Comment by patio11 | Hacker News Reader

Comment by patio11 | Hacker News Reader

This is a fantastic writeup.

I wonder if a part of the attraction isn't de-commercializing the experience for the diners? Paying up front, presumably via credit cards, means that the service experience is Uber-smooth. You never have to ask for the check, fumble with cards, or do the who-has-this-one dance with other people at the table. You simply show up, get treated like royalty, and leave when you're ready to.

I feel professionally obligated to quibble at one point:

Most reservation and ticketing systems charge by the number of customer transactions, the number of restaurant admin users, for equipment, or a combination of all three. The more business a restaurant does, the more they end up paying. As a business owner I hate such models. Adding an incremental user on my end costs a software company nothing – especially one that has a cloud based system.

You may discover, in running a software company, that it is really valuable to have the prices which you can charge scale with the success of your users. It's how software companies can bid down their lower-end entry points, since we can't conveniently sell our users alcohol at 80% margins.

well aware of that fact... but the scalability and margins are such that it's still a great business. If I charge flat $ 495 per month for a restaurant but save them $ 100k plus per year then I win all restaurants... incremental costs minimal on the dev side. Hosting is a pass through.

Our booze does not run 80% margins... more like 70% .... and labor crushes it beyond that. Restaurants are lucky to get 10% margins if you are smart. We do better, but we do tickets!

You do have a sliding scale, in the form of the hosting cost pass through. Your average restaurateur is entirely unqualified to estimate the AWS hosting costs of your software in relation to his/her restaurant, so these costs are completely opaque. (As patio11 puts it, "Metered pricing is none of predictable, transparent, or fair.") You, on the other hand, probably have a very good idea of the costs relative to e.g. size or popularity of establishment. In the interests of transparent pricing, you ought to consider factoring these costs into your price and charge your customer a fixed predictable amount, tiered according to the relevant parameter.

I'm taking a bit of a stab but flat pricing probably works well for you because the profile of a customer/restaurant doesn't vary that much. If a restaurant can't afford or justify $495 per month, they probably aren't a good fit for your product.

'3 full time employees answering phones' was your starting point. I assume that a restaurant with more than 5 is rare and a restaurant with less than 1 full time person on the phone is a bad fit.

You are not losing many potential customers under that size and you are not leaving too much on the table with huge customers.

If you were trying to sell a hotel booking software and wanted to target customers from BnB scale to resort scale, you would need some way of charging bigger customers more, even if the marginal cost to you was the same.

I think the point that Patrick is making with the margin on booze is that similarly to restaurant prices, software pricing (like restaurant pricing) is more "made up" than the price of manufactured goods where a 'rational' pricing model like cost plus can be employed. Most costs are fixed rather than marginal so pointing to the marginal cost is almost like saying software shouldn't cost money.

I think you demonstrate that by selling tickets. Instead of charging patrons by what they order, you charge them by when they come. The 'what' pricing was made up and you made up a different pricing that worked better.

> Paying up front, presumably via credit cards, means that the service experience is Uber-smooth.

Just like using a group on voucher. It feels a bit weird, just leaving at the end of a meal, without having to go to the register.

> It feels a bit weird, just leaving at the end of a meal, without having to go to the register.

or walking out of an apple store with an iPad and no bag and no receipt. I enjoy the convenience and green nature of it but feel like a thief sometimes. especially since there is no "checkout register" as everyone can ring you up for the device.

"no bag and no receipt. I enjoy the convenience and green nature" - that's because an iPad comes in a clear plastic wrapped bleached-white, non-recycled (but highly recyclable) cardboard box. There's nothing green about iPad packaging or not getting a bag. The decentralized checkout process is really just bringing the cash register to the buyer. That works for high price items like Apple sell, but wouldn't work for much else.

What's even weirder is that with the Apple Store app you can scan your own items and just walk out of the store. Haven't tried it with anything really expensive, but I bought an iPad case for around $80 and just scanned it with my iPhone and left. I was half expecting someone to run down the street to catch me as I walked away.

That sounds crazy. I freak out a little bit when I forget to buy everything I need from the grocery store, then have to go back in for one thing to add to my nearly full bag of previously purchased goods. Haha.

Last I tried, you can't use it for anything with a serial number - including the AppleTV units that are sitting out on the shelf.

But yes, I know the feeling.

Do they have sensors at the door or anything?

A pretty neat solution would be to put rfid tags on the boxes, and rfid readers (powerful enough to read them) at the doors. When you exit it could check and make sure the given item number was actually purchased by a user.

Nope. They're operating on trust.

Nandos', in the UK, offers a similar experience - just by having you pay when you order.

Can't speak for everyone, but I much prefer it.

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