CEO @ The Atlantic | Co-Founder, Keynote Speaker
The most interesting thing in tech: a new paper from the NBER suggests that bringing Starbucks coffee shops to communities that don’t have them increases entrepreneurship. If people have spaces where they can sit and talk to each other, they come up with good ideas and start new companies. The finding doesn’t hold for bars, or coffee shops that don’t have places to sit. It’s a good reminder for city planners and business leaders: build communities where people can share ideas together and good things will happen.
I would argue that Starbucks is past tense. How about local, independent coffeehouses. For starters, the coffee will be far superior. Add the cool vibe of many of these spots and you’ll have a winning combination Nicholas Thompson
This makes sense to me, too, but I think that with some modifications, public libraries could function as well or even better as third spaces. Many have unique research tools, even maker spaces that allow the public to prototype, and are so under utilized today that it's possible to find quiet, secluded areas for private discussion in addition to more public, energetic zones near public computers or catalogue terminals. They have much more space and more flexibility to host special events, too.
I find it amusing that many people are thinking that this post is about Starbucks versus creating suitable spaces to facilitate meeting and devising business ideas.
But does Startbucks bring good entrepreneurship, meaning profitable growing startups? About 85% of America's publicly traded unicorns are unprofitable, that percentage has not decreased much over the last five years, and most of that decrease comes from the dozens of publicly traded unicorns going bankrupt or being acquired in the last five years. We don't need more entrepreneurs because we have too many poorly performing startups. We need much better ideas. More details can be found in this article (https://americanaffairsjournal.org/2022/11/web3-the-metaverse-and-the-lack-of-useful-innovation/) and my forthcoming book (https://www.harriman-house.com/UnicornsHypeandBubbles)
While this is interesting, it is NOT conclusive. We can NOT conclude that getting a Starbucks caused increases in entrepreneurship. One part compares census tracts that got Starbucks to "census tracts that expected a Starbucks but did not ultimately get one due to administrative issues such as city planning, zoning board rejection, architectural board rejection, or community organization." Well, obviously these tracts are not quite comparable. There were differences between the tracts -other than- getting a Starbucks or not. The "administrative issues" were more than simple "administrative issues". This is surely an interesting paper but much more study is needed. We need to find out what about the administrative issues makes the tracts different.
Did you read the paper? It only shows a correlation, but you present it as causal.
Has Starbucks funded this research? 🤔
This is fascinating, and confirms a lot of anecdotal evidence that third places are essential to entrepreneurial ecosystems and generative economies more broadly. Imagine how powerful it would be if we could reliably create these types of spaces in communities that would benefit from growth...without needing to be dependent on a corporation's location strategy.
Starbucks is not the power brand it used to be and, thus, commands less influence. "Starbucks is struggling. It has strayed from its successful strategy of offering customers exceptional experiences and, in the process, has commoditized itself." https://hbr.org/2024/06/how-starbucks-devalued-its-own-brand?utm_source=pocket-newtab-en-us
CEO @ The Atlantic | Co-Founder, Keynote Speaker
4wHere's the paper: https://www.nber.org/papers/w32604