Those "stupid ideas" may not be so stupid

http://shadyacres.tumblr.com/post/37841861568/on-the-breadth-of-the-human-psyche

by eykanal • 14 years ago

77 47 14 years ago

shadyacres.tumblr.com

I think this is a case of you're not who they're marketing to. Nice post.

teeja• 14 years ago

I think this is a case of not understanding operators who're fishing for suckers. If you're not that kind of predator, you might not see it.

tinco• 14 years ago

Why do you think the limited edition gift card owners/buyers are suckers?

spc476• 14 years ago

"No one in this world, so far as I know-and I have searched the record for years, and employed agents to help me-has ever lost money by underestimating the intelligence of the great masses of the plain people." ---H. L. Mencken

ky3• 14 years ago

Ogilvy's Confessions has a fine line about this, which roughly paraphrased, goes:

Those who are most successful in new business are those who show the most sensitive insight into the psychological make-up of the prospective client.

(Emphasis mine.)

casca• 14 years ago

It's very easy for us to look at others and identify their behaviour as stupid. I've always tried to assess it as all people are domain stupid, just like all people are domain smart. By this I mean that everyone has their area (or domain) of expertise and of ignorance.

For example, I'd suspect that the majority reading this cannot change the brakes on their car? Perhaps a similar proportion of mechanics can code C++.

Looking at the example in the post - people buying a limited edition $400 Starbucks card for $450: Starbucks is far more than a coffee vendor to those who shop there regularly. When you spend money on things, you become overly attached to those things. As Starbucks overtly sells consumables, there is some dissonance to attachment without a physical manifestation. So with the limited edition gift card, I am able to focus my attachment on a physical object.

The additional genius of this move was to make the card $450. They could have also made a $25 card with $20 credit but the high price of both the card and the premium meant that people felt that it was a better representation of their attachment to Starbucks.

mikeash2• 14 years ago

It seems odd. Most of us have probably spent $50 on similar things. It's not really any different from buying a Star Wars poster or a TMNT action figure or whatever your cultural enjoyment is.

I bet that if they got rid of the gift card aspect of it and just charged $50 for swag, many fewer people would call it stupid. I think it comes down to an inability to distinguish multiple functions. People see that it's a gift card, and that people are overpaying for that function, and so they conclude "stupid". But there's more to it that they either don't see or aren't paying attention to.

When pointed out, many people will double down and say that spending $50 for Starbucks swag is "stupid". These same people probably spend similar amounts of money on swag for things they like, so at this point they can be safely ignored. People's opinions have inertia that's hard to modify with something as trivial as facts.

wmil• 14 years ago

The card isn't just a collectable. You use it every time you go to Starbucks. So it also sends a signal.

I don't exactly know what message people are trying to send. Many of them may be trying to impress cute baristas by being a big spender.

andrewflnr3• 14 years ago

  These same people probably spend similar amounts of money on swag for things they like

Actually, some of us just really think swag is silly. Be very careful with how you make and apply statements like that. In particular be careful of assuming the particular person you're arguing with thinks like that.

rdtsc2• 14 years ago

> Starbucks is far more than a coffee vendor

You hit the nail on the head. They describe themselves as a 'third place'. The first two are work and home. Starbucks is a third place right after that where people meet, work, relax, spent time. It is not a simple coffee shop. For every person who ridicules it for all the stores being the same and selling the same burnt coffee there are 100s who love going to Starbucks and enjoying a more or less of a consistent experience.

After a while it is also a place where memories are made for those people. Like people attached to the homes they live in and they remember "ah here I burnt my first steak after we were married" a lot of people will probably have similar memories of Starbucks "here we came on our first date", "here I met my biggest client for coffee and it turned my business around".

It was interesting that even in the economic downturn their stock didn't suffer too much. People still want to get out and go to this "third place" even in bad times (I am saying this because I sure thought they would lose quite a bit of business, as what kind of people would keep paying $4 for coffee when jobless rate is at 15% for example, I was wrong).

lostlogin• 14 years ago

I was and still am mystified at the Starbucks business here in New Zealand. The chain doesn't seem to be doing great (link below). However whenever I go past their store in K-road it looks very busy. Yet it is near some great independent coffee stores. I'd argue that some of the competition nearby is world leading. Theatre cafe for example. It is within a stones throw and its owner, Chris Priestly, is the former owner of Atomic coffee - a New Zealand coffee institution. The independent cafes and very small chains here are amazing, yet people still go to Starbucks. I know I'm missing something, because those people who go there see something I don't.

http://nzherald.co.nz/business/news/article.cfm?c_id=3&o...

Nursie4• 14 years ago

Your post reads like a home-style ad campaign for the chain.

It's just a coffee shop.

AndrewKemendo• 14 years ago

There is a massive difference between domain specification based on comparative advantage and economically irrational behavior, so let's not give too much validity to these decisions even if we are speaking about subjective decisions.

It could be claimed that the "effect" that they get from the purchase or the cachet that comes from owning this Veblen good outweighs the $50 in marginal cost. I would argue however that it remains irrational, but well within the range of irrational behaviors that humans exhibit more or less constantly.

petercooper• 14 years ago

Amy Hoy's talk at Webstock was along similar lines: http://vimeo.com/39750688 .. inspirational and worth watching (if only because I'm a very minor example in it ;-)).

A lot of people find many things stupid until they're exposed to it enough. "Wii" was a stupid name. Microsoft releasing a console was stupid. The iPod was stupid. The idea of powered flight was crazy. Life, industry, and entrepreneurship feeds on stupid and makes it smart.

scottmagdalein• 14 years ago

Guys, this is simple. For people who can afford it, it makes a great Christmas gift if they love someone that loves Starbucks.

zdw• 14 years ago

Buying a new car and losing 10-30% of the value by driving it off the lot is lunacy to some people.

Buying a used car with no warranty is lunacy to others.

Stupid is relative.

rimantas• 14 years ago

I never quite understood the first group. I buy a car to drive it not to sell at the moment I am out of the gates. And where would the get cars if no one bought brand new ones?

netcan• 14 years ago

In one way or another, its' "value" represents its value to some people.

Nursie4• 14 years ago

I don't know where we'd be but my thinking on the matter is that if I can get twice the car for my cash because someone else drove it for a few months, then why wouldn't I?

martinced2• 14 years ago

And there are even some who like to buy 6 months old cars that still come with a warranty and would consider the two groups you mentioned to be lunatics ; )

nmcfarl• 14 years ago

Article about the card, and EBay sales on Forbes: http://www.forbes.com/sites/moneybuilder/2012/12/13/starbuck...

mynameishere• 14 years ago

The card can be reloaded with money. The card gives the recipient gold level membership in the Starbucks rewards program. This includes a free birthday drink, and a free drink or food item after the purchase of 12 drinks. Paying with your registered Starbucks Card gets the cardholder brewed and iced coffee and tea refills at no charge during your visit at a participating store.

It's not a bad deal for someone who goes there every day.

mv• 14 years ago

All the benefits you listed are available with the gold card which you receive after purchasing (25?) drinks with a normal registered card.

kamakazizuru• 14 years ago

ironically - this seems to work perfectly well for startups and companies on a less obvious level. Anyone remember the Gmail invites? They were offering email - a service that existed for a decade already (free) at this point - yet people were ready to kill for an invite! I remember a site that opened up around it called GmailSwap - where people were often offering up cold hard cash, in exchange for a Gmail invite. Today's launchrock pages are essentially a gentler version of the same thing "sign up to get exclusive first access to our beta" => "Give us your email so you can be the first to test buggy beta software and tell us how to make it better" You can extend this to a lot of different areas - schemes like Amway or Tupperware - and if I allow myself some leeway - I'd say even some religions.

martinced2• 14 years ago

But people knew it was going to be (and still is) one of the best (if not the best) webmail ever.

I couldn't wait to switch to GMail because I knew I'd still be using it today. As an example, I forgot what email spam was and everytime I hear about email spam I kept wondering: "People are still using mail clients connected to mail servers that do forward spam en masse?".

And, surely enough, I'm here still using my GMail.

Asked a buddy at Google to send me an invite.

I don't remember that it was particularly buggy although I was one of the early adopter.

I do remember it totally rocked compared to Yahoo! that said.

Why so much Google hate? ("Give us your email so you be the first to test buggy beta software")

That's honestly not the GMail I remember: I remember it totally rocked since the beginning.

andrewflnr3• 14 years ago

  I’ve been thinking about entrepreneurship a lot lately,
  and this really drove home the point that I have no clue
  what people want.

I think this is the most important/practical point from the article. It certainly is for me.

smsm42• 14 years ago

That's the beauty of the system - if you think somebody has more money than sense, you don't have to resort to violence or coercion. You only have to sell him a card that is worth $400 for $1000 (or some other shiny gadget, like an app saying "I am rich" or just making farting sounds for those who aren't that rich yet), and you both are happy, and both perceive you have more than they came with (even though you both secretly think the other guy was stupid, but who cares?). And you don't even have to do all the work yourself - there's a whole corporation that does all the work for you for mere $50 (less than 10%, how cheap is that?).

shanellem• 14 years ago

"Don’t laugh at anything, there are business opportunities in places you’ve never even knew existed."

Absolutely. The best entrepreneurs are the ones who can find opportunity in the most unexpected places.

dgant• 14 years ago

If you're reading this article on Hacker News, you are a very unusual person. In fact, everyone's very different and very strange, but you in particular are very strange.

If you extrapolate your beliefs, behaviors, and attitudes and expect them to apply to the rest of the population, you are making a mistake, and missing opportunities.

Those "stupid ideas" may not be so stupid

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