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In other sectors that's just called a "small business" and celebrated as the fullest expression of the American dream. I've always found it funny that tech trea
by idlewords 2y ago
In other sectors that's just called a "small business" and celebrated as the fullest expression of the American dream. I've always found it funny that tech treats the idea of a going concern with such distaste.
- aprilthird2021 2y agoSpecifically investors, not "all of tech". And to be fair to them, if a company doesn't grow, your investment is wasted in that company, right? No shade to good small businesses, but they may not be worth investing in?
- cowsandmilk 2y agoVenture Capitalists, not all investors. See https://codiesanchez.com/book/ https://codiesanchez.com/book/ or https://store.hbr.org/product/hbr-guide-to-buying-a-small-business/10090 https://store.hbr.org/product/hbr-guide-to-buying-a-small-bu...
- CPLX 2y agoWhile I do agree with you, if it took tens of millions of dollars in initial capital to get there, which hasn’t been returned, it’s quite a different thing to the standard small businesses model.
- withinboredom 2y agoSo ... is a restaurant considered a small business? Where do you draw the line on initial investment?
- zdragnar 2y agoWhat kind of restaurant takes tens of millions to start? Most estimates I'm aware of are less than 1 or 2 million at the very most.
- withinboredom 2y agoI imagine some of the themed restaurants in Disney cost at least that much.
- soared 2y agoHaving worked at those, they are shoestring to the core. Guests see beauty, behind it is paper mache and $8/hr college students whose wages are garnished for rent and class fees.
- someone7x 2y agoAt Disneyland? Where there’s a union for food and beverage workers? > We perform everything from preparing and creating treats like turkey legs and churros to serving grant and exquisite meals at the famous and exclusive Club 33. If you are eating in the parks, our members are making that happen. https://workersunited.org/joint-boards/local-50 https://workersunited.org/joint-boards/local-50
- soared 2y agoDisney college program makes up a good portion of workers, and they are not a part of the union. Edit - looks like 5% but they can only work the unskilled food service etc
- zdragnar 2y agoA themed restaurant at Disney isn't exactly a small business...
- duskwuff 2y agoDepending on the restaurant, those may not be independent businesses at all - they may just be one of the attractions at the park.
- nprateem 2y ago10x return
- CPLX 2y agoDepends on what kind of restaurant. But the point is that a business model that is "profitable" but actually took millions in initial capital and has no provision for debt service isn't an actually profitable business model.
- withinboredom 2y agoThat’s what I’m asking. Most businesses take startup capital, but where do you draw the line? If it takes 10mil of funding to get off the ground and it would also take any competitor that to catch up… then you have a moat and can basically make money forever. Even if you wanted to get into money transfers, the licensing alone is around 1million, and you haven’t even written any software yet or gotten any infrastructure. You can also “rent” someone else’s license but then your margins go out the window. So, I’m not sure what the point is here. Some types of businesses require capital to start, even if they never scale.
- CPLX 2y agoThe point is that capital has a cost. If you’re not carrying the cost of that capital on the books you’re not “making money” at all.
- baxtr 2y agoI know a guy who sells kitchens for a living and makes around $2-3 million per year with a profit margin of 60% or so. But he didn’t spend 10s of million dollars to get there.
- AbstractH24 2y agoEven if he did, that’s not such a bad deal. Particularly if the brand has value when he’s ready to move on and can be sold.
- erikerikson 2y agoOr bar owners pulling down similar amounts.
- nunez 2y agoThis is kind of like tech sales at huge tech old-cos. Sales people there can pull down insane comp if aligned to the right account with way less work than a traditional sales grind.
- rchaud 2y agoWhen you see how VC-funded AI startups market their products ("eliminate artists/editors/paralegals"), it's not surprising that they wouldn't be happy with dividends from a profitable business that employs people. Better to throw the money into a "moonshot" company that perennially loses money until BigCo buys them out to acquire their IP and fire everybody.
- amyjess 2y agoMy favorite video game company is a little Japanese outfit called Nihon Falcom. They've been around since 1981, have about 65 employees, release exactly one new game a year, and if you've played any of their games, you can tell they're all made on absolutely shoestring budgets. They have also never posted a loss and have an absolutely bonkers amount of cash on hand (enough to keep the company going for several years on their current budget IIRC). They also make the best story-driven RPGs I've played in my life. And they specifically went the story-driven route because it's cheaper to hire good writers than it is to wow people with AAA graphics or a giant open world or whatever. More video game companies should be like Falcom.
- jbverschoor 2y agoAhh good old dragon slayer iv in the MSX
- deleted 2y ago[deleted]
- tptacek 2y agoI think people are overly fixated on the fact that a successful small business isn't a workable VC investment target (the winners have to pay for the losers, and even with a conservative portfolio of startups, most are going to lose) and they're working everything back from that.
- lenerdenator 2y agoOther sectors are filled with far fewer people with low empathy for other humans. Not none, of course. It's just not a near-requirement.