People who know me know that I often rag on Starbucks, mainly about their coffee. They over-roast the beans. They scald the milk horrendously in lattes, macchiatos and cappuccinos. You can have any coffee you like at a store, so long as it’s Pike Place. The one thing they do get right, however, is customer service.
Another thing I’m known for is collecting used coffee cups on my desk (or any surface, for that matter). When I went into the office earlier, I decided to pick up one of my collection of Starbucks tumblers and clean it out to take with me. Upon close inspection, I noticed that one particular model (below) was damaged. This particular model has a design flaw; there is no release valve or any way for expanded air to escape. This plagued me all the time with this model since every time I had hot coffee in it with the lever moved to the closed position, I would get coffee splashed all over me everytime I opened the lever to take a sip. In any case, I had presumably left the lid closed, since I noticed that sufficient pressure had built up inside it to actually break the internal arm which connected the rubber gasket seal with the switch on top. Thus it was impossible to close.
I walked into my neighborhood starbucks and showed them what happened. It’s important to note this was a tumbler I probably paid about $12 for 2-3 years ago. The employee behind the register did not hesitate and told me to grab any replacement tumbler off the shelf to replace it at no cost. “Really?” “Any tumbler. I like the steel ones with the built in French press, ” he responded. So I picked up my brand new $23 plus tax solo stainless steel press pot (picture below) and went on my merry way. He even filled it up with coffee at no charge.
My friends know that I go to Catalina Coffee in Houston if I want a good cup of coffee (or Caffe Medici in Austin, where I frequented while attending South by Southwest). But there is a lot to be said about this level of standing behind a product, no questions asked. This wasn’t the first time, either. Years ago, I purchased my parents a Starbucks Barista Aroma automatic coffee maker for Christmas. After 2+ years of nonstop use, it just stopped working one day. My father took it into his nearest Starbucks, and even though it was well out of warranty, received the same treatment as me. This was a $200 coffee maker to boot. It is good to know that even a multi-billion dollar corporation empowers its employees to give you mom-and-pop shop level service every now and again.
(UPDATE) I wanted to take a moment to update this post, since it has been almost three weeks since it was originally authored. We’ve had a virtual group hug through this post, evidenced in the comments below. Let me restate the obvious: Max’s coffee and coffee drinks are the best in Houston,Â probably in the top 10% of coffee shops on the planet. I do have to admit I haven’t been back to Catalina yet, but I will be paying Max a visit very soon (mostly to get some beans now that I’ve finally settled into my new place, with espresso machine). Lest there be any doubt, I will frequent Catalina for its off-the-charts lattes and coffee, albeit less frequently than before. The reason for that actually has to do more with my commute and proximity since moving than the fact that Max and I had a tiff or that his electrical outlets are still covered up (and yes, they are still covered up). If I were Max, I wouldn’t have covered the outlets, but it’s his shop and he can do whatever he damn well pleases. And that’s fine by me. Just don’t fuck with the coffee.
As many of my followers know, Catalina Coffee is one of my favorite coffee shops and hang outs. In my opinion, it epitomizes cafe culture (albeit a unique American variant) and has, bar none, the best coffee in Houston, period. In many cases, like many regulars there, I’ll make it by more than once in a day. I’m very sad to say, however, I had an extremely unpleasant experience today.
In the aftermath of Hurricane Ike, it has been extremely difficult to come upon a coffee shop (or anywhere, for that matter) with a) power, b) coffee, and c) wireless Internet access. Catalina was one of the only places in Houston to offer all three, and they did so the day after Ike made it’s appearance in our fair city. None of the local Starbucks were open, and other local coffee shops (Coffee Groundz) that were either had bad coffee, no Internet, or both.
When word got out, Catalina quickly became overwhelmed with new business from Houstonians needing their caffeine fix. It also served as a command center and refuge for many citizens who had no power or Internet at home, who wanted to check the latest status updates from Centerpoint Energy, check on loved ones, and generally go about their business online. Consequently, long lines for coffee and tables overcrowded with laptops became the norm.
Though I’ve made a few appearances at Catalina after the storm for coffee, today I arrived with my fully discharged laptop needing to catch up on a couple of mundane tasks, including paying a few bills and moving utility services to my new residence (incidentally, my old place has power but no Internet; my new place has no power). I was surprised to see all the power outlets had metal plates over them. Suspecting this was a result of Ike-related water damage or some other such safety issue, I inquired when the outlets would be available again. Max (the proprietor) responded, “Never.” He stated the reason was that the environment was getting mob-like and out of control over the last few days as “people were fighting over power outlets” and things of that sort. While I certainly understand the need to mitigate unruly behavior, there are many other ways to go about it. I do have to tip my hat to Max for his ingenuity in solving the supposed “problem;” it was extremely effective. The problem is it unnecessarily penalizes legitimate, regular customers who spend lots of money on coffee and conduct their affairs online. To add insult to injury, he decides to use this “solution” during a time of crisis and when people need to use it the most. It smacks of reactionary behavior and poor business citizenry in the least.Â After debating the issue with Max for a few minutes, I seem to have unearthed some far deeper rooted issues that apparently vex Max. I’ll reiterate some of our discourse and let you be the judge.
After getting the “never” response from Max to my question about when we would expect to get the power outlets back (assuming this was a short term fix, even if it was extremely poor timing given the current situation post-Ike), I politely stated that I needed to get some things done on occasion, along with a subtle allusion to my regularity and largesse (not only do I spend lots of money on coffee and am always careful to not take up space unless I’m buying things along the way, but I tip extremely healthy and have referred lots of new people to the establishment).Â He said, “bring another battery.” I told him that wasn’t an acceptable solution (a) I don’t have another battery, and b) where am I supposed to have charged these batteries especially if I don’t have power?). His shocked response to that was, “Unacceptable? Are you fucking kidding me? Unacceptable. I can’t believe that.” I told him that especially after Ike in a time of crisis I thought he was betraying his customers’ trust. He stated that he was “tired of people abusing my space. Cafe culture is not sitting down at a coffee shop for three hours.” Really? Are you kidding me? I suppose you have never sat down in a Parisian cafe then. Incredulous and stunned to that response, I told him that I thought the defition of cafe culture was different for everyone and that one should err on the side of what your customers wanted it to be. His response? “Customers? I don’t care what customers want. What matters is what I want. I opened my own shop because of that.” I asked him if he had thought of better ways to address the problem. His very cavalier response was that he had solved the problem and wasn’t really interested in discussing the subject any further. I told him that he was curing cancer by killing cancer patients and there certainly were better ways of addressing the problem.
I have tremendous respect for Max, his craft and his business acumen. He runs a very tight ship that produces a superior product and spares no expense nor takes any short cuts to achieve it. That is a very rare quality that I think more businesses should adopt. I also absolutely appreciate running your own business on your terms and not doing things the way everyone else does. I respect his ingenuity in his approach to the problem, but it is akin to solving email spam by simply only accepting 1 out of 1000 emails to your inbox, regardless of content. If his problem is slim margins from not turning over enough tables, he should address the business model accordingly and raise prices, or charge for wifi, or establish minimums. Ripping out the rug from under customers and biting the hands that feed him is not the proper solution. I am troubled by Catalina’s “solution” on two fronts: 1., the “solution” itself, and 2., the arrogant, cavalier attitude exhibited about the “problem.” I wasn’t aware that working quietly on my laptop for a few hours and spending $20 while I’m there in one sitting was “abusing his space.” In 20 years of starting and running small businesses, I do understand the importance of “firing” bad customers and mitigating abuse. By the same token, however, I have always found it extremely beneficial to the bottom line to err on giving customers the benefit of the doubt and applying the golden rule in abundance. That this decision comes in the highest time of need, makes it especially pernicious.
Thomas Friedman, the Pulitzer Prize winning author of The World is Flat, appeared on David Letterman this past Monday to discuss his latest book, Hot, Flat, and Crowded. Friedman is known for being a huge proponent of free trade, outsourcing, capitalism, and globalization. While I may not agree exactly on his methodologies about all these from a practical point of view, I do think he stirs up some good thinking points. He has become a somewhat controversial advocate of the green movement in his advocacy surrounding what to do about climate change. In this case, however, I am in 100% agreement with his argument about stoking the American innovation machine in order to solve the problems facing us. Another book from author Fred Krupp, the president for the Environmental Defense Fund, entitled Earth: The Sequel, similarly discusses the role capitalism, coupled with government leadership as referee to ensure a level playing field (i.e., allow new technologies to come to market in a way to compete with the more than $6 Billion in taxpayer subsidies still received by Big Oil, not to mention addressing mothballed clean tech patents acquired by Big Oil to stifle competition), can play in stoking the new “energy technology” revolution the way it did with information technology (which, in its present form, was built largely on the back of a government project called ARPANET, which we now know as the Internet).
The full video of the interview on David Letterman is posted below for your viewing. I’ve taken the liberty to paste the main points from the interview verbatim, with emphasis added to especially important narratives. His points are the same points I would make in debating about what needs to be done with US energy policy, specifically as this country’s biggest mandate and wealth creation industry for the 21st century. It doesn’t matter if you believe in climate change or not (though if you don’t you possibly also believe the Earth is 4,000 years old, but I won’t get into that here). It is an economic and security imperative at this point that we take charge and lead the way or suffer the fate of becoming a second rate power.
Dave (concerning letting the nation know the seriousness of climate change): “We need people coming out here screaming . . . . we need somebody to knock people over and jump up and down on their chest.”
Thomas: “[Republican's] mantra is drill baby, drill . . . what I’ve been saying to them isÂ . . . we’re on the eve of [the energy technology] revolution . . . on the eve of that revolution, to be saying, ‘drill, baby, drill’ is like saying on the eve of the IT revolution, . . . ‘I want more carbon paper . . . more IBM typewriters’ . . . hello?”
Dave (in discussing the Government’s role): “Maybe I’m wrong, maybe we don’t need leadership in this country, in the white house, maybe we don’t need a national political mandate.”
Tom: “We do.”
Dave: “Until we look at this like a national problem . . . this country always wants to be a world leader, why aren’t we leading the world at this?”
Thomas: “And why do we need government? Why, you are right we need a leader, because . . . leaders write the rules, they shape the market . . . what we need is a price signal, ok, a price on carbon, a price on gasoline, that says to the American marketplace, which is the greatest innovation engine in the world, go out and invent the alternatives and you’ll get rich. So we get 100,000 people trying 100,000 things in 100,000 garages, 100 of which will be promising, ten will be great and two will become the next green Microsoft and green Google.”
Dave: “Will either of these guys [presidential candidates] do it?”
Thomas: “Certainly if you listen to them today, they aren’t preparing the public for that. Everyone’s ready to say, ‘I’m going to throw this amount of money at it’ . . . but it really isn’t, Dave, about throwing money at it. It’s triggering the innovative prowess of this country that gave us the IT revolution. That’s what we need for the ET revolution. Now if we don’t do it . . . this is the next great economic revolution, the next great industry . . . the country that leads that is going to have the higher standard of living, the most economic security, the most national security, which part of that sentence don’t people understand?”
Dave: “And to a great affect will solve our current economic problems . . . . it’s not an overnight kind of a deal, it will contribute greatly to making things much better economically. Why can’t we get a guy smart enough . . . to say ‘by god, here’s how it’s going to be different, and I’m the guy that’s going to make it different, and I’m going to lead the world, and I’m going to save the planet’?”
Thomas: “What if you were . . . one of those members of congress who came out and said, ‘we need a carbon tax, we need gasoline tax, we need the right standards, we’ll offset it on people’s payroll’ and then your opponent says, ‘there’s my opponent . . . [who] never saw a tax he didn’t like’ . . . here’s what I would say, ‘let’s get one thing straight pal, we’re both for a tax, because we’re being taxed right now by Saudia Arabia, Iran, Nigeria, Russia; I just prefer that my taxes go to the US treasury to build US schools, US roads, US highways.Â . . . It’s just a little tick I haveÂ . . . that I like my taxes to go to my country.Â . . . if you can’t win that debate, you don’t belong in politics.”
Dave: “Would that work as a stump speech . . . in a debate?”
Thomas: “I believe this issue is like civil rights and women’s suffrage . . . the public are ahead of the politicians. . . . [the public] will take a lot of pain on this if they think you have a real plan, and it’s equitable . . . and it’s a plan not just about energy, but about nation building in America. This is the key to propelling our country into the 21st century, not into the 19th century with drill, baby drill . . . if it’s a hoax . . . everything we would do to prepare ourselves for climate change would make us more respected, more innovative, more competitive, more entrepreneurial.”
The following is a letter one of my friends and colleagues wrote to Senator Kay Bailey Hutchison concerning the upcoming Senate vote on the Lieberman-Warner Climate Security Act. I have left it unedited, with the exception of replacing his underlines with italics for readability. I think he makes some excellent points here and I concur with his assessment, particularly the point about Houston (and Texas) constantly taking the easy road of eschewing change, resulting in the best minds, ideas and innovations going to the west coast. I am tired of the intellectually lazy, business-as-usual conservative politics here. Because of insipid, brainless dogma, we repeatedly squander every opportunity to do truly great, innovative things. Anyway, enough of my opinion. Enjoy!
To: Senators Kay Bailey Hutchison & John Cornyn
RE: Lieberman-Warner Climate Security Act
The Senate is scheduled to debate and vote on the Lieberman-Warner Climate Security Act the first week of June.
As a citizen of Texas, a technology entrepreneur, a co-founder of one of Houston’s first Internet service providers, a veteran of the armed forces, and a current real estate professional, I urge you to seize this historic opportunity and pass this bill.
Here are five compelling reasons to act now:
The political opportunity is ripe. 78% of Americans want Congress to act on global warming. We need to take advantage of the tremendous momentum that exists today.
Building a domestic renewable energy supply that weans us from a mostly foreign, Middle-Eastern oil supply should be a national security imperative.
Carbon emission caps also address a very important LOCAL concern in Houston – our notorious air toxicity and ozone (exacerbated by CO2 and other heat-rapping gases).
This isn’t an issue with whether or not you agree with global warming – this is an economic issue now of producing domestic, cleaner energy and spurring technology investment in Texas beyond oil and gas – gas prices are out of control and we need more choices for energy. However, every year we wait equals extra effort. If we delay this bill by just two years, we will have to make twice the annual cuts in carbon emissions to hit the same cumulative reductions by 2020.
Someone is going to win the global race to create competitive cleaner energy. Houston and Texas can benefit, with effective leadership, from this growing consensus. Renewable energy promises to become one of the world’s most profitable industries – Japan and Germany already are ahead of us. But advances in renewable energy technologies will not be fully realized without a national cap on global warming pollution – almost every clean-energy entrepreneur agrees with this statement that has been interviewed. Refuse to act and most of the entrepreneurship will go to Silicon Valley just like in 1995 when I was starting Houston’s first large Internet services provider. Please don’t become complicit in a technology brain-drain from Texas 10 years out.
The science is unforgiving. As the Earth warms, we approach a “tipping point,” after which large destructive climate changes become inevitable. This is a scientific consensus (like tobacco smoke causes lung cancer) – I am frankly not interested in whether or not policy analysts or members of Congress agree with this consensus or not, especially when it comes to my planet and health.
What legacy will the 110th Congress and you leave for Texas? When future generations look back at this moment, they will either praise you and the Senate for starting us down the path to solving the global warming crisis, or blame you and the Senate for squandering this opportunity. If you fail to vote, you stand to put us right back to the 1980’s in Texas while the rest of the nation moves ahead. You have an opportunity to make us a leader in the energy future of America, or to allow us to decline when oil production drops off. It will happen – history is famous for repetition.
Finally, have you read Earth: The Sequel: The Race to Reinvent Energy and Stop Global Warming by Fred Krupp? What amazes me as a business leader and entrepreneur is his complete embrace of markets – with smart and effective federal leadership – to solve the problem, based on case studies and diligent research. What are you doing to secure Texas in this new emerging energy markets? Please vote FOR the Lieberman-Warner Climate Security Act when it comes to a vote in June.
I’m usually very loathe to simply link out to another blog’s content, but I thought, with tax season upon us, this post was worth a mention. I think it’s a tremendous testament to social media when a company the size of H&R Block (and one that is in the tax business of all things) embraces social media to strengthen brand awareness. I encourage you to read the whole thing, but I’ve pasted three paragraphs below from the story that relate directly to H&R Block’s use of Twitter. Who ever thunk it?
When people join Twitter, they often send an update out into the world and then go away. Nothing happens. So they don’t get it.” But once they move in to Twitterville, as you call it, and really listen and reply and become part of the community, they’re addicted. There’s nothing like it.
When it comes to truly connecting with customers, I’d say that Twitter has been the most valuable and most effective component of our social media efforts. I went back and looked at our update archive and I realized that more than half of our updates are “@ replies.” Not only have we shared tax tips and advice that serve the general community, but on a one-to-one basis we’ve helped people get jobs and professional tax training.
We’ve helped others overcome the anxiety associated with doing their taxes on their own for the first time. We’re having a blast participating in @zefrank’s Colorwars (how could H&R Block resist a “veryGreenTeam”?). We’ve discovered and resolved customer support issues and we’ve met and thanked very happy customers. It sounds crazy, but I actually feel like H&R Block has made some friends on Twitter. We even had a customer call us out as part of @garyvee’s Good People Day! We couldn’t ask for more than that.
I know all the Friedmanist laissez-faire, free marketeers will jump all over my shit about this, but the current financial crisis, and every crisis prior, certainly makes a strong case about tighter regulation of Wall Street. Here’s the recipe: 1 part great wealth creation phenomenon and 1 part Wall Street greed yields a huge serving of crisis. Make no mistake, the Internet bubble wasn’t created by technology companies or entrepreneurs. It was created by greedy financiers and Wall Street. Don’t get me wrong — I certainly hope to have a ridiculous pay day with Wall Street’s help (I had a Wall Street pay day before, but the bubble burst before my section 144 stock was free to trade), which is precisely why I would like more effective oversight to prevent another bubble from bursting in my face.
The Internet bubble would never have been were it not for Wall Street, in my opinion. It would have been an extended, sustainable period of prosperity that awarded innovation (not the “let’s sell $1 bills for 95 cents and make it up in volume” kind of innovation that was improperly awarded during the bubble). The current sub-prime mortgage crisis is another example of a bubble created where none existed. The rose colored glasses on Wall Street were all too willing to give AAA ratings to mortgage backed securities that really were absolute crap. The “greater fool theory” is all too real a phenomenon in the apparent zero-sum game that is Wall Street finance (it doesn’t need to be). The problem is, we’re running out of fools. Additionally, our entire financial system gets downgraded as you can rest assured the fools who got bitten once won’t be back to the trough any time soon. Meanwhile, our currency weakens and more of our debt is in foreign hands.
It seems we repeat history all too often and never learn anything from it. Sorry Gordon Gecko, greed isn’t that great after all.
Here’s the scenario: you issue a purchase order for $50,000 worth of product from a hardware manufacturer. The product is to be shipped to your location via Fedex. Fedex loses the shipment. The shipper did not insure the shipment. Who’s responsible for coughing up $50K? Answer: you are. Shocking, I know. Why?
I wanted to share this brief experience my business partner and I had regarding receiving such a product shipment. Rules for commerce are typically governed by the Uniform Commercial Code. The purchase order in this case specified the shipment was FOB Origin (or FOB Carrier). This is where the rules come into play which govern which party has responsibility. Basically, if you are shipped something FOB (Free On Board) and it is anything other than FOB Destination (i.e., your location), you are responsible for the shipment. If you want the shipment insured, the onus is on you to require the shipper to insure it accordingly on the purchase agreement.
This is one of those instances where I had to learn this from experience. We mistakenly assumed the shipper would insure such expensive equipment while in transit. Don’t ever make this assumption. Luckily, in our case, the manufacturer “did the right thing” and replaced the shipment for us. From now on, we’ll be ordering everything either FOB Destination or requiring the shipper to insure the freight (which you can have added to your invoice). Please make sure you do the same!
I can certainly identify with this Business Week story about Sprint’s business troubles, largely stemming from customer service woes. I was a customer of Sprint’s for 3 years, relatively happy with the service. The trouble came when I decided to switch service plans to reduce my minutes since I was taking time off work and no longer needed the huge pool of minutes I previously required. Using the Sprint website, I modified my plan. I had my online banking configured to pay Sprint automatically the same amount every month. After confirming the service plan change, I modified my online payments to reflect the new amount. I got a service disconnect notice about 3 months later (I never really paid much attention to the online bills and opted out of receiving paper bills) with a bill attached for nearly $300! Upon calling customer service (this is in 2004), I learned that my service plan in fact never was changed. Of course they had no record of the change I made and it was my dumb luck I didn’t write down the confirmation number the website had given me (nor saved the website – I always do this now). The customer representative said she would be happy to change my plan once I paid the amount due. Explaining my story resulted in nothing more than, “well I’m very sorry.” I had her escalate me to the manager on duty. Again I explained my story and said I would even prepay or renew my contract (I was month to month since my initial contract had expired) if they would simply give me the benefit of the doubt. I thought I had some leverage since I had been spending a decent chunk of change with them and even kept the phone active when I was living in Europe in 2001! Nada. Zip.
Needless to say I was quite exasperated by this point and simply wasn’t going to tolerate it any longer. I told her something to the effect that they could shove my account and balance where the sun didn’t shine and they would never get another penny from me, ever. After going through 3 other providers, including Cingular (another customer service nightmare), I landed with T-Mobile and have never looked back. The mobile phone service providers really need to use T-Mobile as a case study on how to run a customer service organization.
Business Week has re-released its original story about the importance of Social Media (i.e., blogs). This time, many of the predictions and facts are annotated with updated information snippets. It is certainly an interesting re-read to see how far we’ve come!