Technical challenges integrating with existing restaraunt ordering systems; probable need for active field salespeople. They acknowledge possibly even needing hardware...
It might stand a chance of being a more profitable business than Reddit, but it's a tough and expensive route to market without experience or a large chain desperate to try the system. Probably pg had good reason to be more risk-averse about the types of business he invested in back in 2005.
But it seems like more of a risk to think a social news site (of all things) will be a successful business. Without Condé Nast to be the "greater fool" (in the sense of the "greater fool theory" http://en.wikipedia.org/wiki/Greater_fool_theory) it's really questionable even today whether Reddit could have been profitable.
Something that actual businesses can use to sell things to people? Sure, there are risks, but at least it can make money.
But still, the sales challenge is immense, especially for 3 guys with no sales experience and no money (remember that back then it was nowhere near as easy to raise a bunch of money after YC). Individually talking to every restaurant you sell to doesn't scale at all, and signing on big chains would have been very hard, especially before they had proven that it works and makes restaurants money.
Plus, the problem he mentioned about integrating with other restaurants' systems is a major one. I'd guess that there are many different order-tracking systems. They'd probably have to customize that hardware solution to each restaurant that already had an electronic order-tracking system.
Now, they could have started out with restaurants that were just using paper (with the hardware appliance just printing stuff out), but that would pretty much exclusively mean small non-chain restaurants, which, again, doesn't scale.
Comments
Technical challenges integrating with existing restaraunt ordering systems; probable need for active field salespeople. They acknowledge possibly even needing hardware...
It might stand a chance of being a more profitable business than Reddit, but it's a tough and expensive route to market without experience or a large chain desperate to try the system. Probably pg had good reason to be more risk-averse about the types of business he invested in back in 2005.
But it seems like more of a risk to think a social news site (of all things) will be a successful business. Without Condé Nast to be the "greater fool" (in the sense of the "greater fool theory" http://en.wikipedia.org/wiki/Greater_fool_theory) it's really questionable even today whether Reddit could have been profitable.
Something that actual businesses can use to sell things to people? Sure, there are risks, but at least it can make money.
But still, the sales challenge is immense, especially for 3 guys with no sales experience and no money (remember that back then it was nowhere near as easy to raise a bunch of money after YC). Individually talking to every restaurant you sell to doesn't scale at all, and signing on big chains would have been very hard, especially before they had proven that it works and makes restaurants money.
Plus, the problem he mentioned about integrating with other restaurants' systems is a major one. I'd guess that there are many different order-tracking systems. They'd probably have to customize that hardware solution to each restaurant that already had an electronic order-tracking system.
Now, they could have started out with restaurants that were just using paper (with the hardware appliance just printing stuff out), but that would pretty much exclusively mean small non-chain restaurants, which, again, doesn't scale.