>Of course the reality is that a successful San Francisco restaurant makes millions of dollars per year.

Selection bias anyone? Of course a 'successful' $X makes money, it wouldn't be successful otherwise. That tells us nothing on how many restaurants had to fail in relation to the ones that did well. From a hypothetical investor's point of view if 1 out of 10 restaurants does well enough to earn a payback and you would have to put $1 million in each one to get it started, then the one that succeeds has to profit at least $10 million for the investor alone. Yea, seems like a pretty high risk environment.

Both your analysis and Peter Thiel's are coming from that weird place where becoming filthy rich is the only marker of success, rather than opening a business, building its loyal clientele by offering a valuable service they appreciate, employing people which helps their own lives grow and being able to support your own self from all that.

What the f would Peter Thiel know about the joy derived from feeding someone good food?

> Both your analysis and Peter Thiel's are coming from that weird place where becoming filthy rich is the only marker of success

Actually, it looked like his analysis was for what was required to break even, on the average. Invest 10 million (across 10 companies), get back 10 million in profit from the 1 (of 10) that succeeds.

I am trying to point out the ludicrous attempt to apply tech venture capital strategy to starting restaurants.

There is no way anyone is going to open ten restaurants simultaneously, fail at 9 of them and earn 9 million in first-year net profit from the 10th. That's not how opening or operating restaurants works.

Instead one person opens one restaurant and they have a 90% chance of failing. That's so much worse!

I think you have that wrong, 90% of people fail at opening and operating restaurants.

Some folks have a very high success rate.

I think the failure rate I’d restaurants is more tied to the types of folks who open restaurants than the business model.

There are many other things one can derive joy from that don't require putting in 90-hour workweeks, won't cause crazy levels of stress and aren't likely to result in boatloads of debt.

Sure, if sufficient care, attention, and elbow grease made it a near certainty that even a halfway competent owner/manager could take out, say, $100k per year to live on, then you might have a reason to be a little indignant toward Thiel.

The restaurant market is notoriously fickle with considerable risk of ruin. Between opening a restaurant and building its clientele is a lot of uncertainty. It’s easy to look at the surviving restaurants and think that anyone could make a comfortable living at it. The economist must consider both the seen and the unseen — of which the latter in this case is all the restaurants that started and failed.

> filthy rich is the only marker of success

it's the only marker that others judge you by.

Said the king, before the guillotine fell and decapitated him

I think his line of thinking is more like, why spend so much time trying to get X to work, when I can just do Y and make the same amount of money? Unless you really really want to run a successful restaurant, he's not wrong.

If it takes 1/10th the effort to run a cleaning business and make $1m a year, vs a tech business, would you do it? Some people would, others won't. Operating in a space with (not just normal but) extreme cut throat competition can get tiring after a while as well.

And even if you really want to run a successful restaurant, capital doesn't give a fuck. Banks won't lend you more money because you have a passion. Investors won't either.

Drugs cartels seem to emerge without government assistance.