I know some people that roll a pizza slice (from crust to center) to eat it. Blasphemous, and inspiring.
Some sandwiches naturally want to be eaten from the middle layer out.
They uh, literally did, 25 years ago. Breadmaking at Subway scale requires a single large mixer, some countertop space, some proofing racks, an oven, and a few hours at certain times.
Like, lmao bakeries are tiny! They have been premier examples of small business for basically all of human history! It's something you can just drop into the morning setup if your food business has any interest at all in "fresh" ingredients or higher quality like the vast majority of small businesses try to focus on. It scales down extremely well, which is why Kitchenaide does great business in their "Pro" series of mixers.
In fact, 25 years ago, the New England grocery store chain Hannaford also had a fully functional and running in house bakery, including in their small stores. Fresh baked bread and pastries and cakes and baked goods every single day.
Both companies have switched out the process without actually switching out or removing the required hardware (they both still have the racks and ovens and still install them in new locations!) to one where the bread is made in a distribution hub and sent out frozen.
It was an easy service to offer when Americans could afford to pay for that kind of thing because most Americans had fine jobs. But Subway can't afford the labor rates for someone who genuinely knows how to make fresh bread, because they have to/want to pay absolute bargain basement labor rates. Their business cannot survive if they priced their sandwiches in line with how much they were 25 years ago, with the same quality of ingredients they had 25 years ago.
Americans can't afford to pay american labor, which means fewer americans end up getting paid good labor rates, which means those americans can afford less, which means etc etc etc.
Meanwhile executive compensation has only ballooned. Gee whiz.
Every time someone figures out how to do something that's subjectively graded at scale the definition of "great" changes because a large part of it is partly based on exclusivity and a smaller part is based on frequency/familiarity (i.e. people get sick of or discount the subjective quality of things they encounter with frequency).
The optimal quality model is for a sandwich place to contract out with a bakery for perfect bread but barring that a bakery can make great bread and ok fillings and still make decent sandwiches.
Think apple silicon at TSMC model for optimal quality results, intel model for good enough results.
The best sandwich shops will not make their own bread because it’s a lot easier to iterate without a bakery and 100 sandwiches shops can fail at relatively low cost for the one great one to shine. Capital costs on bakeries are much higher so you can’t just iterate in bulk. But you can get good enough at the bakery.
Those that only sell bread and nothing else, are very few and slowly going away.
Thus maybe the other way around, as sibling comments are pointing out.
One thing is right though, many Germans think they are unique on this.
To me it appears those are somehow related to what I mentioned on my comment, "Those that only sell bread and nothing else, are very few and slowly going away."
On the other side of the border, most of those bakeries survive in small villages with an aging population, and have been wipedout by pasteleria/panaderia businesses in towns and cities.
Then again, I never been in tourist free areas when in Spain.
There's a lot of overhead in a sandwich shop hiring a baker, then outfitting a kitchen to efficiently bake bread at scale. And how do you handle his days off, with n=1 baker?
Vs. a bakery only needs 4' of counter space to do a modest volume of basic (cold cuts & such) sandwiches. Unless it's a pretty upscale bakery, the customers will be fine with less-than-fancy sandwiches at less-than-fancy prices - those are mainly a "while I'm here" convenience. Vs. a "great sandwich" shop has to qualify as a destination.
Subway?
Though I should point out that this is not baking, but simply putting premade delivered dough into an oven. The dough is baked, yes, but this is not what people mean by baking.
A bakery generally is mixing flour themselves.
It's been a while since I ate there, but the bread quality was for-sure not up to "we hired a baker to elevate our sandwiches" standards.
Frozen dough doesn't come out the same, nor does reheated pre-baked bread. It's fresh it just isn't made from scratch there in the store.
There's a couple dozen fresh dough facilities scattered throughout the US that serve all of these restaurants that need fresh bread, but without the cost of paying someone to mix flour locally.
The thing you buy at 6am (or 6pm, lol) was in an oven or a mixer (depending on whether the chain in question is baking on site or at the hub) at 12am that morning and on a truck at 3:30.
The bakery has to become a inferior sandwich shop to make sandwiches. The sandwich shop doesn't have to become a bakery to bake just the types of bread that they need to wrap their sandwiches.
The bakery would be better off selling dough to the sandwich shop.
Yes, the core idea behind Stack Fallacy was that if you are Apple you don't need to build a better CPU than Intel for all workloads - you just need M3 for your Mac.
So yes - just one type of bread. Like Subway. Or Panera.
There is a different class of sports though. Schools should have sports as exercise for students, and classes on how to get better at sports.
* Sports gives Academics some funds
* Sports gives Academics brand marketing/prestige
* Academics gives Sports a moral cover for exploiting young athletes
* Academics gives Sports a pre-made core fanbase of students
In my experience, one of the most reliable heuristics for finding a place that makes good sandwiches is "go to a place that's a good bakery and see if they make sandwiches".
I can't think of a time I've gotten a sandwich from a (good) bakery where the sandwich wasn't at least quite good, and frequently, very very good. On the flip side, if you just buy a sandwich from a dedicated sandwich shop? On average it will be bad. There are excellent sandwich shops, for sure, that do not bake their own bread. But there are very few bakeries that make sandwiches that do not make extremely good sandwiches. (Subway doesn't count: they are not a bakery, in that they do not sell bread or other baked goods. They only produce their disgusting "bread" to enable them to sell sandwiches).
It also strikes me that this argument is essentially the inverse of the Alan Kay line "People who are really serious about software should make their own hardware" that Apple people are always quoting.
I think perhaps the Sandwich Fallacy lacks explanatory power, because the Stack Fallacy does as well. I think if the reason why big companies consistently fail to win markets in which their customers compete was because of the points made in the post, then we would see evidence that big companies are disproprotionately successful at winning markets in which their suppliers compete, the layer _below_ them in the stack: "The bottleneck for success often is not knowledge of the tools, but lack of understanding of the customer needs." the companies that build these sandwich-filling layers are the customer, they understand this quite well, but I don't think they generally succeed at this. So there must be something else at play.
I also find the examples in the article unconvincing:
"Apple continues to successfully integrate vertically down — building chips, programming languages, etc., but again has found it very hard to go up the stack and build those simple apps — things like photo sharing apps and maps."
Apple's photo app is extremely popular. Apple's messaging app, Messages, is so compelling it continues to sell Apple's ludicrously expensive devices. It's literally a Killer App for iOS, in the Visicalc mode. Apple has been building top-tier first party applications for it's platform since the 1980s. For iOS, it's Photos, Messages, Notes, Music, and Safari (I'm not arguing that Safari isn't terrible, or that Apple isn't holding back the progress of the entire open web via failing to make progress on Mobile Safari (they are). I'm simply arguing that it's undeniably successful.) Before the mobile era it was the 'digital hub' apps like iPhoto, iMovie, Garage Band. In the 'productivity' era it was ClarisWorks. In fact, it's so common that there's a slang term for when Apple-the-platform-vendor starts to compete with it's application developers and uses its structural advantages to win the market: "Sherlocking".
"It is therefore no surprise that Apple had an easier time building semiconductor chips than building Apple Maps."
Did they? They bought PA Semi a zillion years ago. Apple Maps had a rocky launch but now it's quite good. I concede I have no evidence that it's popular or successful in the market. It looks to me like Apple was successful in both categories.
"In the 1990s, Larry Ellison saw SAP make gargantuan sums of money selling process automation software (ERP) — to him, ERP was nothing more than a bunch of tables and workflows — so he spent hundreds of millions of dollars trying to own that market, with mixed results. Eventually, Oracle bought its way into the apps market by acquiring PeopleSoft and Siebel."
I mean, sort of? Oracle is an absolutely dominant player in this market category now. They got their through the usual mix of Oracle chicanery. You know where Oracle is struggling? All the layers _below_ them.
So I think it's pretty safe to reject the Stack Fallacy and the Sandwich Fallacy. There's clearly a pattern where big companies fail to win markets of their customers as well as markets dominated by their suppliers, which is confusing given the strategic advantages they would have expanding in either direction, but I would argue that if there are common structural explanations for this, the proposed explanations are not correct.
I guess I just think it's funny that when I skimmed the initial post I just thought "hmmm, maybe?" but when I read your sandwich analogy I was like "oh, right..this doesn't make any sense. Bakeries make awesome sandwiches, almost always!" and I started thinking about it more. Whereas if you made the same point with almost any other example I would have probably been like, "yeah! This guy's right! None of the best ice cream shops are also dairies! None of the best coffee shops are also coffee farms! I've never seen a successful textile weaver start a line of pants! None of the best...tire stores...also...produce industrial rubber compounds?" I don't know. So it's a funny choice.
A lot of good bakeries decide to start making sandwiches. It’s an obvious value-add and adds margin. But sandwich customers are different from bakery customers, a sandwich shop has a different layout from a bakery, and making a great sandwich is a very different skill set from making great bread. So it’s not easy to stay a successful bakery and add on a successful sandwich business.
On the other hand, a great sandwich shop can pretty easily hire a baker and set up an oven to make exactly the bread that it needs to elevate its sandwiches.