The Founder Who Taught His Biggest Future Competitor Everything He Knew

Prompted by “Peet’s Could Have Guarded Its Coffee Secrets From Starbucks. Instead, It Helped Build a Giant”, Inc. (Amaya Nichole).

Alfred Peet trained the three guys who went on to found Starbucks. Supplied their beans. Then told them to stop depending on him and start roasting their own coffee. Fifty years later, Starbucks has 41,000 stores and Peet's has about 250 — and Peet's own people still say it was the right call.

The logic experts point to isn't generosity for its own sake: Peet believed his standard of quality mattered more than protecting any one shop's edge. He bet that teaching his standard would spread it further than hoarding it ever could, even knowing exactly who he was training.

What are you actually protecting?

Here's the test for an owner-operator: what in your business is actually a technique you're protecting versus a principle you could teach freely? Most founders conflate the two and end up guarding things that cost them nothing to share — a sales approach, a quality bar, a way of treating customers — while the thing that actually differentiates them (their judgment, their relationships, their follow-through) was never copyable in the first place.

Test it out: name one thing in your business you've been protecting — a process, a client approach, a pricing method — and ask honestly whether sharing it (with an employee, a partner, even a competitor) would actually cost you anything, or whether you've just assumed it would. Peet bet it wouldn't. He was right.

Sorting what is worth guarding from what is worth teaching is the kind of thing we work through in Strategic Advisory.

Looking for a place to discuss issues like this with other local business leaders? Join one of our no-cost Rochester CEO insight sessions and test your ideas with your peers.

Originally posted on LinkedIn ↗