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March Madness Has Become an Internet...   Techie Bill Gross, Going for the Aut...
Mar 20 2008 10:37AM EDT

Starbucks Looking for Ideas Via Social Networking

Starbucks is turning to social networking and hoping its customers will help it out of its current slump.

But maybe Starbucks has a problem it can't solve with technology or anything else. I had lunch the other day with iconoclastic economist and author Tyler Cowen. We got talking about Starbucks, which Cowen suggested has been so successful in large part because of an aura it created -- not because it ever had better coffee. Starbucks was a cool new thing, he said, and it grew rapidly to take advantage of that image. But the rapid growth now becomes Starbucks very undoing -- because by definition, if you're huge and omnipresent, you can no longer be the cool new thing.

"Starbucks has gone from being Apple to being Applebees," Cowen said. "Lots of people go to Applebees, but no one thinks it's cool to go to Applebees."

Interesting side question to Cowen's comments: Is Apple's success built on an aura, or is it built on actually being better?

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