[nlabs]

Your missing the point of the analogy. The idea is focus on customer acquisition in a niche rather than trying to go big with VC funding/IPO. You could have just as easily replaced "Italian restaurant" with "local flower shop" or whatever.

[davidw]

The niche a trattoria competes in is inherently limited by geography, whereas there's no reason a VC funded bingo card creator can't try and muscle in on patio11's turf. The only reason is probably that there is simply not enough money there to support that kind of investment/expected return.

So I guess if there's a fair point in it, it's to go after some niche that has an upper bound to its profitability as a defense against large competitors. In the US, at least, though, chain restaurants make the 'little restaurant' example once again a bit suspect because they end up competing in a niche that can, to some degree, be filled by a large corporation.

I think it's a flawed analogy, and that rather than trying to make it work, it would simply make more sense to discuss the economic factors and business decisions that make something like patio11's company successful.

[lsc]

but what could money improve there? advertising, and ? Corporations are usually not run by subject matter experts; my experience consulting for corporations has been that the decision is usually a compromise that ends up being... suboptimal. I mean, they usually get the job done, eventually, but they spend a lot more money on it than they need to, and they usually don't solve the problem in the most elegant way.

I guess that's the idea with mass-market software. the marginal cost being nearly zero means that the chance of hitting a few out of the park justifies a whole bunch of expensive flops.

[davidw]

> the marginal cost being nearly zero means that the chance of hitting a few out of the park justifies a whole bunch of expensive flops.

Yep. If you're interested in the economics of our field, I can't help but recommending 'Information Rules' ( http://www.amazon.com/dp/087584863X?tag=dedasys-20 ). One of the co-authors is now the chief economist at Google.

[lsc]

heh. I'm a janitor, not a programmer, so the marginal costs in my field are definitely non-zero. As I sadly say when I buy a particularly large amount of hardware "But, that's my porsche!"

But my point was that I think the advantage that the large corporation has is not as big as people seem to think it is. It's a lot more expensive for them to swing the bat than for you to do so, and you don't have to do as well. I think the only large advantage that large corporations still have in this arena is advertising, and of course in software like modern games that is too big for one person to complete in a reasonable period of time.