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When tech startups == closed restaurants

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Re: When tech startups == closed restaurants

#4

Post by nhebb »

Why do people in the software business feel the constant need to compare it to other fields? I don't know of any other profession that does.

I think the restaurant analogy is flawed because the accounting for fixed and variable costs doesn't jibe. You can bootstrap a software company with minimal investment - as YC itself proves, but restaurants require a building, cooking equipment, tables, chairs, dishes, etc. Plus, you can start a software business in your spare time - something I doubt too many restaurateurs attempt.

Re: When tech startups == closed restaurants

#5

Post by pierrefar »

comment176 wrote: post #3
pierrefar wrote: post #2

Great stuff. Next time someone demands you code something for free, ask them to feed you for free. Quite an apt analogy.

Restuarants regularly give away free samples to gain "word of mouth" reputation.

That's the fremium model, yes. I was referring to people who demand that all software is easy and should be free.

Re: When tech startups == closed restaurants

#6

Post by sailormoon »

comment176 wrote: post #3
pierrefar wrote: post #2

Great stuff. Next time someone demands you code something for free, ask them to feed you for free. Quite an apt analogy.

Restuarants regularly give away free samples to gain "word of mouth" reputation.

They do? News to me. I've never gotten a free penne puttanesca. But I've gone back to my favourite restaurants after 5+ years. And god damn, I do code changes for "free" too. I need to harden up!

Re: When tech startups == closed restaurants

#7

Post by rikthevik »

nhebb wrote: post #4

Why do people in the software business feel the constant need to compare it to other fields? I don't know of any other profession that does. I think the restaurant analogy is flawed because the accounting for fixed and variable costs doesn't jibe. You can bootstrap a software company with minimal investment - as YC itself proves, but restaurants require a building, cooking equipment, tables, chairs, dishes, etc. Plus…

I agree that the software business is new, but it's still business, and the laws of business still apply. You need to have revenues greater than costs and steady cashflow to keep the doors open and the lights on. Lots of us in software forget things like that.

Re: When tech startups == closed restaurants

#8

Post by dan_the_welder »

nhebb wrote: post #4

Why do people in the software business feel the constant need to compare it to other fields? I don't know of any other profession that does. I think the restaurant analogy is flawed because the accounting for fixed and variable costs doesn't jibe. You can bootstrap a software company with minimal investment - as YC itself proves, but restaurants require a building, cooking equipment, tables, chairs, dishes, etc. Plus…

It's an analogy. A tool to further understanding. On many levels software is just like many other businesses, Just like many other businesses are like software on some levels.

I own a restaurant and I release early and often!

Re: When tech startups == closed restaurants

#10

Post by zarski »

The article is is too vague and its advice unbalanced. Sure, you don't want to JUST be ticking off programming related todo list items. Yes, you need to do your marketing (adwords,blogging,emailing,etc.) and you need to watch your burn rate (fiscal management). However, the best marketing is having a great product. The users you do get to sign up you need to keep and in turn have them then do word of mouth. How do you do that with not-so-special software?

I don't like the analogy either as there are not enough details. A lot of restaurant startups I have noticed that tank think quality is everything. The have a two-month burn rate and need to be smash hit by the third (I am speculating). I don't want to contradict what I just said about web application quality but you got to balance and hang around for at least certain duration. I like this article on the subject of duration http://www.dshen.com/blogs/business/archives/lasting_two_yea....

IMHO 30% Marketing. 30% Fiscal management and creativity. 40% Continued application development and enhancement.

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