A relentless hunt for their favorite foods and drinks led Scott and Ally Svenson into launching not one but two multi-million dollar businesses. The first came about in 1990s London when they discovered that British coffee meant instant coffee. So, the Washington natives decided to start the Seattle Coffee Company in the U.K, inspired by their love of Starbucks—which was still only in the U.S. But, once Starbucks started to go global, Scott and Ally decided to sell and move back to Seattle. They soon found themselves looking for quick, affordable, crowd-pleasers to feed their growing boys on busy nights; pizza is a good solution, but it can also be slow and expensive. So Scott and Ally wondered if they could figure out how to make individual, fast-casual pizza work; and they started MOD pizza as a one-store experiment. 15 years and more than 500 locations later, Scott and Ally have their answer: they can make it work.




This episode was produced by J.C. Howard, with music by Ramtin Arablouei

Edited by Andrea Bruce, with research help from Casey Herman.




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So on How I Built This, we talk a lot about working with colleagues who have different points of view.

And this made me think of a conversation I recently had with actor Rainn Wilson, who famously played the nerd bully Dwight Schrute on The Office.

And Rainn told me what it's like to be a person of faith in the world of comedy, where religion and spirituality are more often a punchline than a way of life.

To hear more, check out my conversation with Rainn Wilson over on my other podcast.

Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators.com.

Our qualification was the fact that we had been customers of the thing that we wanted to create.

I think 1 of our strengths at the time was the fact that we didn't know what we didn't know.

A friend joined our board early on, and the week before our first store opened, he said, listen, I decided to do this because I really like you too.

And I wanted to make the process of failure less painful for you, because this is never gonna work.

♪♪ Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

I'm Guy Raz, and on the show today, how Scott and Ali Svensson took a huge swing at 2 simple ideas and turned them both into multi-million dollar businesses.

Back when I was a student in London in the mid-1990s, I used to get my coffee fix at an American-style coffee bar.

It was 1 of the only places you could get a latte or a cappuccino or double espresso in a to-go cup.

Back then in London, When you asked for your coffee to go, they'd hand you a styrofoam cup without a lid.

At the time, there was no Starbucks in London.

There was Seattle Coffee Company, and it was started by Scott and Ali Svensson.

Within a few years of opening 1 location, they turned Seattle Coffee Company into a mini empire.

It got big enough that when Starbucks was looking to expand to Europe, the company simply bought Scott and Ali's coffee chain.

So they eventually went back to the US, back home to Seattle.

But the itch to start something new wouldn't go away.

So in 2008, they decided to take on pizza.

They were inspired by fast casual chains like Chipotle and Panera.

And they wondered, why wasn't anyone doing fast casual in pizza?

Well, their answer was to create Mod Pizza.

And today, it's 1 of the fastest growing restaurant chains in the US, with more than 530 stores nationwide.

Scott and Allie were high school sweethearts at Bellevue High, just outside of Seattle.

They both ended up going to college on the East Coast.

Scott graduated a year before Allie and ended up in New York.

Allie was in Paris studying abroad, but, and this is before the era of email and text messages, they still managed to stay in touch.

It's actually fun to think back to this because writing letters was something that we relied on a lot.

Scott and I had been on kind of a little bit of a break.

Our circumstances were just that we were in such different places.

Scott had been on the East Coast for a summer.

I was in Seattle, and then I knew I was going to be abroad for the year.

And when I was in France, It was just about postcards and writing letters.

Scott and I would write each other occasional updates.

And then as time went on, the letters became longer and I got 1 of these beautifully long wonderful letter from him.

And I remember thinking, I just I love the way he writes.

I was able to come home for a very quick trip for the holidays during Christmas time.

From that point on, there was something that had happened in our letter writing that once we were back together again from that holiday period, I did go back to France for the whole second semester, and he then graduated and came over and spent time with me there.

We've basically been completely together ever since that break, And then by my senior year at Wellesley, he was in New York.

And we tried to see each other as often as possible on weekends.

So we made it work, but there was no FaceTime or texting or any of that.

We wrote letters and then tried to spend time together when we could.

I guess, Scott, you decided to go work in finance, and you got a job for the infamous, or sort of later infamous, Drexel Burnham Lambier.

Was there, I mean, finance, was it just sort of like, yeah, I mean, it's an easy way to make some money and I'll go do that.

Or were you really excited about going into finance?

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 loans back because I did need to make money and to get an education in business because I graduated with a undergraduate degree in government, and I literally graduated not knowing the difference between a balance sheet and a profit and loss statement.

So I had a lot to learn, and I viewed it as a fabulous way to get an education and get paid enough so that I could start repaying my student loans.

And it turned out that that was what it delivered me.

It was a great lesson for me at that stage as well.

So You end up working there and then I think they moved you to London.

And, Allie, I think 1990 you joined Scott in London.

You moved there after college, after you graduated.

I got my dream job, which was back in Seattle.

I loved it, but it was a two-year kind of program.

It was with an NBC affiliate in the Seattle market.

Well, I was actually on the track more of producing, and I loved this job, but it became clear to me as I was doing it that if I were to pursue that career, that industry, I would be beholden to moving to the different markets that that job required me to move to.

And at the time Scott and I, You know, we had been together for a long time, and we'd been living apart for a long time, and we agreed that if we were going to stay together, we needed to actually be together, which meant moving to London.

But yeah, I moved there in 90, and then we ended up getting married in

And meantime, Scott, you, I mean, because of what Drexel Burnham, I think, declared bankruptcy.

So presumably they had to find another job.

You went to go work for a private equity group.

And I guess why you were there, you ended up becoming the deputy CEO of a healthcare company.

Was that a company that the private equity group had bought out?

I left Drexel with a group of professionals that moved to another firm, Apex Partners, and I spent 3 years there advising and investing in a range of companies.

And 1 of the areas that we specialized in, or that I in particular focused on, was healthcare with a focus on long-term healthcare.

I had been advising a company on restructuring their business and raising some financing and did a large financing.

Then the CEO on board came to me and said, Hey, listen, you've, you've put in place a lot of the framework that we're now going to go and try to execute against.

Why don't you come and join us and help us do it.

And, I knew that I didn't want to spend my whole career on the advisory side.

And I was, this was my first opportunity to step across that divide and get into an operating role.

a small public long-term healthcare company.

And you were like, what, 28 years old or something?

And Ali, what did you do when you got there for work?

I said, let's go get a latte and then I'll go get a job.

And 2, there was no way an American could get a job without a work permit.

So the very first Monday that I was there, I walked around looking for coffee because I thought Scott had just been working too hard and he just hadn't found the good coffee places.

And a family friend of mine worked in publishing.

And I knocked on many doors trying to get jobs in publishing because that was the only connection I had there in London at the time.

And so I ended up getting a job with a magazine called City Limits.

And it was actually a very fun job for an American living in London because my job was to make sure that the magazine was distributed and marketed and had visibility on all the streets.

So I would spend hours and days walking the streets of London getting to know the news agents, making sure that they would put city limits up in a way in which people could see it.

So I would drive my little commute every day with my little homemade cup of coffee, my hack of Starbucks-like coffee offering that we were looking for, but we would have to make our own coffee, bring all the coffee back from the US, and that went on for a while.

Will Duffield, MPH, Chief Investigative Officer, CCCC,

So this is like, I mean, obviously, we're foreshadowing here because we're going to talk about coffee in a moment.

But this is the early 90s in the UK, and probably a lot of people drank instant coffee.

And coffee culture, like that whole sort of second wave hadn't really arrived in the U.S.

Starbucks was mainly in the Pacific Northwest.

I think they had a location in Chicago, maybe 1 in L.A.

But you knew it because you guys were from Seattle, so you knew Starbucks.

And in London, you could not find anything like it.

You couldn't find a decent cup of coffee there at the time, in the early 90s.

And it was really surprising and probably shocking to people now to think that it was like this, but it really was.

There were, if you went into all the sandwich bars that were everywhere, it was just crap coffee in little styrofoam cups.

You would get like a, I remember like a metal little teapot and they'd put some instant coffee in there and just like put hot water in there and give that to you.

Right, and if you could find some good coffee, there were about 4 Italian coffee bars in Soho.

The coffee was good, but if you asked for an extra shot, which I always did, or if you asked for a different size, or you wanted to specify what kind of milk, they just were so angry and didn't want to do that.

So they were the hardcore Italian coffee bar offerings.

And then there were a few French places that were so a few little spots would have 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.

It did not – and we know because we walked every single street.

I mean, truly we spent about 3 years looking.

And if you wanted it to go, they just give it to you in a styrofoam cup with no lid.

1 size with a really bad lid, the kind that you you know those old ones.

So when did the 2 of you start to talk about, hey, maybe there's an opportunity here to open a like a Starbucks-like coffee place?

Looking back on it, it did not occur to us to do that.

We were looking for something that we desperately wanted.

We kept hearing false rumors that Starbucks is coming or somebody's friend's cousin is about to open a place, and I would go look at the real estate that we heard where it was gonna open and nothing ever happened.

And it wasn't until some friend slash colleague of Scott's had been hearing us talk and bitch and moan about this for for quite some time, right?

Yeah, so it's interesting that it all came to a head.

I was in Scotland on a work trip with the person I worked most closely with, the CEO of the company I was at, and his brother, who are both good friends, and they'd been hearing Ali and I talk about this coffee idea for years, and we were flying back from Scotland to London, and they both looked at me and said, you know what, you 2 need to stop complaining about this or do something about it.

And in the spur of the moment, I said, okay, well, if we're gonna do something about it, then you need to do it with us.

This is the CEO of the long-term healthcare provider company.

He was very entrepreneurial, his family was very entrepreneurial.

And so, 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.

And so we agreed as part of this challenge, if you will, that Allie and I and Nigel and Andrew, our 2 friends, would go and spend a weekend in New York and we would explore Starbucks and we would make a decision.

And so we ended up going to New York together and spent a weekend and came back and decided that we were going to open a Seattle-style coffee shop in London inspired by what we missed from our days in Seattle with Starbucks.

Well, so let me just kind of pause for a moment.

And he's saying, hey, if you're so sick and tired of this, why don't you go do something?

I mean, he's essentially saying, hey, you can leave the company that I hired you to be my deputy and go start this thing.

It sounds crazy to me that he would say that.

Well, There are 2 components to this story that need maybe a little bit more detail.

1 was, at the time, the idea was we would just do this on the side and that I would stay at CrestaCare.

Secondly, 1 of the most profound moments of my professional life was an incident where, unfortunately, this same individual ended up having a disagreement with the board.

It all came to a head in a very dramatic board meeting where some evidence was produced and put on the table.

And unfortunately, I was the 1 with, you know, 15 people sitting in the room that when I looked at this document, I identified the element in this document that confirmed the board's contention.

I ended up having to ask for the meeting to be paused.

I asked for this friend of mine to walk out in the hall with me.

I asked him directly whether or not what I saw in the document was correct.

He didn't say anything, just walked away and did not go back in the boardroom.

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.

He was essentially probably stealing money from the company.

He was negotiating his employment contract and there was a disagreement and there were some concerns about the integrity of documents that had been I see.

And so it ended up blowing up into, and there were other things that kind of concerned the board, but in any event, this led to him being removed.

And despite that situation, and I think it was because Andrew, the person involved, recognized that he knew that I had a certain personal ethic and that I stood by my ethics when I had to, you know, call him out.

And so he, I think he forgave me that and we stayed friends and we ended up building this business together.

Ali and I built it and they were our backers.

So he basically, he had, they had already agreed to back you, then he was ousted.

But you had already kind of made this decision that you would, on the side, start this coffee store.

The specific sequencing in time is a little foggy.

I mean, this guy that was going to back you, that he and his brother encouraged you, and then you had to kind of confirm that, you know, he had kind of produced false documents.

Yeah, it was a very, very difficult moment.

It was 1 of the most profound lessons of my young professional life.

But we, as a team, Ali and I and a group of people who backed us, this family in particular, carried on and pursued this exciting opportunity to build Seattle Coffee Company together.

And so I'm assuming you, but basically that was the reason why you left CrestaCare, or that was 1 of the reasons, it just made sense for you to go?

Well, so what ended up happening is we had made an acquisition and brought on a very prominent doctor who ended up becoming the new CEO.

So I was still the deputy CEO working with this new individual.

I stayed in that role for another 12 months and it was about 6 months into that experience that Allie and I, with the group behind Seattle Coffee Company, decided at that point that we were really on to something.

Allie and I talked about it and we made the decision for me to come in full time because Allie had been-

So, these guys say, hey, you should open your own place.

But let's start with like a coffee shop, right?

I mean, you're coming from running a long-term healthcare company, and Ali, you were in publishing.

And of course, we're not talking about like starting an automotive company and industrial manufacturing, but still, like, it is, there is still things you have to learn about that business.

You know, it's a quick service restaurant, let's say.

Where did you, I mean, you went to Starbucks in the U.S.

And you saw what they were doing and you loved it.

So, how did you even start to think about how you would build a coffee shop in London?

We, at the time, we knew, I mean, our quali...

What we realized though was our qualification was the fact that we had been customers of the thing that we wanted to create.

And that became kind of the lens that we used for everything.

And I remember at the time, Lavazza, we went to who makes some of the best coffee?

And we went to some coffee shows and tasted coffee and actually started to just systematically go through a little list of what do we need.

I mean we wrote it down on a lined piece of paper.

Did you even know how to make an espresso?

In fact, I remember we went to the Lavazza training program in the little industrial estate on the outskirts of London because if we were going to be, once we decided we were going to use their coffee initially for the espresso, they then put you through these little training things.

So we learned what we could, and also also realized early on the importance of good partnership.

You know, who's your supplier and if they're really good and their product is really good, you can lean heavily on that.

And we also called a daughter of some family friends of ours and said, listen, we're looking for somebody who's worked in a Starbucks-style coffee place.

We knew we needed to get somebody over that could help just from an operations perspective.

And this friend of ours said, oh yes, I'll think about it, I'll look into it.

And then she contacted us and said, well, I want to be that person.

And she got to school really quickly on learning everything she could in the Seattle market.

And then she moved over right before we opened the first location.

And we need to figure out the operation of how to bring the product to customers.

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, you know, we will create a Seattle-style coffee bar that would fool a Seattleite, which meant things like it had to be the cups and the lids that we're used to, and it can't be compromised, and it can't be the UK version of that stuff.

I think 1 of our strengths at the time was the fact that we didn't know what we didn't know,

we had an incredibly clear and we were totally aligned on the vision for what we wanted to bring to life.

And a friend of this family that I mentioned before was a very prominent retailer in the UK.

And the week before our first store opened in a board meeting, he said, listen, I decided to do this because I really like you too.

And I wanted to make the process of failure less painful for you because this is never gonna work.

And he had his theory because, you know, he could not imagine selling enough cups of coffee to not only pay the rent, but also pay very expensive labor in the UK and all the other cost of goods sold.

And he just couldn't envision it because he had never been to Starbucks in the US.

He had never seen this coffee revolution.

He just thought of it in the context of what existed in the UK at the time, which was very, very different.

Like you said, around the world at that time, about 92% of all coffee consumed was real coffee and 8% was instant.

It was over 90% instant and the balance was real.

They drank a lot of tea and hot drinks, but coffee was just not the thing.

And so he just couldn't imagine the Brits rallying around, you know, coming in often enough to buy expensive cups of coffee to make this work.

And he was not unique in having that kind of, you know, doomsday approach.

The way this was viewed at the time, people just did not get it in the UK.

For a period of time in our little basement flat, when we were trying to source the paper products, we knew we needed cups and lids, and we contacted every single possibility in the UK.

We need a short, tall, and a grande, and we need the lids.

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MOD Pizza & Seattle Coffee Company: Scott and Ally Svenson