6 ms·

Mom and pop shops are cutting software spending, creating jitters on Wall Street

61 points by CharlesW 3y ago

crazygringo 3y ago
Key details from the middle of the article: > Nick Martin cited higher borrowing costs as a main reason that Joe Coffee has reduced the number of software products it buys. The company now has roughly six software subscriptions, down from 12 to 15, accounting for 3% to 5% of operating expenses, down from around 8%, he said. > Decisions on what to get rid of are based on whether a product is a “nice to have” or is essential to business operations. “Can we get away with just doing this in a spreadsheet?” he said. 12–15 is a lot of software subscriptions. I think you'll expect to see more consolidation of software products, if they're all so specific to the restaurant space. Especially with customers just wanting better integration and less complexity.
- CSMastermind 3y ago
  > “Can we get away with just doing this in a spreadsheet?” he said. Realistically you can do pretty much everything a startup or small business needs in a spreadsheet. Buying specialized software at that scale is a nice to have.
  - mrsilencedogood 3y ago
    I read this as "vitamins vs painkiller" analogy. People forget to take their vitamins all the time, and if it's expensive vs the perceived (sometimes vague) ROI, then it's going to be the first to be cut. Versus... people do NOT forget to take their painkillers and nobody is looking too hard at how much ibuprofen costs (beyond comparing costs... they're gonna buy it regardless).
    - dan_quixote 3y ago
      Let's also keep in mind that vitamins as supplement pills are mostly useless, we all mostly know this, yet we all mostly buy them anyway. Maybe this idea is already wrapped up in your "perceived ROI" comment...
      - geodel 3y ago
        Agree. I buy it all the time. And its mostly assuaging my psyche that "Hey, I am doing something to take care of my health."
  - geodel 3y ago
    Buying specialized software and buying latte. To me this seems part of same trend: You deserve it, You are worth it, Why not? This is kinda opposite of old thrifty lifestyle: starting up early, making own coffee, doing speadsheets and all.
    - timeon 3y ago
      > You deserve it It is just latte. Also you do not need to start early just to make <whatever> coffee.
      - geodel 3y ago
        Well popular excuse we have when stopping to get coffee at a shop/drivethru is that we are running late. Just implying no time to make coffee/breakfast at home. > It is just latte. Maybe you deserve Ferrari. However for lot of us, "deserve" is used for innumerable trivial/unnecessary things in life.
  - ben_w 3y ago
    Technically true, but spreadsheets are also very easy to accidentally mess up. Yesterday I discovered my personal finances spreadsheet was giving me a total that was wrong by about 10% because I'd forgotten to update which fields it was summing over. Nothing relied on this sum so no harm done this time, but oh boy do I have slightly[0] more sympathy for the news stories where billionaires accidentally loose track of one hundred million. Get proper accountancy software if it's important; a spreadsheet will lead to tears. [0] but only when they're being asked about some asset by a journalist or on twitter etc. and not when they make this mistake on taxes, because they should be getting professional help with taxes well before becoming a billionaire.
    - dghlsakjg 3y ago
      > Get proper accountancy software if it's important; a spreadsheet will lead to tears. The irony being that once you reach a certain scale, the accountant you hire will be using... a spreadsheet.
    - geodel 3y ago
      True. I guess question here would be : Should a reasonably priced one time license cover this requirement for accounting software or a perennial subscription is only way to go
    - alt227 3y ago
      Yeah, and subscribing to SaaS vendors is a fine way to run yoiur business until they, or the cloud they run on, goes down.
- rchaud 3y ago
  > “Can we get away with just doing this in a spreadsheet?” he said I felt a great disturbance in the incubator, as if millions of SaaS suddenly cried out in terror and were suddenly silenced.
- cooperadymas 3y ago
  HR, payroll, time tracking, POS, online ordering, review alerting, online advertising, social media marketing, email marketing, integration services, financial reporting, website, email, rewards management. And that's for a business that mostly operates offline. It's really easy for these things add up quickly and without you realizing it. This is why I always object when someone points out that $50/user/mo is a tiny percentage compared to what you're paying for the employee. It's not $50/user/mo, it's typically ($50 * 10-20)/user/mo.
sickofparadox 3y ago
Turns out, consumers aren't the only ones fed up with having needless subscriptions shoved down their throats. In infinite money covid land, it wasn't that much of a problem for businesses, but like so many other things, now that rates are up small and medium businesses are questioning whether these things are providing that monthly value.
boplicity 3y ago
Software costs can really add up for a small business. I run a relatively small business -- mostly online -- and between 3 main services, the software (and hosting) adds up to around $15k US per year, which is not insignificant. And that's with hosting our own email server, which otherwise would cost us another $15k or so per year to go with an established ESP.
- nly 3y ago
  What's your definition of a "small business" that your email alone would cost you $15K!?!
  - Beached 3y ago
    55 persons using an e3 license would be 15k/y. 55 would definitely fall into my definition of small business
    - cjbgkagh 3y ago
      As a solo dev 5 people would feel huge. Going by OECD small is < 50, medium is < 250 and micro is less than < 10.
  - deleted 3y ago
    [deleted]
  - dghlsakjg 3y ago
    Small business, a legal designation in the US, can be surprisingly big: Depending on industry, you can have up to 1,500 employees, or $50mm in revenue, and still be considered a small business by the federal government. https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20...
  - lozenge 3y ago
    Maybe they're a spam business? $15k a year spend at AWS will get you the ability to send 150 million emails.
gspencley 3y ago
Speaking only for myself as a consumer, I'm not just buying fewer lattes, I'm actively looking for businesses that can make the ordering process familiar and convenient. I don't want to have to have my phone on me, or to pull it out, scan a QR code, read a digital menu. Just let me walk up to the counter, read a physical menu, place my order with a human being and get out of there. There are a FEW situations where mobile ordering and such is better. When there is a MASSIVE line at the counter for example. Mobile ordering can skip waiting in line and let you know when your order is ready to go pick up. In that situation, it makes sense. But most restaurants, at least where I live (in a medium sized city), don't come close to having that issue. Yet trends are trends and we love solving things with the wrong tools just because something is popular somewhere, so businesses assume consumers will enjoy it everywhere and it will be the "next big thing." 90% of the time, it's not.
- NickC25 3y ago
  >Just let me walk up to the counter, read a physical menu, place my order with a human being and get out of there. Seriously. Seems like so many physical businesses are going fully digital with little reason to do so. Following a trend, I guess. But the utility of interacting with a human versus navigating an app (of which it seems every restaurant or fast-casual-takeout has their own) is just so much higher. The cost to build and maintain that app too eats into the establishment's costs, which in turn mean the end consumer's costs are higher. I'm already paying high prices as-is, and my experience isn't drastically better doing everything digitally. As you said, maybe there's a scale at which digital processes are indeed faster and less cumbersome (like a McDonald's level operation), and offers higher marginal utility, but most places I order from aren't at that scale. Few are.
  - gspencley 3y ago
    I brought up the scale, to be fair, because my wife and I have a Disney World vacation booked in a couple of months and for quick service restaurants at the parks it looks like mobile ordering will be a life saver. But we're talking a theme park with enormous crowds and long lines. It's not your typical environment. I know there are some busy restaurants in major urban areas that get long lines out the door, particularly at peak times of day ... but how typical is this for most restaurants? Not very I suspect. Pick the right tools for the right problems.
avgDev 3y ago
I really think there is a market for niche software solutions, where a small shop can evolve with the business and keep growing with customers. Some products seem enticing at first, when let's say a user is only $20 a month, but it quickly adds up and that does not account for migrations and retraining employees which often is an extreme pain point. I write/manage a large project and we are very careful about any large changes because it is a pain to retrain non-technical employees. I know an older guy, who has been working with multiple similar businesses and tailoring AS400(created circa 1986) to them. He made a business around it and it has been chugging along for few decades now.
geodel 3y ago
I wonder if increasing percentage of tip, aggressively seeking tip from reluctant shoppers will help cover loses due to less footfalls in coffee shops and the likes.
- rchaud 3y ago
  I imagine the product people working on Square payment terminals do nothing besides optimizing this.
  - geodel 3y ago
    Yeah, a voice command on payment terminal, that shouts loudly at niggardly tippers "Hey there! looky look we have cheapskate award winner for today" will certainly help.
    - bigstrat2003 3y ago
      Props for use of the word niggardly, but I don't think that would work. I certainly would never again to to a business where that happened, even if it was someone else that it happened to.
      - geodel 3y ago
        Well, if 5% of places have this software one can avoid, if > 50% have this it will be normalized then. Just like 20% tipping is normal without any expectation beyond a plate of food placed on your table and waiter never returns except to bring in check.
robotburrito 3y ago
I sometimes have a dream where I escape software and end up running the local donut shop down the street. In this dream, I always end up writing some GNU donut shop software though :)
- marci 3y ago
  Is GNU/Donut source code indented to have the shape of a donut? Or maybe some displays that show ascii donuts: https://www.a1k0n.net/2011/07/20/donut-math.html https://www.a1k0n.net/2011/07/20/donut-math.html
- gedy 3y ago
  DouGNUt
- bbarn 3y ago
  One of my best friends literally runs a donut shop down the street, and he's trying to break into software development.
  - robotburrito 3y ago
    I find this to be quite common. Nearly everyone I know in software dreams of not doing it anymore, and everyone not in software dreams of doing it lol.
deleted 3y ago
[deleted]
cowboyscott 3y ago
Anecdotal evidence of macro trends aside, it isn't clear to me what value Joe Coffee provides. It seems like they are a SaaS reseller for a particular vertical (coffee shops), and have some amount of custom software. My local, Barrett's Coffee in Austin (they are excellent, btw), seems to use Shopify on their website, and I suspect that the iPad-like PoS system in the shop is backed by the same inventory and sales management system. I don't really see the value in using a middle-man that's specific to coffee when it seems like a reasonably smart owner plus a general sales platform should do the trick.
kbos87 3y ago
Extreme example - I’m just a guy with an Airbnb as a side hustle. (Barely even a real business!) I’m pretty thoughtful about taking on new software subscriptions, but I currently pay for: - Guesty (calendar management & guest messaging) - $40/mo - Pricelabs (algorithmic price management) - $20/mo - Abode (security system) - $16/mo - Sutro (pool & spa monitoring) - $30/mo - Minut (noise monitoring) - $12/mo - Google/Nest video storage - $18/mo (might be a little off there) …and I’m probably forgetting something. I scrutinize this list regularly and there’s nothing I’d get rid of. These are also purely software subscriptions - not including things like cable/internet, recurring maintenance, insurance, etc. There’s also a long list of products I probably could add to the mix to help manage the house and the business that is a short term rental. I’m pretty sure this pattern exists in every corner of the market across industries and across business sizes.
- timeon 3y ago
  > - Guesty (calendar management & guest messaging) - $40/mo Is this not provided by Airbnb?
  - kbos87 3y ago
    If you want syncing between platforms to avoid double bookings and automated messaging, you need to use a third party.
- CogitoCogito 3y ago
  > - Pricelabs (algorithmic price management) - $20/mo Out of curiosity, is this similar to the price collusion software discussed here? https://news.ycombinator.com/item?id=38297203 https://news.ycombinator.com/item?id=38297203
TMWNN 3y ago
I run an online retail business from home as the only employee. My software costs: * Excel (accounting) * Sellbrite (inventory and listing) - subscription * ShipStation (shipping) - subscription. However, this can largely be replaced by * Veeqo (also shipping) - free Sellbrite, ShipStation, and Veeqo work well enough, but they don't handle the recording of each order's financials, which I do in Excel. If there is a one-stop solution that can grab orders' revenue, sales tax, and fees from Amazon, Walmart, and eBay in this way, I'd like to hear about it.

61 points by CharlesW 3y ago

Key details from the middle of the article: > Nick Martin cited higher borrowing costs as a main reason that Joe Coffee has reduced the number of software products it buys. The company now has roughly six software subscriptions, down from 12 to 15, accounting for 3% to 5% of operating expenses, down from around 8%, he said. > Decisions on what to get rid of are based on whether a product is a “nice to have” or is essential to business operations. “Can we get away with just doing this in a spreadsheet?” he said. 12–15 is a lot of software subscriptions. I think you'll expect to see more consolidation of software products, if they're all so specific to the restaurant space. Especially with customers just wanting better integration and less complexity.

CSMastermind 3y ago
> “Can we get away with just doing this in a spreadsheet?” he said. Realistically you can do pretty much everything a startup or small business needs in a spreadsheet. Buying specialized software at that scale is a nice to have.
- mrsilencedogood 3y ago
  I read this as "vitamins vs painkiller" analogy. People forget to take their vitamins all the time, and if it's expensive vs the perceived (sometimes vague) ROI, then it's going to be the first to be cut. Versus... people do NOT forget to take their painkillers and nobody is looking too hard at how much ibuprofen costs (beyond comparing costs... they're gonna buy it regardless).
  - dan_quixote 3y ago
    Let's also keep in mind that vitamins as supplement pills are mostly useless, we all mostly know this, yet we all mostly buy them anyway. Maybe this idea is already wrapped up in your "perceived ROI" comment...
    - geodel 3y ago
      Agree. I buy it all the time. And its mostly assuaging my psyche that "Hey, I am doing something to take care of my health."
- geodel 3y ago
  Buying specialized software and buying latte. To me this seems part of same trend: You deserve it, You are worth it, Why not? This is kinda opposite of old thrifty lifestyle: starting up early, making own coffee, doing speadsheets and all.
  - timeon 3y ago
    > You deserve it It is just latte. Also you do not need to start early just to make <whatever> coffee.
    - geodel 3y ago
      Well popular excuse we have when stopping to get coffee at a shop/drivethru is that we are running late. Just implying no time to make coffee/breakfast at home. > It is just latte. Maybe you deserve Ferrari. However for lot of us, "deserve" is used for innumerable trivial/unnecessary things in life.
- ben_w 3y ago
  Technically true, but spreadsheets are also very easy to accidentally mess up. Yesterday I discovered my personal finances spreadsheet was giving me a total that was wrong by about 10% because I'd forgotten to update which fields it was summing over. Nothing relied on this sum so no harm done this time, but oh boy do I have slightly[0] more sympathy for the news stories where billionaires accidentally loose track of one hundred million. Get proper accountancy software if it's important; a spreadsheet will lead to tears. [0] but only when they're being asked about some asset by a journalist or on twitter etc. and not when they make this mistake on taxes, because they should be getting professional help with taxes well before becoming a billionaire.
  - dghlsakjg 3y ago
    > Get proper accountancy software if it's important; a spreadsheet will lead to tears. The irony being that once you reach a certain scale, the accountant you hire will be using... a spreadsheet.
  - geodel 3y ago
    True. I guess question here would be : Should a reasonably priced one time license cover this requirement for accounting software or a perennial subscription is only way to go
  - alt227 3y ago
    Yeah, and subscribing to SaaS vendors is a fine way to run yoiur business until they, or the cloud they run on, goes down.
rchaud 3y ago
> “Can we get away with just doing this in a spreadsheet?” he said I felt a great disturbance in the incubator, as if millions of SaaS suddenly cried out in terror and were suddenly silenced.
cooperadymas 3y ago
HR, payroll, time tracking, POS, online ordering, review alerting, online advertising, social media marketing, email marketing, integration services, financial reporting, website, email, rewards management. And that's for a business that mostly operates offline. It's really easy for these things add up quickly and without you realizing it. This is why I always object when someone points out that $50/user/mo is a tiny percentage compared to what you're paying for the employee. It's not $50/user/mo, it's typically ($50 * 10-20)/user/mo.

sickofparadox 3y ago

Turns out, consumers aren't the only ones fed up with having needless subscriptions shoved down their throats. In infinite money covid land, it wasn't that much of a problem for businesses, but like so many other things, now that rates are up small and medium businesses are questioning whether these things are providing that monthly value.

boplicity 3y ago

Software costs can really add up for a small business. I run a relatively small business -- mostly online -- and between 3 main services, the software (and hosting) adds up to around $15k US per year, which is not insignificant. And that's with hosting our own email server, which otherwise would cost us another $15k or so per year to go with an established ESP.

nly 3y ago
What's your definition of a "small business" that your email alone would cost you $15K!?!
- Beached 3y ago
  55 persons using an e3 license would be 15k/y. 55 would definitely fall into my definition of small business
  - cjbgkagh 3y ago
    As a solo dev 5 people would feel huge. Going by OECD small is < 50, medium is < 250 and micro is less than < 10.
- deleted 3y ago
  [deleted]
- dghlsakjg 3y ago
  Small business, a legal designation in the US, can be surprisingly big: Depending on industry, you can have up to 1,500 employees, or $50mm in revenue, and still be considered a small business by the federal government. https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20...
- lozenge 3y ago
  Maybe they're a spam business? $15k a year spend at AWS will get you the ability to send 150 million emails.

gspencley 3y ago

Speaking only for myself as a consumer, I'm not just buying fewer lattes, I'm actively looking for businesses that can make the ordering process familiar and convenient. I don't want to have to have my phone on me, or to pull it out, scan a QR code, read a digital menu. Just let me walk up to the counter, read a physical menu, place my order with a human being and get out of there. There are a FEW situations where mobile ordering and such is better. When there is a MASSIVE line at the counter for example. Mobile ordering can skip waiting in line and let you know when your order is ready to go pick up. In that situation, it makes sense. But most restaurants, at least where I live (in a medium sized city), don't come close to having that issue. Yet trends are trends and we love solving things with the wrong tools just because something is popular somewhere, so businesses assume consumers will enjoy it everywhere and it will be the "next big thing." 90% of the time, it's not.

NickC25 3y ago
>Just let me walk up to the counter, read a physical menu, place my order with a human being and get out of there. Seriously. Seems like so many physical businesses are going fully digital with little reason to do so. Following a trend, I guess. But the utility of interacting with a human versus navigating an app (of which it seems every restaurant or fast-casual-takeout has their own) is just so much higher. The cost to build and maintain that app too eats into the establishment's costs, which in turn mean the end consumer's costs are higher. I'm already paying high prices as-is, and my experience isn't drastically better doing everything digitally. As you said, maybe there's a scale at which digital processes are indeed faster and less cumbersome (like a McDonald's level operation), and offers higher marginal utility, but most places I order from aren't at that scale. Few are.
- gspencley 3y ago
  I brought up the scale, to be fair, because my wife and I have a Disney World vacation booked in a couple of months and for quick service restaurants at the parks it looks like mobile ordering will be a life saver. But we're talking a theme park with enormous crowds and long lines. It's not your typical environment. I know there are some busy restaurants in major urban areas that get long lines out the door, particularly at peak times of day ... but how typical is this for most restaurants? Not very I suspect. Pick the right tools for the right problems.

avgDev 3y ago

I really think there is a market for niche software solutions, where a small shop can evolve with the business and keep growing with customers. Some products seem enticing at first, when let's say a user is only $20 a month, but it quickly adds up and that does not account for migrations and retraining employees which often is an extreme pain point. I write/manage a large project and we are very careful about any large changes because it is a pain to retrain non-technical employees. I know an older guy, who has been working with multiple similar businesses and tailoring AS400(created circa 1986) to them. He made a business around it and it has been chugging along for few decades now.

geodel 3y ago

I wonder if increasing percentage of tip, aggressively seeking tip from reluctant shoppers will help cover loses due to less footfalls in coffee shops and the likes.

rchaud 3y ago
I imagine the product people working on Square payment terminals do nothing besides optimizing this.
- geodel 3y ago
  Yeah, a voice command on payment terminal, that shouts loudly at niggardly tippers "Hey there! looky look we have cheapskate award winner for today" will certainly help.
  - bigstrat2003 3y ago
    Props for use of the word niggardly, but I don't think that would work. I certainly would never again to to a business where that happened, even if it was someone else that it happened to.
    - geodel 3y ago
      Well, if 5% of places have this software one can avoid, if > 50% have this it will be normalized then. Just like 20% tipping is normal without any expectation beyond a plate of food placed on your table and waiter never returns except to bring in check.

robotburrito 3y ago

I sometimes have a dream where I escape software and end up running the local donut shop down the street. In this dream, I always end up writing some GNU donut shop software though :)

marci 3y ago
Is GNU/Donut source code indented to have the shape of a donut? Or maybe some displays that show ascii donuts: https://www.a1k0n.net/2011/07/20/donut-math.html https://www.a1k0n.net/2011/07/20/donut-math.html
gedy 3y ago
DouGNUt
bbarn 3y ago
One of my best friends literally runs a donut shop down the street, and he's trying to break into software development.
- robotburrito 3y ago
  I find this to be quite common. Nearly everyone I know in software dreams of not doing it anymore, and everyone not in software dreams of doing it lol.

deleted 3y ago

[deleted]

cowboyscott 3y ago

Anecdotal evidence of macro trends aside, it isn't clear to me what value Joe Coffee provides. It seems like they are a SaaS reseller for a particular vertical (coffee shops), and have some amount of custom software. My local, Barrett's Coffee in Austin (they are excellent, btw), seems to use Shopify on their website, and I suspect that the iPad-like PoS system in the shop is backed by the same inventory and sales management system. I don't really see the value in using a middle-man that's specific to coffee when it seems like a reasonably smart owner plus a general sales platform should do the trick.

kbos87 3y ago

Extreme example - I’m just a guy with an Airbnb as a side hustle. (Barely even a real business!) I’m pretty thoughtful about taking on new software subscriptions, but I currently pay for: - Guesty (calendar management & guest messaging) - $40/mo - Pricelabs (algorithmic price management) - $20/mo - Abode (security system) - $16/mo - Sutro (pool & spa monitoring) - $30/mo - Minut (noise monitoring) - $12/mo - Google/Nest video storage - $18/mo (might be a little off there) …and I’m probably forgetting something. I scrutinize this list regularly and there’s nothing I’d get rid of. These are also purely software subscriptions - not including things like cable/internet, recurring maintenance, insurance, etc. There’s also a long list of products I probably could add to the mix to help manage the house and the business that is a short term rental. I’m pretty sure this pattern exists in every corner of the market across industries and across business sizes.

timeon 3y ago
> - Guesty (calendar management & guest messaging) - $40/mo Is this not provided by Airbnb?
- kbos87 3y ago
  If you want syncing between platforms to avoid double bookings and automated messaging, you need to use a third party.
CogitoCogito 3y ago
> - Pricelabs (algorithmic price management) - $20/mo Out of curiosity, is this similar to the price collusion software discussed here? https://news.ycombinator.com/item?id=38297203 https://news.ycombinator.com/item?id=38297203

TMWNN 3y ago

I run an online retail business from home as the only employee. My software costs: * Excel (accounting) * Sellbrite (inventory and listing) - subscription * ShipStation (shipping) - subscription. However, this can largely be replaced by * Veeqo (also shipping) - free Sellbrite, ShipStation, and Veeqo work well enough, but they don't handle the recording of each order's financials, which I do in Excel. If there is a one-stop solution that can grab orders' revenue, sales tax, and fees from Amazon, Walmart, and eBay in this way, I'd like to hear about it.