How fast can you grow a billion dollar business today? For Jenny Qian Zhiya, it’s taken her just 18 months to build a $4 billion coffee business. She’s now launching a new store every four hours, and will be bigger than Starbucks in China by the end of this year.
In late 2017, Jenny was working for UCAR, a car rental app, when she was queuing for a cup of coffee in Beijing and thought “I can do better than this.”
So she set up Luckin Coffee, with the idea of ordering a coffee as easily as ordering an Uber (or DiDi).
With small stores, few staff, no seats and all ordering, payments and coffee delivery via an app, she was able to make her coffee prices 25% less than Starbucks (which had an 80% market share in China before Luckin started).
By the end of 2017 she had nine stores.
By the end of 2018 she had 2,073 stores.
By the end of 2019 she will have 4,500 stores - more than Starbucks.
Who would have thought an entrepreneur with no experience of the coffee business could go from zero to bigger than Starbucks in less than two years?
Yesterday, Luckin Coffee had its IPO on Nasdaq, raising $561m and valuing the business at $4 billion. Its shares closed the day 20% above the listing price.
Jenny is a new breed of entrepreneur that has worked out how to turn a traditional business into an exponential business by adding a digital layer.
She’s beating economies of scale with economies of speed.
And with her micro-stores she’s getting bigger by getting smaller.
This is Japan’s concept of “Society 5.0”, where slow becomes fast, fast becomes faster, big becomes small and small becomes smaller.
We are about to see a flood of new exponential businesses that turn traditional business models into exponential models by adding a digital layer, disrupting industries from retail to education to healthcare to factories to farming with micro-stores, micro-schools, micro-clinics, micro-factories and micro-farms.
Each will lead to brand new multi-billion dollar companies.
Will yours be one of them?
“It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” - Charles Darwin
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