Comment by muzani

I ran a coffee cart once. The money simply doesn't add up unless you have economy of scale like Starbucks.

In software, you're being paid to work on a project that loses millions of dollars per year, until it becomes a unicorn then starts to make millions of dollars per week. A guy who can improve ad click rates by 0.1% is worth several millions. Even without the economy of scale, the profit margin is 90%

In the food industry, you're buying a steak for $10, selling it for $20. But there's labor, rent, utilities, etc. Very often it boils down to $18 costs for a $20 steak.

But your competitor just quit his job to become his own boss. His dad and wife thinks he's an idiot and should just stick with the corporate job. They all put down half a million dollars on the restaurant. The numbers differ, but it's usually half the price of large house in the area. He's losing $1000 per month, but on some months he makes $2000. He'll probably get divorced if he calls it quits, so he's plodding on hoping for more profitable months. He works 14 hour shifts with his wife and will do so until he's 70.

Some of these people are immigrants. Home might be at war. They have no way back and no other skills than cooking. The kids go to school and come home and prep stuff in the kitchen. They're not playing games or chatting on the internet. They're helping mom and dad eat.

In a free market, restaurants are the losers. They're the least efficient way to turn time into money. Even washing cars has a better profit margin.