5 Lessons in Entrepreneurship From Starbucks and Philz Coffee

These two coffee brands found success by emphasizing customer experience and creating a genuine message.

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By Shayna Smilovitz


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It wakes us up in the morning. Brings friends together. It's even become its own subculture and a billion-dollar business.

I'm talking about coffee.

Once thought of as a West-Coast indulgence, coffee brands have changed our taste in beverages, shifted our culture and succeeded commercially.

Let's learn what two pioneering coffee brands, Starbucks and Philz Coffee, can teach us about entrepreneurship:

1. Do something innovative of real value.

Starbucks has done this by offering one of the most successful rewards programs of all time and introducing an ingenious mobile payment system with the Mobile Order and Pay feature in their app. As the name implies, this feature allows customers to order and pay within the Starbucks app, then pick up their drink in the store, bypassing the line completely.

Related: Starbucks CEO Howard Schultz Says He's Not Afraid of Dunkin' Donuts

This accounts for 25 percent of their total transactions and is expected to rise. In this way, they have smartly combined their rewards program, their branded app, and an exclusive mobile payment system -- a pioneering move in the retail and restaurant industries. Insiders in the mobile payment industry note the correlation between rewards programs and mobile payments, and cite Starbucks as a clear leader in this arena.

2. Create experiences, not just a product.

Whether it's for a coffee date, a catch up with an old friend or even an interview, going to Starbucks or Philz is an experience, and entrepreneurship means understanding how to create a feeling, rather than simply sell a product. These two coffee titans have tapped into that by focusing on creating a community and positive experiences between people as a foundational piece of their businesses. Starbucks CEO Howard Schultz was inspired by Italian coffee culture and how they treat it as a small community. Philz founder Phil Jaber has always loved bringing people together to create authentic experiences, an attitude he's passed on to his son and CEO Jacob Jaber.

3. Spark true engagement on social.

Starbucks is known for customer engagement, especially in the social media space. They engage customers with user-generated content and fun contests (including the Holiday Red Cup contest). The coffee giant is also succeeding at influencer marketing. Influencer marketing is the use of social media influencers to enhance brand awareness and engage the public.

Related: To Sell Products to Millennials, First Invite Them To Help Develop It

Other big brands like Pepsi and Origins are investing in influencer marketing also, using platforms like HYPR to increase their influence in the social media space. Entrepreneurship isn't only about what your product is, but how you engage the right audience to vouch for you.

4. Be authentic and personal in your approach.

Both Starbucks and Philz are masters at this. You may be thinking, How is Starbucks authentic and personal? They're a multi-billion dollar company! But, Schultz exemplifies being personal by taking action on his social stances, including providing healthcare for full- and part-time workers, which is a radical departure from most large American corporations who employ shift workers.

Related: How a Coffee Franchise With Russian Roots Made it in the U.S.

Philz's customers connect with the story of the coffee brand and its humble beginnings. Jaber's charismatic and eccentric persona is extremely authentic and personal, which allows him to connect with his customers -- which leads me to the next lesson:

5. Create an emotional connection.

This emotional connection accounts for a large part of Philz's commercial success. They are also succeeding with word-of-mouth recommendations and have a great reputation with the public, evidenced by their stellar Yelp reviews. Each customer has a personal connection to Philz -- which brand they like, which is their favorite blend, and so on. Starbucks also succeeds at fostering an emotional connection with customers, due in large part to the emotional connection most people have with coffee -- drinking it with friends, cozying up to a hot drink in the winter time and enjoying the inherent social nature of "going out for coffee.'

Coffee imitates life.

Coffee has become a mainstay in our global culture. It connects people from the same neighborhood as easily as those thousands of miles away. Starbucks and Philz, two creative and pioneering coffee brands, teach us a lot about the core of entrepreneurship -- how to create real and genuine experiences, introduce something valuable to your customers and imbue an emotional connection to your brand. The success of coffee, and these two companies in particular, shows how brands and even whole industries can touch a nerve with the public, one sip at a time.

Shayna Smilovitz

Content marketing expert

Shayna Smilovitz is a content marketing expert based in Tel Aviv. Born and raised in Silicon Valley, she has tech in her blood and loves writing about the intersection between technology, society and culture. 

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