By trying to please
everyone—including freeloaders—the coffee company ultimately began alienating
the paying customers.
EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V
AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1
FEB 25, 2025
Trying to please everyone, or be all
things to all people, has never been a successful strategy for business, or for
just about anyone other than certain politicians who are adept at smoothly
lying to whichever segment of voters they happen to be addressing, and
promising them precisely what they want to hear. Millions of them would rather
remain deluded than learn the often-harsh truth and be forced to face the
painful realities of their lives and their future prospects.
Trump has not only made lying into an
art form, but he’s also gotten away with virtually everything. Crime evidently
pays when the frauds and thefts are grand enough. And the grifting and graft is
regularly celebrated and excused by millions of MAGAts, sycophants, enablers,
and venal politicians looking out for their own hides.
Every day we’re also seeing the living
embodiment of the “don’t ask for permission, ask for forgiveness” doctrine from
a shameless scoundrel. And here again, MAGAts and right-wing media applaud his
willfulness and reckless disregard for the law—at least until they slowly
realize that their own oxen are being gored, their businesses are imperiled,
and their own parents and kids are being screwed.
Setting the Wrong Example00:0001:42
In all of this chaos and lawlessness,
there couldn’t be a worse set of messages for our upcoming entrepreneurs, who
are young, naive, and painfully short of memory. The days of the Theranos prosecution and the foolishness and
dangers of the “fake it until you make it” attitude are long gone
and largely forgotten. So, the temptation to say anything, eagerly overpromise,
run blindly full speed ahead, and pray for the best is quite seductive
regardless of the size of your business or the years that you’ve been at it.
A current case in point is Starbucks,
which is in the midst of its third or fourth massive turnaround — including a
layoff of 1,100 corporate employees — and can’t seem to make up its mind about
what it really wants to be. As a result, the company is spread a mile wide and
an inch deep across 40,000 locations and providing little or no coherent
guidance, direction, or vision to stores, licensees, or customers. Nor has this
flawed wayfinding been helped by having four CEOs since the pandemic, in
addition to periodic visits from Howard Schutz, Starbucks’s creator, visionary,
and former CEO/chairman, who lingered too long.
His masterstroke of woke foolishness —
in 2018, after an embarrassing and racially charged scene in a Philadelphia
store went viral — was to remark that he didn’t want nonpaying customers who
were being turned away from using the stores’ bathrooms to “feel less than,” or
presumably to have their feelings hurt. Attempting to put that confusing and
inconsistent sentiment into a policy or procedural manual to make everyone
happy was a fool’s errand.
After years of inviting the world into
its shops and truly turning many locations into pre-pandemic offices, the
company motto could just as well have been, “Stay for the day without having to
pay.” The growing problem was that underlying this welcoming approach was also
a policy that asked nonpaying customers, after some modest amount of time, to
leave. In addition, it became increasingly clear that the volume and behavior
of the freeloaders was discouraging paying customers. The fantasy of openness
was a nice sentiment, but the facts on the ground were becoming harder and
harder to manage.
Why Starbucks Is Making a Belated
Backtrack
Starbucks has now officially reversed
its open-door policy and will focus, appropriately, on paying customers, which
makes a ton of business sense. An extensive new code of conduct has been
published that warns that violators will be asked to leave and that the cops
may be called if necessary. The goal is to make expected behaviors clear for
all and to thereby create a better environment for everyone.
But as you might imagine, because the
company is still a (struggling) business and not a public service, Starbucks’s
new CEO is trying to have his cake and coffee, too. The result is more
corporate doublespeak, which is unlikely to do anything beyond compounding the
confusion and dumping the onus of interpretation, and enforcement, on the
baristas. The new CEO, Brian Niccol, recently told investors that he wants to
make the stores “feel like welcoming coffeehouses” and “community centers”
without mentioning that everyone entering would be expected to buy a cup of joe
or a latté. If this strikes you as a pot full of the same old and tired
porridge, you wouldn’t be far off.
At some point, Starbucks needs to
admit that the company seeks a certain kind of customer and a certain level of
spend that simply cannot include all comers. You can’t please everyone, you
can’t serve everyone, and you can’t fool anyone with a story that makes no
sense. The unfortunate thing is that senior management has pushed the problem
downstream to the frontline troops who are the least prepared and able to
police the properties while at the same time trying to serve the paying
customers. Things are bad enough that they are constantly navigating the
minefield between in-store buyers and mobile
customers—all of whom feel at one time or another like second-class
citizens.
There’s clearly no good or simple
solution, although removing the bulk of the seating at many stores and
converting them into basically drive-up and pick-up shops seems to be working.
How? By better setting and managing the customers’ expectations. But the
best and most realistic answer is to bite the bullet and tell the truth: You
can’t be all things to all people.
