Looking back, we (incredibly) should have heeded the advice of bad-boy chef Anthony Bourdain, who wrote our epitaph in Kitchen Confidential: "The most dangerous species of owner ... is the one who gets into the business for love."
Why didn't doing it for love work for the author? I suppose if I were to answer the question myself, I'd say either a) they didn't love it enough. or b) They did some bad math.
Why not just sell the crossiants for $3? Why not sell the cold house coffee for $3 instead of $1? Raise the price, let your customers keep you alive. If they like what you have to offer, they will.
If their dream was to open a coffee shop, why /not/ work there full time? Why not make it work? Other coffee shops have figured out the formula and do survive. Maybe their owners loved it more?
Every business struggles in the beginning.
Do /not/ give up. Keep going. If your formula isn't working, tweak it. Don't close up shop. That's what you don't do if you love what you do. You don't give up on something you love. You can't.
"Why didn't doing it for love work for the author?"
"Do what you love" does not have a second clause. It's not an argument. It makes no promises.
One of my favorite people in this world was a saxophone instructor. He loved to play. He was good at it -- stunningly good. He did the New York club scene, did session work, played backup for some huge names. But he never became famous, and never achieved wealth. He also worked a dozen different jobs, died young from a heart attack, and left behind a widow and an infant son. His funeral was the largest I've ever attended.
You can do what you love, and you'll succeed. You can do what you love, and you'll fail. You can do what you love, and you'll never be anything more than mediocre. Doing what you love does not automatically make you successful. But it might let you become a better person.
I honestly don't know if the man ever wanted to be famous. I just know that he did what he loved, and that the money didn't follow.
When people implicitly tack "...and the money will follow" onto the end of "do what you love", they're missing the point. Do you what you love, and you might be successful, or you might not. If you're doing what you love, it doesn't matter.
That's charmingly idealistic, but unfortunately it simply isn't true. There is more to life than what you do to earn a living. There's having a family, traveling, whatever you can imagine. At some point, you will need a sufficient quantity of money to do stuff unrelated to work. And if you can't make that money doing what you love, then you're going to have to make some choices about what you really want.
Don't shoot the messenger. I didn't come with the advice, and I realize that it has limitations.
That said, if your family/travel/something else is so important to you that you'll work a job you don't like to make it possible, them perhaps those other things are what you love. Nobody said that you have to define yourself by what you do for a living.
2. in order to do activities in the first category.
It may be that you can earn money doing what you love, but it may not. If not, you may have to spend time doing category 2 activities in order to do category 1 activities.
> There is more to life than what you do to earn a living. There's having a family, traveling, whatever you can imagine.
I think here's the major disagreement between the practical and the idealistic. To the true "amateur" in the original sense, there is no family, traveling, whatever to compete with the ideal or loved interest. Marriages do break-up (or never occur in the first place), people do stay in one place their entire lives, and so on if they love what they do enough. But for people that don't "do what they love," what they DON'T do is what they love, hence the disagreement.
Raise the price, let your customers keep you alive.
I nominate this advice for being tattooed onto the forehead of web startups. I heard something about a spot of trouble in the market, CPMs in freefall, waily waily waily? What if we stopped trying to be all things to all people for nothing and instead tried being pain relief to people who are familiar with the notion of paying money for that?
(I, for one, am raising prices in February, because I've been undercharging for years now. Silly me.)
One problem: coffee shops are a competitive business. This makes their owners what economists call "price takers". It makes them what the rest of us call "bankrupt".
There is more than one axis on which coffee shops compete, though. Price is one of the least-critical, IMHO -- ambiance, service, and "extras" like a decent menu or late-night hours will earn you a lot more loyal customers than a $0.25 price cut on coffee. Remember, if cost was the major deciding factor, people would be making their coffee at home. Going to a coffee shop is a social act, so the "scene" matters at least as much as the product.
The problems (and attempted solutions) the article's author described sound to me like they all stemmed from a lack of interest in paying any attention to the market. He admits that the most prominent and loyal types of coffee shop customers (commuters who just want to grab a cup for the road, and laptop warriors who want to sit tight and work for several hours) weren't interested in his business, and then seems surprised that he failed to make a profit? Color me unsurprised.
You can make money in the service industry, eventually -- but you have to provide something that people want. Simply being in love with your own clever ideas is seldom a good path to profitability.
There is more than one axis on which coffee shops compete,
Absolutely. I live about 7 miles from the nearest town, 30 miles or so from the nearest big city (Minneapolis). I would love a quiet, sit-down coffeeshop that had good coffee, tea, (and yes, cocoa :-) and pastries along with WiFi. I have no problem paying a small hourly fee for the WiFi or better yet an hourly drink minimum.
It's nice living on a farm in the middle of nature, but sometimes I want a different environment and I don't want to go all the way into the city or large suburb to find it. I'm sure there are many around here with a similar wish.
Depends. There's often a fair degree of brand loyalty in coffee shops - people have their favorite cafe and don't really check out other places, because they like the atmosphere and want to support the owners. It's not like gas stations, where the price is posted prominently and you can just drive elsewhere.
Unfortunately, much of that brand loyalty seems to be to Starbucks, so the little guys don't get much of it.
Is this true? The article mentions that the markups on coffee would be ridiculous for most other industries. And the market pretty much accepts this.
I know I'm not considering all the other business costs here. But, shouldn't someone be able to "Wal-Mart" Starbucks and copy their product but cut the margins to put them out of business?
Another example is the people with laptops who are buying $5 tickets in the form of cups of coffee to rent a few hours of de-facto office space. Are they going to quibble if it's $6? If the ambiance is a little cooler, or the coffee a little hipper, or the wait-staff a little cuter, an extra dollar might not matter to them, or might not be enough to chase them to the Starbucks across the street.
In short, part of the point of going to a coffee shop is to get away from seeing yourself as a "price taker." Otherwise, you can get your caffeine cheaper at McDonalds.
Do those of you reading this pass up one coffee shop over another for $1 difference in price? $0.50? $0.25? I'm honestly curious.
As I sit in my cubicle day in and day out practically forcing myself to do work that I don't really care about, I often wonder if I merely love the idea of being an engineer rather than the actual practice of it.
Yeah. It's kinda sad when you have a romantic idea of something, but reality paints a totally different picture.
I'm learning a new language at the moment. The romantic idea I had in my head was being able to speak it fluently with friends from that culture, read books, etc. The reality is that learning a language is difficult and and takes a lot of effort and patience.
Thankfully, I love studying it. But then if I didn't and then gave up I'd still be painting that romantic image in my head thinking i "shoulda, coulda, woulda..".
I kinda forgot where I was going with this... sorry :-(
With languages, my experience has usually been that it's easy and gratifying at first. Then it gets tough and demoralizing. And then you sort of break through that wall and it becomes quite gratifying again. So hang in there. :)
Oh, and to get past the level where you can hold a simple conversation I have found immersion necessary. My Hebrew improved as much in a month in Israel this past summer as it had in the previous year.
This is the only practical way to learn a language. There is an oft repeated cliche about playing quarterback in the NFL, that no matter how much you practice or try to simulate game conditions, the speed and chaos of actual game conditions is something you can't understand, really, until you experience it.
Well, learning a foreign language does not involve 300 pound men coming at you at high velocity, but the real experience of trying to communicate something you really want to say to a real human being is a very different experience than learning words or even grammar structure from a book, audio, video, or lecture. Even interacting with classmates is somewhat contrived, because you are probably trying to say something your teacher prepared for you, instead of getting own ideas across.
So, to summarize: learning a language with out immersion (or something close to it) will likely never amount to anything more than an academic experience.
Well, most of what you say is true, but doesn't require immersion. For example, I have Israeli friends here in the States, and I keep in touch with a couple cousins in Israel. So it's possible for me to have real conversations (as opposed to contrived conversations with classmates or workbook exercises etc.) without actually going to Israel.
I found immersion useful because when you hear a language all day, every day, it seems to seep into your subconscious. Also, I think that language learning is a function of density rather than just volume, so to speak. That is to say, spending ten hours speaking a language every day for a month is more effective than speaking it for half an hour a day for 600 days.
Perl is the programming language that's closest to a natural language that I've seen.
It's very aggravating knowing that there are 20+ ways to say the exact same thing, and in order to understand most people you need to learn all 20+ ways and completely memorize them.
Along with immersion, which is crucial, I've found it's useful to color-code as much textual information as you can, and aim for a "lossy" understanding of the language. Read a passage or listen to someone and just try to get some vague meaning from it, don't get caught up on particular words or grammar.
Also, if you are just starting, I find the traditional method of flinging a few phrases and a bunch of completely random vocabulary is inane. Learn those phrases, sure, but try to learn pronouns and modal verbs as soon as possible, followed by the most common form of past tense. Pulling figures out of thin air, I'd say 90% of the time people talk about what they need, want, should do, or can do, or about things that have already occurred.
Some languages are handy in that you get a free "immediate future" tense by learning the present tense; if you ask a question like 'Are you eating?' it's understood as 'Are you about to eat?' in the right context.
Once you have this framework of expressing most of your thoughts, you can start to dump in all the vocabulary and extra grammar. Eventually, after learning all the grammar and other random bits of knowledge, the learning game plateaus and you are basically just learning vocabulary, idioms, and slang.
kentosi, I wanted to talk to you about language learning. I am working on a site to help people learn foreign languages and am trying to find people to give me feedback. Would you be interested? I couldn't find your contact info. My email is my name at gmail.
I think you love the idea of being an engineer working on things you like, doing them the way you want instead of forcing yourself to do what other people want, doing them the way they insist upon.
Everyone likes making cool new stuff. No-one likes deathmarches and debugging race conditions and writing documentation and sitting in meetings and dealing with incomplete or ambiguous specs or having their project cancelled after working on it for a year or having an idiot for a boss who doesn't understand what you do. But that's what engineering is really like for most people, most of the time.
I love writing, I don't necessarily love the concept of being an author. Book tours, having to pay 100% of everything from my own benefits to my own pension, etc.
I want to get published, not because I love the job but because I love writing. I spend hours a day writing, and then when I'm doing other things it's still running through my mind and I'll end up writing notes down or grabbing a pad at 2am and writing down an idea I had while sat on the toilet.
I'm sure most coders on here do their job because they love to code not necessarily because they love their job.
Maybe I'll do this later, but I always wanted to open up a hacker's place. I'd call it the Bit Bucket.
Part bookstore (~50 titles, classics only - W. Richard Stevens, etc.), part coffee shop, part decent hardware shop (FPGAs, GPGPU, blade servers, and half & full-height rackmounts you can convince your S.O. to let you put in the basement), and bar.
Also, a good selection of little parts that you'd normally have to ebay, a little selection of RAM, heat sinks, PCI cover plates, etc. I'd put it in a display where you'd normally see the baked goods.
I'd have no illusions of being profitable at this, but it'll give me something to do when I retire :-)
"In 2008, Fry's vice president of merchandising and operations, Ausuf Umar Siddiqui, was charged by federal prosecutors in an illegal kick back scheme involving Fry's vendors. The alleged scheme was designed to defraud the company in order to cover Siddiqui's gambling expenses"
Open up the second floor, put in a bunch of desks with fast ethernet, and let customers rent or time-share them. Coworking is becoming much more popular, is seems.
This also answers my longest-standing question about cafes: Why are there so few fun ones?
San Francisco's Valencia Street (with its immediate offshoots) supports hundreds of interesting businesses. Many of them are cafes. Only two of those cafes are any good: Ritual Roasters, and Four Barrel. Four Barrel was founded last year by a disgruntled co-founder of Ritual.
While the rest of Valencia's cafes are grimy, poorly lit, deathly quiet, or all of the above, RR and FB are sunny, friendly, and loud. That noise is all the foot traffic (and some David Bowie). The people sitting in Ritual for five hours on a laptop aren't paying the (staggeringly high) rent. It's the constant in-and-out of to-go cups. Mercifully, Four Barrel has no wifi and thus a more talkative, flowing crowd.
Ironically, because RR and FB have coffee that makes people come and go quickly, they can afford to make a pleasant space for people who stick around. Their solution to cafe economics was to make their own high-markup product.
Of course there are other solutions. Cafe du Soleil in the Lower Haight offers an extensive sandwich menu and gets its baked goods as part of a chain of boutique cafes and restaurants called the Bay Bread Group, which also sells bread to bigger clients like the Ritz Carlton. For all I know, Soleil is riding on the profits of the Bay Bread Group as an indulgent loss leader.
But I suppose there's a lesson there for any startup with a boutique aspect: Make your own supplies, and you might have a business plan to support your dream. In a way, wasn't that the model for Reddit and Justin.tv?
I think it's a matter of staffing. Cafes in San Francisco have a skeleton staff, particularly the ones on Valencia. It's just not economical to pay the high rent and more than one person at a time. Especially when people linger over tea & a laptop for about 5 hours.
To take an extreme example, the Muddy's cafes (near 16th and 24th) are one step away from dissolving into chaos. The people who work there seem to hate it.
RR has better coffee than average, and more foot traffic. I'm not sure why this hasn't been replicated. Maybe the beautiful people who seem to live there perform the same function as go-go dancers at clubs; they delude you into believing you're as hip as they are.
The best coffee experience in the Bay Area, as far as I know, is actually in a strip mall in Cupertino. Really!
Barefoot Coffee Roasters have many people on staff all the time, and they even hang out there in their off hours. It's got a very strong community feel and their baristas win a lot of awards. Much more laid back attitude compared to RR. I can't figure out why they haven't taken over the universe yet. Possibly they have higher staff costs, but choose to keep it like that rather than sacrifice to efficiency. That's just a guess though.
Honestly I think it's a location thing. Valencia Street is a place where interesting businesses would exist..I've always been intrigued at the kind of businesses I see when I visit friends in the area.
From personal experience (I've been in the market for coffee shop businesses of all types in Los Angeles for a couple years - from family owned tiny mom and pop stores to franchises), it's all about the location unless you have a lot of hype and if you have both even better. Anyone can start a coffee shop and stock their display cases with local/well known bakeries and coffee providers, but you need all kinds of customers (both the people who occupy a table with only a $1 cup of coffee all day long and the people who rush in and out, both something you can't get if you are badly-situated) and not just a little something extra. The latter is typically a way to get people to come to your store rather than another close by, or a little perk for your customers so they'll return later.
Plus, there's always Starbucks and Coffee Bean and Peet's to deal with...sigh.
But like I said, there are plenty of awful cafes on Valencia. I guess I conflated financial success and coolness: Mission Creek, one block down Valencia from Ritual, seems to get along just fine but it's a terribly dull place to go. The coffee there is just like anyone else's; the food is mediocre; the atmosphere is deathly silent. They've taken prime real estate and turned it into an office for people with no office -- and not a fun one. It's literally no more social than sitting in your living room, and the coffee and food are on par with what you could make for yourself. And the entire city is full of these decrepit little places that can only afford to offer mediocrity, because better food wouldn't necessarily bring in profits, and cranking up the music might drive away the customers who buy the most product. In the midst of all these mediocrity machines, Ritual and Four Barrel stand out because of what they've done with the same opportunities.
Okay, they do have one big real estate advantage: they bought giant spaces with room for a roaster. But is there any other way a cafe could serve something special that still attracts the high-profit foot traffic that turns Ritual and Four Barrel into community centers? I'd like to hope so.
Go to Barcelona, in Europe, and walk around anywhere in the city. There are a few Starbucks, but full with short-term tourists only, who need the reassuring familiarity of ordering exactly the same thing as they do home.
The long-term tourists, aka those in love with the city and who find themselves unable to leave it, enjoy the "bars i cafes" that exist all over. Many, many of them privately owned, not part of a chain.
A big difference between San Francisco and Barcelona is the following: people's houses and work places are all in the same place (which does not mean that the inhabitant's don't commute anyway). If anything, this overlap provides business throughout the entire day. This overlap provides "eyes on the street", that Jane Jacobs described, in her book "Death and Life of Great American Cities", as the source of safety and comfort (and thus business opportunities) in any city street, along with very small blocks so that walking around the local neighborhood is possible.
Perhaps in the big cities of the USA that match the Los Angeles sprawl model, like San Francisco does to some extent (as opposed to Manhattan & Brooklyn), only chain cafes may survive, riding on the low costs of mass production and distribution.
San Francisco isn't on the sprawl model. It is not a typical American city that's been hollowed out to be a workplace for people who live in the suburbs. It's pretty dense with a mixture of residential and business. There are other weirdnesses though - people who work in the suburbs and live in the even-further-out suburbs come to SF for entertainment.
The Mission district is particularly local-oriented since there is a large youth and student population and a lot of professionals who either consult or work from home. Hence... cafes. Although this is more of a district that people live in during their 20s rather than their whole lives.
I'm a writer. I go to coffee shops, sit there, and drink as little coffee as possible, staring into my little book while taking up a table and spraying a Cone of Introverted Quiet everywhere I turn. I am the bane of the regular coffee shop. But what if there were a shop that tailored their business model to me?
Instead of charging for food or drink, and then letting you have the space for free, how about switching the two? Charge for the table by the hour (or with a monthly subscription), and then have free little snacks and drinks to go along with the seat. Limit customers to those with a creative/insightful streak (yes, get resumes), and disallow anyone from sitting alone or ignoring the people next to them for more than ten minutes. Perhaps even invite famously loquacious people to hang out there (in the exact same way as the regular patrons do.) Thus is born a sort of "idea club"--like TED, but every day, and peer-to-peer instead of multicast.
On the same vein, don't buy newspapers (or anything else topical) for reading material; buy hardcover books, fiction and non-. Require that people read them out loud if they're reading (thus, basically, giving a reading of the book to whoever's nearby.) Don't have a wi-fi connection; do have a "room librarian" that will look up the answers to questions on a hard line, and is ready to explain the answers in detail. And so on.
So, to summarize your Cafe 2.0 business model, if I may...
Prospective customers submit resumes to you for the privilege of being allowed to rent table space at your cafe. Those who clear that hurdle remain under constant threat of eviction unless they talk to everyone around them every ten minutes. Customers can only read hard-copy material that you prescribe, and must read it out-loud to the entire room. And they must relinquish all web-surfing mobile and laptop devices, to be replaced by a single "room librarian" who will personally attend to any web search requests.
OK.
Take this concept to Sand Hill Road. Untold riches await you.
I admit, it's only for a certain kind of person--the kind that would be talking to the people around them more often than every ten minutes anyway, and would rather have a conversation about a topic than look it up themselves. Extroverts. The resume thing, and eviction thing, are just what they sound like: being in a club. Haven't you ever been in a club? They have membership requirements and you have to maintain the membership by doing all sorts of crazy annoying/boring things. But people do them, because it's better than not being in the club. I'd even say that there would have to be a Fight-Club-esque rule about the place to prevent it becoming some sort of super-prestigious gathering place where everyone there was only there to say that they went, and no one is actually enjoying themselves. But I digress.
I was a bit off in describing the reading material concept: whatever people wrote on the whiteboard above the book-pile, and remained up there for longer than a day without being erased, would be purchased at the cafe's expense and added to said pile the next day. Same with food and drink suggestions. It's not supposed to be about the cafe; it's supposed to be about the other people in the cafe. The cafe itself is unimportant. You're paying to be put in spitting distance of people who love thinking, and are willing to help you out on creative, technical, or even philosophical projects if you reciprocate. It's sort of like the physical manifestation of a compatibility-matching dating site, but without the actual "dating" part (but I mean, if relationships start there, hey...)
Writing this for the second time this week on HN...I should just copy and paste ;)
Coffee shops: expensive rent for owner because of prime retail location, foodservice business (therefore more requirements with less space to work with).
Workspace/office rental: not so expensive rent for owner since it can be located anywhere there is commercial real estate, is not a foodservice business (less restrictions, more space). Bonus: not as much noise and more actual office space with wifi and ethernet and places to plug in. Additional bonus for you: some of these workspaces will have newspapers and other reading material for you to check out without having to buy.
Both: offer tables and coffee and food for people who want to sit down and chill.
What a lot of people SHOULD be doing is going to a workspace (i.e. in los angeles there's theOffice and Blankspaces off the top of my head) and actually paying per table or workspace by the hour/day instead of sitting at a coffee shop where that per table pricing model is completely infeasible because of what a coffee shop inherently is. Sadly demand for them isn't as high as I would have thought, but the problem has been approached before in a way that doesn't bankrupt the owner (aka a coffee shop with an hourly per-table/seat charge).
What about an automated coffee shop? A machine that remakes coffee when it gets low with a reserve of beans it grinds automatically, dispensed in different sizes by coin or bill. Have a machine on the inside and on the outside, facing the street. So you can have your romantic atmosphere and make a lot of money selling coffee quickly to people on the go for the mere cost of a machine.
But there is only so much space for romantic atmosphere inside a shop (the main issue, really), and existing automated coffee machines are..limited (then again, most people would probably just get ordinary coffee). On the other hand, that sounds like an interesting thing to hack together for home if only I wasn't in love with my french press :)
Also when a similar topic came up last week, there was mention of charging a fee (i.e. $20/day) for use of the table, wifi and a bottomless cup of coffee.
It would be interesting to see both of these implemented in an actual coffee shop, cause they're not necessarily something I have seen and are certainly one way to approach the problem.
OT but the coworking spaces that seen to succeed (e.g. attract a base of full-time coworkers) are providing more than a desk space for rent - they are involved in the local community. For example, CubeSpace in Portland hosts the monthly meetings of the Ruby users group. The space is more of a salon (in the Hemmingway sense) than a office space.
Instead of charging for food or drink, and then letting you have the space for free, how about switching the two? Charge for the table by the hour (or with a monthly subscription), and then have free little snacks and drinks to go along with the seat.
4 points by noonespecial 7 days ago | link | parent | flag
Seems like there's a market for a place full of private cozy nooks where $20 buys a bottomless cup of coffee, an all day wifi pass and a plug at every table.
The problem is that street-level storefront space is expensive. Street-level shops - including coffeeshops - rely on continuous flow of customer traffic. A people-storage business model does not work at street-level. It might work if the space to be rented were not at street-level.
Well, it's not really my ideal; I was just trying to imagine up something that didn't already exist (in the forms presented herein.) I actually like these better ;)
I like the idea of charging per table and letting the drinks and snacks be free, but I think encouraging and/or forcing a particular 'cozy' environment would be a bad idea.
As a college student I like to go to coffee shops to study. It's a great way to get out of the house, maybe meet people, and get stuff done. I always buy something there but I feel bad because I believe I stay (with my laptop on the shop's free wifi) for a long time - probably costing more than I've contributed with my purchase.
I would gladly pay a monthly membership fee and pop in and out knowing that I'll get whatever I'm in the mood for without any more expense. In fact, I would probably end up paying more for the 'free' drinks because I wouldn't show up enough to take advantage of the free food.
I wouldn't like it if there was no wifi or if the rules about talking to people and reading out loud were enforced. Of course customers could still be screened somehow. A membership card could be swiped or scanned for the drinks (maybe even tracked) and an ID and password for the wifi would keep the freeloaders away, and if any customer becomes too unprofitable (too many drinks or slipping drinks to friends) their membership could be easily canceled.
workspace! sounds like you're in LA...you should go check out blankspaces or theOffice ;)
They both do have a monthly membership fee and to them, drinks are probably the least of their concerns with regards to profitability. Unlike a coffee shop, where space is expensive and hard to come by. Both have wifi and leave you alone...in fact, probably enforce leaving others alone too :)
At the University of New Mexico's Engineering Library (Big main library also has these) they have these little alcoves with closed, locking doors that grad students use to write/read their thesis and so on; can't be bigger than 5x10 feet. They're hard to get and always in high demand. When I was an undergrad I wanted one but of course they weren't allowed for undergrads.
"There are wealthy gentlemen in England who drive four-horse passenger-coaches twenty or thirty miles on a daily line, in the summer, because the privilege costs them considerable money; but if they were offered wages for the service, that would turn it into work and then they would resign." --- Mark Twain
As someone who opened a similar business I thought that the ratios that were listed as rules of thumb were failry on target with my experience, but the statement "If you haven't hit the latter mark in a month, close" was crazy.
1.) Your potential customers are creatures of habit and it takes time to change their traffic patterns. Your grand opening is your biggest splash and a key time to get attention, but getting return customers is a struggle to reshape their patterns.
2.) A new business should ideally be properly capitalized to slug out way more than a month. Not only does it take time to get people in the door but it takes you and your staff more than a month to adjust to the unexpected, get your act together, and polish your product.
If your new business is going to be your only stream of income you need capital available before going in to stretch more than a month. This piece of planning is every bit as important as the name on your shingle.
Opening a new and not yet profitable business does suck up your whole life, but if you succeed that doesn't have to last forever. Its after this initial "slugging it out" time period that you can reclaim your life.
You are not selling coffee, you are selling an experience. Most people go to Starbucks for the experience they have there, the illusion of being refined members of society who can afford it. To feel cool among their peers. The coffee is an admission price. People with a laptop bothering you? How about providing a wi-fi service and charging for it instead?
To distinguish yourself you want to have outrageous quality and markups. You want to target upper middle class people who don't mind spending $10 for a large cup of coffee and a couple of baked goods.
Make your environment as nice as possible. Make the quality of your coffee as good as it can be. Be remarkable. Be well known for having the best coffee in your city, state, or even America. Make people want to drive 20 miles just to get there.
Just opening another unremarkable little coffee shop doesn't make much sense. Opening the "Fat Duck" of coffee shops does.
People go to Starbucks because once you've learnt Starbuckish you can order your coffee exactly how you like it anywhere. They're selling ubiquity. It's the same business as Subway, you can get your "unique" thing wherever you are. Brands that (successfully) go for "cool" you see people wearing their logo on their clothing and accessories and I don't recall seeing anyone who wasn't staff ever sporting a Starbucks logo.
My regular Starbucks, where they know me and start making my drink as soon as I walk in, I go to because it's on my way home from work and it's open 24 hours. And Starbucks knew that there was this kind of consumer and that's why they're there. That's what they're selling.
It is always easier to armchair quarterback people's stories like this, but I do see two problems that immediately stuck out at me.
Success in business centers around execution and if you do not execute effectively you are bound to fail. In the first paragraph the guy says "The one that, as you calmly and correctly observed, was doomed from its inception because it was too precious and too offbeat?" As a business owner if my customers were telling me I was "doomed" I would be working to change that perception. If a potential long-term customer sees your business as doomed from the start, he or she is probably going to resist going to your business by instinct. This can be especially true in the restaurant business and even more so with coffee shops. People are creatures of habit and tend to go places they like and enjoy. If you want people to come to your coffee shop it is going to take time (more than a month). If they do stop in and feel as if your business is doomed then what incentive do they have to come back again?
The second problem I see here is this guy had a dream and in that dream there was a part where he would open the shop and there would be immediate success. Not success earned by time and through customer loyalty. He expected the success of opening the doors and having people rushing in. Starting a new business takes time and, as others have said, a savings available to handle the rough times and starting period. This is especially so with restaurants and probably more so with coffee houses. Expenses are going to be high between rent, payroll, and food expenses. If you can't afford to handle these without a single customer walking in the door for a month or two your chances of success are instantly diminished.
The final problem I see is this guy was not open to changing his pricing. His solution was to go with the cheaper product rather than raise his prices. It is a known fact that people will pay more for a better product, but they aren't going to pay the same for a cheaper product. I surely wouldn't buy a Kia at a BMW price.
While I feel sorry for this guy and at the same time give him credit for trying, I do not feel as if he put enough thought into the business, gave it enough time, and surely was not familiar with the management side of running a restaurant. Sadly he learned the hard way and now his life is destroyed.
I'm wondering what you see the difference as? For me, every start-up is a small business (with various size visions), and every small business is a start-up.
Is it the size of the vision? (ie, a boutique cafe will only ever be small, while a start-up might be valued at $15B) Or is it the difference between leveraging effort rather than leveraging scalable code?
To be a startup, a company has to be a product business, not a service business. By which I mean not that it has to make something physical, but that it has to have one thing it sells to many people, rather than doing custom work for individual clients. Custom work doesn't scale. To be a startup you need to be the band that sells a million copies of a song, not the band that makes money by playing at individual weddings and bar mitzvahs. -- http://www.paulgraham.com/startupfunding.html
I understand the distinction, but bands haven't turned out to be the best analogy. Thanks to P2P, etc, most bands now make little from CD sales, and have to pin their hopes on touring and merchandising - things that look a lot like "playing individual weddings and bar mitzvahs." And there was always the Grateful Dead, and Phish, The Black Crowes, etc, etc, which build a loyal following through their concerts, and encourage taping, thus in essence giving away millions of copies of their songs in order to promote their concerts and merchandise.
Likewise, for startups, the distinction isn't always that cut and dry. If you're an Oracle or a Salesforce.com (both of which were once startups) you probably had to do customization for every one of your first n clients in order to make the sale.
I think there are obviously businesses that let you scale easily, and ones that don't, and the quote above is a good starting point, but it's not a 100% clear line. And often what looks like a scalable business turns out not to be so, and vice-versa.
I think you may have missed the point. Playing a wedding or bar mitzvah is custom work on contract with a single client who to some extent directly dictates your set list, etc. Playing a giant stadium concert is you putting out your product and thousands of individuals autonomously buying in.
I'm just trying to muddy the point. Most of those bands playing giant stadium concerts started out playing maybe not bar mitzvahs, but small clubs, and doing cover songs. The distinction between products and services is not as clearcut as pg describes.
yeah, look at starbucks - they offer a service, but they've standardized the experience and packaged it into a product. I think the key is replication, not service.
I was talking to Justin recently, and he gave the most succinct definition I've heard: A startup is a business aiming for a liquidity event.
Edit: Reading the responses to this, people clearly got the wrong idea. A liquidity event != early acquisition. But every successful startup nonetheless hits liquidity: acquisition, IPO, or substantial dividend payment to its shareholders. And that's a distinction between a successful startup and a successful small business, which are not intended to achieve liquidity.
Succinct but definitely not universal. Like seemingly everyone else here, I'm a startup founder, and I did it because I thought what I created needed to exist.
A "liquidity event" (god I hate that term) might be possible but it's not the driving force. If someone offered me a huge sum of money, I might be tempted, but I'd just take that money and work on the next thing I considered needs to exist!
I don't think people obsessed with the goal of money beyond anything else create startups, although they might find great riches as a result of their efforts. If money was the only thing in my life I'd probably have tried to found an investment fund or a real estate company or something.
Sorry to talk about myself here but in such things one can only really refer to one's own experience.
If you'd take the money (and if you have clients it's really hard to take the money because they hired you) and you'd start the next thing, you're the perfect startup founder.
That's a popular one, but I find it so depressing. Here you've quit your job and thrown yourself into something you believe in, and from the first day you're thinking about how you'll unload it?
I think the idea of startupism, or startup mentality, is that one believes most of all in starting things - kicking off great ideas - rather than being a shopkeeper. There are other people who like being shopkeepers. Let them run it after you've created and tamed it for them, so you can be free to kick off other great ideas - or to help new entrepreneurs do it.
I tried to open a neigborhood grociery store. It didn't destroy my life, but I did lose a lot of respect for the local city officials. Imagine if you wanted to start a website, but you couldn't work from your home on it because your home didn't have an ADA compliant restroom.
Coffee shops fail because of poor management and/or poor quality. 4Barrel and Ritual succeed because they are quality focused. If you are a coffee shop- roast and brew the best coffee possible; this takes love, work, and an interest in coffee. Owners of successful coffee shops like the ones mentioned try to roast and brew the best coffee that they can. The author must not have set themselves apart from other coffee businesses in terms of quality; either that, or poor management. If you have quality and capable management it would be hard to fail. Defining coffee quality is beyond the scope of this site- methinks. ( basically, it is buying great green coffees, roasting them very well( don't burn them!), brewing them as best as you can( French Press or something without paper( and often (every 30-45 minutes))), having staff that care about keeping the quality standards ( good luck with that one!!), and thinking: about how to have better quality and be more efficient). Actually, it is fairly easy.
The author notes that he did not do this out of wanting to own a business. While I believe that, I also believe that many folks who start businesses do so out of the romantic idea of owning your own business. They may not love the business but they love the idea of owning the business. I think this generally happens with people who are nearing retirement and are looking for something to do when they are done with their 9-5.
It's almost ALWAYS a bad idea. One of the common reasons for their efforts is that they want to leave something behind...either in their name or a business that can be passed on to their children. Why burden YOURSELF with the hassles of a business in your retirement years let alone make your children feel like they have to take over when you can no longer work?
If there's one thing I'd like my parents to do in their retirement, it's nothing. Enjoy life. Relax. Travel. Play golf. Show me see how enjoyable my retirement years can be.
I'm glad he quotes Bourdain. Kitchen Confidential is a great book and convinced me never to open a restaurant-even though cooking is my 3rd passion (behind hacking and photography)
One thing that annoys me about coffee shops is how unfriendly people are. Mostly peering into laptops. I'd like to go to a coffee shop where people go explicitly to engage in interesting/random conversation with strangers.
Looking back, we (incredibly) should have heeded the advice of bad-boy chef Anthony Bourdain, who wrote our epitaph in Kitchen Confidential: "The most dangerous species of owner ... is the one who gets into the business for love."
This in spite of recent conversations here discussing "doing what you love": http://news.ycombinator.com/item?id=449295, http://news.ycombinator.com/item?id=449457
Why didn't doing it for love work for the author? I suppose if I were to answer the question myself, I'd say either a) they didn't love it enough. or b) They did some bad math.
Why not just sell the crossiants for $3? Why not sell the cold house coffee for $3 instead of $1? Raise the price, let your customers keep you alive. If they like what you have to offer, they will.
If their dream was to open a coffee shop, why /not/ work there full time? Why not make it work? Other coffee shops have figured out the formula and do survive. Maybe their owners loved it more?
Every business struggles in the beginning.
Do /not/ give up. Keep going. If your formula isn't working, tweak it. Don't close up shop. That's what you don't do if you love what you do. You don't give up on something you love. You can't.