5 ms·

Minimal viable product/lean startup. This is not that. For a restaurant that means: 1. Have good food, that sells. Nothing else matters. No big up front invest

by AJJB10 10y ago

Minimal viable product/lean startup. This is not that. For a restaurant that means: 1. Have good food, that sells. Nothing else matters. No big up front investments. Have a killer product, which you make in your home kitchen if you have to. I thought Americans knew this, with their food trucks and shared kitchens. I see this all the time. People thinking about how to name their company, how the logo looks, or in this case which forks to use. These things matter, but only in the long run, when you're able to sell your product successfully already. Access to money and people like the author make this difficult, you aren't forced to survive. A restaurant near me has started without a name, no interior decoration and a less than good but not too bad location. After six months they had a line out the door, every night. After a year they had a name. After two years they renovated, but just a little bit. Now it's 5 years later, it looks fancy, they have a logo and it's nicely renovated. But they started with the product. I think it's a good idea to do everything in reverse, especially when we are worried how we are perceived. We see finished, well working things and think we need to emulate everything they are doing, including the expensive business cards, when it's really the other way around. Product first, being forced to survive, the details come later. Makes for a much more relaxing atmosphere as well, with much less meetings that go nowhere.

tomcam 10y ago
1. You can't sell homemade food in a restaurant with the exception of a few items like bread that don't require refrigerators or a grease trap or a ventilation system (stove hood). There are slight variations on this theme per locality 2. Compliance, permitting, inspections and so on make your idea of a restaurant MVP literally impossible in Manhattan and the state of New York.
jackweirdy 10y ago
People seem to forget the principle that while a great salesman can sell dirt, any idiot can sell gold.
- AJJB10 10y ago
  And people think they are great salesmen like they think they are great drivers.
  - M_Grey 10y ago
    There are great divers and great salesmen though...
mordechai9000 10y ago
That's one way of doing it, sure, but some restaraunts are themselves the product. My parents, for instance, would be completely lost trying to eat in a startup type restaraunt like you describe. They want familiar menu items served in a nicely apportioned, comfortable restaraunt. The operators of those kind of places are usually more business people than artists. Getting a restaraunt like that up and running on time and within budget is it's own challenge, requiring a different set of skills.
Espressosaurus 10y ago
Execution matters too. Where I work, there's a limited number of restaurants in walking distance, and a number of office parks in close proximity. A restaurant recently opened up. It has good food, and initially, there were lines out the door. Unfortunately, their execution has been shoddy. Bathrooms not always stocked, not always able to give change for cash purchases, frequently get the orders wrong, slow customer throughput due to poor layout and poor planning. They're at only a handful of customers at prime lunchtime now, which is a pity since the same old restaurants have gotten beyond boring, and it's nice to walk instead of spending the entire day indoors. I guess this is a long way of saying "make sure you have good food, that sells, and make sure you can actually sell it (at a profit)".
tiatia 10y ago
"Have good food, that sells. Nothing else matters." Not I have zero experience in the food industry. But I tell you two things from observation: 1. First, learn where the profit is made. For many restaurants the profits are made with alcohol, not with the food. 2. I have seen restaurants with the most delicious and affordable food bite the dust. It is my impression that in places like NYC you are more in the real estate business than in the food business. Your landlord raises the rent and you are out. I respect people that run successful restaurants. I think the difficulty is often highly underestimated.
- lordnacho 10y ago
  I second this. I have a lot of family in the restaurant business, and you don't need amazing food. Don't poison people, of course. But it doesn't have to be special. Booze is the easiest thing to make money on. The only labour involved is opening the bottle and pouring. My parents were always happy to keep the place open if there was a table of drinkers at the end of the evening. Buy into a brand that is cool. Not an actual brand like coca-cola, but a cuisine type like Thai or Vietnamese. Those are way more in fashion at the moment than Chinese (bad rep for unhealthiness), but you can make them with the same staff. Decor and ambience matter more than anything. Being in a fine restaurant is as much about being seen in the right place as eating good food. It's like art; most people can't tell the difference between mediocre and great. But a gallery in Chelsea sends a different signal to one in Shoreditch. Finally, running a restaurant is indeed difficult. You're competing with people's own cooking, ready-made meals, and every other eatery in the area. Sure, there's three meals a day to sell to each person, but there's also a constant influx of people wanting to give it a go.
- tomcam 10y ago
  Dead on. For someone who doesn't know this business you are a quick study
- deleted 10y ago
  [deleted]
- deleted 10y ago
  [deleted]
CPLX 10y ago
This sounds like it was written by someone who has no direct experience (side note: selling people food you made in your home kitchen is illegal) and I am pretty sure restaurants, generally, aren't like tech startups, where you experiment to get product-market fit and so on. People like food, they want to eat it, and chances are high you're making food that's generally recognizable as such and part of a general culinary category and price range. There are acceptable standards for service, wait times, cleanliness, and so on, that you can meet or exceed to provide a certain level of experience. From what I understand, and being around the business, restaurants almost invariably sink or swim based on how good a real estate deal they've been able to get, and their ability to have a stable staff and be relentless about controlling costs, things like spoilage, advance planning, etc. Software based startups are all about growth. You fuck around as you describe and when you nail the product it grows like crazy at a very low marginal cost. Restaurant economics essentially look nothing like that. They aren't about growth, they are about margins, and since they have to be highly price competitive, that means fundamentally the business is about managing expenses.
- petra 10y ago
  What about unique dishes ? According to the article , they have a lot of value, together with a chef's brand. And does IP protection happens in that business ? How ?
  - tptacek 10y ago
    When's the last time you dined out --- had a whole meal --- on a "unique dish" in something other than a conventional table-service restaurant? Pretty much just food trucks, right?
    - SolaceQuantum 10y ago
      I once had an entire meal at an exclusively vegan/vegetarian Malaysian cuisine restaurant. The people serving were apparently staunch Buddhists. It was unconventional and great.
nstj 10y ago
Just because that restaurant had a line out the door, doesn't mean that it was a successful business. Often food and beverage "businesses" will be incredibly busy, but not be turning a profit. Restaurants have horrendously low margins[0] - from 1% - 5%, so even if you're selling hundreds of plates of pasta/burger/lobster it's quite possible that your restaurant is making a loss. [0]: https://www.sageworks.com/pdf/Data_Release_06102014.pdf https://www.sageworks.com/pdf/Data_Release_06102014.pdf
- gjolund 10y ago
  The same is true for many tech companies.
  - joe_the_user 10y ago
    Yes but an Internet tech company has the potential to expand its scale without increasing its costs and so may, might be able to turn small amounts of money per customer into profits. A restaurant basically can't - food costs money no matter what. Selling food at below your costs may bring in customers but it will lose you money no matter what your scale. Edit: (remembering article from years ago) A few, very few restaurants have been successful based on low-prices through economies of scale these are a very exceptional group I believe.
  - deleted 10y ago
    [deleted]
eternalban 10y ago
case in point regarding primacy of good product: Pepe Rosso in SoHo [1]. True that it is a charming place and has a definite take on presentation, but seating, utensils, etc. are all subpar. But the food is great and it is always packing them in. The nearby Tomoe Sushi is kinda the same deal. It is a hassle because of the ever present line and the interior is ~shabby but it has an excellent product. [1]: http://onthegrid1.imgix.net/Pepe-2.jpg http://onthegrid1.imgix.net/Pepe-2.jpg
icantdrive55 10y ago
I worked in three resturants. Even if I had the money, I don't think I would open a resturant, other than a pizza place, or a burrito place with a long lease. I heard the failure rate of resturants in New York City is 95%. Those odds might be wrong, but I wouldn't want to try to beat them. I worked in three restaurants. I was a cook at two. I'm aging myself, they are called chefs now. I was making roux based soups, and bread, so I guess I was a chef? All the resturants I worked in failed, and I always felt like a cook. If I ever owned a resturant, I would try to minimize risk. I'm not a foodie anymore, so it would probally be a pizza/burrito place. My food costs would have to be low. And yes--the food would need to be good, and plentiful. I would want to have customers take the leftovers home, and remember why they ate at my resturant. It would be located where young people interact/spend money. Example--near a university. It would have a long lease, or a lease tied to profitability. The business would be a corporation for bankruptcy purposes. Their would be no wait staff. (People can pick up their own food). Then again, I have seen a pretty face bring in masses. First dilemma! I would definetly want a liquor licence. My place would only need a beer/wine license. Next dilemma! I gave seen little dives do great because they have a full liquor licence. I would fire all my help every six months. Yes--gasp! Harsh, but I have read two of the better books on resturant managent, and both say this in a round about way. I don't belive everything I read, but this one rang true. There's a lot of theft in the business. A bad attitude by a server/manager can empty a place slowly. I would be upfront in the interview though. I'm not sure how I would verbalize the fact they they will get fired in nine months from now though. I might keep the right people? Then again, at the places I worked in, the nicest/wardest working person was usually embezzling money. I will say that I was accused in high school of embezzling money fron a resturant, and honestly, I wasen't. I just wanted to do a good job. After all I just said--I couldn't just fire good employees after a period of time. Then again, I will probally never open up a place. Third dilemma! I would Never load my resturant up with cheap labor. I will walk out of any resturant that loads up their resturant with cheap help. I'll get a lot of flack for this next one, but if I opened up a resturant/bar, I would load it up with pretty women. I am still shocked how much young guys spend in order to impress a pretty women. The demographics of the men were from 20's to late 30's--no wonder? I was one of those guys. "Oh Ari--the tips I gave you." Isn't the resturant business lovely? It's too bad we have so many resturant positions available in America. It's a horrid job on so many levels. I feel bad for everyone, especially the owner because so many of them go out of business, and so many went in with the right attitude. A lot of dilemmas? That's why it seems like every successful business owner I knew had a successful/helpful father. A father that can take on financial risk, and wanted to help his kids. I sometimes think success in America is comming from a enabling family that can take on risk?
paganel 10y ago
I could never understand how come people are patient enough in order to stand in line at a restaurant. I understand lines in front of things like doughnot shops, where you're sure that in 5-10 minutes you'll have a precious and delicious doughnot in your hands, but having to wait 30 minutes to 1 hour in front of a restaurant in order to have some food that will satisfy your appetite it's just to much, it borders on food fetishism.
- hughperkins 10y ago
  If you are living on expenses, so can/must eat out every night, you quickly notice that empty restaurants have shocking food; and conversely the ones that are full, and have lines, have the most awesome food/atmosphere.
ArkyBeagle 10y ago
Restaurants are about ( for lack of a better term ) UX. I'm not familiar with the situation in New York City, but out along the Interstates and big suburban road-pipes in flyover country, the most popular restaurants have pretty medium-quality food. And it depend son what sort of restaurant. It'd pretty clear that, for example, Mexican food places tend to be more interested in selling (higher margin) Margaritas than enchiladas. Montreal has/had much better restaurants, but it seems that was much about immigrants wanting to have their own place in the New World. I was there between 2002 and 2003 and the best places seem to have vanished.
megablast 10y ago
Exactly, just like facebook. Every restaurant should be like your example, every startup should be like facebook. Accept no substitutes.

by AJJB10 10y ago

tomcam 10y ago

1. You can't sell homemade food in a restaurant with the exception of a few items like bread that don't require refrigerators or a grease trap or a ventilation system (stove hood). There are slight variations on this theme per locality 2. Compliance, permitting, inspections and so on make your idea of a restaurant MVP literally impossible in Manhattan and the state of New York.

jackweirdy 10y ago

People seem to forget the principle that while a great salesman can sell dirt, any idiot can sell gold.

AJJB10 10y ago
And people think they are great salesmen like they think they are great drivers.
- M_Grey 10y ago
  There are great divers and great salesmen though...

mordechai9000 10y ago

That's one way of doing it, sure, but some restaraunts are themselves the product. My parents, for instance, would be completely lost trying to eat in a startup type restaraunt like you describe. They want familiar menu items served in a nicely apportioned, comfortable restaraunt. The operators of those kind of places are usually more business people than artists. Getting a restaraunt like that up and running on time and within budget is it's own challenge, requiring a different set of skills.

Espressosaurus 10y ago

Execution matters too. Where I work, there's a limited number of restaurants in walking distance, and a number of office parks in close proximity. A restaurant recently opened up. It has good food, and initially, there were lines out the door. Unfortunately, their execution has been shoddy. Bathrooms not always stocked, not always able to give change for cash purchases, frequently get the orders wrong, slow customer throughput due to poor layout and poor planning. They're at only a handful of customers at prime lunchtime now, which is a pity since the same old restaurants have gotten beyond boring, and it's nice to walk instead of spending the entire day indoors. I guess this is a long way of saying "make sure you have good food, that sells, and make sure you can actually sell it (at a profit)".

tiatia 10y ago

"Have good food, that sells. Nothing else matters." Not I have zero experience in the food industry. But I tell you two things from observation: 1. First, learn where the profit is made. For many restaurants the profits are made with alcohol, not with the food. 2. I have seen restaurants with the most delicious and affordable food bite the dust. It is my impression that in places like NYC you are more in the real estate business than in the food business. Your landlord raises the rent and you are out. I respect people that run successful restaurants. I think the difficulty is often highly underestimated.

lordnacho 10y ago
I second this. I have a lot of family in the restaurant business, and you don't need amazing food. Don't poison people, of course. But it doesn't have to be special. Booze is the easiest thing to make money on. The only labour involved is opening the bottle and pouring. My parents were always happy to keep the place open if there was a table of drinkers at the end of the evening. Buy into a brand that is cool. Not an actual brand like coca-cola, but a cuisine type like Thai or Vietnamese. Those are way more in fashion at the moment than Chinese (bad rep for unhealthiness), but you can make them with the same staff. Decor and ambience matter more than anything. Being in a fine restaurant is as much about being seen in the right place as eating good food. It's like art; most people can't tell the difference between mediocre and great. But a gallery in Chelsea sends a different signal to one in Shoreditch. Finally, running a restaurant is indeed difficult. You're competing with people's own cooking, ready-made meals, and every other eatery in the area. Sure, there's three meals a day to sell to each person, but there's also a constant influx of people wanting to give it a go.
tomcam 10y ago
Dead on. For someone who doesn't know this business you are a quick study
deleted 10y ago
[deleted]
deleted 10y ago
[deleted]

CPLX 10y ago

This sounds like it was written by someone who has no direct experience (side note: selling people food you made in your home kitchen is illegal) and I am pretty sure restaurants, generally, aren't like tech startups, where you experiment to get product-market fit and so on. People like food, they want to eat it, and chances are high you're making food that's generally recognizable as such and part of a general culinary category and price range. There are acceptable standards for service, wait times, cleanliness, and so on, that you can meet or exceed to provide a certain level of experience. From what I understand, and being around the business, restaurants almost invariably sink or swim based on how good a real estate deal they've been able to get, and their ability to have a stable staff and be relentless about controlling costs, things like spoilage, advance planning, etc. Software based startups are all about growth. You fuck around as you describe and when you nail the product it grows like crazy at a very low marginal cost. Restaurant economics essentially look nothing like that. They aren't about growth, they are about margins, and since they have to be highly price competitive, that means fundamentally the business is about managing expenses.

petra 10y ago
What about unique dishes ? According to the article , they have a lot of value, together with a chef's brand. And does IP protection happens in that business ? How ?
- tptacek 10y ago
  When's the last time you dined out --- had a whole meal --- on a "unique dish" in something other than a conventional table-service restaurant? Pretty much just food trucks, right?
  - SolaceQuantum 10y ago
    I once had an entire meal at an exclusively vegan/vegetarian Malaysian cuisine restaurant. The people serving were apparently staunch Buddhists. It was unconventional and great.

nstj 10y ago

Just because that restaurant had a line out the door, doesn't mean that it was a successful business. Often food and beverage "businesses" will be incredibly busy, but not be turning a profit. Restaurants have horrendously low margins[0] - from 1% - 5%, so even if you're selling hundreds of plates of pasta/burger/lobster it's quite possible that your restaurant is making a loss. [0]: https://www.sageworks.com/pdf/Data_Release_06102014.pdf https://www.sageworks.com/pdf/Data_Release_06102014.pdf

gjolund 10y ago
The same is true for many tech companies.
- joe_the_user 10y ago
  Yes but an Internet tech company has the potential to expand its scale without increasing its costs and so may, might be able to turn small amounts of money per customer into profits. A restaurant basically can't - food costs money no matter what. Selling food at below your costs may bring in customers but it will lose you money no matter what your scale. Edit: (remembering article from years ago) A few, very few restaurants have been successful based on low-prices through economies of scale these are a very exceptional group I believe.
- deleted 10y ago
  [deleted]

eternalban 10y ago

case in point regarding primacy of good product: Pepe Rosso in SoHo [1]. True that it is a charming place and has a definite take on presentation, but seating, utensils, etc. are all subpar. But the food is great and it is always packing them in. The nearby Tomoe Sushi is kinda the same deal. It is a hassle because of the ever present line and the interior is ~shabby but it has an excellent product. [1]: http://onthegrid1.imgix.net/Pepe-2.jpg http://onthegrid1.imgix.net/Pepe-2.jpg

icantdrive55 10y ago

I worked in three resturants. Even if I had the money, I don't think I would open a resturant, other than a pizza place, or a burrito place with a long lease. I heard the failure rate of resturants in New York City is 95%. Those odds might be wrong, but I wouldn't want to try to beat them. I worked in three restaurants. I was a cook at two. I'm aging myself, they are called chefs now. I was making roux based soups, and bread, so I guess I was a chef? All the resturants I worked in failed, and I always felt like a cook. If I ever owned a resturant, I would try to minimize risk. I'm not a foodie anymore, so it would probally be a pizza/burrito place. My food costs would have to be low. And yes--the food would need to be good, and plentiful. I would want to have customers take the leftovers home, and remember why they ate at my resturant. It would be located where young people interact/spend money. Example--near a university. It would have a long lease, or a lease tied to profitability. The business would be a corporation for bankruptcy purposes. Their would be no wait staff. (People can pick up their own food). Then again, I have seen a pretty face bring in masses. First dilemma! I would definetly want a liquor licence. My place would only need a beer/wine license. Next dilemma! I gave seen little dives do great because they have a full liquor licence. I would fire all my help every six months. Yes--gasp! Harsh, but I have read two of the better books on resturant managent, and both say this in a round about way. I don't belive everything I read, but this one rang true. There's a lot of theft in the business. A bad attitude by a server/manager can empty a place slowly. I would be upfront in the interview though. I'm not sure how I would verbalize the fact they they will get fired in nine months from now though. I might keep the right people? Then again, at the places I worked in, the nicest/wardest working person was usually embezzling money. I will say that I was accused in high school of embezzling money fron a resturant, and honestly, I wasen't. I just wanted to do a good job. After all I just said--I couldn't just fire good employees after a period of time. Then again, I will probally never open up a place. Third dilemma! I would Never load my resturant up with cheap labor. I will walk out of any resturant that loads up their resturant with cheap help. I'll get a lot of flack for this next one, but if I opened up a resturant/bar, I would load it up with pretty women. I am still shocked how much young guys spend in order to impress a pretty women. The demographics of the men were from 20's to late 30's--no wonder? I was one of those guys. "Oh Ari--the tips I gave you." Isn't the resturant business lovely? It's too bad we have so many resturant positions available in America. It's a horrid job on so many levels. I feel bad for everyone, especially the owner because so many of them go out of business, and so many went in with the right attitude. A lot of dilemmas? That's why it seems like every successful business owner I knew had a successful/helpful father. A father that can take on financial risk, and wanted to help his kids. I sometimes think success in America is comming from a enabling family that can take on risk?

paganel 10y ago

I could never understand how come people are patient enough in order to stand in line at a restaurant. I understand lines in front of things like doughnot shops, where you're sure that in 5-10 minutes you'll have a precious and delicious doughnot in your hands, but having to wait 30 minutes to 1 hour in front of a restaurant in order to have some food that will satisfy your appetite it's just to much, it borders on food fetishism.

hughperkins 10y ago
If you are living on expenses, so can/must eat out every night, you quickly notice that empty restaurants have shocking food; and conversely the ones that are full, and have lines, have the most awesome food/atmosphere.

ArkyBeagle 10y ago

Restaurants are about ( for lack of a better term ) UX. I'm not familiar with the situation in New York City, but out along the Interstates and big suburban road-pipes in flyover country, the most popular restaurants have pretty medium-quality food. And it depend son what sort of restaurant. It'd pretty clear that, for example, Mexican food places tend to be more interested in selling (higher margin) Margaritas than enchiladas. Montreal has/had much better restaurants, but it seems that was much about immigrants wanting to have their own place in the New World. I was there between 2002 and 2003 and the best places seem to have vanished.

megablast 10y ago

Exactly, just like facebook. Every restaurant should be like your example, every startup should be like facebook. Accept no substitutes.