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What’s after Starbucks?

Posted on Saturday, Apr 16th 2005

It would be fair to say that Starbucks has penetrated the cultural fabric of America quite extensively. Now, it is also attempting to do the same with the rest of the world. It has become a place to get together with friends, an extended office, a pick-up joint, and many other things – different things to different people.

Starbucks is a consumer concept that was pretty much unimaginable until it was implemented, scaled, funded, and scaled further. Howard Schultz envisioned the concept after experiencing the popularity of coffee bars in Italy. For those who were gutsy enough to invest in the concept (Jamie Shennan of Trinity Ventures, for example, who is still on the Board, and invested in 1990; Starbucks went public in 1992) the deal paid off handsomely.

The world’s #1 specialty coffee retailer, Starbucks operates and licenses more than 8,500 coffee shops in more than 30 countries. The shops offer coffee drinks and food items, as well as beans, coffee accessories, teas, and CDs. Starbucks operates more than 5,200 of its shops in five countries (mostly in the US), while licensees operate more than 2,800 units (primarily in shopping centers and airports). It reports an employee count of 96,700 in 2004.

As the US continues on its quest towards finding business concepts that cannot be off-shored and out-sourced, clearly, high-touch retail and consumer concepts such as Starbucks are highly desirable.

Here is one that I like to fantasize about: Jazz Bars and Dance Floors of the ambience, musical quality, and vibrancy that we see in the movie, _Ray_, celebrating the life and music of Jazz legend Ray Charles.

As American culture degenerates further into becoming more and more sedentary, obese, isolated, on-line, and uninteresting, I wonder when would the pendulum swing far enough, that someone will get frustrated enough to start something new. A new place to “connect”, a new way to “enjoy”, and consequently a new way to “employ”…

My hope is, that those who will launch that quest will rediscover the joys of Swing and Foxtrot, as Herman Hesse described in his celebrated novel _Steppenwolf_.

I haven’t done the business plan, and I haven’t run the numbers but I sure hope there would be money in such a venture, if done creatively, with the thoughtfulness and business savvy of how Starbucks was launched upon the world.

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What would be good for Starbucks to do is get their act together, again. I’m certain their sales per store are stagnating and it isn’t because they have too many stores. It is because the quality is hit-or-miss. More on my blog soon since I take all things Starbucks personally! 🙂

Mihail Lari Tuesday, April 19, 2005 at 9:29 PM PT

[…] What’s after Starbucks? I fantasized about a day when anywhere you are, you can go to a great club and listen to Jazz or […]

Merry Christmas - Sramana Mitra on Strategy Monday, December 24, 2007 at 4:15 PM PT