Bootstrapping the Starbucks Way

starbucks_cups.gifBootstrapping any new startup is always full of challenges; a big one, of course, being controlling the burn rate of the venture in the face of trying to get bigger. Steve Walden, a former Prodigy exec, a good friend, and a HiddenMarket advisory board member, tells me that I “hold court” at Starbucks, since I tend to hold many back-to-back meetings there. This lead me to think about the many other entrepreneurs who do the same. So here are my tips for watching those fully vested pennies while gettin’ your Starbucks on.

Tip #1: Drink like Jed, not Zsa Zsa. Do you really need to shell out $3 for a Maple Macchiato? Best to avoid fluffy drinks like this and stick with the rockgut run-of-the-mill varieties. I personally get the “coffee of the day”, which changes every day or so. You can’t go wrong with a cup of house blend either.

Which reminds me of a funny story. Back when I was in the Army (20 years ago – oh my god!), there was this fellow who had the most “creative” way of drinking his morning coffee while we were out in the field. He would open up his MRE (field ration) and remove the little plastic pouch that contained his instant coffee. He would rip it open, dump the contents into his mouth, take a big slug of canteen water, swish it around for a minute, and swallow. I have a hard time imaging this guy ordering a Caramel Macchiato with cinnamon sprinkles at Starbucks.

Tip #2: Get a Starbuck’s card. I owe this tip to my pal, Jerry. At the register, you can purchase a pre-paid “Starbucks gift card”, and you can put however much currency on the card as you desire. It doesn’t lower the cost of a cup of coffee, but what it does do is remove the impetus to tip the cashier/barrista. If you walk up, get a cup of coffee, and swipe your Starbucks card, there is no money changing hands, and no pressure to contribute to the “gas jar” which is usually prominently placed near the register.

Now, before you decide that I’m a complete miserable scrooge of a person for not tipping Jimmy the Barrista, I want to share three thoughts:

1) According to my wife, I’m an overtipper in most situations. I’ve been the guy working behind a counter – suffice it to say I wasn’t doing much to save for my retirement then. That being said, I do tend to contribute to the tip jar at Starbucks. I’m simply offering this tip for those who want to use it.

2) People generally tip for table service, not handing you something that you’ve ordered over the counter.

3) The employees of Starbucks are shareholders, or at least have the option to become so. From all accounts, they also earn a decent wage.

You can even go online to starbucks.com and set up your card to “auto-reload” when it is empty. How cool is that?

Tip #3: Get refills. A lot of people don’t even realize this, but you can get refills at Starbuck’s for a fraction of the cost of a new cup of coffee. The coffee may be $1.82 a cup (here in Atlanta), but a refill is only .45 cents or so.

Do the math.

1) Say you drink 3 cups of coffee a day while having meetings at Starbucks

2) Say you work 6 or 7 days a week, or about 28 days a month (you do call yourself an entrepreneur, right?)

3) Say there are 4 of you doing this, as a team.
That would come to about 84 cups of coffee per person, per month, or 336 cups per month for a team of 4 people. At cost, that would be $611.52 for all that gourmet goodness. If you got refills on all but the first cup of the day, the total would be $304.64, or a savings of 306.88 per month (or $3,682.56 per year).

Of course, this doesn’t include gratuity. See tip #2 above. :)

Also, this tip only works with regular coffee – not the Zsa Zsa drinks, so stick with the normal coffee – see tip #1 above.

Tip #4: Oh, you shouldn’t have! Get to know your Starbucks team! They often offer free samples of new drinks, and are more than happy to share them with you. In fact, if you really get to know your Starbucks staff, you’ll often find yourself on the receiving end of the “unofficial Starbucks rewards program.” My local barristas know me because they see me several times each week. Often times, they’ll give me a complimentary cup. And for good reason – I am often accompanied by others – I bring them business. The savings-fest continues!

Tip #5: Re-use your cup! If you’re really hard up, re-use your cup from day-to-day. Just be sure to catch them at a busy time (i.e. the barrista is overloaded with 5 or 6 gourmet Grande Capa-latte-macchiato-chinos in the queue.) Just jump in line and ask for a refill on regular coffee. You might want to pretend to be on a cell call while doing this, to serve as a distraction, and lessen the likelihood of being questioned. I personally don’t do this, but I have seen people doing it. Ethical? No. Cost-effective? Yes.

Tip #6: Bring your own food. I am a sucker for the iced lemon pound cake at Starbucks. For that matter, I’m a sucker for most anything under the glass there. However, forking over seven bucks for a cup o’ joe and a piece of cake is well, disheartening. If you are pinching your pennies, toss a granola bar or a sandwich in your bag before heading out.

Tip #7: Location, location, location! Starbucks offers Wi-Fi through a partnership with T-Mobile. This is a fee-based service. Bah, I say! Find a Starbucks that is next to a place that has free WiFi … the best of both worlds! Sooner or later, Starbucks will wake up and realize that pay-for-Wifi is so 1990s. You know free Wi-Fi is becoming the norm when you see it being offered at McDonald’s and Krystal.

Tip #8: The Hail Mary. I hold certain meetings (somewhat begrudgingly) bright and early in the morning. I am not a morning person. Period. During these times, I’ll often load up with a “stiff” drink, by Starbucks standards. I need the extra “pep” in my step if meeting someone that early. If you are drinking the coffee for a buzz, skip the multiple cups of coffee and go for an Americano with an extra shot of espresso. A cheaper, faster ticket to a healthy caffeine buzz.

Tip #9: Don’t spill my precious! One of my favorite stories to tell about my late father was when I scored tickets to the World Series several years ago. He and I were sitting in our seats and he accidentally spilled his beer. He chuckled to himself and calmly said “Son, I never thought I would see the day where I’d spill a $7 beer.” Those gourmet coffees are expensive! To help ensure that you don’t spill your coffee, I’m going to bestow upon you some great wisdom.

You know those little white plastic lids they put on the coffee cups? Make sure the drink hole in the lid is on the opposite side of the vertical seam running up the side of the cup itself. Everytime I have the drink hole in alignment over the seam, I end up spilling or leaking the precious black gold inside. No kidding …

Tip #10: The Ultimate Coffee Drinker’s Bootstrapping Tip. Avoid going anywhere where coffee is nearly $2 a cup. Instead, go to CostCo or Sam’s and buy a palette full of instant coffee packets. Empty one pouch in your mouth, slug down some water, swish for a minute or so, then swallow. Hmm. On second thought, I’ll meet you at Starbucks.

Cheers.

3 Comments

  1. This was a great post and I’m going to link it to my post titled “Howto: Meet at Starbucks”. One tip that I can add is I bring my own travel mug in with me. It tends to keep the coffee warmer than the paper cup and sleeve over the course of those marathon “holding court” sessions.

  2. Hi there, Marc, and thanks for dropping by.

    Good tip! I wasn’t aware that they would pour into a non-Starbucks cup. Handy to know …

    Cheers.
    Scott

  3. Scott,

    I’ve written almost exactly the same message- but it regarded beer ;)

    Rob

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