Entrepreneurs spend too much time obsessing over their products and not enough time worrying about what actually generates revenue
Last Sunday my wife went to lunch with friends, which left me on solo “dad duty” for the afternoon. I’d initially planned on taking my kids somewhere outdoorsy and fun so they could run around and hopefully tire themselves out, but the rainy weather wasn’t cooperating.
Lacking any other brilliant ideas, I opened my Google Maps app and searched “kids entertainment” options. The closest choice to my house surprised me. I’d forgotten I live down the road from a Chuck E. Cheese. Sure, I hadn’t been to one since I was little, but I remembered enjoying the experience as a kid. Why not give it a try as a parent?
For those of you who’ve never been to or heard of a Chuck E. Cheese, it’s a sort of hybrid pizza place and arcade meant for kids. It’s named after its mascot, a singing cartoon mouse named — you guessed it — Chuck E. Cheese.
Admittedly, a “pizza-arcade” named after a singing mouse actually sounds kind of amazing. But don’t be fooled by my description. Chuck E. Cheese is not the magical wonderland of pizza, games, and make-believe that you’re imagining.
For starters, the pizza tastes like cardboard. Plus, it costs as much as caviar. As for the “arcade,” it’s basically just a bunch of chintzy “luck” games where you press a button to earn some tickets that you eventually trade for cheap, crappy prizes. It kind of feels like being in a casino except with more lights but somehow less exciting. As a result, by the time you’re done at Chuck E. Cheese with two kids, you’ve spent $100 on a pizza you’ll wish you hadn’t eaten and a couple of Tootsie Rolls because those were the only “prizes” you could actually afford despite your pile of tickets.
By the way, the saddest part of this entire experience was the way it made me feel about myself as a parent. After all, as you might imagine, I wasn’t the only dad solo-parenting at Chuck E. Cheese on a rainy Sunday afternoon. Apparently, that’s where all the beaten-down, desperate dads go when trying to buy their children’s love.
Luckily for us dads, buying a child’s love isn’t too hard when they’re still too young to question all the stains on a yellowing carpet. As a result, my kids seemed to have a fun enough time to call the trip a success. Though, to be fair, I should mention that every Chuck E. Cheese features an animatronic band containing a life-sized Chuck performing with his animal friends. Again, while that might sound as cool as a “pizza-arcade,” it’s actually the stuff of nightmares. Just ask my 5-year-old who literally spent the next three nights sleeping in my bed because of what she called “the creepy, singing animal Taylor Swifts.”
Even though my kids enjoyed themselves for a couple hours, I doubt we’ll be returning anytime soon. The crappy food, crappy games, and multiple nights of bad dreams make me think there are better places to spend my money. But that’s not the point of me sharing this story.
I’m sharing this story because, after having such an underwhelming experience at Chuck E. Cheese, I was curious to learn more about the business. After all, I’d gone to Chuck E. Cheese when I was a kid, so it’s been around for a long time. In fact, according to my research, the first Chuck E. Cheese opened all the way back in 1977, meaning the company has been in business for nearly 50 years. But How can a company with such a crappy product exist for so many years?
The answer is an important lesson about entrepreneurship that underscores the value of a startup’s potential “market size.”
In the case of Chuck E. Cheese, the market of “parents desperate for novel ways of entertaining their kids” is so enormous that the quality of the option doesn’t matter nearly as much as its mere existence. Simply put, in order to turn a profit, Chuck E. Cheese doesn’t need to serve gourmet food while immersing patrons in the most epic gaming experience of their lives. Instead, the world is filled with so many exhausted dads watching their kids on a rainy Sunday afternoon that, to be successful, Chuck E. Cheese just needs to exist. To be fair, when it was new in the 70s, it was probably an exciting way for kids to get out of the house. But we live in a world of Playstations and streaming, so Chuck E. Cheese’s continued existence is purely due to its position as a product of conveniences in an absolutely enormous market.
This positioning is what brought me to Chuck E. Cheese with my kids. I didn’t need it to be fancy, epic, innovative, or even clean. I just needed it to be different enough from what I otherwise would normally have been doing with my children so I’d be able to say, “I took my kids somewhere fun.”
Can you position your startup to take advantage of the same kinds of quality-agnostic market forces?
To understand why incorporating this type of strategy matters, compare launching a Chuck E. Cheese competitor to, for example, launching a new cell phone that’s going to compete with iPhone and Android. If you were launching a new phone, imagine how amazing you’d have to make your new device in order to get people to change from their current phones. It’d be almost impossible, right?
In contrast, if you wanted to launch a competitor to Chuck E. Cheese, you might not even need to create something better. Instead, the “kids entertainment” market is so enormous and options are so underwhelming that getting customers isn’t the hard part. You can literally have a restaurant that serves overpriced, cardboard pizza while giving children nightmares, and it’ll still be profitable.
To be clear, I’m not suggesting anyone should intentionally create crappy products. But I am trying to remind everyone reading this about the danger of being so focused on your product that you forget about all the other factors impacting a business’s eventual success.
Savvy entrepreneurs don’t forget about all those other factors. Instead, they leverage whatever they can to make success more likely. And why shouldn’t they? Why put yourself in a position where the only way to succeed is by having an amazing product? Wouldn’t you rather operate in a more forgiving market? Wouldn’t you rather be building something that doesn’t have to be perfect in order to be successful? After all, a mediocre product in a great market is still a thriving business, and that’s a powerful lesson for any entrepreneur. It’s a reminder that, as you build your startup, you should focus less on what you’re building and more on who you’re building for. Find an enormous, forgiving market. Identify where the demand is high, and the competition is low. Then, craft a solution that meets the market’s basic needs. If you do that, you won’t have to be perfect to be successful — you’ll just need to exist, like Chuck E. Cheese on a rainy Sunday afternoon.
