It really seems like it should be possible, but you have to put in the effort to develop recipes, buy minimum quality ingredients, and train the staff. Old school diners, especially Greek diners in the NYC area, used to be famous for their wide-ranging menus—burgers, spaghetti, spanakopita, chopped liver, etc.—and the food was generally pretty good. Cheesecake Factory has built something similar on a national level, and workplace cafeterias often aren't bad either, certainly not at the level of a ghost kitchen.
I think tech founders often underestimate what it takes to build a food business and what the margins are like and then start to cut corners to make the business viable.
Greek diners in NYC are a miracle to me. The food isn't the greatest, but it's good enough, and the huge diversity of menu items (usually made by one guy in the back), served for decades, is enough to make me wonder if there's something I'm not understanding about the business -- like secretly they're running 50% gross margins, or the meat is all rat.
Land and rent used to be cheaper, and a lot of people come through the door. The margins on a lot of diner food, like eggs, ground beef, and coffee and fried potatoes, were at least historically fairly high. People in NYC also historically ate out a lot.
I think longtime NYC restaurant owners often love being a community hub, particularly if they’re first generation Americans, so they’re not thinking of how to squeeze the customers or follow the latest fads.
A lot of stereotypical “ethnically owned” businesses in NYC also have their own supply chains. It’s very possible they are or were buying from Greek-American wholesalers who are effectively buying in bulk for diners across the city.
My impression in general is also that people who’ve worked in the NYC food business for a while in general know their preferred vendors to call for any particular thing, from whole chickens to pest control, and that if you tried to compete with them by finding vendors on Yelp or whatever without those relationships you would be at a complete disadvantage.
> I think tech founders often underestimate what it takes to build a food business and what the margins are like and then start to cut corners to make the business viable.
Is that just tech founders, or American business culture, generally? Seems like everything's getting corners cut to the maximum extent possible.
I think tech founders often underestimate what it takes to build a food business and what the margins are like and then start to cut corners to make the business viable.