24A – Venture Concept No. 1

Venture Concept

Opportunity

The opportunity that I am exploring in my business venture originates deeply within the culture of American service expectations and the customer expectations that come with it. The expectation of the average American citizen to tip their servers when they are out to eat is the opportunity that I am exploring in this venture, and although I do not have the one-fits-all solution to this opportunity, I am going to be exploring possible catalysts that can spark change in this cultural organization that has been embedded in American culture.

Specifically, most middle-class working Americans citizens who go out to eat often fit the market segmentation of this opportunity. Also, the range of age of the market segment includes American citizens from 18-40 years old. The nature of the need is not more situational rather than vital, not an intense need, but can be vital when the situation arises. This is why the market segmentation is extremely important to set up for the environment in which the opportunity would arise.

To set up this opportunity, we have to put the market consumers in the environment in which it will occur. In this case, imagine an average, working class American family going out to dinner. This particular family has a lovely meal, served to them by a waiter/waitress who was not extremely nice to them during their time at the restaurant. However, at the end of the meal, the family feels the need to still tip this server who was not necessarily deserving of the gratuity. If this scenario was flipped, the server would most likely be mad at the family for not tipping her/him, making the situation extremely uncomfortable for both parties involved. This type of scenario, by the way, would also have to take place in a rather populated area, preferably a city or a strip of town that has a lot of business. Anyhow, another issue with this awkward scenario is that the main driver is the wage of the workers and the sympathy given by the consumers to the workers. From my experience, I have learned that most servers rely on their tips rather than the wages that they are given per hour, mainly because they are paid below minimum wage; corporations assume that these servers will account for the lost wages in the tips that they will supposedly make. This creates an issue with the dynamic of the customer and the workers, making the environment and situation uncomfortable and maybe making some customers not come to the establishment again.

Unlike some, customers who are wealthy enough to tip servers do not come across this issue as often, but from experience I have learned that even the wealthiest of people can show signs of greed. Consumers bite the bullet most of the time and just tip servers to avoid such awkward interactions, which is also an issue that aids in making the whole process of eating out more uncomfortable. The opportunity itself is quite large, spanning across the country at all different restaurants, cafes, and diners that allow tipping. Thankfully, unless things start to change, this window of opportunity will always be open.

Innovation

            Amidst this broad spectrum of this opportunity, I have come up with a startup/catalyst business idea that could solve both workers and customers problems with tipping and gratuity by creating a new innovation restaurant that would no longer allow tipping, paying workers higher wages and leaving both parties satisfied. This innovated restaurant will make money by attracting more customers by not only being new and unique but also creating a more comfortable experience for them. Rather than selling a specific product or service, I am selling an experience that is familiar, yet different in one aspect that can change the dynamic entirely. I would not change many aspects of the prices of certain menu items, or even charge for the experience, however giving the workers a higher wage would require some extra spending that would need to be accounted for.

Venture Concept

            Because of how this innovated experience will make customers and service workers feel, it will completely solve the opportunity I described previously by eliminating tension between workers and consumers and alleviating the pressure of having to add gratuity at the end of a check. I do not think that it would be hard at all for consumers to switch to this new service. Not many things would change, and the location would be even more convenient for consumers to possibly just wander in and be pleasantly surprised, leading them to spread the word. There would not be many competitors, however in a different point of view every other restaurant could be a competitor. In this case, their main weakness would be that they enforce gratuity and my establishment would not. Customer service is the main proponent of my business concept, and I would organize my business and advertisement around the production of this unique service exchange.

What’s Next?

            The most important resource in my venture is going to be my social capital and learning how to network in the large service industry market. I would have to learn how to not only provide exceptional service, but also make it prevalent and make consumers aware in some way that is not invasive that they do not have to tip the serves because they are being appropriately compensated for. Next, I would love to tackle a more specified product that can be packaged and narrowed down to a very specific market. But, in the next ten years, assuming that I would have launched my business venture, I would love to have more than one establishment practicing this type of service and possibly influencing others to follow my lead in this endeavor.