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The coffeeshop fallacy (2011): https://news.ycombinator.com/item?id=3134322 https://news.ycombinator.com/item?id=3134322 > Lots of people think they want to s

The coffeeshop fallacy (2011): https://news.ycombinator.com/item?id=3134322 https://news.ycombinator.com/item?id=3134322 > Lots of people think they want to start a coffeeshop. They likely don’t. That’s like buying a minimum wage job for two hundred grand. What they want is to be a customer and sit in a cafe, drink coffee, be nice to people, and possibly curate an art gallery. [...]

netman21 10y ago
For decades I wanted to create a single malt whisky distillery. Luckily I never quit my job to do it. Now that I am over 50 and realize I would be almost 70 before having my first 18 yr old barrel I see that it is much MUCH cheaper to just buy and drink any bottle of whisky I want.
resoluteteeth 10y ago
> That’s like buying a minimum wage job for two hundred grand. This is literally true. If ignoring your own labor you calculate that you will make $20,000 a year on a $200,000 investment for your business, it seems pretty awesome, until you realize you could just work minimum wage and not have to put up the $200,000 investment. I think is actually the most common mistake initially made by people who want to open a cafe or similar small retail business: treating your own labor as free and ignoring opportunity cost. For the purposes of calculating return on investment, you should imagine you are paying yourself whatever you would have to pay to have someone else to do the same work in your business.
- iamacynic 10y ago
  > treating your own labor as free and ignoring opportunity cost. this goes for any services business. people consistently undervalue/underprice their own labor, especially when it comes to managerial work.
michaelbuckbee 10y ago
I see this is the startup world as well. There are many people who seem to not want to make a business so much as sit in a coffee shop, dictate arbitrary product design decisions and network with people in an attempt to "crush it".

netman21 10y ago

For decades I wanted to create a single malt whisky distillery. Luckily I never quit my job to do it. Now that I am over 50 and realize I would be almost 70 before having my first 18 yr old barrel I see that it is much MUCH cheaper to just buy and drink any bottle of whisky I want.

resoluteteeth 10y ago

> That’s like buying a minimum wage job for two hundred grand. This is literally true. If ignoring your own labor you calculate that you will make $20,000 a year on a $200,000 investment for your business, it seems pretty awesome, until you realize you could just work minimum wage and not have to put up the $200,000 investment. I think is actually the most common mistake initially made by people who want to open a cafe or similar small retail business: treating your own labor as free and ignoring opportunity cost. For the purposes of calculating return on investment, you should imagine you are paying yourself whatever you would have to pay to have someone else to do the same work in your business.

iamacynic 10y ago
> treating your own labor as free and ignoring opportunity cost. this goes for any services business. people consistently undervalue/underprice their own labor, especially when it comes to managerial work.

michaelbuckbee 10y ago

I see this is the startup world as well. There are many people who seem to not want to make a business so much as sit in a coffee shop, dictate arbitrary product design decisions and network with people in an attempt to "crush it".