Like millions of other people, I’m working at a Starbucks today (on my PC, not behind the counter). Despite some recent financial hiccups, Starbucks has built an amazing brand over the last 20 years and rocketed the category of high end coffee shops into mainstream existence.
Starbuck’s process of building their brand is a great example for any startup. There was no heavy spending on brand advertising. At Starbucks it’s all about the brand experience. They obsessed over everything – from the quality of the cups to the quality of the toilet paper. The music, colors, furniture… It’s all an orchestrated brand experience.
The cost of this brand building was nothing compared to the losses someone can incur on massive brand building campaigns. Starbucks is a great concrete example of why spending a lot to build brand awareness is a waste of startup resources.
Andrew Chen
Brant Cooper
Dave McClure
Eric Ries
Jamie Siminoff
Steve Blank
In these recessionary times I am glad you added the parenthetical clarification for “I am working at Starbucks today.” It may be a fate that awaits many startup VP’s. I think the other lesson from Starbucks for startups is that almost everyone in both organizations is customer facing. Managing those improvised interactions is one of the keys to success. Good post, I agree with you on the brand spending, act in ways that make you memorable instead.
The point can also be made that the dilution of the Starbucks brand (made clear in the famous Feb. 2007 memo by H.S.) happened in the same way – the dilution of the “experience” added up to the dilution of the brand which. Now they seem caught somewhere in limbo. Another lesson that can be learned is that while they once obsessed about making the customer happy, since they went public they have obsessed about making shareholders happy. The question now is, can they recapture their brand essence and stay relevant? With the growing numbers of independents who have the captured and even improved on the’experience’ on one side and the big brands like McDonalds, Dunkin Donuts and 7-eleven on the other side, it remains to be seen whether Starbucks can recover and return to those halcyon days.
This is an interesting post. I hadn’t seen your earlier post about startups spending money on brand awareness, but I think that you make some good points. I wrote a post for our blog today that covers a lot of startup branding topics and the important of branding a startup: http://startup.partnerup.com/2008/04/08/create-a-successful-brand-startups-small-business/ I’d love to hear your thoughts on whether we’re suggesting startups should spend too much money on their brand, or if you agree with it.
Do something that people will remember the service or product. Perception and word of mouth is a big help in building company’s brand name.