My Starbucks Idea : an Open Innovation Case Study

How did Starbucks gather more than 150,000 ideas and create new products and services by engaging its community

Since opening its first store back in 1996, the Seattle-based coffee behemoth now includes almost 30,000 coffee shops around the world and is valued at a staggering $30 billion. A strong commitment to open innovation has helped to drive this incredible growth. This zest for open innovation led to the “My Starbucks Idea” platform, a customer participation experiment. 
So, what can a case study of the “My Starbucks Idea” platform tell us about open innovation? What were the benefits to Starbucks from managing this platform, and how can other businesses take advantage of these benefits? Let’s learn more about “My Starbucks Idea” platform with BambuUP

How did Starbucks do it?

As a company, Starbucks has always placed a lot of value on refining its products and procedures following customer feedback. In the company’s earliest years, this was reflected in simple systems like suggestion boxes and customer surveys.
In 2008, however, founder Howard Schultz launched the open innovation platform “My Starbucks Idea”. This platform encouraged customers and fans to share their ideas and suggestions for how to make the company’s beloved products even better. Over the first five years of operation, the platform received over 150,000 ideas, and the company put hundreds of them to use

The original “My Starbucks Idea” platform. Source: Starbucks Melody

The website did not focus on community development features like social networking. The format was simply designed and it allowed all customers to create a profile and write (and categorize) their suggestion. My Starbucks Idea is also up to date with the news of the ideas that have been accepted and are being implemented

What made “My Starbucks Idea” unique?

To help encourage a community of fans, Starbucks enabled users to vote and comment on ideas they liked. There was also a public leaderboard showing the most dedicated fans, as well as those with the most popular ideas. Not only did it create a lot of great product innovations for Starbucks, but it also helped to drive increased customer loyalty. Through actively managing the “My Starbucks Idea” platform, Starbucks engaged customers, making them feel they were being listened to. By rolling out fan-driven ideas like cake pops and pumpkin spice lattes, Starbucks created greater product diversity

What were the results of the “My Starbucks Idea” platform, and what can these results tell us about customer-driven innovation?

By paying attention to customer preferences, Starbucks was able to hold its spot as the market leader, even in a rapidly changing industry like the food and beverage sector. The “My Starbucks Idea” concept was based on a core belief: customers know what they want.
More than just receiving product suggestions, however, the platform also led to suggestions around process improvements, including finessing Starbucks’ mobile payment systems and offering free Wi-Fi. For a better overview of the range of innovations submitted through the “My Starbucks Idea” platform, check out the following infographic, published in 2013:

These examples demonstrate the value of open innovation. By handing power over to customers, and by giving them an incentive to participate by recognizing their ideas, Starbucks was able to channel a lot of crowd creativity. So, it’s clear that the “My Starbucks Idea” platform led to a huge amount of valuable product innovation. But beyond just suggesting new drink flavors, what were the wider benefits of this experiment?

What were the benefits for Starbucks?

The “My Starbucks Idea” platform created significant benefits for Starbucks. First, there’s the obvious benefit: empowering customers to make suggestions for product improvements meant that Starbucks had access to new, and potentially very valuable, ideas. Besides the simple value of these ideas, the platform also helped generate a lot of media attention and free advertising. By encouraging die-hard fans to engage online, Starbucks created a new way to market their products to their most valuable customer segment. The platform also served as a market research tool, too. Many thousands of fans signed up to submit their ideas, and in doing so provided the company with demographic information. This allowed Starbucks to build detailed customer profiles. 

The benefit didn’t go just one way, though: Starbucks customers also got plenty of value out of the platform. By engaging with the company, customers experienced a greater sense of inclusiveness, with the platform helping to build a real community. It wasn’t all sunshine and rainbows, however. As significant as the benefits were for both Starbucks and its customers, the “My Starbucks Idea” platform still created a number of risks to be managed.

How did Starbucks manage the risks of open innovation?

As we’ve seen in the examples of General Motors crowdsourcing advertisement suggestions on Twitter, handing the keyboard over to the customer can open a company up for online criticism, and even harassment. Sometimes, open innovation can be something of a double-edged sword. 
For “My Starbucks Idea”, this risk was definitely present. Starbucks employees were required to sift through the online ideas and comments on a regular basis to weed out any trolling or abuse, and to prevent the platform from becoming a tool for corporate mockery. Managing the risks of online abuse and platform misuse took a lot of dedicated resources, requiring an active approach from the company. Despite a strict set of community guidelines, the platform still required a lot of moderating.
By unleashing the creative potential of its diverse customer base via the “My Starbucks Idea” platform, Starbucks was able to source valuable new product ideas, engage with their most dedicated fans and gather market information to stay on top of trends.