I usually pride myself in not falling blindly for a brand’s marketing, and being objective in decision-making. Maybe it’s the classic case where everyone believes that advertising works, but not on them. But I’ve always claimed that I bought the iPhone not because of the mad rush for it, but because I was convinced by objective reviews about its superb user experience.
But I make an exception for one brand: Starbucks. The coffee brand you can love or hate but can’t ignore. What does this brand stand for? It stands for a third space between home and office, a coffee experience that goes beyond the actual drink, a feeling of belonging to a welcoming place, an exciting coffee that makes other coffees duller. And I’ve swallowed this entire brand essence, hook, line and sinker.
What makes a big difference is the approach followed by a few baristas. I used to work at the Concourse building, Beach Road, Singapore, which has a convenient Starbucks downstairs. A bunch of friendly baristas by the names of Hansel, Rafi and Johari had a great way of putting people at ease. They remembered not only the names of most customers, but also their favourite drinks. They remembered 3 or 4 of my favourite drinks and asked me which of these I wanted to have each time. On one occasion when I was about to go to Bali on holiday, I happened to mention it to Hansel in passing. 10 days later he asked me how my trip to Bali was. I was amazed that in the midst of hundreds of customes, he remembered that I had made a trip to Bali. This is on-the-ground CRM! Low-tech CRM it may be, but it works! If only every brand remembered so much about every consumer!
And the Starbucks culture ensures that other baristas show a similar attitude. After Hansel and Johari moved to other outlets, I still kept on going to the one at Concourse, because others fulfilled their roles equally well. It remained the place that excited me whenever I wanted an early morning cuppa or a break in the afternoon. Many times I considered going to the small drinks stall across the road, but it was just not exciting enough.
Then, something terrible happened. We shifted office to Scotts Road! One of the first things I found out was if there was a Starbucks nearby. And no, there wasn’t! I thought a lot about what I was going to do. There were mom-and-pop coffeeshops nearby, but they were not Starbucks. And astonishingly, I went a whole month without a Starbucks coffee!
I was naturally cribbing about it. A friend in the office who noticed it said that there’s a Starbucks next to Orchard MRT, which was quite far from my office. It’s not walkable unless we have half an hour to spare, and that acted as a deterrent. But one morning, that same friend bought me a tall nonfat latte (my favourite drink) from the Orchard MRT Starbucks! Having my first Starbucks in a month was orgasmic! For a few seconds I considered marrying this friend of mine (disclaimer: exaggeration).
I had the taste of it again. I was not going to wait another month for my next Starbucks. Since then, once every week I get down at Orchard MRT instead of my usual Newton MRT, get my tall nonfat latte at the Orchard MRT Starbucks, and then take a bus to my office. Sometimes even at 10am or 11am in the office, I feel like a Starbucks and make a bus journey to get one. Soon I realized, I’m not the only one in the office who’s doing it! Sometimes a group of us make the same half-hour trip for a Starbucks. That’s the bonding we have with Starbucks.
It’s often said that a truly successful brand is something you would drive a whole night for. In my case, it’s a brand I would make a half-hour journey for, once a week!
It’s no secret that America has lost its aura of invincibility in the last few years. The subprime crisis of 2008, the collapse in Detroit, the high unemployment, and the rise of China and India are all factors attributed to the new air of vulnerability surrounding America. So much is said about the power shift from the west to the east. At this time, it takes a lot of courage to stick your neck out and say America will remain No. 1. But I’m going to do exactly that.
I recently read a book by Singapore’s iconic leader Lee Kuan Yew, called Hard Truths To Keep Singapore Going. Among many things, he mentioned that for any society to continue doing well, 4 types of people are critical: innovators, entrepreneurs, mentors and super-mentors. And he said the only country which has all 4 in large numbers is America.
That was consistent with my own observations: that America remains the capital of creativity and entrepreneurship. It remains the only country capable of giving us a Facebook or an iPad. Think of new innovations that emerged in the 2000s – the search revolution spearheaded by Google, the social networking phenomenon led by Facebook, Twitter and MySpace, the location based networks trend spearheaded by Foursquare and Gowalla, 3 innovations from Apple that changed the world (iPod, iPhone, iPad), the e-books revolution spearheaded by the Amazon Kindle. They all have one thing in common. They all originated in the US.
The blueprint of America is special, and has withered many a storm. It’s the mindset of entering uncharted territory, creating something, and building a good future for everyone involved. That blueprint existed when the original invaders of the continent built every city, town and economic hub from scratch. That blueprint exists to this very day in Silicon Valley, hence the innovations mentioned above.
It includes the mentality of welcoming every nationality and absorbing them into its fold, and being enriched by their multiple talents. This mindset existed when English, Irish, German and Hungarian immigrants docked at Ellis Island. It existed when Jewish immigrants took over the realm of small-scale entrepreneurship, and slowly increased their scale to the extent that they control most of the economy today. It existed when Chinese, Indians and Vietnamese enriched Silicon Valley. It exists to this day, because America remains the only country where the son of a Kenyan immigrant can become President.
This blueprint also includes the world’s greatest entertainment culture. The story is considered America’s greatest export, and nowhere is it more true than in Hollywood. It remains the world’s dream factory. Apart from that, you can see phenomenal expressions of this entertainment culture in Las Vegas, Universal Studios and Disneyland, just to name a few.
Asia has its own strength, primarily a large population of high IQ, educated and hardworking people. But I believe that this is just a starting point of a society’s success, and not the be-all-and-end-all. This alone cannot take Asia ahead of the US. The culture of creativity and entrepreneurship in the US continues to act as a magnet for Asian talent. The long list of Indian technopreneurs in America like Vinod Khosla, Ram Shriram and Naveen Selvadurai bears testament to this. It absolutely begs the question: Why couldn’t Vinod Khosla’s Sun Microsystems or Naveen Selvadurai’s Foursquare emerge out of Bangalore or Hyderabad? China isn’t far ahead either when it comes to creating global brands that take over the world. All they can boast of is Lenovo, which had to be taken over by America’s IBM. And Huawei, whose only markets outside China are India and Indonesia.
The culture of creating something special out of thin air is still missing in Asia. China’s ability to produce graduates with great scientific and mathematical ability is legendary. But in industries like advertising, which require creativity and communication skills, there’s a severe shortage of talent in China. The conformist mindset of the people doesn’t help.
I’m not denying the rise of China. I would be a fool to do that. But does China have the blueprint to be No. 1? Does a country which depends on the fake goods industry to spearhead 8% of its economy have the foundation values in place? Does their undeniable economic rise necessarily mean they will be accepted as the global leader?
At least it’s debatable whether China can take over the No. 1 spot. But I don’t think the India case is even debatable. Quite a lot of what is said about India is theoretical and melts in the real world. For instance, there was so much rhetoric about microfinance and how it was going to get millions out of poverty. India contributed famous microfinance case studies like the Shakti Amma movement in Andhra Pradesh state of southern India. But today, microfinance is seen as India’s own subprime crisis, where tens of thousands are struggling, unable to repay loans borrowed from aggressive lenders. The same Andhra Pradesh is the worst hit.
Another commonly heard rhetoric about India is that it has a young population and a large workforce. What’s actually happening is that more and more lower-income Indians are migrating around the world, doing jobs locals don’t want to do. The last five years have seen a substantial increase in construction workers from Uttar Pradesh, Bihar and Rajasthan migrating to the Middle East. The last two years have seen immigrants from Punjab and Gujarat emerge as the second largest group of illegal immigrants in the US, behind only the Mexicans. Does it make sense if a “superpower” is a major source of labourers for the rest of the world? The demographic dividend of a country can be realized only if it educates its increasing population. A large belt in India, from Punjab in the north to Bengal in the east, doesn’t appear to be doing this.
If even China and India cannot match the US, what chance do other countries have? Can we really imagine a superpower emerging from elsewhere? Japan and Korea plateaued 20 years ago. Latin America doesn’t appear ready to lead the world. Europe has shown itself incapable of global leadership in spite of its economic success over the last few decades. The Next 11 emerging markets (Mexico, Turkey, Indonesia etc) are all capable of significant economic success, but it’s difficult to imagine any of them exerting substantial geopolitical influence.
There are only flimsy reasons supporting the belief that America’s best days are behind it. Superpowers emerge by having a solid DNA in place, and only if they lose it, they will decline, as in the case of the Roman empire and the British empire. And America is showing no signs of losing it. What they are facing now is only half as bad as the Great Depression of 1929. The challenge from China and India is no different from Russia sending Yuri Gagarin into space, in which case America responded by sending Neil Armstrong to the moon. A country which put cars on every road, computers on every desk, and Mickey Mouse and Donald Duck into the heart of every child, is not going to relinquish its status as the world’s leading superpower for the next hundred years.