Selling cheese for pizzas is just as profitable as selling shovels to gold prospectors.

1. I was surprised to learn that one company holds 85% of the pizza cheese supply market in the U.S. Its annual turnover is $3.5 billion, and its owner, James Leprino, has a net worth of $2.3 billion.

2. In the 1960s, a young James noticed the beginning of the pizzeria and frozen pizza boom in the U.S. and started his own cheese-selling business with just $615 in his pocket. Within two years, his company was already supplying 200 pounds of cheese per week to Italian restaurants.

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5. Secondly, as soon as the pizza boom began, everyone wanted to create great products—opening pizzerias or, at the very least, making pizza to sell in supermarkets. No one thought that during this boom, one could profit by selling trivial pizza cheese.

6. It seems that right next to the phrase “during a gold rush, don’t dig for gold, sell shovels” there should be a phrase, “and during a pizza boom, don’t sell pizza, sell cheese for pizza.”

7. By the way, in your market, what’s the pizza, and what’s the cheese for it? Don’t you want to start selling cheese instead of elbowing your way through other pizza sellers?

3. However, the turning point came when Pizza Hut began searching for a supplier who could help them reduce the cost of making pizzas. That’s when James came up with the idea of selling them thinly sliced cheese sheets in packaging. This allowed the restaurant to save both on the cost of cheese and on the time spent slicing it in the restaurant.

4. This story, first of all, once again proves that the most important thing for a startup is timing. You can sell even the most common cheese—as long as you know who to sell it to, for what purpose, and in what packaging.