Blank Street Coffee, a new and fast-growing coffee chain, recently completed a $20 million funding round (following the $67 million raised in 2021) with investors such as Left Lane Capital, HOF Capital, General Catalyst, and Tiger Global.
I love that S.C.A.L.E. framework!! Also, it seems like they are closer to a human operated vending machine than they are a cafe, so I wonder if a line of coffee vending machines would beat them on both cost and convenience. For just cheap and easy caffeine dosing, I use gum (12.5 cents for a 50mg dose).
The idea of hot vending machines isn't new. Japan has warm vending machines for food... (they sell spicy mapo soup, for example). Some physical product innovation could serve the same Blank Street crowd with fewer real estate requirement, fewer human capital expenses, and fewer menu items.
Vending machine for espressos and cappuccinos are actually not available at this point. It's actually harder than it seems and the maintenance is not trivial.
Don't forget about Luckin in China! They appear to be making a resurgence after their fraud "scandal" and are probably the ultimate example of coffee/tech-enabled/blitz scaling. Enjoyed the article as always Gad
This is a great article. You might find this interesting -- I analyzed the reviews of Blank Street in NYC and it actually seems like the operational efficiency from the automatic machines lets the baristas give better service, at least in some locations -- people rave about the baristas.
I run two boutique cafes in Boulder, CO. I've been watching this story for a long time.
This is what happens when tech investors and tech founders meet the world of F&B.
Running scaled F&B is the farthest thing from a tech company that one can get. It is slow, involves humans and physical retail. None of those things scale fast in the United States or Europe as far as I know. The only place they scale quickly that I know of is China where labor is plentiful and there is a blue ocean for coffee (see luckin, etc.)
Beware rapid scale into a mature market. Customers are discerning and have a variety of choices across need sets. Mediocre hospitality / retail / product will not be tolerated.
guess they are in dire need of product glow-up, that hits different with genZ.. beyond but around the coffee.. the way WiFi and not coffee stanned Sbucks .. perhaps a game u play only while you vape while sippin the coffee, lets disc. a 1-night date, or get slay at it:)
I love that S.C.A.L.E. framework!! Also, it seems like they are closer to a human operated vending machine than they are a cafe, so I wonder if a line of coffee vending machines would beat them on both cost and convenience. For just cheap and easy caffeine dosing, I use gum (12.5 cents for a 50mg dose).
I agree. The only issue at this point is that espresso robots are slot and hard to maintain. That will change.
JavaGPT?
The idea of hot vending machines isn't new. Japan has warm vending machines for food... (they sell spicy mapo soup, for example). Some physical product innovation could serve the same Blank Street crowd with fewer real estate requirement, fewer human capital expenses, and fewer menu items.
Vending machine for espressos and cappuccinos are actually not available at this point. It's actually harder than it seems and the maintenance is not trivial.
Also, consumers likely have lower expectations of vending machines for quality, "cafe" environment, personal interactions, and access to restrooms.
Don't forget about Luckin in China! They appear to be making a resurgence after their fraud "scandal" and are probably the ultimate example of coffee/tech-enabled/blitz scaling. Enjoyed the article as always Gad
That was definitely another "scaling gone wrong" story.
This is a great article. You might find this interesting -- I analyzed the reviews of Blank Street in NYC and it actually seems like the operational efficiency from the automatic machines lets the baristas give better service, at least in some locations -- people rave about the baristas.
https://residualthoughts.substack.com/p/hows-blank-street-coffee-doing?r=9c2r
Thanks Joe! I will read your article. looks very interesting.
Would be curious to hear your thoughts!
I run two boutique cafes in Boulder, CO. I've been watching this story for a long time.
This is what happens when tech investors and tech founders meet the world of F&B.
Running scaled F&B is the farthest thing from a tech company that one can get. It is slow, involves humans and physical retail. None of those things scale fast in the United States or Europe as far as I know. The only place they scale quickly that I know of is China where labor is plentiful and there is a blue ocean for coffee (see luckin, etc.)
Beware rapid scale into a mature market. Customers are discerning and have a variety of choices across need sets. Mediocre hospitality / retail / product will not be tolerated.
A perfect side to my laborious hand-ground, hand-pressed espresso. Your class on scaling was transformative, and this article was a nice reflection!
Happily will agree with you and take my coffee break without venture funding & scale.
What other non-VC funding sources do you think that firms with growth aspirations like Blank Street’s should have been pursuing instead?
I think private equity will be ,generally speaking, more aligned in terms of the returns expectations.
guess they are in dire need of product glow-up, that hits different with genZ.. beyond but around the coffee.. the way WiFi and not coffee stanned Sbucks .. perhaps a game u play only while you vape while sippin the coffee, lets disc. a 1-night date, or get slay at it:)