You can do that to a point, but if what you're serving is simply a well-executed diner burger, then, like I said, there's a ceiling. You can't charge $30 for that. Or, you can, but you'll create more problems than you'll solve.
This guy ate at 330 different burger restaurants. He has a finely-tuned metric for what a good burger is (his #3 is also a neighborhood place he grew up with). He's set up to appreciate what Stanich is actually accomplishing with his burger. The average foodie tourist is unlikely to arrive armed with that context; they'll pay $30 for the burger, expect a revelation, and leave unhappy.
I think this is the In-n-out effect - people who grew up on it see it as a vastly superior version of McDs, Wendy's etc for the same price, and are understandably effusive about this. But visitors expect something profound instead of a well executed fast food style burger.
That's exactly what it is, a very well executed fast food burger. I mean, I'm not going to trade it for a real good local burger joint burger (Superburger in my area), but that joint burger is 2x times the size plus fixings (depending on what's ordered) and costs 3x the In-n-out burger, and doesn't have a drive through. When you start adding all the variables in, the picture becomes clear.
Oh, and as someone that gets fast food burgers once every week or two, Wendy's has always been particularly high on my list, and McDonald's recent switch to non-frozen patties for quarter pounders has also significantly raised the quality of that product. Even so, In-n-out is still better overall than either in my opinion.
As crazy as it sounds, there are people who are adamant that In & Out is not just good relative to fast food, but in fact one of the finest places you can eat, at any price.
In the city I live in, a proposal for an In & Out came up. It split down the city in half for reasons; traffic, "In & Out is great", "In & Out is awful", and so forth. Nothing's come of it and as far as I know the lot remains defunct.
Elsewise I too encounter people who hold In & Out on a pedestal simply because of their food. Personally, I've tried and honestly but I just can't. McDonald's, Burger King, Wendy's, Jack In The Box all have better burgers and fries than In & Out for me, but say that to the devout and you'll be shown the door faster than they'll tell you to go to Hell. It's amazing.
Why would you ever expect more than a well executed fast food style burger from, well, a burger. That’s literally what burger means as far as I’m concerned.
There are certainly non-fast-food restaurants that sell burgers.
To give a random example that comes to mind: the burger is one of the most iconic/famous things on the menu at the Spotted Pig, which has a Michelin star. You can't really compare it to McDonald's any more than you could compare any other dish to the fast food version.
There may indeed be a ceiling. It's not even near whatever he's charging that leads to a 5 hour lineup.
Similar situation, my mother is a lawyer mostly handling wills/estates and real estate deals. Small town law firm, sole practitioner. She's got too many clients, too much work, and she hates turning people away. She's got a small army of secretaries working their asses off. It's good business, but she wants to do less so that eventually she can retire.
She's trying a new strategy: raising prices every 3 months until there's exactly as much work as she wants to do. If things get a bit dry, she can lower prices a bit again. But by fluctuating ever so slightly, she can choose how much work she wants to do.
I feel like this should be fairly obvious business economics. If there is too much demand for your product for you to service, you should raise your prices until the demand matches what you can produce. It's basic supply and demand.
The opposite applies as well. If you have excess capacity that's going unused, you should lower your prices (down to the marginal cost anyway).
Of course there's a ceiling, but you're assuming the ceiling is based on the burger. It's not. It's based on the demand for the burger, and that demand is way, way higher than the supply, so the ceiling is higher than the current price. Pretty simple.
And yes, you can only raise it to a certain point, but you only need to raise it to a certain point: that certain point is the ceiling.
And you don't need to jump from $10 to $30 all at once. You just need to keep raising the price until you find the ceiling where your demand is more reasonable. It's probably more like 30-50% more, rather than 200% more, but who knows. Or better yet, charge more for peak times (like by offering a killer happy hour special during the slow times) to smooth out demand and also serve people who don't want to pay $30 for a burger.
Pricing that is based on cost plus some margin for overhead is so dumb. Price based on demand!
This is a terrible term but I'll use it because it works here: the genre of burger we are talking about here is "cheap burger" (I mean that as a quality/experience descriptor, not price). It's a relatively thin, wide ground chuck patty on a good-but-standard bun; the only "interesting" ingredient they use is hamburger relish.
So, yeah I am explicitly saying that the price
ceiling and the demand for the burger aren't as neatly related as it looks, because the substitutes for this particular burger are going to be very close to it in quality (it's possible that for something close to 50% of patrons, this burger will be perceived as "worse" than other cheap burgers they've had, because opinions vary).
If this was that Raoul's burger, where it's ground short rib and brisket with a triple cream brie and a cognac cream dipping sauce, I'd be right there with you. But Stanich is apparently just a cheap diner burger very well executed (in Alexander's estimation, but I have no reason to doubt him). If you charge $30 for that, people will pay (once), and then feel ripped off. For a little while. Then word will get out.
It probably is the best cheap diner burger in America! The dude did the research! I'm just saying, you probably can't charge $30 for a cheap burger, sustainably. You'll do OK in the short term, and then irreversibly harm the business.
Scaling out makes a lot more sense. He probably should franchise.
Again, you're just comparing burgers in isolation, but that's not how it works. This isn't delivery. People pay extra for ambiance, for service, for exclusivity, for visuals, etc. The fact that people are standing in line for 5 hours means that they don't view it as just another cheap burger. They're willing to pay more. I'm half convinced that people in NYC will pay more BECAUSE they stood in line. How else would you know if it's good if there's not a bunch of New Yorkers validating your choices by waiting in the freezing cold too?? :)
And you don't need to charge $30. Charging a few extra bucks probably solves this problem without the downsides you're talking about.
Finally, I'm also not convinced those problems you suggest would be caused by charging $30 are actually problems. Maybe people feel like it wasn't worth it, but so what? Word gets out that the $30 burgers are overpriced...does that mean people will stop coming? There's an entire class of overpriced crappy restaurants that stay busy because of former glory, or location, or whatever. Like almost every big restaurant in a tourist zone of major world cities.
And if they DO stop coming, then doesn't that solve the original problem? Crowds dry up, you drop the prices back down, life goes on.
Just seems like almost anything would be better than throwing your hands up and shutting down the restaurant. Which ironically isn't even what happened here!
The subtext of my argument is that they are standing in line not knowing what they're going to get, expecting (or at least hoping for) a revelation that is not going to come. I agree with Alexander that these burgers are the best burgers (I haven't had this one but am familiar with the genre! The best Chicago burgers from the same genre!), but I think Alexander has, ironically, a more sophisticated take on these things than his readers do.
Remember, the 2nd place burger on his list is an absurd chef burger, even by the standards of chef burgers.
My favorite Chicago food writer has a bit about NYC pizza (he's a former NY-er) that I think captures the spirit of where I'm coming from, which is that the food tourists that seek out the best NYC slice have missed the point entirely, and that the best NYC slice is always within 1-2 blocks of where you're standing.
There's a distinction between being "great" and being "destination food" that this whole article is lamenting people --- I'd include this thread among those people --- not understanding. It's funny to see that misunderstanding expressed on HN in the language of HN --- product pricing and product/market fit.
You have to acknowledge the point he is making, he said you don't have to get to $30 to find the right spot, moreover making it a franchise will definitely take away the lore of the place and quality control. Better to raise the price but have a reward system that keeps the price lower for those who have supported the restaurant for years.
That assumes that whatever it is that he was doing before things blew up can be scaled. I think it's quite possible that it can't. Particularly as, according to Alexander, the things that pushed the place over the top were intangibles about atmosphere, which isn't reproducible.
Also, "scaling" assumes that the owner wants to scale. If he's only interested in operating a neighborhood burger diner, he probably doesn't.
The article talks about him actively considering franchising. And: I doubt there's really anything to the burger here that can't be replicated. Further: he doesn't have to replicate it perfectly, just enough to serve the local customers he wants to serve while the foodies queue up at the original shop.
> If you charge $30 for that, people will pay (once), and then feel ripped off.
Waiting 5h has EXACTLY the same effect. The difference is that in one situation, he will make 10x more profit out of it and will be able to ride the hard months later on.
The key isn't just higher prices. It is long term revenue from people who are liekly to buy repeatedly.
My solution would be $30 for tourists, $6 for anyone with a Portland ID and a loyalty card that you get in three seconds. That solves both issues mentioned (one-off, buckelist tickers and loyalty to locals).
> He has a finely-tuned metric for what a good burger is
This is one way to put it. Lets pretend that every burger isn't different, every cook isn't different, ingredients aren't the same from day to day, etc... Then it all becomes having the right combination on the day you get there. And this ignores how the reviewer is feeling, and what they ate and drank already that day and the day before.
> This guy ate at 330 different burger restaurants. He has a finely-tuned metric for what a good burger is (his #3 is also a neighborhood place he grew up with). He's set up to appreciate what Stanich is actually accomplishing with his burger. The average foodie tourist is unlikely to arrive armed with that context; they'll pay $30 for the burger, expect a revelation, and leave unhappy.
Rubbish. Here's 2006 list of burgers that you must have before you die from GQ:
By Alan Richman who "traveled 23,750 miles and consumed more than 150,000 calories while taking the measure of 162 burgers across the country—with one goal: To find you the best damned assemblage of ground beef and buns this country serves up" -- the boss of a Thrillist writer probably did not even know about that infamous GQ list.
* Number 1 in NYC : Peter Luger. Still there. Accolades did not kill it.
* Number 1 in Philadelphia : Rouge. Rouge burger - still there. Restaurant is going downhill but it has changed owners multiple times -- Neil, who opened it, died a couple of weeks ago.
* Number 1 in Philadelphia (small sliders) : Barclay's Prime - of course it is also still there.
Oh, and yes Rouge raised its prices to handle the load that article generated - the place maybe sat 50, including the bar. And now since it is not as popular as it once was, the prices are lower.
> This guy ate at 330 different burger restaurants. He has a finely-tuned metric for what a good burger is (his #3 is also a neighborhood place he grew up with).
He was just not very good as the closure of his favorite burger places demonstrated.
> He was just not very good as the closure of his favorite burger places demonstrated.
Is that supposed to imply that as long as the food is good the restaurant will succeed? I've always viewed the food as being good as an almost essential, but by no means sufficient component to a restaurant's success. I've seen plenty of places with good food close.
The Rouge burger was a custom meat blend on challah with gruyere. It's a chef burger. What we're talking about is a ground chuck diner burger on a sesame bun. If this was the Raoul burger, 12 served a day, ground short rib and brisket, I'd be right there with you.
Rouge burger was not a custom meat blend. It was a rouge steak ground from steak into ground meat for the burger as the burger was ordered because there was no space in the kitchen - it was that small.
But that's not the point - the list was of burgers: roll, meat patty, cheese, maybe some other stuff. The one that he raved about had gooish cheese etc. Were there also caramelized onions? It was the "we too can make a burger like those fancy places and not a greasy spoon diner next door".
Burger is a burger. The better the burger the higher its price could be if there are people willing to wait for it.
Chef's burger or no chef's burger - i mean hell, NY Burger Co's burgers beat some of the chef's burgers.
That's simply not true. Chef burgers and diner burgers are not the same product, which you can verify for yourself by reading Yelp reviews of the restaurant we're talking about and seeing the shocked comments from people who expected a transcendent chef burger experience from this place which only ever served diner burgers.
I'd rather have a good diner burger than a chef burger, but the whole point of the story is that the author of this ranking had one intention, his readers took away another, and the result was problematic for the restaurant.
Of course they are the same product. The product is a burger. Which is why the burger from Le Bec Fin was a flop while NY Burger Company's burgers are success. On the other hand Peter Luger burger or Rouge Burger or Parc Burger are successes.
It is unquestionable that the reviewer had no clue about a good burger - he picked OK burgers in OK places that were barely hanging on which is why his review targets did poorly. Compare that to burgers ( or restaurants ) picked by the Guy on DDD - in Philly that would be Good Dog, with its Good Dog burger - nothing special except that the cheese is injected into the patty, while it was cooked well enough by people who aren't that skilled at cooking. The wait went from 10-20 minutes to 1.5-2 hours. The place continued to sling the burgers ( and other stuff ) and continued to be popular year after year because unlike the clueless reviewer at Thrillist Guy ( who has a boatload of other problems ) at least can identify a good burger in a place that won't go out of business if its business increases by 400% ( not to mention 10% that his review did -- all of those numbers are well known - Food Network has all the numbers because they do hundreds of shows based on that. The so called magnificent changes in the fortunes of restaurants after Ramsay/Mission Impossible/etc mean 15-30% of receipt increases ) Good Dog was an anomaly in that because they did 3x in business based on the show airing for nearly a year ( DDD shows do ~30%-45% boost on average boost)
Exactly. There's a fine line between a reasonable price with a long line... and raising it where people say "they're price gouging, ugh!" and lose your customers forever because you're no longer someone with a passion for the best burger, you're a sellout for the money.
Supply and demand doesn't work as smoothly as you think. It's the same reason why huge TicketMaster fees exist -- so artists can sell tickets at a "fair" price (any higher would piss off fans) and TM takes the flak for all the "fees", many of which go to the artist/management in the end anyways. Or why shows sell out instead of raising prices -- people simply revolt at pricing they perceive as "unfair". And once they do, it's hard to get the good will back.
That's actually really interesting about TicketMaster. I can't find any info about it online; but if that's actually what's happening, it's genius—I never thought about that possibility.
A simple fix for that is to put up a big sign that says "Tourist tax in effect" and make a $25 rebate for any regular customer or person that can prove a local address; or simply assert with a straight face to the staff they live on this and this street. It's a bit of a hassle for the locals but the place is saved.
Sure, the tourists will attack you on Yelp and Instagram and accuse you of price gouging. But to hell with them and their opinion, on the long run only the opinion of the locals matters.
OMG an interrobang, my eyes can hardly believe it. Haha. I love the idea (I constantly use '?!' in online chat) but they don't look so great. Also, in chess, !? and ?! have different meanings..
This page (in the comments at the bottom of the page) has spanish-speakers using both that and the reversed version, and even the 'gnaborretni' (inverted interrobang) :
This guy ate at 330 different burger restaurants. He has a finely-tuned metric for what a good burger is (his #3 is also a neighborhood place he grew up with). He's set up to appreciate what Stanich is actually accomplishing with his burger. The average foodie tourist is unlikely to arrive armed with that context; they'll pay $30 for the burger, expect a revelation, and leave unhappy.