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Comment by stordoff | Hacker News Reader

Interesting article, though it did seem a little odd to discuss the costs of business then describe coffee sales as "a rogue’s playground of jaw-dropping markups". When I go to a coffee shop, I know I'm not just paying for a cup of coffee, but for a cup of coffee to be available and prepared in that location, plus some amount of profits. The fact that the cost of goods is a tiny fraction of the sale cost isn't at all surprising IMO.

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I am not a coffee drinker, and don't frequent cafes all that much, and I must admit to being staggered at the markups in the coffee business - for basically something that you will quite literally pee out later in the day.

In fact, I think the last time I was at a cafe, was a business meeting where I was talking to a potential investor in an app I wrote. I clearly remember him telling me "Gosh, NO ONE wants to pay $2 for an app (that I had sunk several hundred hours programming into) these days...." while literally holding a $5 latte in his hand, and signalling the waiter for another.

He's right though. You can be a hypocrite and still be right.

In addition to the tasty beverage, $4.00 at Starbucks buys you a nice caffeine buzz, a warm place to sit, a relatively reliable restroom experience, and guilt-free wifi for the foreseeable future. The people who don't take advantage of that are subsidizing the people who do.

It's strange and quite arguably hypocritical, but still correct. Millions of people pay markups for coffee and booze that are completely absurd every day. Very few people will pay a dollar or two for a app, even a well-made app that does something useful and saves them a pretty significant amount of time. There's a reason why so many are moving to ad-based or freemium revenue models in their apps.

You get exactly what you expect and want from the cup of coffee. Apps, not so much.

Do you though? What do you do when you get a take out cup that is too bitter or over/under sweetened? Do you wear it, or take it back?

What happens when you get caught up talking to someone or distracted, and your $4 cup of coffee becomes cold and undrinkable? Or if someone nudges you and you spill some? Does the $ value ever factor into it, or is it just a 'throwaway' cost?

In fact, does anyone ever stand at a urinal and think to themselves - "That is a $10 pee, given the coffees I bought this morning"?

Once seen written above the urinals in the toilet of a bar:

"You don't buy beer, you rent it."

I guess the same applies to coffee.

That's life, though - people will pay markups for coffee and booze because they know what they're getting; you get a reliably enjoyable experience with no mental overhead required.

Even the best apps have two unknowns - 1) you don't know if it's going to be useful, and 2) you don't know how to use that app; you need to learn how it works. The former issue can be obviated by word-of-mouth praise, but it's soooo tough to get over the latter.

Like you I am a startup founder, which probably means that we are both pathological novelty-seekers when it comes to tech. And yet... I worked at an amazing B2C startup for two years and, to be completely honest, I never really got into the habit of using the product daily. The app is targeted at my demo and I didn't use it daily.

That's why they say that the crux of building a great B2C company (e.g. an app) lies in changing the public's consumption habits. It's tough, and it seems like such an impenetrable problem. I have a lot of admiration for B2C founders.

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