I tried my first Clover coffee this morning at Starbucks on Pine in downtown Seattle.
A Clover is an innovative new machine for brewing coffee that uses a process much like a French Press only the Clover device takes 90 seconds compared with the typical 6-minute cycle of a French Press. What’s more, since each cup is brewed individually, the operator can modulate the key levers in making a cup of Joe (water, temperature, bean) just for you.
I started to quiz the Barista about the Clover and learned a little inside scoop about how the unit made it into the Starbucks stores.
It turns out, according to my informant, that the Clover unit was designed by a couple of coffee-loving inventors. The Clover machine was originally designed to be sold to small, independent coffee houses that were being beaten up by Starbucks’ dominance and needed an innovative new product to woo customers.
The Clover units caught on among coffee aficionados and Starbucks began to lose customers to some of their independent competitors. Sensing a threat, Starbucks ordered a couple of the $11,000 Clover machines to run a pilot in a few stores.
The trial was a huge success with Starbucks customers who liked the freshness and customization delivered by the Clover brewer. Baristas liked the ease of brewing a Clover cup when compared to the slow and cumbersome process of making a French Press brew.
Based on the results of the pilot, Starbucks decided it wanted to install a Clover unit in each of their 5000 small store format locations. At the time, Clover was an 11-person company. A $55 million dollar purchase order would have been a multiple of their annual sales many times over. Instead of placing the order, Starbucks simply decided to buy the company outright.
Is it possible that the best offer to buy your company will come from your customer’s toughest competitor?
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John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies. Most recently John transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which he sold to the Corporate Executive Board (NASDAQ: EXBD). In 2008 he was recognized by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers.
