Third Places and Neighborhood Entrepreneurship: Evidence from Starbucks Cafés

Or alternately, neighborhoods with no previous coffee shops where Starbucks start opening are gentrifying.

Is Starbucks good at predicting gentrification? Presumably there is some criteria someone is using to gauge the feasibility of a location vs others. If you can beat the rush, you can probably get better leasing terms etc.

That was my first thought, too, but that's not totally ignored. It all hinges on this part: "...when compared to census tracts that were scheduled to receive a Starbucks but did not do so..."

So the sampled population is the neighborhoods that were scheduled to receive a Starbucks, and lack prior other coffeeshops. Which means we're basically only looking a newly gentrifying neighborhoods (that Starbucks has calculated are worth opening something in, but that's probably mostly redundant with "newly gentrifying"). This severely limits the scope of applicability, but is fine in terms of the statistics.

The big question is: why did some locations not receive the Starbucks they were "scheduled" to receive? Because that is a potentially huge confounding factor. If it's because Starbucks corporate said "hey, we only want to open up 2000 new locations this year, let's roll dice to see which ones get it", then it's all good. If (as seems more likely) it's more like "let's start the process for all candidates, but drop the ones that are slowest to get through the permitting process or hardest to get a loan/insurance/workers/supplies/building materials for", well then -- might those affect the ability to start up a company just a wee little bit?

I'm torn. It's an interesting enough result that I'd almost like to go to the extreme measure of doing the "actually read the paper" thing that I've heard rumored some people do. And yet, my cynicism says my doubts are probably correct, so I don't want to bother with the effort to find out if they aren't.

Unfortunately, Starbucks is opening “kiosk only” locations with no seating that, obviously, fail to function as a third place. My partner finished up a medical appointment and was waiting for me to arrive, and decided to stop in Starbucks. Oops, just a kiosk. The options left for a “third place” was a petrol station that had seating and a grocery store.

Somehow I don’t think petrol station seating areas will promoting a huge amount of neighbourhood entrepreneurship. I would probably look at more independent, locally-owned kind of establishments—particularly that do have seating.

I can think of a lot of critical meetings that happened in these sort of coffee shops, including a first interview for the person who is now our staff software architect, the first meeting I had with my now-business partner where we went over her product idea (admittedly that was a Starbucks), getting together to hash out ideas to solve difficult problems, and best of all, a random chance encounter because we were in a third place. This is in places as diverse as small heartland American towns, NYC, Tel Aviv, or Pennsylvania’s rust belt.

Fewer of these places means fewer of these good things happening. I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.

> I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.

You would probably enjoy the experience of a small, locally owned coffee shop then. Starbucks is optimizing for their profit. In my suburban city, Starbucks has closed most or all locations that were a few miles from the freeway. They built new locations with drive throughs and very little to no seating within a few blocks of every freeway onramp. This tells you what they are optimizing for.

Unfortunately, chances are encounters and warm fuzzies do not please the corporate overlords.