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The “Take and Bake Revolution” Comes to the 401(k), Part 1

Greg Carpenter

December 29, 2022



I absolutely love this innovative business model.

The company is Papa Murphy’s. They sell pizza. Cold uncooked pizza. No delivery – take out only. No other entrees. The store has one small bench for customers. It’s a great example of innovation by subtraction. Lost?

I’m reading an excellent book – Inside the Box by Drew Boyd and Jacob Goldenberg. Here’s a link to their essay in The Wall Street Journal that summarizes the key points.

Their basic premise is that the best innovation to products and services comes from thinking “inside the box” using materials at hand – the polar opposite of “brainstorming.” Innovation by subtraction is when you remove a critical piece of the product or service and reimagine who might benefit, hence buy, the modified product or service.

Papa Murphy’s took away the pizza oven, and the delivery man. Let’s think through the results of that innovation.

First, the customer has to come to the store and get the pizza. A burden? For some. For others (think soccer moms and commuters) it is pit stop on the way home. Often less burdensome than phoning in a pizza order and waiting for the delivery. For Papa Murphy’s, they get to meet and greet the customer on each purchase. The employees are well dressed and cheerful. Customers feel a personal connection.

Second, the customer has to cook the pizza. Upside is that the customer gets to precisely control the time and “doneness” of the pizza. As a control freak I love it. And my kids don’t pester me asking when we are going to eat.

No oven and delivery means that Papa Murphy’s has lower costs. They use some of that savings to provide high quality, plentiful toppings. Thin, traditional and even Chicago deep dish crusts. Bottom line price is competitive and pizza quality is outstanding.

Here is my point. Papa Murphy’s is going to appeal to some pizza buyers zero percent of the time. For those who value the product attributes, they will be loyal, long-term customers.

The market for 401(k) plans and plan services is no different in some ways from selling pizza – innovation creates niche markets that may not be for everyone, but attract loyal and enthusiastic customers. Next week’s post will extend the innovation principles to retirement plans.

Until then, I recommend the Chicken-Bacon-Artichoke on thin crust!

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