“Parents said: do not lean out”: Fedor Ovchinnikov (“Dodo Pizza”) about the capture of the market, plans for IPO and their small salary

Fedor Ovchinnikov is an entrepreneur from Syktyvkar, founder of Dodo Pizza. Over the nine years of the network, he discovered 583 pizzerias in 13 countries of the world, including China and Nigeria. Elizaveta Ossetian talked with him about whether it was possible to make fast food high -quality whether the pizza and Yeyska taste in Moscow and when Dodo Pizza will appear in Italy. The Bell publishes the most interesting fragments of the interview, see the full version on the channel “Russian Norms!”.

https://www.youtube.com/watch?v=CJYBOYW_WVVM

"The idea is not in a particular pizzeria, but in the system"

- I read a blog in which in 2011 you painted in detail what awaits people if they buy shares of Dodo Pizza. It was a solid business plan. Usually, when startups are made, people are not advised to write business plans, because they still do not come true. What did you come true and what not?

- Our story is unique in that in fact 9 years ago I wrote that we will build a national network first, and then an international company, and it came true. Of course, this was not a detailed business plan, but a general vision where we need to move. From the very beginning, we set big goals. It seems to me that the problem of many Russian companies is that they have no faith, that you can build something big.

- In general, a little brazenly - to live in Syktyvkar, having one good pizzeria, and think about the opening of the pizzeria network in the USA. How did it occur to you?

-Maybe it looks brazenly, but after graduation, I never had a doubt that I could do something big. I had the same confidence in this as that tomorrow I would get up and go to work. In Europe, Dodo Pizza is now the fastest growing network of restaurants. It is clear that our market is very favorable for this, there is not strong competition enough. But at the same time, our scale and speed are impressive. Many say: "I have been working and opened three restaurants for 20 years and I can’t imagine how to open 20 restaurants during this time." But I believe that if people do not set big goals and cannot believe that they can be achieved, they do not achieve them.

-You usually say that the most important thing is the idea of ​​Radical Transparency, your IT system that allows you to see how they prepare pizza online.

“We never say that.” When you make pizza in some premium restaurant in Moscow, you can personally choose chefs, cooks and provide quality. But, when we make a product for millions of people from Nizhny Tagil, Saratov, Kuvandyka, you need to create an operating system to ensure a stable quality service. And our IT system allows you to make all the processes transparent, see the speed of production, the mood of our partners, employees in pizzerias, profitability. Because, if the pizzeria is incomprehensible, you will not be able to provide quality and service for a long time, you can’t attract people, pay good salaries, invest in the service.

- I read different comments about the quality of the PIC, and many said: “What do you expect from taste, this is a mass product, and its quality will be like this fast food.”

- Fastfood is not about the quality of the product, but about the labor organization system in the kitchen. This is actually industrial production, which can be of high quality. When people write on Facebook that “I didn’t like your pizza”, this is a question of waiting for expectations. We sincerely strive to constantly make our product better. But there is a Russian market that is not developed. Today there are three cheese manufacturers who can provide our volumes - we consume 10% of the total cheese of Mozarella in Russia. But at the same time, we are clamped by the economy, because the incomes of the population are falling, and we must make our franchises profitable.

- Pizza in Yeysk and in Moscow of the same taste or not?

- Yes, because we have a single supply system and the largest network of logistics. If McDonald's and KFC work in Central Russia and a little in Siberia, we work in Yakutsk, in Norilsk, in Yuzhno-Sakhalinsk, in Nakhodka.

- Did you think how much Russia can eat pizza?

- We now have about 470 pizzeria in Russia. We are 200% sure that we will open 1000 pizzerias.

- I watched the numbers how you developed. When you were small and even mediocre, you doubled. And in 2019 you slowed down.

- This is the effect of an adult base. When you have 400 pizzerias, it is 2 times more difficult to increase than when you have 50 pizzerias. We understand that the boundaries of the Russian market are already noticeable. There are cities where you cannot open the pizzeria more than the population there. Therefore, we go to other countries - to the UK, to China - and work to ensure that when our growth in Russia is slowed down, we make a breakthrough in new markets.

"First, we will copy the menu of successful pizzerias, and then the practice will show"

-The “Dodo” output to international markets is some kind of crazy story. You opened in America in 2014, just to show that everything is not so bad.

- The discovery in America was a crazy step. In 2013, I came to Moscow to look for money and told, having 10 pizzeria in the regions that we will build a global network. Then I did not see support in the eyes of investors. And we decided to make crowdfunding, announcing that we would attract money from any private person from 300 thousand rubles. We began to accept this money in 2014, and in August the fighting in Ukraine began, in December the ruble fell, and we completely stopped investments. We attracted money in parts and immediately spent it. And as the head of the company, who has a constant box office gap, I understood that I had money left for a month and a half. After that, I will come to the team and say: "I have no money to pay salaries." Then I took a cache, put in a cell. Then it was necessary to come up with something fantastic in order to make people, the investors' team to believe that the company from Syktyvkar would be able to survive and succeed. And I decided to open the pizzeria in the United States for several reasons. Firstly, if something is terrible with the economy, we seem to land the colony on Mars, there will be disputes of our lives, and we will be able to start developing something in the USA. The idea is not in a specific pizzeria, but in the system that we created. Secondly, we wanted to force the franchisee to believe that all our stories about global are real, that these are not Fyodor's fairy tales from Syktyvkar.

- What did you do?

- I wrote a letter to Steve Green - this is an entrepreneur from the USA, the founder of PMQ Pizza Magazine, the former Francasis Domino's. I invited him to Syktyvkar, he arrived, awesome that there are some beautiful pizzers working on the edge of the world of an IT system. I asked him: "What we did here could work in the USA?" He said: “Not. We have a huge number of pizzerias that look worse, which do not have such a design, system. ” I came to him in Oxford, Mississippi, is a beautiful city to test this one-story America, where there is Steve’s support, which knows the local Community, where it is not so hard in terms of rent, life, people, like in New York. Steve said: "Open the pizzeria in the Mississippi, we will help, we will develop recipes, we have suppliers." So we began to open the pizzeria there, investors saw that everything that we do was really believed. As a result, we collected investments, despite the crisis.

- Why, if American pizza is such a successful thing, did you sell it?

- Because it is important for us that this business exist, live. The business of one pizzeria depends on a person who creates a team every day gives this business energy. We did not have people, we expanded too quickly. Dementia and courage are our motto.

- A little more about America. Why didn't you develop business there further?

- America is too far. Now we have, no matter how ridiculous it sounds, three tricks: Russia, Kazakhstan, Belarus, perhaps we will open next year in Ukraine. Our task today is to maintain a business in the United States, supporting our partners. To go to the USA and die, destroying the whole company, this is completely irrational. Tomorrow we will be given $ 100 million and say: grow quickly. We cannot. It is necessary to constantly save the balance. You will develop too quickly - you will break the bones. Too slowly - you will sleep. Hyp about Dodo Pizza is international, because Russia is a noticeable market. In Russia, we overtook the closest competitors 2 times, we are more than Domino's and Papa John's, if we put them together.

- In Russia?

- In Russia. Russian Domino's, the master of Francasis, is trading on the London Exchange. It is clear that investors who invest in Domino's, they look at the Russian market, at analytics, and the following: what kind of Dodo Pizza? They go to the site, look: damn it, yes, this is not some kind of regional network with some kind of town brand there, they have it. They begin to be interested in, information about our company is distributed. And there are many requests from the Middle East, from India, from Asia about the franchise. We stop ourselves now, because we simply cannot.

- Did it make sense to master Europe or China and not to rush to open in specific markets like Nigeria or Slovenia?

- I would not want to change anything, because difficult situations helped to find unusual solutions. For example, how to make a menu in the USA or in China without money for research?

- How?

- A marketer from a large company will say: it is necessary to conduct a million rubles or a million dollars to conduct a study. We decided that we would act in China as the Chinese. First, we will copy the menu of successful pizzerias, we will begin to work, and then the practice will show.

- Tell the story about Italy.

- There is a very frequent question: “What if“ Dodo Pizza ”opens in Italy?” What is Italy? This is a country where they love pizza. But in Italy there are no pizzeria networks. However, they are needed there. All pizzerias are Mama's and Papa's. It is impossible to scale. Modern Italians do not want to work all their lives in the pizzeria. But to create a network business, systemic, controlled, why not? And not one Italian entrepreneur addressed us. They need a system, but, as a rule, Italians love Magic. That is, the Italian chef that helped us make the dough in China determines the temperature of the water with his hand. No one cancel the fact that creative is needed in the creation of recipes. But you need to combine it with a scientific approach.

- The next point will you open in Rome?

- We will definitely open in Italy. In general, we will open everywhere. This is a matter of gradual development.

- A few years ago, you promised that in 2020 you would cost almost $ 2.5 billion. I recall the famous story about the napkin Grigory Finger, on which it was written about these plans.

- This is Grigory Finger, not me. It is clear that now we are not standing and close to $ 2 billion. According to conservative estimates, taking into account, say, our financial indicators, EBITDA, amendments to the risks of the Russian market, this is somewhere around $ 100-120 million.

-Still about investors. Did you eventually find some kind of Family Office, some kind of oligarch?

- No, not an oligarch. This is a pragmatist, idealist, entrepreneur, who with us on the same wave, who simply believed and invested in us. This is an IT entrepreneur, but he said that he does not like publicity, does not want questions. Our openness ends where the openness of other people begins, and this is the main rule.

- As far as I understand, you have a profitable Russian business, but not international yet?

- We have successful Eastern Europe. Pizzeria in Tallinn is the third for sales among 555 pizzerias in the world. Revenue there is about € 100 thousand per month.

- Is this your own?

- No, this is a franchise. We have only 23 pizzerias. One in China and 22 in Russia. We create a brand, marketing, recipes. Franchisees are engaged in Execution. The franchisee is not a buyer of a franchise, this is a partner in a chain of creating value. We are building a global brand that unites entrepreneurs from different countries and cultures. One of the key values ​​is total openness.

“I read that you opened your own salary at some point.” $ 4.5 thousand - in principle, a small salary for CEO.

-Now it has grown a little-to 430 thousand, in my opinion. We must understand that we all have a very high salary in the company today, not a market one. And there is an option, it is serious. Just all partners are interested in the long -term growth of the company. And I cannot raise my salary without lifting it to everyone in the team.

- And the employees who are at the checkout or, roughly speaking, make pizza?

- They are in PNL pizzerias. There is a management company, it receives franchise deductions, invests in it. Every month we invest 20 million rubles, that is, $ 1 million, once every three months in the development of the system. And this is what we earn ourselves. We always have a balance. Let's attract investments and raise us salaries. And the team is ready for the sake of Marshmallow in the future now not to increase the salary. I admit that I completely sold a small number of shares, because I understand that I am not enough.

"There is a feeling that you are free because you are profitable"

- You say that you are growing a company. Is there a point at which you are ready to sell the company?

- No. I am not doing the company for this. In principle, I have no such thoughts. You can open the hotels after some time. There are cool people with whom I work with whom I am pleased to work. There is a feeling that you are free because you are profitable. That you are not dependent on some investors who are with other values. Of course, we have a big goal - this is our IPO. It is connected with the fact that we must give liquidity, monetization to investors who have invested in us, these are 200 ordinary people, unprofessional investors. There are employees who actually invested their energy, time in the company. But IPO is not an absolute goal.

- At the very beginning, you said that you wanted to be an entrepreneur and that you had the feeling that everything would work out. And where does this feeling come from?

- Don't know. From childhood.

-Did your parents want something special for you?

- No, my parents, on the contrary, discouraged me to do business, said: do not lean out. I don’t know, I just wanted to do something in my life. The question is not a business. I have never sold a newspaper as a child, I never had a monetary motivation. To do business with passion in order to earn money and go to spend it, no. I was passionate about archeology. I took up business because I worked in an advertising agency. At first I became interested in marketing. Because marketing is cool and interesting. These are Cannes Lions. I read Generation P and plunged into the world of marketing, studying at the Faculty of History. He began to read magazines, “The secret of the company”, Western books. Then I went to work in an advertising agency, began to create a full-cycle advertising agency in Syktyvkar, trying to make some brands for local dairy. Then I was tired of inventing ideas when everyone says: listen, dude, we will not do it all, this is some kind of garbage, let's do this. I decided to open a business so that there was freedom in the implementation of my ideas. Since I did not know how to do business, I had to learn operating management, financial discipline, and so I gradually became a businessman.

“You mentioned several times that you are reading books about entrepreneurs.” Many entrepreneurs say that they do not read books about entrepreneurs, because "you will not learn anything from them." Are there any entrepreneurs who are your role models?

- I believe that all entrepreneurs are similar. Maybe there are some differences in characters. In fact, both Tinkov and Galitsky-there is a certain common philosophy, when a person takes responsibility for other people, he cannot simply have any other values ​​conditionally. I really like entrepreneurs who created large retail businesses such as Walton, Ingvara Camprad. The Japanese like. One of the favorite entrepreneurs is Konosuke Matsusita, who created Panasonic. In Japan, in general, no matter what you do - all philosophy. Business is a philosophy for them.