Quelling Juggernauts
Some time ago, I ate at Ritual, a restaurant in Nelson’s Bay. It is located on the corner of a suburban shopping mall, propped up against a Blockbuster video store (covered in posters of Miley Cyrus) and a greasy chicken shop. To the hardened slicker, Austral Street Shopping Village is the definition of fucking nowhere. It would be foolhardy, however, to suggest that these surroundings are indicative of an experience at Ritual.
Opening by reservation only, there was a total of four people that night. On their website Chef Carl Kenzler explains that that it only “seats 12 customers maximum, therefore you are assured of personalised service.” With my three dining companions, we were treated to Cappucino jubes, ‘sphereised’ Tom Yum soup and liquid nitrogen peppercorns. It was sensational.
I was curious as to why such a brilliant restaurant was in the middle of nowhere serving only four customers. Carl explained when he came over to discuss the meal. Operating in Nelson's Bay means that he can focus on delivering amazing food. If Ritual were in Sydney (as expected of most calibre Chefs), his challenge would be in trying to serve 40 people a night, not making the dishes perfect. He has purposely limited his business to grow the quality of his product.
Extrapolation
Recent web applications are starting to build limits directly into their business models too. Pinboard by Maciej Ceglowski and Fever by Shaun Inman are two great examples. Pinboard charges you 0.1¢ for each existing user, so the more users there are, the more you pay. Fever is a feed reader which requires you to host your own webserver (no simple task).
Why limit your userbase like this? Don't you want as many people using your product as possible? In each example there is a limited resource. Carl can only cook so much and Maciej & Shaun can only provide so much support. Though it may sound counter intuitive to turn away revenue, if you have some sort of limit, you have to adjust your business to match this limit.
Don't just have a beta. Betas are bullshit. Make users wait a week, manually review their application or make them order over the phone. Placing a roadblock will deter all but the customers you want to have. When Google takes a website and makes it run for ten billion users they are playing catch up to public demand. They are subject to the masses and are on the back foot, forced to spend millions and hire to satisfy demand. Carl Kenzler is inspiring because he is only a slave to his own standards.