Early reports are that response to Stabucks (SBUX) social site mystarbucksidea.com has been positive.
About 300 suggestions were posted in the first hour after the shareholders meeting, which drew a crowd of 6,000 and by the end of the week, more than 100,000 votes had been cast. An algorithm built into MyStarbucksIdea pushes the most popular ideas to the top by factoring in the number of votes, how recently votes are cast and the volume of comments an idea has generated.
While this does show Starbucks is “listening” and could lead to the discovery of the next “big idea”, the concept is fraught with risk. For instance, the first ideas Starbucks promised to enact based on customers’ ideas were ones it had already made: to offer free wireless Internet access in stores and rewards through its loyalty car. So, to date they really have not enacted anything based on customers needs or desires.
Here is where the potential downfall comes in. As the site gains in popularity, and I think it will, the hard core users will dominate the site. That will lead to their ideas also taking prominence on it. Their ideas may benefit their demographic but may not be what is best for the company, trying to serve people at 14,000 locations. Starbucks needs to appeal to a broad range of people, not just those willing to dedicate hours a day trying to push a limited agenda.
Can anyone envision a scenario where a competitor hires a team of folks just to jam the site with ridiculous ideas simply to distract management? I am not suggesting McDonalds (MCD) would do that but I can see thousands of smaller competitors jumping in, or enacting the ideas there and then saying “at least we are listening to you”.
Should these folks then feel “ignored”, the site could morph into a very real company sponsored soapbox of anger. In this case, what was designed as a wonderful idea sharing platform, could become an obstacle to constructive dialogue as to the company’s future. Ignored ideas will then be held up to the “what if you had listened to this” scenario should results not satisfy investors. This is very bad…it illicits second guessing.
Marv Levy, the only coach on the history of the NFL to lead a team to the Super Bowl 4 consecutive times once said, “If you spend too much time listening to the fans, you’ll soon find yourself sitting with them.” A corollary to that could be “do not let the inmates run the asylum.”
Starbucks is in an odd position. They almost have to do the site because they have so lost touch with their consumer it may be the only way for them to understand what is going on out there. I guess any ideas posted there really can’t be much worse than anything coming out of Seattle in the last year and a half. But, unless the site is managed to perfection, it may end up backfiring in a very big way…
Can anyone imagine Berkshire’s (BRK.A) Warren Buffett starting a site so shareholders could give him ideas in what to invest in? Yea…me either..
Disclosure (“none” means no position):Long MCD, None
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