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The Starbucks Effect: Don't Let Others Define Your World

You know you've become a cultural phenomenon when they name a sociological effect after you.

In the case of Starbucks, the pioneer in high-end coffee and street corner third places, their pricey espresso concoctions--costing an average of $3 per--gave rise to the so-called "latte effect" of incremental discretionary spending. Do without the $3 a day habit, financial advisors held, and you'd save a bundle over the course of a year. Spawning that sort of pop phenomenon is not what Starbucks had in mind. Letting it cure into folklore was their big mistake.

I am sure there are numerous economic theories governing the utility of a cup of joe. Who is to say that the pure enjoyment or cognitive boost from a hot foamy beverage doesn't yield productivity or other tangible benefits? I don't know. And who is to say that the thousand bucks saved on a year of lattes wouldn't be just as easily squandered on the NASDAQ--in less time than it takes a barrista to throw down a double mocha? What I do know is that Starbucks should have seen the latte effect as a genuine threat and should have done something about the percolating paradigm.

Over time, the message that a stop in Starbucks should be a sometime thing has caught on, putting pressure on the mermaid's ability to grow. Bad news for a for a company opening five new shops a day somewhere in the world.

Today, word dripped out that Starbucks would be experimenting with a $1 cup of brew and perhaps a free refill scheme. I don't think Dunkin' Donuts is wetting themselves with worry, but the move says that Starbucks needs to back track a bit. It is a risky move--price competition is a slippery slope. And, when it's a buck, it's a buck, no matter how elastic the costs become. It will be hard to get the same buzz with a $1.20 cup of Americano in two years. Besides, it is never a good idea to turn your core business into a loss leader. But I digress.

My real issue is not with matters of economics or pop culture, but rather the cautionary tale of letting untoward information live on uncontested on the Internet or anywhere else today. Leave an untruth or unattractive comment--or questionable economic law--go unaddressed for more than three months and it becomes a de facto truth in this day and age.

Remember the old three-second rule--retrieve dropped food from the ground in less than three seconds and it is still cool to eat? Well, we now have a three-month rule. Ignore a piece of FUD on the Internet for more than three months and it will stick forever, maybe even reshape reality. I call that the Starbucks Effect.

What Does Your TweetStream Say About You?

Ah, the "twittersphere."

You know a technology is catching on when a culture and food chain sprout up around it. To wit, love the work the guys at Character140 are doing to track patterns in the tweetstream of microblogging utility Twitter.

With the US presidential sweepstakes very much front and center, their Politweets site gives us a tweet-level view to which candidates are generating the most buzz. They also have a great site Twittertale that tracks the spew of dirty words in the twittersphere. Guess I better watch my twitter patter.

Are You Driving the Decision Curve in Your Industry, or is Someone Else?

Before Sony knew it, Apple was driving the "decision curve" in mobile music players. If Starbucks isn't careful, McDonalds is about to drive the industry agenda in third places. In fact, the destiny of every industry--including yours--is shaped by those few companies that step up to set the pace of industry growth and development. The question is, are you driving the decision curve in your industry?

Every industry turns on myriad decisions. Everything from standards to price competition. Some companies--often not the largest players, by the way--seem to wield disproportionate strategic influence and power. They may not be the market share leaders today, but one day they will be. When you drive the decision curve you set the agenda, set the pace of innovation and change, frame the terms of the debate and basically keep your competitors in a permanent reactive mode. Indeed, it can seem that companies that drive the decision curve get so deep into their competitors' heads that it is eerie. For every move, the decision driver has a preemptive strike. For every parry there is a thrust. By design those who drive the decision curve drive the competition to distraction.

This tendency for some to shape the strategic context is even more pronounced in times of transformational change like the period we are about to enter. As I lay out in my new book, Jump Point: How Network Culture is Revolutionizing Business (McGraw-Hill, February 2008), we are about to see such profound change in the business landscape that the status quo in most industries is about to be scrambled. We can easily expect a changing of the guard in most segments. Looking ahead to the next thousand days, you have to ask yourself, "am I driving the decision curve or am I being driven? Do I have what it takes to grab the mantle and drive the curve? How can I reset the terms and wrest the steering wheel from the current driver?"

Feel a headache coming on? Take a copy of my book and call me in the morning.

Sexiest Phrase of 2008: Download Now

In my new book, Jump Point: How Network Culture is Revolutionizing Business (you can pre-order it now) I examine the phenomenon of the "Permanent Now." Simply put, today's consumers do not want to wait. For anything. The world of the Network has rewired our brains: the delayed gratification impulse (old brain thinking related to food scarcity and survival) has been reset. We want what we want right now.

The latest examples of Now Economics come from the announcements by Netflix and CinemaNow of new instant movie download services planned for this year. All I can say is, it's about time.

Question for you: what are you doing to collapse the TTW (time-to-wait) in your business? Ignore this new dynamic at your own peril. If you won't speed it up, someone else will. Cut to black.

Jobs of the Future: Personal Privacy Manager

This Christmas, you may have given out more than presents; you may have unwittingly given away your privacy. Whether you shopped online or got in line at the mall, it seems that this year's desperate retailers turned a particularly nasty corner on the practice of collecting, repackaging and sharing your personal information every time you made a purchase. According to a breaking news items about Sears and KMart (and many others assuredly) the clandestine practice of using spyware to make your life more transparent hit a high point this holiday season. With the Net impetus to share information, I guess this should be an expected cost of modern life.

What to do? My bet: we will soon need to hire, along with a tax preparer and a Geek Squad cadet, a Personal Privacy manager to scrub our public lives and develop everyday practices to insulate us from prying eyes. If you know of anyone who is already in the business, let me know and we'll pass the tip on. That way, unless Facebook sends out a Beacon on our purchases, it may still be possible to be a secret Santa next year.

2008 Jump Point: Notebooks Overtake Desktop Computers

The new year will see more records fall than a New England Patriots game. First up is mobility. Data for 2007 show that sales of notebook computers have surpassed--or very shortly will surpass--sales of desktop units. No surprise here: the trend has been developing for sometime now; although if true, it would be a milestone that arrived several years ahead of forecast.

Given the inevitability of the trend, we should begin to look ahead to the wider implications of this rather significant Jump Point. First, the mobility imperative will clearly support the continued roll out of commercial WiMax (Worldwide Interoperability for Microwave Access). High quality mobile computing and communications is a virtual certainty around the world. This opens up all manner of possibilities for emerging economies and for changing how we live, work and play. I will explore the impact on the emerging world later. Appropriate of back to work day, let's consider how our professional lives will start to change this year.

We can expect remote work, education and collaboration to grow. Fewer people will slog off to a physical office, and location-neutral hiring will increase as companies find and recruit the right people for their jobs, regardless of locality. We will grow increasingly comfortable working for and with people we rarely if ever see in person. Mobile work is more productive work, meaning work days will become less rigid but longer. Work as we know it may get more seamlessly integrated into life as we know it. The drop in office culture will change the way we socialize and communicate. There will be fewer annoyances, but perhaps more loneliness too. Might even change our collective senses of humor--remote employment makes situation comedy settings like The Office, a relic of "old work." (Of course, there will always be a way for the Dwight Schrutes of the world to pepper our lives.) Something to think about as you take down the holiday decorations from your cubicle. Happy New Year.