Starbucks and Square

I find two things interesting having watched “the big interview” with Howard Shultz and Jack Dorsey last night.

First, the complete lack of vision expressed by both iconic leaders. I expected to hear them wax eloquently and in unison about the impact on customer experience, perhaps the ability to put an order in as you walk in the door and skip the line-up to pay. I expected Howard to talk about how Starbucks will be able to more efficiently service customers and improve service. I expected Jack to reenforce the fact that Square is consolidating multiple players in the payment chain and disrupting that traditional industry to extract efficiencies with Starbucks’ scale which Starbucks couldn’t have done alone. But we heard none of this. Nope, you couldn’t watch the interview without being left with the impression that Square dropped their shorts to get scale, and Starbucks was solely motivated by getting a cheaper payment processor.

But second, I do believe the value being created in this partnership is far more profound than what we’ve heard from the horse’s mouth. Specifically, we have a two year old tech startup gaining a board member and investor from the top of a $12Bn revenue global leader that employees over 37 thousand people. Think about this — Starbucks has committed in this partnership to transition their entire corporate store transaction processing to startup with presumably less aggregate volume across its entire customer base than Starbucks alone has today.

Square has an opportunity to significantly recast the way Internet and real world commerce come together.

The point here is reenforcing that Internet startups today have a profound opportunity to impact and disrupt major traditional industries. As a VC, that gets me up earlier in the morning.

Thanks for leading the way, guys.

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