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September 11, 2007 10:03 AM PDT

What if Starbucks were your filling station?

by Adam Richardson
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The common wisdom is that gas stations make almost no profit off the gas itself (the gas companies make a ton of profit, of course) and must have side businesses like garages and, above all, snack shops to turn a profit.

What if you were to turn that equation on its head and add a "filling station" to, say, a Starbucks? That's the intriguing possibility raised by an article on SFGate about Hyatt Hotels and Tesla Motors, the Google-founders-financed electric car start-up. (It's also been written up on CNET News.com.)

"Hyatt will install Tesla recharging stations at three hotels, stretching in an arc from San Francisco to Lake Tahoe.... By placing rechargers at Hyatts at Fisherman's Wharf, Sacramento and Incline Village on Tahoe's North Shore, a Tesla owner could drive from San Francisco to the lake without fear of running out of juice. Tesla has already driven one of the roadsters from Tahoe back to the company's San Carlos headquarters without recharging, but that was downhill, said Diarmuid O'Connell, Tesla's director of corporate marketing."

The two companies talked up the brand alignment between them, and how a Tesla customer is a Hyatt customer. Whether that's true or not, it's rather more upscale than an oil company aligning itself with, say, a fast food company to supply burgers at its stations.

Hotels are good places for charging because customers will leave their cars overnight. Starbucks could enter the picture when you can charge more quickly.

A separate news item in Technology Review about secretive battery manufacturer EEstore claims that they have a battery technology that will give a range of 200 miles--and charge in less than 10 minutes. If it's true (and there are plenty of skeptics), that would make a Starbucks a perfect place to add a charger. Pull up and park, plug your car in, stand in line for a latte, come on out and you're off with another 200 miles. It would transform the aesthetic and tone of "filling up" from one that has become grimy and unpleasant to one that is clean and faintly European.

The gas station as a "third place." I love it.

Adam Richardson is the director of product strategy at Frog Design, where he guides strategy engagements for Frog's international roster of clients, envisioning and creating new products, consumer electronics, and digital experiences. Adam combines a background in industrial design, interaction design, and sociology, and he spends most of his time on convergent designs that combine hardware, software, service, brand, and retail. He writes and speaks extensively on design, business, culture, and technology, and he runs his own Richardsona blog. Adam is a member of the CNET Blog Network and is not an employee of CNET.
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Really Turning Equation on its head
by tenc21 September 18, 2007 7:31 PM PDT
It may be turning the equation on its head to have gas stations connected to Starbucks, but why? If, as suggested, there is little to no profit in the sale of gas...why would the profitable part of the equation need the non-profitable part? Even to attract customers, there are better ways that could be more profitable. Why not sell videos and rent DVDs and players (affixed to tables) while the customers are sipping their latte? If gas stations truly live on the non-gas income, then they should just become convenience stores only and ditch the gas sales. Gas could be sold at little to no profit at drive up insurance stores where the gas station customers could then be hit with pitches for better and cheaper coverage under the gas/insurance owner's offerings. That's really turning the equation on its head...
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Alternative fuel is what changes the equation
by richardsona September 20, 2007 8:36 PM PDT
It may not be possible to flip the model with gasoline at this stage. But it's the introduction of alternative fuels, such as electric, which require more prolonged "filling" (or charging) cycles that prompts a look at shifting the paradigm. Instead of the "filling" station being the distination, the recharging or refilling is an adjunct to another activity/destination. The Hyatt/Tesla partnership is along these lines. My suggestion that Starbucks could take this role too (somewhat tongue in cheek) was in the same vein.
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About Matter/Anti-Matter

Tim Leberecht and Adam Richardson both work for Frog Design, a consulting firm specialized in designing innovative products and services for Fortune 500 clients. On the Matter / Anti-Matter blog, they engage in a debate around questions they face day-to-day in their work, using convergence/divergence as a lens through which to look at the pressing issues in business, culture, and technology. What makes a successful convergent product or a successful divergent innovation? Is convergence a myth that users don't really care about, or is the current state of convergence just not satisfying enough for them to embrace? How much divergence of innovation is good, and when does it just become confusing? How do you stay on top of people's ever changing needs and wants?

They are members of the CNET Blog Network and are not employees of CNET.

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