Tech startups are purportedly to have a 90% failure rate. That means by the time you already heard of a startup getting big funding, about nine already failed by the time you heard the news. For an industry that’s learned so much about failure, it’s rather surprising that there’s little, or even, correlation made between opening a startup tech company and a restaurant. In fact, there are a few lessons that potential restaurant owners can learn from tech startups.
1. Make something people want.
This motto from Y Combinator, a startup funding firm, may sound incredibly obvious–however it’s advice that probably needs to be said every now and then. For restaurants, this advice applies for two reasons: One, restaurants are focusing on a concept that’s already been used many times and end up facing intense competition; Two, the restaurant is too unknown and/or esoteric to build a customer base. A lot of this has to do with ideas–the entrepreneur thinks of a great business idea he/she thinks nobody has done before, builds a business out of it, and either someone else already did it before or nobody cares about it.
More often than not, you might have to do regular market research so you can be actively aware of who wants what in your area. If something you originally wanted to turns out not to be a good idea (whether it’s something a market analyst realized or yourself), then some revisions are bound to happen.
2. Embrace Feedback.
Bill Gates once said, “Your most unhappy customers are your greatest source of learning.” Some restaurants have feedback forms, or leave messages while leaving a tip (or no tip at all). And in more common cases, people are giving their two-cents on Yelp and UrbanSpoon. But if your restaurants got three stars for the past year, do you just swear behind the back of your tongues and somehow move on? While it’s understandable that your restaurant might have one or two rude customers once-in-a-while, consistent negative feedback means it’s time to take a second look at what you’re doing.
And depending on how long you’ve been doing your food concept, it might take some pride-swallowing to accept that what you’re doing isn’t working. But if you’re at least open to what your people are listening, then you have a chance to turn your restaurant around (after all, your servers are there for a reason!)
3. Not Everything Will Work.
An article from Fast Company‘s design section asserts that it’s a good idea to have something not work many times before succeeding just one time. While this doesn’t necessarily mean starting 50 restaurants before realizing that your 51st will be a success, it never hurts to try things out sometimes. Maybe it’s trialing a new entree for your menu, or see if a different music playlist will entice new customers, or maybe even introducing different happy-hours. Whatever small (or big) project you aim to try, it’s okay to find out it doesn’t work.
But what isn’t okay is to focus on the failure and not on learning from it. Instead of thinking, “Oh great now it’s never going to work,” it’s perhaps more productive to think, “Okay so this won’t work, let’s try something else.”
4. Keep Investing.
Startups, unlike companies like Apple, require constant funding to continue their ventures. Now luckily restaurant owners won’t worry about money nearly as much (as long as you’re keeping a balanced checkbook), but it is important to keep building on your restaurant concept. And this time, it’s not just about trying out new things on the menu. If you find out that your restaurant have long waiting times, think about adding waiting areas or ways to entertain your waiting guests. Is your kitchen equipment aging? Get some new/used ones (go to One Fat Frog first before you do anything else, though!). Is your building starting to not get up to code? Either renovate or move to a new location.
While sometimes it may be a boon to have your restaurant look the same for the next fifty years, remember that even One Fat Frog had to invest in a new location.
Keep in mind, this is only a smattering of advice carried down from the world of tech startups. While One Fat Frog isn’t too immerse in the tech startup world, we do meet with potential restaurant startup owners on a regular basis. Some of the advice may not be something you may like, but it’s important lessons other entrepreneurs had to learn the hard way.