Community over competition

In the small suburb where I live, where the shopping strip is often referred to as the Village, there has recently been a disturbance in the usually harmonious business community. This has been caused by a pop-up coffee shop opening just two doors away from an existing, long standing, popular, hole in the wall coffee shop.

The owner of the new pop-up already has an established coffee shop in an adjacent suburb.

So, why has this ruffled feathers, particularly my feathers? For me the very fact of setting up a very similar business (I would image on a shoestring as its a pop-up) just two doors from a long standing existing business could be seen as aggressive competition; especially when it also appears the new business is attempting to compete on price (at first advertising coffee at $3 all day when the standard rate in town is $3.80 – $4.00). As we know, in business, no-one wins in a price war.

I have been running businesses and sitting on boards in Brisbane for the last ten years. I love business, start-ups and entrepreneurialism. I know that business has the power to effect great social change, but also the power to do harm. I am mostly interested in the new forms of business that have ethical and social considerations at the fore, e.g LUSH, Buffed, SEED PPM etc. These businesses show me that we don’t have to continue to do business they way its been done for the last hundred years (ultra competitive markets), because clearly the market is not always right.

To save relying on the flawed free-market methodology, I believe that when a new business owner writes a business plan they should do Community Risk Analysis; asking “if I open a business here, how will that affect others in this community” – what is the scale and probability of negative (and positive) community and social impact.

Overtly aggressive competition is anathema to everything I believe in; it’s a patriarchal, last century business  model, especially  in small towns. A debate was had on facebook when this pop-up popped up, with defenders of the free market stating that ‘people didn’t complain when other cafes started selling coffee in the ‘village’; these arguments were quickly responded to by people pointing out that those other cafe’s in question were not two doors (10 metres) away from an existing business and “have a point of difference from one another”.  There were other tired arguments on how customers will choose the best coffee etc, but these miss the central problem; the moral question of setting up two doors away from an existing almost identical model.

When we rely on the ‘market is always right’ type of argument we miss the point that, as Naomi Klein says, (the capitalist) “system doesn’t think as an entity; it thinks as  collections of self-interested profit-seeking units”;  and those self-interested profit-seeking units don’t take into account the effect one small business opening close-by to an existing similar business will have on the people that own the first business and of the staff that work there.

It seems fairly clear after living her for ten years that local residents enjoy the ‘village’ atmosphere, including the supporters of the pop-up business; but surely in village life businesses tend to be more collaborative and supportive. It’s time we put that into practice.

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About stevewilliams1901

Social entrepreneur based in Australia.
This entry was posted in A Social Entrepreneurs Diary and tagged , , , , , , , . Bookmark the permalink.

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