Thread by @ShaanVP

software is such a cheat code in the game of business. My first company was a restaurant. One of the worst businesses you can start (everyone told me this, but being young, I told them to kick rocks)

we tried building the "Chipotle for Sushi"

Here's the rule of thumb $s :
- ˜10-15% profit margins (if you survive)
- ˜$500k-$1.5M up front investment
- 6 months+ per new store
- need tons of employees, <15% employee retention
- spend 85% of time on the bottom 10% of stores

Plus the lifestyle.
- business runs 7 days a week, no holidays
- I still remember going to the fish market at 430am to get fresh ingredients, & washing dishes until midnight
- Hated the work (crappy feeling "this sucks, who can I pay $12/hr to do this for me?")

Software is like the polar opposite

- can get 80% margins
- no capex. can get going on <$250k investment
- can expand to new geographies instantaneously, with ˜$0 incremental cost
- can build a $1B+ dollar company with < 15 employees
- test/experiment quickly/cheaply w/ data

Lifestyle is so much easier. work from home in your boxers. type on your laptop. bitch about the lack of low fat oat milk in the company fridge.

I wrote a memo to my company called "Software is Magic" based on my observations switching from brick and mortar industries (Food, Energy) to Software (tech). will share just DM me if you wanna read it

OK I got enough DMs (nice fishing on my part), I'll just post it here so I don't have to reply to everyone

✨WHY SOFTWARE IS MAGIC ✨

✨#1 Build Once, Sell Infinitely ✨

With the restaurant, every customer required work (make their sushi roll). With software, we build the product once, and it can serve millions of customers without additional human labor. This makes the margins magical.

✨#2 Expand Globally, Overnight, at ˜zero marginal cost✨

With the restaurant, even if we had a winning concept, it will take years and millions of dollars to expand to every major city. Instagram launched and had users in Japan the next morning. Magic.

✨#3 Every improvement helps every customer ✨

Every business tries to improve it's product over time. But in software, if you improve the product (fix a bug, add a feature). Not only does it help new customers, but it helps *every* customer. No factory recall required. Magic.

✨#4 Experimentation leads to improvements ✨

In the restuarant industry. Testing was excruciating. It took lots of time, money, and guesswork to figure out if customers want A or B?

Software experimentation (eg. A/B Tests) is trivial. Test, measure, re-test. Truth gets told

Add it all up:

Your product gets made once and can be sold infinitely. Like printing one dollar and spending 10 times. And it expands globally without ever leaving your bedroom.

To improve this magical product. You can easily tweak it, and give half the people version A, and half version B. The data will tell you which version performs better.

Oh and if you find a better version, just push a button and all customers (past & present) magically upgrade.

These magical advantages make the "business of bits" > "business of bricks".

Silicon valley is basically hogwarts. you can be neville longbottom and still get rich ✨