

When tech startups == closed restaurants - itsderek23
http://blog.scoutapp.com/articles/2010/02/19/tech-startups-restaurants

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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.

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rikthevik
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.

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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...](http://www.dshen.com/blogs/business/archives/lasting_two_years.shtml).

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

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

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comment176
Restuarants regularly give away free samples to gain "word of mouth"
reputation.

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

