Innovation in Business - Tilted Forum Project Discussion Community

genuinegirly · 03-17-2009, 12:27 PM

The global economic crisis isn't destroying our world - it's altering it.
Here's a thread designed to follow the positive trends in a trying time.

Are you finding successful examples of innovation in business? Tell us about them here.
_____________________________________________________
Here's an article that caught me off-guard.

Quote:

Cafe owner thrives with no-pricing policy

(CNN) -- Cafe owner Sam Lippert has come up with an innovative way to cope with the recession: He's done away with pricing and simply asks customers to pay what they want.

Lippert says sales and customer count has increased markedly since the change, and he's looking at adding more staff.

Lippert spoke Tuesday with John Roberts on CNN's "American Morning" about how he came up with the idea and how customers have reacted. Following is a transcript of their conversation:

John Roberts: So you run the Java Street Cafe. You actually own the Java Street Cafe there in Kettering, Ohio. And you've got a menu that's got no prices on it. People pay what they think the food is worth. How did you come up with that idea?

Sam Lippert: Well, actually, that was thanks to my girlfriend. She is from Bulgaria, and she says it's a common practice in certain cafes in Europe to allow the patrons to decide how much to pay for their meal. Watch Lippert explain how his no-price plan is working »

Roberts: So, in terms of paying for something, if somebody gets a sandwich or maybe a bowl of soup or something like that, typically how close to the old menu price would they get in what they pay?

Lippert: Well, sometimes people shoot a few dollars over, and sometimes it's a few dollars under. And, you know, at the end of the day, it works out for me. ... It works out even.

Roberts: Yes, so, does anybody try to game the system? You know, they'll get a big meal that would be worth $10, $12 and then give you 50 cents for it?

Lippert: Well, you know, they have to look me in the eye and say that that's what they think is fair. And, you know, that's a big incentive. When someone's at the counter and you say, you get to pay what you think is fair, very few people are going to take advantage of that situation.

Roberts: Interesting. So, let's just set the stage for people here. You bought the cafe in April of 2008. In the early going, business was up 10 percent over the previous owner. Then what happened when the recession really took hold?

Lippert: The bottom just fell out. I mean, I was still matching the previous owner's sales, but that was not where this business needed to be in order to make it.

Roberts: All right. So, why did you think that taking prices off the menu would be a boon to your business?

Lippert: Well, I figured in the current times, people need a reason to go out and treat themselves. You know, you've got everybody saying, "Well, if you need to save money, don't buy a cup of coffee out, stop buying lattes." You know, don't go out and buy lunch, take your lunch. And I'm trying to give people incentive to actually go out and eat or go out and get a cup of coffee, because they get to pay what they feel is fair.

Roberts: Now, we should point out to people, too, you're not the typical cafe owner. You're an engineer by trade. You went to school at MIT. You took all of your 401(k) savings out to buy this cafe. It looked like business might be going under. But since you adopted this no-price menu, how's business been?

Lippert: Things have picked up. My sales and customer count are up on a given day between 50 [percent] to 100 percent. And I'm starting to look at being able to bring some of my part-time people on full time and maybe being able to add a couple of new employees.

It's the most inventive business model I've ever seen. Sure, I'm not an economist, nor am I frequently researching businesses. I just think there's too much negative press. I want to highlight businesses that are working in this economic chaos.

What can you find?

Cynthetiq · 03-17-2009, 01:18 PM

here's my contribution to the different business model.

Quote:

View: Don't pay as you go: New York store gives away goods for free
Source: Guardian
posted with the TFP thread generator

Don't pay as you go: New York store gives away goods for free
Don't pay as you go: New York store gives away goods for free

* Ed Pilkington in New York
* The Guardian, Monday 16 March 2009
In recent months downtown Manhattan has spawned a new pastime - you might call it disaster tourism. Every day thousands of people throng its narrow streets, attracted to Ground Zero rising slowly out of the ashes of 9/11.

This week, though, visitors expecting to experience terrorist and economic catastrophe at close range have been amazed to stumble on something far more positive, even joyful, just around the corner.

It is a shop front in Nassau Street, a couple of blocks away from Wall Street, that would be utterly forgettable were it not for the two words stamped across its glass: Free Store.

In the age of postmodern advertising, slogans like "free store" usually mean the opposite - they are probably being used to market hyper-exclusive shops selling nothing under $1,000. But in this case free store is precisely what it says.

Every item on offer inside the small shop is free. Anyone off the street can browse through its goods, select an item, and if they think they need it, walk out with it utterly without charge.

Last week it traded a variety of goods, from kids dresses and art supplies, to DVDs, posters, postcards and a dauntingly large stained-glass ceiling fitting.

The shop is the creation of two artists, Athena Robles and Anna Stein, who have launched it with the help of a $9,000 grant from a local cultural body and the September 11 fund. They began planning it 18 months ago but believe the timing of its opening now is singularly appropriate. "It's a certain time in history in this country when people really need to help each other out."

Within five minutes of the store opening its doors on Friday, it was packed to overflowing with "shoppers" browsing through its T-shirts, woolly scarves, baskets and pair of black riding boots. Robles and Stein explained that they were welcome to take whatever they liked, with the only proviso being that they felt they "needed it". Each transaction was noted in their records and the customer given a receipt as they would be in any money-based shop.

Richard, a travel agent who works in Wall Street, chose a large framed photograph of Audrey Hepburn in Breakfast at Tiffany's. "It's a great time to be cheering people up with gifts, and why not?" he said. "We've bailed out the car companies, we've bailed out the banks, so it's nice to get something back for once."

Kevin walked away with a free copy of a book called Great Sex Trips. So why did he feel he needed a book with a title like that? "Why not? There's always something to be learned."

Robles and Stein based their idea for the shop on a splattering of free stores that cropped up in San Francisco and New York in 1967. They were set up by the hippy group the Diggers, themselves named after the 17th century English agrarian utopians of the same name.

In San Francisco, the Diggers set up two shops in the Haight-Ashbury district called Free Frame of Reference and Trip Without A Ticket. There, returning Vietnam veterans would exchange their uniforms for tie-dye clothes and feed themselves on vegetable soup known as Digger Stew. The Diggers went so far as to set up free hospitals for those who did not have insurance, not to mention free concerts with bands such as the Grateful Dead.

Stein and Robles don't claim to have as expansive ambitions as the 1960s Diggers, and their project leans more towards the artistic, where the Diggers were political and rebellious.

But they do plan to keep the store open until the end of March, replenishing the free items with donations from people who use the shop.

"When we started I was terrified we would run out of stuff," Robles said. "But after two days that's no longer a worry people are bringing in bagfuls of lovely things."

genuinegirly · 03-17-2009, 04:07 PM

Fascinating story, Cyn!
Who would have thought that it would be such a successful endeavor.

little_tippler · 03-20-2009, 05:41 AM

That's pretty interesting, except the second example isn't really sustainable. If the artists were real shop owners, what would they live off?

I like the idea of paying what you think is fair, but I'm sure some people will abuse that. If someone homeless needed food and went there, what would they pay really? They have little to no money. I've never heard of this model in Portugal. But yes, some countries in Europe you can barter how much you will pay for a service. But usually that is used negatively, as a form of extorsion, i.e. either you pay me x or I won't do it for you. I like the turn-around!

03-17-2009, 04:07 PM	#3 (permalink)
genuinegirly Eat your vegetables Super Moderator Location: Arabidopsis-ville	Fascinating story, Cyn! Who would have thought that it would be such a successful endeavor. __________________ "Sometimes I have to remember that things are brought to me for a reason, either for my own lessons or for the benefit of others." Cynthetiq "violence is no more or less real than non-violence." roachboy

03-20-2009, 05:41 AM	#4 (permalink)
little_tippler Leaning against the -Sun- Super Moderator Location: on the other side	That's pretty interesting, except the second example isn't really sustainable. If the artists were real shop owners, what would they live off? I like the idea of paying what you think is fair, but I'm sure some people will abuse that. If someone homeless needed food and went there, what would they pay really? They have little to no money. I've never heard of this model in Portugal. But yes, some countries in Europe you can barter how much you will pay for a service. But usually that is used negatively, as a form of extorsion, i.e. either you pay me x or I won't do it for you. I like the turn-around! __________________ Whether we write or speak or do but look We are ever unapparent. What we are Cannot be transfused into word or book. Our soul from us is infinitely far. However much we give our thoughts the will To be our soul and gesture it abroad, Our hearts are incommunicable still. In what we show ourselves we are ignored. The abyss from soul to soul cannot be bridged By any skill of thought or trick of seeming. Unto our very selves we are abridged When we would utter to our thought our being. We are our dreams of ourselves, souls by gleams, And each to each other dreams of others' dreams. Fernando Pessoa, 1918