Idea
Cafe X: Starbucks-quality coffee from a 10-sq-ft robot
Shaan argues the winning play isn't Cafe X specifically but a robot-arm coffee bar that serves Starbucks-grade, customizable drinks faster and cheaper, in a tenth of the footprint, with no staff, that you can drop into apartment buildings or gas stations.
“And CafeX basically says, cool, what if we could serve coffee faster and cheaper than a Starbucks? What if we could serve Starbucks quality coffee but faster and cheaper than a Starbucks? Why? Because we have a robot arm that could just do the thing. 24/7 and never call in sick and never be an employee, never need, never have any employee like issues. And by the way, I take up 1/10 of the square footage of a Starbucks because it's like a, it's like a giant robot in a hamster ball.”
Steal thisBuild automated retail that beats the incumbent on speed, price, and footprint, then place it where a staffed location can't fit.
Number
WGSN: ~$100M/yr selling color/trend forecasts at $18K/seat
Sam breaks down WGSN, a public trend-forecasting service that tells brands like Starbucks which shade to use. Revenue ~€90M (~$100M), charging companies roughly $18,000/year, throwing off an estimated $30M/year in profit purely off color and trend research.
$18K
Annual subscription per customer · USD/year
“if you have a company that's not like growing that much, but it's worth €90 million a year in subscription revenue, I mean, that's like a $300, $400, $500 million a year company or a company that I think makes like $30 million a year in profit. Only off colors.”
Framework
Arm the rebels: white-label what big brands spent millions building
Shaan's repeated business blueprint: take the custom software big brands spent millions building (Starbucks app, Smile.io-style loyalty, Domino's ordering) and sell a white-labeled version to every mom-and-pop that competes with them — like Joe Coffee did for indie coffee shops.
“I love the idea of basically taking like what the big brands do and what the big brands have spent millions of dollars developing for themselves and then just turning that into an app that any little mom and pop can just plug into their store and have that same user experience.”
Steal thisFind software a big brand spent millions building (loyalty, ordering, paywall), then white-label it for every small competitor: 'arm the rebels.'
Number
Starbucks paid $600M for Teavana, then shut the stores
Starbucks acquired tea retailer Teavana for $600 million, later closing its stores. Segal argues the outcome was so-so because the tea simply wasn't good enough.
$600M
Teavana acquisition price · USD
“$600 million.”
Number
WGSN makes ~$90M/yr forecasting which colors will be popular
Sam describes WGSN, a UK-owned trend-forecasting firm that tells brands like Starbucks which shade of pink or red will be in style next year. It does about $90 million a year in recurring revenue largely off fashion and color forecasts.
$90M
Annual recurring revenue · USD/year
“And so it's an oversimplification, but it's fashion forecast, particularly around colors, I believe. And this company makes around $90 million a year in recurring revenue just off this stuff.”
Framework
Pick a fight: position yourself as the anti-X
Shaan reads from Rework's 'Pick a Fight' chapter: declaring a competitor or industry the enemy (Dunkin' vs Starbucks, Audi vs old luxury, Dyson vs hand dryers) differentiates you and rallies followers because people take sides and get stoked by conflict.
“If you think a competitor sucks, say so. When you do that, you'll find others who agree with you and rally to your side. Being the anti-blank is a great way to differentiate yourself and attract followers. For example, Dunkin' Donuts positions itself as the anti-Starbucks.”
Steal thisName an enemy, a competitor or a whole industry, and position your product as the anti-that; the conflict gives customers a story and a side to join.
Billy
Neil Dempsey: failed into his 40s, then backed Starbucks with his own money
Sam tells the story of his investor Neil Dempsey, who failed at companies into his late 30s/early 40s, got a VC job, found a coffee-shop deal everyone laughed at, invested his own money when the firm passed—and that company turned out to be Starbucks.
“he was in his— he was trying companies and kept failing. And up into his late 30s, early 40s, he was failing, failing, failing. He got a job at a VC and met this guy starting a coffee shop, brought to the VC. Everyone laughed at him. They said, no, we're not investing, this is stupid. So Neil invested his own personal money into it, and that company ended up being Starbucks.”
Number
1-800-GOT-JUNK on 10 million Starbucks cups for free
A marketing manager pitched Starbucks a 'The way I see it' quote from Brian. The 1-800-GOT-JUNK brand ended up on 10 million Starbucks cups for free, born from another 'Can You Imagine' wall idea.
$10M
Branded Starbucks cups distributed · cups
“The 1-800-GOT-JUNK brand ended up on 10 million cups with Starbucks for free because Andrea Baxter had the freedom to conceive something unusual and big that she wanted to make happen. And she did. The quote was, you are what you can't let go of.”
Framework
The beer and barbecue test for executive hires
Brian hired an ex-Starbucks US division president on pedigree but skipped his own culture test. His heuristic: would you want a beer with them, would they fit at a company barbecue, would they put on a blue wig and dance?
“Did they pass the beer and barbecue test? Would I see myself wanting to have a beer with them, hanging out with them, becoming friends? Do they fit in at a company barbecue? Would they put on a blue wig and dance around? Whatever the case might be. This person wasn't the perfect fit.”
Steal thisApply the same culture-fit bar to senior hires as junior ones; a bad fit at the top is just as devastating.
Take
A brand is the story it tells
Brian Scudamore's core branding principle: whether Starbucks, Airbnb, or 1-800-GOT-JUNK, a brand is the story it tells and the hard part is living up to it.
“I think I realized early on in building a business that a brand is the is the story that it tells. Now, as a brand, whether you're Starbucks or Airbnb or 1-800-GOT-JUNK, you have to live up to the story.”
Steal thisDefine the story your brand tells, then build operations that live up to it.
Story
A marketing manager's vision board put the brand on 10M Starbucks cups
Marketing manager Andrea Baxter wrote a 'Can You Imagine' goal of getting on a Starbucks cup; she pitched their 'The way I see it' campaign and landed Scudamore's quote - 'You are what you can't let go of' - on 10 million cups for free.
“The 1-800-GOT-JUNK brand ended up on 10 million cups with Starbucks for free because Andrea Baxter had the freedom to conceive something unusual and big that she wanted to make happen and she did. The quote was, "You are what you can't let go of."”
Story
The ex-Starbucks president hire that nearly sank the company
Scudamore landed an ex-president of Starbucks US as COO and thought he'd won the lottery, but skipped his own 'beer and barbecue' fit test; one wrong person at the top of a $100M+ company proved as devastating as a bad 11-person team.
“But you grow a business that's well over $100 million and you've got one person that isn't quite the right fit and they're at the top, that can have the same devastating effects.”
Steal thisApply your culture-fit test hardest to senior hires - a bad fit at the top is the most dangerous.