
How Chipotle, Pinkberry, and others win big by doing just a few things well - bpung
http://37signals.com/svn/posts/2007-how-chipotle-pinkberry-and-others-win-big-by-doing-just-a-few-things-well
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zach
Taco Bell has at least fifty menu items (not to mention their multi-brand
restaurants). In-N-Out has, well, burgers, fries, shakes and soft drinks.

Okay, In-N-Out does a great job. But a Taco Bell kitchen is about the same
size, yet produces a substantially larger menu.

How do they pull it off? Middleware. At In-N-Out, they make food out of
potatoes, buns and refrigerated beef. At Taco Bell, they make food out of
ingredient bags which are processed and packaged off-site. In-N-Out is
something that a chef can respect -- Taco Bell is not.

But it's worth pointing out that In-N-Out can thrive only because their market
doesn't demand a wide-ranging product. Sometimes markets move in that
direction, and the artisans -- who cannot abide using middleware, who want to
make everything to their high standards -- have a hard time competing.

~~~
mikeryan
But every In-N-Out I've ever been to has a line out the door. Taco Bell may
have a larger menu but I doubt they have anywhere near the per-store revenues
or profit margin of an In-N-Out.

~~~
whopa
> But every In-N-Out I've ever been to has a line out the door.

That could also be explained by the fact that there are far less In-N-Out
locations than Taco Bell, so one store has to handle demand from over a larger
area than Taco Bells.

If In-N-Out has the same density of locations as a Taco Bell, the per-store
revenues will be quite different.

~~~
mikeryan
Sure but lets put it in context of this article. If I were looking to open one
fast food franchise, I'd much rather be in the In-N-Out, do one thing well
camp then Taco Bell's give them anything world.

(this isn't to say Taco Bell's business is poor, I'd just rather do what In-N-
Out does)

~~~
whopa
Taco Bell is also pretty successful, and that contradicts the article. Other
contradictory examples are Olive Garden and The Cheesecake Factory, both of
which have extensive menus and are wildly succesful, the latter also having
the same scarcity dynamics and lines as In-N-Out.

Articles like this are annoying. There are multiple ways to success, and
presenting one as clearly better than others when there are so many
counterexamples is disingenuous.

In-N-Out has a simple menu, above average ingredient quality, and treats their
workers pretty well. All great qualities. But it's pretty evident, especially
when it comes to food, that you can be bad in all those areas and still be
successful, and perhaps even outcompete those who are better than you, if you
focus on price and consistency, even if the thing you're consistent at is
being mediocre.

------
Readmore
I'm starting to feel like this advice isn't so great anymore.

Everyone is trying to do less and what we end up with is a million little apps
that do one thing really well, which is great, but you're still dealing with a
million separate apps. The iPhone wasn't just a really great phone, it was a
phone, an iPod, and an 'Internet Communicator' but because those things were
combined in such a great package it really spoke to people and made it
something they would want. Of course the App Store is what is driving the
popularity now but that is still because customers can come to one place, the
iPhone, and get tons of different uses out of their one device.

I think we're starting to enter an era where users are more interested in
packages of functionality that are easy to use and work really well over a
bunch of tiny solutions.

Maybe I'm wrong, but I know that I prefer products/applications that let me do
lots of things reasonably well in one place instead of getting the 'perfect'
thing for each problem I have.

What do you think?

~~~
proee
You may need to factor in the "minimal viable product." A few years ago, an
mp3 player could be consider enough for a high-end (read non-knockoff)
product. However, fast forward a few years and you now need a mp3 player,
video player, and app store driven device.

So I think you need to factor in the minimum requirements of the device (or
foodchain) and then execute with the highest level of quality.

------
asher
"Simple" as a discussion-starter? Great. "Simple" as a universal prescription?
Maybe not.

Chipotle thrives on its simple offering; Cheesecake Factory thrives on its
deep menu.

Larry Ellison fought against the "best of breed" concept to promote a unified
Oracle Applications. A Cheesecake Factory style package.

The argument for "complex" is that once you've earned the trust of a customer,
you can provide the spectrum of products/services that customer needs. You can
be counted on to pick up all dropped balls.

(But maybe there is a completely pointless complexity - proliferation of
marginal features - which we can simply avoid.)

The only reliable guide is complete focus on the customer's needs.

------
eswat
I'm not so sure that the Nintendo Wii should be considered as a good example
for this sort of thing anymore.

They _had_ won big with the Wii, turning profits on each console sold while
the competition lost with each sale. But now they're facing the problem with
the Wii being abandoned in households rather quickly and the decrease in
software sales that brings.

DS aside, can Nintendo really be considered as a company that does few things
well when the longevity of 1/2 their flagship lineup is in jeopardy?

~~~
axod
>> "But now they're facing the problem with the Wii being abandoned in
households rather quickly and the decrease in software sales that brings."

First I've heard of it, can you point to anything to back that up?

~~~
eswat
Here are some software sales stats for the past 3 years. The Wii has shown
strong sales so far but has plateaued this year:
<http://www.gamasutra.com/php-bin/news_index.php?story=25740> (though it could
be due to lack of meaningful choice this year in comparison to last year, not
due to abandonment)

Admittedly my remark about the console being abandoned quickly was a hasty
generalization. I took into account some reports from 2007 that questioned the
longevity of the Wii and had gathered the percentage of people in Japan that
used the system frequently. That and experiences my friends and others I know
online have had with their Wiis.

<http://games.ign.com/articles/827/827313p1.html>

------
eam
In-N-Out in California reinforces this very well.

~~~
brown9-2
Same thing with Five Guys (not sure if they've spread beyond the East Coast).

Very simple menus seems to be a hot trend recently.

~~~
oconnor0
They've recently made it to Colorado.

~~~
spicyj
Really? I don't see any on <http://www.in-n-out.com/locations.asp>, and none
came up when I searched for various cities.

~~~
_pius
They're talking about Five Guys.

------
wglb
This was also true for Domino's Pizza back when they began to take off like a
rocket: a very limited menu, and low delivery time.

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petervandijck
Sure, and other companies win big by doing lots of things. Still worth
restating though that doing 1 thing well can work great.

~~~
toby
Like most 37signals articles, this presents a platitude backed by two
examples. There are thousands of companies that succeed with the opposite
strategy, and thousands that do something simple and fail.

It's not even clear that Pinkberry succeeded because of its small product
offering or due to some other factor. In fact, the first time I heard about
it, a fan was raving about the incredible selection of toppings to choose
from.

A whole economics thesis could be dedicated to a controlled study of which
strategy is actually preferable. This being the internet, simple narratives
tend to win over rigorous results.

~~~
asher
Can you suggest any way of gaining a broader perspective? Both companies
mentioned in the article are B2C and highly visible. They may have "visual
punch" outweighing their "economic punch".

How can we get a broader, more realistic picture of what's really happening in
the economy?

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steve_mobs
This is a typical exapmle of market focus and niching based on focusing on
core competency.

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duh
It's no surprise 37signals is based in Chicago (I just did a whois) if they
think Chipotle does Mexican food "well".

~~~
jrockway
Chipotle is a national chain that is highly-profitable. Consider it the
Starbucks of Mexican food. Not as good as the "local" place, but consistently
okay everywhere you go.

~~~
duh
Why consider it the Starbucks of Mexican when it's owned by McDonald's, a
better example than any of the companies mentioned thus far.

~~~
notirk
McDonald's bought into it early, expanded it, then spun it off as an IPO. They
don't own a majority stake (if any of it) anymore.

~~~
blasdel
They got involved because the first Chipotle was right near the McDonald's
corporate offices in Denver -- the executives were eating there so much, they
bought into the company!

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giardini
I tried Chipotle once: I'd rather eat a piece of rug.

But maybe if they get everyone to try it _once_ as I did, that will define
success?

~~~
aaronblohowiak
i think chipotle is delicious. it is the mcdonald's of mexicali

~~~
spicyj
Somewhat literally: McDonalds holds a huge stake in Chipotle. Except Chipotle
is way healthier and works better than most fast food joints.

~~~
jonknee
McDonalds holds no stake at all in Chipotle. They did a ways back, but spun it
off onto its own through an IPO and divested all shares.

