Saturday, I was reading an article in Montreal’s La Presse regarding McDonald’s entry into specialty coffee shops and how it’s a direct attack on Starbucks. I was especially intrigued by comments from Bryant Simon, a teacher at Temple University in Philadelphia. As a history teacher, he’s interested in the social phenomenon that leads us to pay a premium to belong to the Starbucks community.
Quoted in the New York Times in 2004, he said: “Starbucks has become the corner bar of the 21st century. (…) It symbolizes the hunger for community in today’s atomized world. Starbucks has tapped into people’s desire to be with other people. It’s become a new public space where people can go to be with other people. That’s the genius of the place. That’s why I resist the demonization of Starbucks. Who else is building these community spaces in America today?”
As we know, since then, Starbucks has lost its cool factor, and many of its early enthusiasts are now drinking better coffee at local places, behaving almost like wine connoisseurs. It made me thing about my “Twitter is The New Facebook” blog post, about the reasons why innovators/early adopters are very fickle and the increasing speed at which they switch brands.
(chart found here)
I believe the introduction of social tools on the web gives early adopters access to better information than they used to have before. It’s easier to find out if your peer “tribe” is adopting new products & services. And if they are, you trust that your tribe is right, you pick up your friends and you just leave (what I call “Brand Nomadism”). Combined with low switching costs online (the next site is only a click away), it creates a situation where we see the rise of many new “next-big-thing” Web properties (Facebook, Twitter, FriendFeed, SocialThing, etc.).
I was first exposed to that phenomenon when I saw a presentation by Bill Tancer from Hitwise at the Web 2.0 Expo last year. He showed the attendees the YouTube early adopter adoption curve. In it, you clearly see that it took only 4 months for YouTube to really explode on the scene.
As for Starbucks, I think they lost a lot by standardizing their product offer through the introduction of automatic coffee machines. By becoming a “middle-of-the-road” brand, they’ve basically positioned themselves in the no-man’s land between big brands like McDonalds (or Tim Hortons) and small local coffee shops, effectively being attractive to no one in particular. I believe this innovator/early adopter curve is critical to the future success of a new venture and I think that, if you want to build a sustainable long-term business, you’ll want to remember who put you in the driver seat. Make sure there’s always a place for your first customers in your strategic plan.
Seb Provencher's Blog 
Nice post Sebastian, I am oddly enough reading it from Starbucks.
I haven’t spent a ton of time thinking about Starbuck’s positioning of late, but read your post with great interest.
I think Starbuck’s has become a defacto standard, not in coffee, but in terms of destination.
Starbucks to me is really about four things. First and foremost, it is about community, as you said. Second, it gives people a brief ‘time out’ during the day … a smoke break for non smokers. Third, it gives people a non alcohol environment to meet. Finally, when people are traveling, a safe haven with some creature comforts.
When you see as many Starbucks as McDonald’s its easy to see how their premium positioning is being eroded but the brand they have built, still leads me to a Starbucks in any city I end up in.
Nice post Sebastian, I am oddly enough reading it from Starbucks.
I haven’t spent a ton of time thinking about Starbuck’s positioning of late, but read your post with great interest.
I think Starbuck’s has become a defacto standard, not in coffee, but in terms of destination.
Starbucks to me is really about four things. First and foremost, it is about community, as you said. Second, it gives people a brief ‘time out’ during the day … a smoke break for non smokers. Third, it gives people a non alcohol environment to meet. Finally, when people are traveling, a safe haven with some creature comforts.
When you see as many Starbucks as McDonald’s its easy to see how their premium positioning is being eroded but the brand they have built, still leads me to a Starbucks in any city I end up in.
Great analysis.
What happened to Starbucks just highlights the need for companies to constantly re-assess their products and brands, and deciding what markets to serve. Should a company move along its early adopters, hoping to surf on market shifts? Or should it go mainstream as more and more adopt its products and services? While there is still a mass market in many segments, many markets these days tend to look less like the traditional bell curve (with 80% of the population in the middle) and more like a camel (with 20% in the middle and two humps at either ends). Going mainstream should be a carefully made decision, and not one simply taken by default.
For myself, I primarily go to Starbucks when traveling, using it as a “safe haven”.
Great analysis.
What happened to Starbucks just highlights the need for companies to constantly re-assess their products and brands, and deciding what markets to serve. Should a company move along its early adopters, hoping to surf on market shifts? Or should it go mainstream as more and more adopt its products and services? While there is still a mass market in many segments, many markets these days tend to look less like the traditional bell curve (with 80% of the population in the middle) and more like a camel (with 20% in the middle and two humps at either ends). Going mainstream should be a carefully made decision, and not one simply taken by default.
For myself, I primarily go to Starbucks when traveling, using it as a “safe haven”.