Monday, February 12, 2007

The Seattle Times: selling good karma

The Seattle Times: Business & Technology: A Kirkland cafe with no prices Interesting concept from that other coast.

The name Terra Bite ( is a play on the tech term "terabyte," a trillion bytes, as well as a reference to earth and food.

More than coffee, sandwiches or even convenience, Peretz is selling good karma.

"People want something different. They want simplicity" of payment, he said. "They want to be taken to a new place, and they want to contribute to something."

Just how much they want to contribute is another matter.

While charities like the Boomtown Cafe in downtown Seattle charge $2 for Saturday brunch or let people exchange work for meals, Terra Bite is a for-profit business, and Peretz refuses to suggest prices. Each day he records how much was sold and how much was paid.

So far, Terra Bite has served up to 80 customers per day, averaging about $3 per transaction, he said. When the shop brings in a steady flow of 100 customers a day, Peretz figures, he will more than break even.

But will new customers pay, let alone pay it forward?

Even without posted prices, "social monitoring" — the feeling that others are watching what you do — can enforce payment, said Erica Okada, assistant professor of marketing at the University of Washington Business School.

With its anonymous drop box, Terra Bite has minimized, if not eliminated, that effect. Under these circumstances, Okada said, the economic model predicts that Terra Bite customers won't pay anything.

But they do.

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