

The bold "pay-what-you-want" restaurant experiment - cwan
http://www.salon.com/food/feature/2010/06/17/pay_what_you_can_restaurants/index.html

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Jun8
"Radiohead makes most of its income by touring, so even if they lose money on
the album, but get more popular, they can just go on tour. A restaurant has no
other way to get that money back."

This is the crucial point. The Radiohead model is not applicable because for
them the albums is a publicity machine that feeds into their real business:
concerts, memorabilia, etc. Think Google, every free service/tool/platform
they offer funnels into their main search business.

I think for big chain restaurants, like Panera, this may make sense. The loss
they suffer from 2-3 stores is more than offset by the huge publicity they
gain, but they cannot do it widely. For small unknowns it doesn't make sense
to do it continuously but they make try it for short periods of time. Similar
to how small businesses tolerate Groupon's huge 50% commission.

Doing this as a short (e.g. 2-3 month) experiment also gives you an excellent
indicator of the perceived value of your service.

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bradleyland
It's also worth examining the cost of the goods being sold. The "cost" of a
digital album download is negligible. The cost of producing a meal represents
a significant portion of the selling price when you factor in labor.

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p3ll0n
I like this model a lot but what if it was "pay what you can", not "pay what
you want"? While subtle I think this change in the verb drastically changes
the game. Not only is it much harder than you’d think to evaluate for yourself
what you can pay but it requires a change in how we calculate value and turns
payments into a mutual ethical obligation between producers and consumers. It
goes well beyond our naive notion of "voting with your wallet".

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johnbender
I was in Berlin not 3 days ago and saw a restaurant that, by all appearances,
is flourishing with this business model.

It should be noted that in Berlin, you ride the underground on something of an
honor system, and no one j-walks, so the culture clearly supports this kind of
business model.

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Shorel
Make it a place where you eat every day, and it will be a failure.

Make it a place where you take your girlfriend on payday, and it will be a
total success.

It totally depends on context.

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Shorel
Also: "Radiohead makes most of its income by touring, so even if they lose
money on the album, but get more popular, they can just go on tour." is false
and misleading.

Radiohead makes money if the average price paid is more than the average
bandwidth and hosting price. And hosting is very cheap nowadays.

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trafficlight
Very true. And if they choose to use Bittorrent, it becomes even cheaper.

