Wednesday, 12 January 2011

Spreading the fixed costs

You'll recall Wellington's one-day-a-week Ethiopean restaurant.

TechDirt points to another way of spreading those fixed costs: folks who set up facilities for rent by small clients. TechDirt points to a New York incubator for culinary startups:
On a block in Long Island City, Queens, shared by car washes, plumbing parts manufacturers and livery-car garages, the three, as well as other cooks, pay by the shift to use a commercial kitchen equipped with 80-quart mixers, deep-frying caldrons and walk-in ovens, churning out food they sell on the Web and at farmers’ markets and coffee shops.

The kitchen’s 5,500-square-foot work space is both a refuge for dreamers and a life preserver for the unemployed.

“There are a lot of career-changers here, a lot of casual gourmets who channeled their energies into cooking as a way to make money,” said Meg LaBarbara, a former travel consultant who makes dips and spreads at the kitchen, called the Entrepreneur’s Space, on 37th Street near Northern Boulevard.
Unfortunately, the space seems not to be commercially viable as yet:
The kitchen, rare in its approach, solves many problems. It offers cooks space they do not have at home, is fully equipped and complies with the city’s health code. The place has also fostered an informal network, where cooks combine purchasing orders for things like butter and olive oil to save money, or rely on one another as taste testers.

But like many of its users, the kitchen suffered when the economy cratered. It used to function as a training ground for unionized workers, available for rental to commercial cooks at night and on weekends. Once grants and donations dried up, though, the Consortium for Worker Education, the union-backed nonprofit group that sustained it, could no longer afford to lease the space.

The kitchen was supposed to close at the end of August, but its manager, Kathrine Gregory, hatched a survival plan and enlisted the cooks to help her.

One made vegan pâté. Another baked Finnish ruis bread. Ms. LaBarbara made sun-dried tomato hummus, and Ms. Angebranndt, of course, baked whoopie pies. The food was laid out before a small group of officials from the city and nonprofit groups who had gone to the kitchen to hear Ms. Gregory’s pitch. They left extending a bailout package worth more than $250,000 and a $1-a-year lease agreement for the equipment.
Some tech business incubators are publicly funded, or at least their initial set-up costs are subsidized. Private funding here could work if the investor reckoned at least some of the renters would make it big and that he could get an equity stake in exchange for space at the incubator. But the selection mechanism will differ a fair bit: I'd expect a higher proportion of satisficers among folks leasing kitchen space than those leasing tech business incubation space. But Wikipedia article suggests reasonable graduation rates from kitchen incubators. Here's hoping the New York incubator proves viable in the longer term.

No comments:

Post a comment