Another Safe-to-Fail Experiment: New Starbucks Store in Denver

If I say “let’s get a coffee at Starbucks”, what images start appearing in your mind? It’s a high probably it’s one of these pictures below. This is the brand that Starttarbucks has successfully created and the paradigm they have imbedded inside our brain. It’s how we perceive what a Starbucks store looks like, a traditional store with large square footage. And we feel very comfortable being in one. 

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While we as customers feel comfortable, Starbucks understands it can’t be otherwise it will start heading down the negative slope of the S-Curve business life cycle. There are only so many large coffee houses you can build and expect profitability.They need to constantly think differently and explore other ways of meeting their mission statement: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

Understanding why people will visit a coffee house is a Complex Domain issue. Type of drinks offered, food served, price, location, convenience, ambience, social atmosphere, free amenities like WiFi and iTunes downloads are all factors that go into making up the Starbucks brand. These needs are well established. However, are there other consumer needs that a Starbucks store can satisfy? What about Art to emotionally touch the heart? As customers become more energy-saving conscious, what about a coffee house that has a small carbon footprint and is environmentally green? Really good questions that need answering.

Decision time. You can choose to analyze and build a “fail-safe” business case filled with forecasts, assumptions, and mitigations for every known risk. Then run it up the corporate ladder and negotiate with the strategy, marketing, finance, operations people to support it.

Safe-fail experiment

Alternatively, you can pose a “what-if” Value Proposition and conduct a Safe-Fail experiment. Try something small, monitor how people respond, learn what works and amplify, learn what doesn’t work and dampen, and be on the lookout for better opportunities that serendipitously emerge.
Smart business people will do the latter because it’s relatively better, cheaper and faster to execute. You avoid ego problems that come with owning an idea and defending it when it goes awry. The initial idea is simply a starting point. It’s just a probe, a drop of water into a pool to watch the ripple patterns and see where they go. If the idea catches on and even goes viral, then you have discovered a new solution. Now move back into the Complicated Domain to install the processes, systems, and structures.

This week in Colorado, Starbucks opened a store unlike any before it.
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There are no leather chairs or free power outlets. In fact, there’s no space for the customer at all. Starbucks has reimagined the coffee hut as a “modern modular,” LEED-certified drive-thru and walk-up shop. The building was constructed in a factory and delivered from a truck, but its facade is clad in gorgeous old Wyoming snow fencing.
At a mere 500 square feet, they have just enough space to squeeze in three to five employees along with all of the coffee making apparatuses necessary to execute a full Starbucks menu.

Their new building paradigm is a confluence of all these various impulses: the environment, localism, market growth, low-cost, low-risk expandability. While officially labelled a “pilot program”, it sounds to me it’s still in the Safe-Fail experiment stage. Conceivably the local Denver folks might totally avoid it and the store will fail in terms of profitability. No big deal. You respond by closing the store, picking it up, re-imaging, and trying another location. Consider the money spent as an investment in learning and anticipating the future.

This blog was inspired by the design folks at Fast Company. To read their awesome article in full and learn more about Starbucks, click here.