The coffeeshop fallacy

Without taking anything away from the article, it's worth noting that running a software business absolutely can provide one with a great lifestyle. More so than pretty much any other profession I can think of.<p>The lifestyle I wanted: pretty much as close to zero required work as possible, the ability to do said negligible work from anywhere I feel like parking myself (preferably with good rock climbing), enough money to live comfortably there.<p>Absolutely achievable, with a couple years of effort (and achieved, by the way.) Try doing that in any other high-paid, high-prestige profession (Doctor, Lawyer, Banker, whatever). Can't do it. Too much doctoring, lawyering, etc. taking up all your time. Sure, you can set up your own practice, staff up, and eventually get the thing running on autopilot. But certainly not in your spare time after work, and definitely not for a few hundred dollars, all in.<p>So yeah, set your goals right and you'll find you've chosen the one industry where you really can own that coffeeshop.

The coffeeshop fallacy is, in fact, a fallacy.<p>People don't open coffee shops to drink coffee all day any more than someone would open a bar because they want to drink all day.<p>My brother is a wine maker. He is insanely passionate about wine (Pinot to be precise). When he's not working he's talking about and sharing wine. But at the end of the day, he's just a farmer. He tends his vines, picks the fruit, puts in vats, waits a while and then pours it out into bottles. It's horrible, torturous, back-breaking labour for him. But he does it because he wants to put the best damned Pinot on your table.<p>That's why you open a coffee shop.<p>That's why game developers build games.<p>Anyone passionate about wine knows what it means to make wine, and anyone passionate about coffee knows what it takes to make coffee. The coffeeshop fallacy assumes our coffee drinker knows no shit-all about coffee.

Similar to the coffeeshop fallacy is something I described to a friend over dinner the other night as the "ambulance fallacy" ...<p>He was telling me about his startup ambitions and about one particular business that he said sounded like a ton of fun (it was an alcoholic beverage business) - he loved the lifestyle potential of being "that guy".<p>I told him a story about how I wanted to be an EMS worker when I was 12 years old. Why? For a single, simple reason -- I thought it was _extremely_ cool to be able to drive around with lights and sirens blaring, blasting through traffic. That was it.<p>Then a family friend who actually was an EMS worker told me one day what the job was actually like - sure, for about 10 minutes you were driving like a madman through traffic, but the rest of the time you had to, you know, actually BE an EMS worker :)<p>And the same goes for startup life -- you have to actually BE a startup founder for 99% of the time. Don't get caught up by the lights and sirens.

This is similar to what was around in the 80's with corporate people and owning a Bed and Breakfast. Many wanted to get away from the stress of corporate america and traded it for owning a B&#38;B in the country. What they found was that running a B&#38;B was obviously much different then staying there as a guest.<p>"The 1980's was the ideal time when everybody wanted to own an inn, thanks to Bob Newhart," she said. referring to the popular television show that featured Mr. Newhart as a Vermont innkeeper. "<p><a href="http://www.nytimes.com/2005/08/19/realestate/19bandb.html?pagewanted=all" rel="nofollow">http://www.nytimes.com/2005/08/19/realestate/19bandb.html?pa...</a><p>Something you like doing everyday and something you like doing occasionally are two different things. As well as something you have to do as opposed to something you can decide to do (like writing comments on HN - imagine if it was your job to do it 8 hours a day 5 days a week or more..)

Not to hijack the conversation, but the following line really struck home with me but in a different way:<p>"Lots of people think they want to start a coffeeshop. They likely don't. That's like buying a minimum wage job for two hundred grand."<p>This is very similar to what I said about buying a home in Silicon Valley. In the nice areas like Palo Alto, the homes around &#62; $1.5MM. If you don't buy a house in a good school district, you need to spend $1000-2000/month on private school, which is I suppose how the price of the homes in PA got inflated.<p>Anyway, I told my wife, "If we were to buy a $1.5MM home in PA, first off we need a downpayment, which is roughly 500k. Then, after the triumph of saving half a million, we are rewarded for all our hard work by exchanging this for a 1MM mortgage."<p>In the same way as the coffee shop example, the economics really need to make sense, otherwise it's a terrible investment. As long as we are living in the Bay Area, we will rent.

I have found that being personally interested in the product has a lot of benefits. First, if you're a user/consumer, it's easier to determine which features are most important as well as usability issues. It's surprising how unusable some products are because the developers never actually use them.<p>Second, and most important, a personal connection helps to get you through the dark days at the start. It's very emotionally draining to work on something that has no traction, no supporters, and just a bunch of naysayers. If you love the product, though, it can offset this emotional drain quite a bit.<p>In my case, I built a tabletop gaming (ie. DnD) CMS. In the beginning, nobody used it except me, and it was tough to go upstairs and hack away every night and weekend. However, <i>I</i> used it and that was enough to keep me moving. Now, we've got thousands of users and paying customers, and the motivation is much easier to find. But, I never would have made it this far if I didn't care so much about the domain.<p>Unfortunately for me, I think there's probably a lot more money to be made in "boring" areas. If you can keep motivated to work on a CRM or medical billing system, you'll probably end up making way more than my DnD website. But, it will definitely be harder to keep the momentum in the beginning.

This is an interesting article by someone who went through the actual coffeeshop version of the coffeeshop fallacy:<p><a href="http://www.slate.com/articles/news_and_politics/recycled/2009/08/make_that_a_double_shot.single.html" rel="nofollow">http://www.slate.com/articles/news_and_politics/recycled/200...</a>

<i>If he saw a big opening he could exploit, he'd be there regardless of whether it was drilling for oil or starting a babysitting empire.</i><p>This is why most everything that we use is shit.<p>Also see: <a href="http://thetudu.wordpress.com/2011/10/12/the-real-reason-well-miss-steve-jobs/" rel="nofollow">http://thetudu.wordpress.com/2011/10/12/the-real-reason-well...</a>

This could also be called the game/app developer falacy. How many programmers started out wanting to make that perfect game/app? only to realise doing so is tedious and boring compared to dropping a $1 on a finished product.

And I thought I was dumb never having worked out a way to make a decent living wage out of the places I patronize. It turns out most of the owners didn't either.

I don't think it worked this way for Levchin, either.<p>It's obvious that they were so excited about what they were making at PayPal. The PalmPilot thing? All that encryption stuff they did early on? They were just in love with what they were making, and it worked out very well for them.<p>On the other hand, Slide, a basically dispassionate attempt to build a company he thought would be successful, while still a success, didn't work out quite as well.

This is great advice for some people, but terrible advice for others. It seriously depends on context -- who is to say someone's maximum pleasure doesn't come from running their own coffeeshop? It's not incorrect, but it's nearly impossible to make these statements without projecting one's own biases into the conversation.<p>The most startling thing was the Levchin quote: "You you can't be in love with a particular idea or business. You have to be in love with the idea of running a business."<p>It's presented as an either/or dichotomy. I'm pretty sure Steve Jobs, Larry Page, Mark Zuckerberg, etc. didn't succeed because they were focused solely on resource management. Lack of passion in one's product is certainly just as important (some would say more so.)

Insightful article.<p>My own experience working in restaurants teaches that one should never go work at a restaurant you love - it might ruin their food and ambiance for you permanently.

Actually I'd prefer a job drinking coffee in a coffee shop.

This is not really different that trying to convince students to study and not bet it all on sports. Family friends did a good job a few years back bringing their son back to reality; he was really good at basket ball; by having him find all the people from his school, county, and state, who made it. Then asking him how many didn't.<p>People seem to always underestimate the effort and over estimate themselves.

I've worked in restaurants and coffee shops where the owner spent about half time hanging out and "curating the bookshop". The author's point is correct though, there's a huge amount of unseen thankless work (and cashflow) needed to make that happen.

&#62; ... it's how people end up spending years building stuff nobody wants to buy.<p>Isn't that the opposite of the coffeeshop fallacy? i.e. that you enjoy producing it, not consuming it; the coffeeshop fallacy is that you enjoy consuming, not producing.

One time when I was working at Luxoflux, the pizza guy remarked it must be great to work as a game developer and "play games all day."<p>I had to hold my tongue or I would have replied that it must be great to work at a pizza place and eat pizza all day.

I'm not convinced this fallacy really exists. It's not hard to observe that a coffeeshop is a hectic place that makes its meager profits one latte at a time.

This is exactly the premise behind Michael Gerber's E-Myth series of books: That loving something /= running a business that sells or does that thing.

Since when does a coffee shop have a 10% success rate? According to a large study by the Speciality Coffee Association of America, independent coffee shops in the US have a 90% success rate. Perhaps the author mistakenly assumed coffee shops have the same market dynamics as a restaurant, but coffee is low-staff, low-overhead, and high-profit. So long as people are walking in the door, you'll do okay.

Maslow [<a href="http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs" rel="nofollow">http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs</a>] would disagree with the fundamental premise of this post.

This all seems at odds with the Ira Glass quote that makes its rounds here:<p><i>Nobody tells this to people who are beginners, I wish someone told me. All of us who do creative work, we get into it because we have good taste. But there is this gap. For the first couple years you make stuff, it’s just not that good. It’s trying to be good, it has potential, but it’s not. But your taste, the thing that got you into the game, is still killer. And your taste is why your work disappoints you. A lot of people never get past this phase, they quit. Most people I know who do interesting, creative work went through years of this. We know our work doesn’t have this special thing that we want it to have. We all go through this. And if you are just starting out or you are still in this phase, you gotta know its normal and the most important thing you can do is do a lot of work. Put yourself on a deadline so that every week you will finish one story. It is only by going through a volume of work that you will close that gap, and your work will be as good as your ambitions. And I took longer to figure out how to do this than anyone I’ve ever met. It’s gonna take awhile. It’s normal to take awhile. You’ve just gotta fight your way through.</i><p>You don't have taste in something you're not passionate about, and you likely won't keep it for long after that passion wanes. You won't know that you've made a good cafe unless you care about coffee. You might not like accounting or mopping but you'll tolerate the grind only to the extent you care about what you're doing.

<i>Caring about the product seems to be the most dangerous. It's how the coffeeshop fallacy pops up and it's how people end up spending years building stuff nobody wants to buy.</i><p>Steve Jobs might have disagreed with that particular point.

This is the paradox of capitalism. Focus on creating something inherently good and it will not be sustainable. Focus on creating something sustainable and profitable and it will most likely not be as inherently good as it could be.<p>Example: McDonalds. Brilliant business model. Awful product.