A Lesson on Scale and Compromise

Looks like the Starbucks Petri Dish experiment has ended for 15th Ave. Coffee & Tea. According to reports, Starbucks is returning/rebranding this location to become a Starbucks Coffee, again.

When 15th Ave. Coffee & Tea opened up in July 2009, I was quick to call it a one-off experiment for Starbucks to relearn some of the personal touches it lost due to making so many compromises in order to grow to over 16,000 locations in 50-plus countries around the world. (We’ve gone over all these compromises on past Starbucks postings so read-up if need be.)

One of the comments in my post about this petri dish experiment didn't understand why Starbucks couldn't scale the 15th Ave. Coffee concept. My response was a short Lesson on Scale and Compromise...

DATE: July 2009
Why Starbucks can't scale its 15th Ave. Coffee & Tea concept...

my original comment:
Starbucks already scaled this [concept] into becoming the Starbucks we know today. Problem with scaling is COMPROMISE. Anytime a business “mass produces” something, compromises occur.

Think of a recipe for homemade cookies. This recipe yields two dozen of the most delicious cookies ever. Scale that recipe to yield 80,000 dozen cookies every day and lots changes. Industrial ovens replace the household oven used. Bulk ingredients replace hand-picked ingredients. Complex systematic procedures insure each cookie is the same diameter, the same weight, the same everything when scale happens. After enough compromises and changes take place from scaling, the taste of the cookie changes. It just doesn’t taste the same.

I bet McDonald’s used to make a very good hamburger. Not today. Scale happened.
I bet Quiznos used to make a very good sandwich. Not today. Scale happened.
I bet Taco Bell used to make a very good taco. Not today. Scale happened.

Very few companies retain its specialness after it decides to scale. At some point, too many compromises are made for the sake of growth and all those nuanced compromises, when added together, result in a product that no longer resembles the original intent. That’s exactly where Starbucks is today. Maybe 15th Ave. Coffee & Tea will teach Starbucks all the compromises they’ve made to grow have truly changed the original intent of the company.

Comments

[Melody O.]

Retail in the detail. Scale takes away some of the detail elements. One thing about 15th Avenue Coffee is that it taught Starbucks has to do a *slightly* different store with beer and wine. Olive Way is the model of something that is slightly more scaleable, but even that store will not work in many cities.
~Melody

[john moore (from Brand Autopsy)]

Melody ... beer/wine sales add lots of complexity in lots of areas from employee training to customer touchpoints to licensing/paperwork stuff to taxes to so much more.

However, a payoff exists because beer/wine sales can drive significant incremental sales. That said, I can only picture a handful of such Beer/Wine Starbucks locations in a major city.

Does that much change in operational complexity merit trying to scale the concept for the incremental sales opportunity? I dunno. Perhaps. Big picture-wise, I think beer/wine sales is more a distraction than a solution for Starbucks. Dig?

[CFD Trading]

This is a good lesson to learn about scale and compromise. In every business venture, we really have to compromise some things in order to prioritize what is more vital. As a company we always always look at the situation wherein we can have profit. This is always true in most of the companies. Thanks a lot for the article. More power.

[Paul Schmidt]

Perhaps with mass scaling, this could create demand for smarter machines that can create more deviations from the original recipe to emulate a small batch small business recipe/feel. I understand that the reason to scale is to save on costs and maintain a consistent product/brand. However, I think we could soon see machines that could provide a more unique customer experience that doesn't feel impersonal or extremely mass-scaled.
Great thought provoking article!