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Risky Innovation: Will Starbucks’s Leap of Faith Pay Off?

The world’s largest coffeehouse chain regularly launches products before they’re perfect.  Why does such a risky approach to innovation work so well?

In late March, as Starbucks was preparing to introduce its first offer on Groupon, the daily-deal service, the coffee chain’s chief digital officer, Adam Brotman, realized he had no clue whether the gambit would pay off. The discount wasn’t for anything crazy like bungee jumps or skydiving lessons–it was for 50% off a $10 Starbucks Card eGift–but to Brotman, the deal was just as risky because of how the company would be offering it. His team had to integrate Starbucks’s eGift platform with Groupon’s system for the one-off promotion, and it was about to go live to the world. “They’d never done deals at the scale we were offering, and we had never put our [eGift] platform through that type of pressure test,” Brotman says. “But we didn’t have the luxury to say anything other than, ‘We think we got this right, so let’s see what happens.’ There are times when we just completely don’t know how things are going to work.”

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