product in favour of a more cost-effective one, but it was a risk that paid off. He decided to test his luck and try to continue his winning streak in the late 1960s, with the introduction of a quick and efficient home delivery system. After meeting the heads of other corporate giants at a training seminar, Monaghan thought to himself, “Wow, what I've got with this concept of pizza delivery is just as good as what they have; I just don't have as many stores.”

When Domino’s was first starting up, delivery was a fairly minimal venture throughout the industry. “Nobody thought you could make money on delivery,” recalls Monaghan. “Most places just delivered to get some volume before they could afford to cut out the delivery.” Monaghan, on the other hand, believed he could do it; he knew that he could get piping hot pizzas to customers in less than 30 minutes and he was willing to bet his business on it. “It was a challenge,” he says. “I just had to figure out how…so I decided to focus on that, and it was the best thing I've done.”

Again, Monaghan took a chance in deciding to focus on delivery, when everybody else was saying it would only land him deeper into debt. In the end, it was Monaghan’s willingness to be first, to set the industry standard, and to place major stakes on his hunches that propelled the company to such lofty heights of success.

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