Jul 24, 2023 · 1h 27m · how-i-built-this
MOD Pizza & Seattle Coffee Company: Scott and Ally Svenson
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In this episode of How I Built This, Guy Raz interviews serial entrepreneurs Scott and Ally Svenson about their journeys pioneering Seattle Coffee Company in the UK and scaling MOD Pizza into a nationwide fast-casual powerhouse. The Svensons illustrate how combining consumer empathy, operational discipline, and conscious capitalism allowed them to repeatedly disrupt traditional dining categories while creating meaningful social impact.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 25.8% of the talking time here. How this is scored →
Guy as informed peer 4.0 Guest teaching 3.5 Guest disagreement 0.2 Guy pushing back 0.5
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:16:40 Scott rejects ghost kitchen viability
Scott directly dismisses Guy's hypothesis that ghost kitchens are the future of quick-service pizza, breaking down the geometric and economic flaws of the concept.
Hardest push from Guy ▶ 1:07:00 Guy challenges franchising brand control risksGuy presses Scott on the inherent risks of franchising, challenging whether adopting franchise partners threatens quality control and brand consistency.
Biggest teaching moment ▶ 16:23 Scott corrects Guy on CrestaCare CEO disputeScott interrupts Guy's assertion that the CEO was embezzling funds, clarifying the precise contractual document dispute and explaining the ethical stance he had to take.
Guy holds their own ▶ 55:10 Guy deconstructs pizza assembly line bottlenecksGuy displays sharp operational expertise by contrasting Chipotle's pre-cooked steam table workflow with the labor-intensive dough stretching and baking constraints of pizza.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Serial Entrepreneurs: From Coffee Bars to MOD Pizza | 5 | 2 | 0 | 0 | Guy opens with personal context about London's 1990s coffee culture and frames the Svensons' background. The Svensons recount their early correspondence before Scott discusses his entry into finance at Drexel Burnham Lambert. | |
| London Relocation and Deputy CEO Role at CrestaCare | 4 | 3 | 0 | 0 | Guy prompts the couple about Ally moving to London and Scott's sudden promotion to Deputy CEO at CrestaCare. Scott clarifies how he transitioned from private equity advisory to operational management. | |
| Navigating London's 1990s Coffee Desert | 5 | 2 | 0 | 0 | Guy and Ally exchange shared recollections of London's lack of espresso drinks and poor takeaway cups in the early 1990s. The tone is entirely collaborative and nostalgic. | |
| The Impromptu Challenge to Launch a Coffee Brand | 4 | 3 | 1 | 2 | Guy pushes back gently, expressing incredulity that Scott's CEO boss at CrestaCare would encourage Scott to start an outside coffee business. Scott clarifies that it was initially conceived as a side project. | |
| Boardroom Crisis and Upholding Professional Ethics | 4 | 4 | 1 | 2 | When Guy infers the CEO was stealing money, Scott corrects the premise by explaining it was a contractual dispute involving questionable documentation. Scott recounts calling out the CEO during a board meeting while preserving their relationship. | |
| Foundational Steps and Operational Education | 3 | 5 | 0 | 1 | Guy asks how they started without retail background or barista knowledge. Ally and Scott candidly detail their naive checklist approach, Lavazza training, and creating their sticky-note mission statement. | |
| Overcoming British Market Skepticism | 4 | 4 | 0 | 0 | Scott and Ally explain British market skepticism, including a board member who joined specifically to soften their impending failure. Scott cites historical statistics showing 90% of UK coffee consumption was instant. | |
| Covent Garden Launch and Daily Operational Grind | 3 | 3 | 0 | 0 | Ally and Scott recount the Covent Garden opening, educating customers on drink taxonomy, and the grueling daily schedule of opening and closing the single shop. | |
| Strategic Geographic Testing in Cambridge and the City | 4 | 5 | 1 | 2 | Guy assumes replication was a straightforward formula. Scott and Ally correct this by explaining they intentionally chose radically distinct test locations in Cambridge and the City financial district, while acquiring Torres & Macatonia roastery. | |
| Mid-roll Break: Starbucks Enters and Pizza Emerges | 3 | 3 | 0 | 0 | Guy questions the extreme pace of opening 20 to 25 stores in two months. Ally describes scouting potential real estate sites across London at 4:00 AM on Sundays with their infant son. | |
| Negotiating the Starbucks Buyout in 1998 | 4 | 4 | 0 | 0 | Scott explains how Seattle Coffee Company intended to become the global alternative to Starbucks before Starbucks approached them to acquire their UK footprint for $90 million. | |
| Starbucks Europe Leadership and the Giant Hairball | 3 | 4 | 0 | 0 | Scott describes his tenure as President of Starbucks Europe, recounting Howard Schultz's advice around 'Orbiting the Giant Hairball' and resisting corporate bureaucratic bloat. | |
| Backing Carluccio's and Founding The Sienna Group | 4 | 3 | 0 | 0 | Scott explains backing Carluccio's in the UK and later returning to Seattle in 2000 to launch The Sienna Group, aiming to invest in businesses combining profit and purpose. | |
| Identifying the Gap in Fast-Casual Pizza | 4 | 3 | 0 | 0 | Ally shares her epiphany while shuttling hungry boys between sports practices, realizing the need for customizable, fast-casual personal pizza inspired by Italian street food. | |
| Test Kitchen Prototyping and Kitchen-Table Mentality | 4 | 3 | 0 | 0 | Guy asks about early prototyping. Scott and Ally discuss working with equipment suppliers in test kitchens and collaborating casually around their kitchen table on initial branding. | |
| Overcoming Throughput Bottlenecks and Lunchtime Demand | 5 | 4 | 0 | 0 | Guy identifies the operational challenge of dough stretching and cook times compared to Chipotle. Scott breaks down the throughput mechanics of 15-20 pizzas per oven and cracking lunch demand. | |
| The Mod Subculture and Made on Demand Ethos | 4 | 4 | 1 | 1 | Scott clarifies that 'MOD' primarily references 1960s British mod subculture rather than strictly 'made on demand.' Ally explains how the 2008 recession and a complimentary hotel water bottle inspired their single flat-rate pricing. | |
| Second-Chance Hiring and Building Social Impact | 4 | 4 | 0 | 0 | Guy asks about MOD's progressive hiring policies. Ally and Scott explain their deliberate choice to employ justice-involved individuals and individuals with developmental disabilities from store two onward. | |
| Balancing Company-Owned Stores with Selective Franchising | 5 | 4 | 0 | 2 | Guy probes why they chose to franchise given the risk of losing brand control. Scott explains that defending first-mover advantage against competitors necessitated partnering with vetted operators for 15% of stores. | |
| Hypergrowth Management and Whiteboard Territory Mapping | 4 | 3 | 0 | 0 | Scott describes how they literally circled regions on a whiteboard paper map of the US to allocate territory, acknowledging the intentional acceptance of mistakes to secure market share leadership. | |
| Distinct Executive Roles: Operations and Cultural Stewardship | 4 | 4 | 1 | 1 | Scott and Ally explain their executive division, with Ally serving as 'Protector of the Purpose.' Scott rejects Guy's suggestion about ghost kitchens, detailing why delivery radii and hospitality dynamics make them unappealing. | |
| Workforce Expansion and Guild Education Partnership | 3 | 4 | 0 | 0 | Scott details their partnership with Guild Education to offer tuition-free degree programs to MOD's 12,000 squad members as the primary driver behind expanding store count. | |
| Artisanal Revivals and the Power of Conscious Capitalism | 5 | 3 | 0 | 0 | Guy compares MOD's timing to the broader artisanal pizza revival (Pizzeria Bianco, Roberta's). Scott delivers a thesis on conscious capitalism as a self-reinforcing business advantage. | |
| Reflections on Marriage, Co-Founding, and Shared Growth | 3 | 2 | 0 | 0 | Guy reflects on Scott and Ally sustaining both marriage and multiple co-founded businesses since their teenage years. Both Scott and Ally reflect on mutual support and shared purpose. |
Statements from this episode (27)
Scott Svenson: Joined Wall Street not knowing balance sheets vs. P&L
“When I graduated, I really had very little clarity as to what I wanted to do as a career, and A lot of people from Harvard ended up going to work on Wall Street, and I looked at it as an opportunity, frankly, very simply to make some money to pay my student lo…”
Ally Svenson: 1990s London completely lacked customizable specialty coffee
“Decent tasting coffee, but nobody had what we were used to, which was a customizable coffee offering that we all now know, you know, it's everywhere, but it was nowhere there.”
Scott Svenson: London coffee venture depended on Starbucks' success in New York
“Starbucks had expanded to New York, and the hypothesis we had was, well, gosh, if it works in New York, given how international and diverse that city is, it'll work in London.”
Scott Svenson: Board disclosures led to a front-page FT story ousting CEO
“I walked back in the boardroom and shared what I had seen, and that led to a front page article in the Financial Times the next day that this CEO had been removed.”
Scott Svenson: Ousted CrestaCare CEO backed Seattle Coffee Company's launch
“Allie and I built it, and they were our backers.”
Ally Svenson: Seattle Coffee Company aimed to fool authentic Seattleites
“We ended up creating our mission statement to reflect this lens that we knew we needed to use, and the mission statement was written out on a yellow sticky that just said our, you know, we will create a Seattle-style coffee bar that would fool a Seattleite.”
Scott Svenson: Over 90% of UK coffee was instant in the mid-1990s
“Around the world at that time, About 92% of all coffee consumed was real coffee, and eight percent was instant. In the UK, it was the inverse of that. It was over 90% instant, and the balance was real.”
Seattle Coffee Company hired former Buckingham Palace footman as first manager
“It was a character named Peter who, his previous job, he'd worked in Buckingham Palace as a footman.”
Scott Svenson: Seattle Coffee Company's early food sales tripled Starbucks' share
“Starbucks food sales at the time were eight to 10% of sales, and ours were 25%.”
Scott Svenson: Seattle Coffee Company raced for real estate to defend against Starbucks
“We knew that it was a market share game. We knew that we had to get out and secure the right real estate and build the brand, and in our real, in our market, they talk about the first mover advantage, and we had to secure that first mover advantage so that if …”
Scott Svenson: Seattle Coffee Company explored US acquisitions to rival Starbucks
“We had signed up with partners in the Middle East, and South Africa, and Southeast Asia, and had plans to go to Northern Europe, and actually had had conversations with several brands in the U.S., Well-known brands about us acquiring them to create a, an entre…”
Svenson: Seattle Coffee Company had 68 stores and 50 in UK pipeline when acquired
“At the time we sold to Starbucks, we had 68 locations, but we had 50 locations in our UK pipeline for the next year, and we had a whole bunch of stores we were going to be opening internationally.”
Scott Svenson: Starbucks amplified the operational dysfunctions of small startups at scale
“What we found was all of the challenges and the imperfections and the dysfunction that we had in our small little company were just amplified on a bigger scale at Starbucks”
Scott Svenson: Starbucks pushed to replicate US playbooks abroad without adapting
“There was a lot of momentum organizationally to simply replicate in a new market what they had success doing elsewhere”
Svenson: Pizza is the second largest restaurant food category behind hamburgers
“Pizza, which is the second largest food category in restaurants behind hamburgers.”
Scott Svenson: MOD Pizza ovens hold 15-20 pizzas baking in 3-4 minutes
“In our ovens, we can at peak have 15 to 20 pizzas in the oven at one time, But it's still gonna take, you know, three to four minutes for that product to cook”
Scott Svenson: Fast-casual pizza concept required cracking lunch economics to survive
“This concept wouldn't work if we couldn't crack the lunch occasion, just given the economics of paying for a piece of real estate and the people and so forth.”
Scott Svenson: MOD Pizza name was inspired by 1960s British mod culture
“The Mod name was inspired by the Mod era of the fifties and sixties in the UK. Ali and I grew up as big fans of the Who and the music and vibe of that era, and”
Ally Svenson: Flat-rate pizza pricing with unlimited toppings was an industry first
“And no, that had never been done before in pizza.”
Ally Svenson: Hiring formerly incarcerated individuals yielded incredible work ethic
“They would have had to check a box in this, in Seattle, and we did not require them to check the box. We employed them. The first job out of prison was working at Maud, and in a very short period of time even though some people thought, well, that's kind of cr…”
Scott Svenson: First-mover market leads in retail dining are hard to supplant
“If you allow a brand in a category to get too far ahead in a particular market, it's hard to supplant them.”
Svenson: 85% of MOD Pizza locations are company-owned and 15% franchised
“So today, 85% of our stores are company-owned, 15% are franchised with nine partners who were fabulous, incredibly valuable, and experienced operators”
Scott Svenson: MOD Pizza scaled from 12 to over 400 stores within 5 years
“On our fifth birthday, 12 stores in western Washington, five years later on our 10th birthday, we had over 400 stores spread across seventy-plus discrete markets around the U.S.”
Scott Svenson: MOD Pizza was US fastest-growing restaurant brand for 3-4 years
“Yeah, we were the fastest growing restaurant brand in the country for, I believe, four years. Three or four years.”
Scott Svenson: Category leadership outweighs the collateral damage of hyper-growth
“Whatever mistakes we made, whatever collateral damage, if you will, there comes from going too fast would be more than made up for by winning in this category and having All the advantages that come from being that market share leader over time, being the Star…”