Pink's Hot Dogs and Scarcity

I visited Pink's Hot Dogs in Hollywood Friday. Pink's is world famous for being the "hot dog stand to the stars." There is always a line at Pink's. (That's me in the photo, looking at the camera.) I waited in line for an hour to get a Stretch 10" Chili Cheese Dog, onion rings, and a cream soda. Despiting it being a rather average meal, I'm glad I did it. Why? Because I ate at Pink's. When I think of Pink's as a business person, I wonder:

• Why they don't raise their prices and reduce the line a little
• Why not expand their building and increase production?

The answer is discussed in Seth Godin's blog post on Scarcity. His reasoning:

1. Scarcity creates fashion - people want something they can't have.
2. Lines create demand - people want something that others want.
3. Scarcity creates word of mouth - people talk about lines and shortages
4. Scarcity drives your product to true believers. When people expend extra effort to get something, they are more likely to talk about it (like I'm doing now.)

So as I build my business, I will keep thinking about expanding my footprint and raising my prices. But I will also be thinking about Pink's.