blog from the ceo & superbarista of phoenix coffee, home of the best baristas in cleveland, ohio

Friday, July 07, 2006

David and Goliath

I remember when I found out that Starbucks was opening on Lee Road, a few doors down from our Phoenix Coffee shop. I happened to be on the cordless phone in the basement of my house, doing laundry when I received the news. I think it was a Saturday morning. I admit that I cried. Carl, of course, was steadfast and confident that we would "win". I decided that we had to win. Friends and family had invested so that we could open Phoenix Coffee on Lee Road, and losing their money was not an option. I decided I had better start figuring out the esoteric principles behind the David and Goliath story, because that was about my only hope.

Since that moment, our business has done nothing but increase. Carl invented Blue Moon Blend, a coffee designed to compete with Starbucks. We changed our menu boards and decor. We began to focus even more on developing relationships with customers as well as community groups. We started our fall Pumpkin Carving party. We began doing monthly coffee tastings and events. Our store got better. Our staff got better. I got more and more proud of our operation. And I got more and more clear about how we are different from Starbucks, in terms of our store's look and feel and product line.

David was able to defeat Goliath because he was able to lodge his blow in exactly Goliath's weak point. Here in Cleveland Heights, Goliath's weakpoint was the fact that Starbucks is not a small, locally owned business. Starbucks can't be agile and can't change its operation to fit its customer base. We could do those things, and we did.

The credit for our success on Lee Road goes to every Phoenixer who made meaningful contributions to the effort, both those who are still with us as well as more than one previous employee. Thank goodness my staff was able to tell me what they thought we needed to do to compete effectively. We made many changes that they suggested, and now we have more business to show for it. Thanks to all of you. I get teary thinking about how much everyone has helped, and all the thought and concern that has gone into making that store succeed.

All that said, now comes the actual lesson in all of this. While Starbucks and Arabica were open, it gradually became apparent that we didn't even need to defeat the Giant. Our business was fine with both of them down the street from us. The competitive pressure was good for us, and did force us to improve our business. However, it would have been better in the long run, for the neighborhood, if Starbucks and Arabica both had been able to stay open. I will continue to preach to other cafe owners that the cafe business is not a closed system; the more cafes there are, the more business there will be. The David and Goliath comparison was born out of a scarcity mentality that I have actually outgrown.

Starbucks generally signs long leases. In this case, I think it was a 20 year lease. I have never heard of a Starbucks closing. Does anyone else know of any others that have closed?


Anonymous Rich said...

There have been SBUX closings in every community I've lived during the past 10 years. That's four cities.

Not a lot of them, mind you, but at least one in each town.

Since I'm not living in Cleveland, guess I'm disappointed to realize it wasn't just me.

4:26 PM, July 08, 2006  
Anonymous paulius said...

Thank you for an inspiring piece of writing. As a small biz owner myself, I too have to deal with competition with the big boys. Have you by chance read Seth Godin's book "Purple Cow"?

7:22 AM, July 12, 2006  
Blogger Sarah Wilson-Jones said...

You are not the first person who has recommended that book. Laura Bennett from Embrace Pet Insurance also said I should read it. Another friend of mine, Joan Potter, just recommended Paco Underhill's Why We Buy. I think I oughta read both of 'em.

Glad you enjoyed the post. Best wishes to you!

7:46 AM, July 12, 2006  
Anonymous paulius said...

I have both if you want to check them out. Also, "All Marketers are Liars" is a tremendous tool as well. Stop by my spot. I'd love to meet you and compare notes. And I do serve your product! Fantastic.

5:17 AM, July 13, 2006  
Blogger Sarah Wilson-Jones said...

I didn't realize that you were THE Paulius from the Velvet Tango Room!!! Forgive me! I guess there aren't too many Pauliuses anyway (your name does rhyme with genius, hmmm...) So yes, I will stop in, it was already on my list to come over for a fine libation. French Press coffee (falls in the fine libation category) would make a lovely addition to your menu if Steve hasn't talked to you about it already.
Thanks for helping to share the liquid intelligence. Cheers!

5:52 AM, July 13, 2006  
Anonymous Anonymous said...

You mention the Blue Moon blend to compete with Starbucks --what blend comes closest to the coffee at Dunkin Donuts (not kidding here).

7:39 AM, April 29, 2007  

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