Testing the Hypothesis

To expect to make money from a new business, the entrepreneur should know something that others do not, or have control of a scarce and valuable resource. 

A deep problem Shcultz faced was that his vision required a radical change in consumer tastes and habits.  What he observed in Milan was not just a different business model but the result of several hundred years of divergent social history.  In the United States, coffee had emerged as a bland tea substitute to be drunk both at meals and at breaks throughout the day.

In southern Europe, coffee was an alcohol substitute, taken in small strong doses at lively "bars."  Whether he knew it or not, Schultz wanted to do more than just open a coffee shop; he wanted to change American tastes and habits.

Schultz's second problem was that there seemed nothing new about coffee, espresso, coffee bars, or espresso shops.  Millions of other Americans had traveled to Italy and experienced Italian espresso bars.  Knowledge about these businesses was hardly privileged.  To expect to make money from a new business, the entrepreneur should know something that others do not, or have control of a scarce and valuable resource. 

ACTION POINT: What do you know about your industry or business that others do not?