Thursday, December 13, 2012

On the Breadth of the Human Psyche

Recently, Starbucks ran a campaign. For a mere $450, you could buy a $400 “limited edition” metal gift card. Now, obviously, Everyone heard about the campaign, and then Everyone immediately said, “wow, that’s stupid. Who the heck would pay Starbucks extra money just to get a gift card that says ‘limited edition’ on it?”, because Everyone is smart. Everybody smartly kept their money in their wallets, the campaign ended in failure, and the ad advertising manager was subjected to public ridicule for even suggesting such a stupid idea.

Ha! Just kidding. The campaign quickly sold out, of course. However, the fun didn’t end there. These cards soon showed up on ebay (eBay?) and garnered bids upwards of $1,000. More on this later.

This fascinates me, for the single reason that—to me—the success of this campaign is absolutely mind-boggling. Yes, people collect things all the time; cabbage patch kids, beanie babies, whatever the latest craze is. However, this is pure, unadulterated, “please give me your money” Capitalism. I would have thought that people wouldn’t be interested in being part of an exclusive club just because that club exists. (Thinking about it some more, I realize that this is the fundamental business model of the entire fashion industry, and that American Express is built on a very similar concept. Ah well, everything’s obvious once you’ve seen it.)

However, what hit me most wasn’t the fact that I clearly have no future in advertising. What struck me was that my point of view—that such an advertising campaign is a completely idiotic idea—is clearly, completely, and incontrovertibly wrong. Not only does Everyone not think it’s stupid, a not-insignificant part of Everyone think it’s an excellent idea, to the extent that they went out and bought one. (Some enterprising folks were so forward-looking that they realized that others would appreciate this idea, and they bought some simply to resell them.) At this point, I wouldn’t be surprised if it turns out that some of my friends, who I would have sworn up and down would think this idea was ridiculous, were among those who bought one of these cards. When I first heard of the idea, I was dumbfounded with the combined audacity and cluelessness of Starbucks. While I’m still kind of disturbed by the audacity of Starbucks, now I’m mainly dumbfounded at the cluelessness of… me.

I’ve been thinking about entrepreneurship a lot lately, and this really drove home the point that I have no clue what people want. This really drives home the concept of “start a business by solving a problem you face yourself”. It’s hard to know what other people want, and it’s really hard to not only solve the need but to solve it well. Lesson learned: don’t laugh at anything, there are business opportunities in places you’ve never even knew existed.