David Segal on DAVIDsTEA: North America's Next Starbucks? While this startup likely won't topple the reigning queen of coffee anytime soon, the skill and backing required to open up shop across North America shouldn't be underestimated.
By Shira Lazar
Opinions expressed by Entrepreneur contributors are their own.
Watch out Starbucks. Thirty-one-year-old Canadian David Segal, a McGill business-school grad and entrepreneur has friends in high places and he's fixin for a rumble. But rather than knock off Starbucks' coffee crown, Segal would settle for the company's tea business.
In 2008, Segal co-founded DAVIDsTEA, a Montreal-based loose- and brewed-tea seller, with his octogenarian cousin Herschel Segal who, in his younger days, also founded the Le Chateau clothing chain. Though it's been just four years, DAVIDsTEA now operates more than 75 stores across Canada and, most recently, opened up shops in New York and San Francisco.
In addition to the famed pedigree, DAVIDsTEA has managed to lasso big-named board members like Lululemon Athletica founder Chip Wilson and Tom Stemberg, the co-founder and former CEO of Staples. Further, the tea seller recently announced a more than $14 million minority investment led by the Highland Consumer Fund.
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If that backing isn't impressive enough, the company has also been using creative social media techniques to connect with current and potential customers. YoungEntrepreneur sat down with Segal and DAVIDsTEA CEO Jevin Eagle to see how they plan to give Starbucks a run for its money. Here is an edited version of that conversation:
Q: So we get that you're not really trying to topple Starbucks, but what do you say about the comparison?
Jevin Eagle: It's flattering. With some respects, what Starbucks did for coffee we are doing for tea -- we're increasing awareness about tea, making it modern and bringing it to the masses. I would clarify that we differ from Starbucks in the fact that we sell more than 150 types of tea, including exclusive blends that people can buy and enjoy at home.
Q: What is the biggest lesson you've learned as an entrepreneur?
David Segal: I co-founded this company with retail innovator, Herschel Segal, who taught me a lot about the retail environment. You need a great team to succeed, and we have an incredibly passionate group of people. The key is to stay focused on providing the best customer service and offering top quality teas and accessories.
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Q: How have you used social media to spread the word about your young company?
JE: It's all about the experience at DAVIDsTEA, and this is no different for our social-media platforms. We treat these communities as an extension of the world of DAVIDsTEA by sharing tea knowledge and posting exciting things that different stores and customers are doing. Whether it is a photo of new tea being launched, a famous face enjoying a cup of tea or artwork inspired by our teas and accessories, we love giving shout-outs on Twitter and Facebook.
A big part of social media is engagement and with our wealth of cheeky tea names -- such as "Main Squeeze" and "Chocolate Rocket" -- and easy-to-use loose-leaf tea accessories, we're able to instantly communicate with our online communities. As a result, our fans will not only ask us, but ask each other for recommendations to pick up their next time in-store. We've created a community of collaboration, discussion and sharing.
Q: How do you energize customers when you launch in a new city?
JE: We spend a lot of time educating people about who we are outside our shops, whether it be by partnering with a local yoga studio, serving tea at a marathon, engaging local celebrities to help serve at a tea party for a cause, or working with a local mixologist to develop some tea inspired cocktails for a special evening.
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We also like to practice what we call "random acts of tea," which empowers our staff to surprise and delight our neighbors and people in the community. We are passionate about the world of tea and excited to educate people on this beverage -- hot or iced, at home or to-go.
Q: What's your best advice for young entrepreneurs?
DS: Have fun working because you'll be working a lot.
