Blue Bottle Coffee and Uber are both Business Model Innovations

Note: This was originally posted in a discussion as part of a Boston University Metropolitan College graduate-level course in Innovation with Professor Kathleen Park.

Blue Bottle Coffee founder James Freeman had an insight - there was no place that serviced high end coffee aficionados like himself. This insight led to Freeman’s innovation, Blue Bottle Coffee. Freeman was an early purveyor of third wave coffee, a movement that treats coffee like artisanal food, similar to wine or craft beer. Freeman’s innovation was entirely based in his business model - a more labor-intensive and expensive process produces higher quality, which in turn draws people (Huddleston, 2019).

Additionally, Blue Bottle Coffee trains baristas with an emphasis on making sure they know their stuff, but are friendly to casual consumers, adding an emotional element (Carman, 2017). This emphasis contrasts lower end chains (Starbucks) and provides an experience based solution. Finally, like fans of craft beer, third wave coffee fans have a sense of community (social).

Freeman displayed the human capital described in Innovation Capital through his forward thinking showed human capital and his act of committing, pouring everything he had into the business, acted as an impression amplifier.

Uber is another innovation where the business model is the innovation. Unlike Blue Bottle Coffee, Uber was originally conceived as a much different service - essentially a high end car service. As the founders developed the concept, their business model evolved into the ride-sharing service (Christiansen, Dyer & Gregerson, 2011) that redefined the transportation industry and upended the traditional cab industry (Griswold, 2019). The business model itself is the innovation.

Uber founder Travis Kalanick had all of the hallmarks described in Innovation Capital - human capital (forward thinking), social capital (networking with innovators) and reputation capital (previous success). (Shontel, 2014).

References

Carman, T. (2017, August 24). Yes, it's ok to like Blue Bottle - even though it's turning coffee into a lifestyle brand. The Washington Post.

Christiansen, C., Dyer, J., & Gregerson, H. (2011). The Innovator’s DNA. Boston: Harvard Business Review Press.

Dyer, J., Furr, N. and Lefrandt, C. (2019). Innovation Capital: How to Compete and Win Like the World’s Best Innovative Leaders. Boston. Harvard Business Review Press.

Griswold, A. (2019, April 27). Uber’s stunning journey to a $90 billion IPO changed transportation forever. QZ. Retrieved June 2, 2010 from: https://qz.com/1592032/how-uber-got-to-its-90-billion-ipo-and-changed-transportation-forever/

Huddleston, T. (2019, July 12). Blue Bottle Coffee: How a struggling clarinet player used $15,000 in credit card debt to launch a $700 million brand. CNBC. Retrieved Jun 2, 2020 from: https://www.cnbc.com/2019/07/12/blue-bottle-coffee-went-from-single-coffee-cart-to-700-million-brand.html

Shontell, A. (2014, January 11). All Hail The Uber Man! How Sharp-Elbowed Salesman Travis Kalanick Became Silicon Valley's Newest Star. Business Insider. Retrieved June 2, 2020 from: https://www.businessinsider.com/uber-travis-kalanick-bio-2014-1