Taco Bell has at least fifty menu items (not to mention their multi-brand restaurants). In-N-Out has, well, burgers, fries, shakes and soft drinks.
Okay, In-N-Out does a great job. But a Taco Bell kitchen is about the same size, yet produces a substantially larger menu.
How do they pull it off? Middleware. At In-N-Out, they make food out of potatoes, buns and refrigerated beef. At Taco Bell, they make food out of ingredient bags which are processed and packaged off-site. In-N-Out is something that a chef can respect -- Taco Bell is not.
But it's worth pointing out that In-N-Out can thrive only because their market doesn't demand a wide-ranging product. Sometimes markets move in that direction, and the artisans -- who cannot abide using middleware, who want to make everything to their high standards -- have a hard time competing.
In-N-Out has the highest profit per location and one of the highest employee retention rates of any fast food restaurant. Their ability to expand is limited more by their refusal to ever freeze their ingredients than anything else (they must stay within X distance of their cattle ranches).
Its a really impressive company, and one that I think backs up Jason's point. There was an amazing article on them recently that I'm struggling to find, if someone has the link and could post it that would be great (BusinessWeek?).
But every In-N-Out I've ever been to has a line out the door. Taco Bell may have a larger menu but I doubt they have anywhere near the per-store revenues or profit margin of an In-N-Out.
> But every In-N-Out I've ever been to has a line out the door.
That could also be explained by the fact that there are far less In-N-Out locations than Taco Bell, so one store has to handle demand from over a larger area than Taco Bells.
If In-N-Out has the same density of locations as a Taco Bell, the per-store revenues will be quite different.
Sure but lets put it in context of this article. If I were looking to open one fast food franchise, I'd much rather be in the In-N-Out, do one thing well camp then Taco Bell's give them anything world.
(this isn't to say Taco Bell's business is poor, I'd just rather do what In-N-Out does)
Taco Bell is also pretty successful, and that contradicts the article. Other contradictory examples are Olive Garden and The Cheesecake Factory, both of which have extensive menus and are wildly succesful, the latter also having the same scarcity dynamics and lines as In-N-Out.
Articles like this are annoying. There are multiple ways to success, and presenting one as clearly better than others when there are so many counterexamples is disingenuous.
In-N-Out has a simple menu, above average ingredient quality, and treats their workers pretty well. All great qualities. But it's pretty evident, especially when it comes to food, that you can be bad in all those areas and still be successful, and perhaps even outcompete those who are better than you, if you focus on price and consistency, even if the thing you're consistent at is being mediocre.
I'm starting to feel like this advice isn't so great anymore.
Everyone is trying to do less and what we end up with is a million little apps that do one thing really well, which is great, but you're still dealing with a million separate apps. The iPhone wasn't just a really great phone, it was a phone, an iPod, and an 'Internet Communicator' but because those things were combined in such a great package it really spoke to people and made it something they would want. Of course the App Store is what is driving the popularity now but that is still because customers can come to one place, the iPhone, and get tons of different uses out of their one device.
I think we're starting to enter an era where users are more interested in packages of functionality that are easy to use and work really well over a bunch of tiny solutions.
Maybe I'm wrong, but I know that I prefer products/applications that let me do lots of things reasonably well in one place instead of getting the 'perfect' thing for each problem I have.
You may need to factor in the "minimal viable product." A few years ago, an mp3 player could be consider enough for a high-end (read non-knockoff) product. However, fast forward a few years and you now need a mp3 player, video player, and app store driven device.
So I think you need to factor in the minimum requirements of the device (or foodchain) and then execute with the highest level of quality.
I don't think the problem is the number of features really but maintaining the simplicity or ability to access the features you need. For any given product there are probably a core set of features that everyone wants and beyond that each additional feature pleases some other slice of the customer group but before you add that extra feature you should probably consider what that might cost you in terms of maintaining the simplicity of access and ease of use of your core features.
"Simple" as a discussion-starter? Great. "Simple" as a universal prescription? Maybe not.
Chipotle thrives on its simple offering; Cheesecake Factory thrives on its deep menu.
Larry Ellison fought against the "best of breed" concept to promote a unified Oracle Applications. A Cheesecake Factory style package.
The argument for "complex" is that once you've earned the trust of a customer, you can provide the spectrum of products/services that customer needs. You can be counted on to pick up all dropped balls.
(But maybe there is a completely pointless complexity - proliferation of marginal features - which we can simply avoid.)
The only reliable guide is complete focus on the customer's needs.
I'm not so sure that the Nintendo Wii should be considered as a good example for this sort of thing anymore.
They had won big with the Wii, turning profits on each console sold while the competition lost with each sale. But now they're facing the problem with the Wii being abandoned in households rather quickly and the decrease in software sales that brings.
DS aside, can Nintendo really be considered as a company that does few things well when the longevity of 1/2 their flagship lineup is in jeopardy?
Here are some software sales stats for the past 3 years. The Wii has shown strong sales so far but has plateaued this year: http://www.gamasutra.com/php-bin/news_index.php?story=25740 (though it could be due to lack of meaningful choice this year in comparison to last year, not due to abandonment)
Admittedly my remark about the console being abandoned quickly was a hasty generalization. I took into account some reports from 2007 that questioned the longevity of the Wii and had gathered the percentage of people in Japan that used the system frequently. That and experiences my friends and others I know online have had with their Wiis.
Like most 37signals articles, this presents a platitude backed by two examples. There are thousands of companies that succeed with the opposite strategy, and thousands that do something simple and fail.
It's not even clear that Pinkberry succeeded because of its small product offering or due to some other factor. In fact, the first time I heard about it, a fan was raving about the incredible selection of toppings to choose from.
A whole economics thesis could be dedicated to a controlled study of which strategy is actually preferable. This being the internet, simple narratives tend to win over rigorous results.
Can you suggest any way of gaining a broader perspective? Both companies mentioned in the article are B2C and highly visible. They may have "visual punch" outweighing their "economic punch".
How can we get a broader, more realistic picture of what's really happening in the economy?
I live in Tucson and occasionally choose to eat at Chipotle none the less. There isn't a taco shop around that makes a veggie burro anywhere close to Chipotle's guacomole burrito. While a caloric load in itself, half a burrito is a good sized meal and is lighter than the comparison.
Is it Mexican? Not quite. Is it pretty tasty? For fast food, at least.
Chipotle is a national chain that is highly-profitable. Consider it the Starbucks of Mexican food. Not as good as the "local" place, but consistently okay everywhere you go.
They got involved because the first Chipotle was right near the McDonald's corporate offices in Denver -- the executives were eating there so much, they bought into the company!
Adding more weight to your point, I read that McDonald's divested their stake in the Chipotle chain, giving the reason that they wanted to focus on increasing revenue at their own restaurants.
Rick Bayless is based in Chicago with Frontera Grill and is considered an expert in authentic Mexican food. He has won multiple James Beard awards including national chef of the year.
I'm not sure I'd describe them as healthy, exactly. They do place a strong emphasis on using good ingedients, but portion sizes are huge -- a chicken burrito is more than 1,000 calories.
Chipotle's meats (particularly the steak) can be quite bad at times, but the rest of their stuff is pretty good, and their chips are great. I haven't been to a Taco Bell since a Chipotle opened up in my neighborhood, despite the Taco Bell being quite a bit cheaper and only two blocks further away.
Okay, In-N-Out does a great job. But a Taco Bell kitchen is about the same size, yet produces a substantially larger menu.
How do they pull it off? Middleware. At In-N-Out, they make food out of potatoes, buns and refrigerated beef. At Taco Bell, they make food out of ingredient bags which are processed and packaged off-site. In-N-Out is something that a chef can respect -- Taco Bell is not.
But it's worth pointing out that In-N-Out can thrive only because their market doesn't demand a wide-ranging product. Sometimes markets move in that direction, and the artisans -- who cannot abide using middleware, who want to make everything to their high standards -- have a hard time competing.