In the Future Everything Will Be A Coffee Shop

By | December 26, 2011

Phil and I ended last week’s FastForward Radio show discussing how higher education will change in the coming years. My conclusion:

Universities Will Become Coffee Shops

We’re faced with an education bubble. Tuition and other costs associated with a college education have been outpacing inflation for decades. It’s a trend that simply cannot continue. It has continued, so far, because the demand for education has proven to be somewhat inelastic. If you want a good job (the thinking went) there really wasn’t much of a choice. You went and you paid whatever price they put in front of you.

But what’s the advantage of a good job if the salary difference between that job and a non-college-level job is lost servicing student debt? It’s a reasonable question that has become more pressing as the amount of student debt required to get an education has risen.

At the same time several universities with world renown branding have begun offering online courses for free. MIT has been the pioneering institution in this. They were first to make practically all classes available online. Now they are beginning to offer some level of credential for completion of online courses through a new program they’re calling MITx.

Imagine a personnel manager at a mid-sized industrial corporation in Kansas who’s looking for a candidate with a particular set of knowledge. There are two candidates: one from the local state school with an appropriate college degree, a second with relevant MITx certificates of completion.

Let’s say all other things between the candidates are equal. Which should be chosen? It’s true that an online education is not the same as the college experience. The candidate who went to college probably enjoyed his experience more, but how much is that experience worth to a potential employer? Unless he’s a member of the same fraternity, probably not as much as the college candidate would hope.

And here’s the reality: the student debt of the college candidate controls, to some extent, his salary requirements. Since the MITx candidate appears to have the knowledge required, and has no student debt, he probably can be hired cheaper.

There is a tendency to go with the college candidate because: “that’s the way its always been done.” But cheaper ultimately wins. Repeat that story a million times over the next few years and you begin to see how the local colleges – which already are overcharging for their product – begin to suffer in favor of free programs like MITx.

Eventually you could have local campuses becoming places where MITx students seek tutoring, network, and socialize – reclaiming some of the college experience they’d otherwise have lost.

Phil thought this sounded like college as a giant coffee shop. I agree. Every education would be ad hoc. It would be student-directed toward the job market she’s aiming for.

This trend toward… coffeeshopification… is changing more than just colleges:

Book Stores Will Shrink to Coffee Shops

Ebooks are coming of age – for many reasons. You can keep your library in your pocket. You can annotate and share your thoughts within social networks. Writers can publish more directly to their audience. Once completed, the unit cost of each ebook sold is essentially $0. Those savings can (and sometimes are) passed on to the customer. Also, an ebook doesn’t have to be limited to the written word. An ebook can incorporate video, audio and other methods of presentation. Your book store is always with you and has every book ready to sell. Nothing ever goes out of print because there are no print runs.

Compare that with your local Barnes and Nobel. Those stores are huge but can accommodate only a small fraction of the titles available in the Kindle store. They require expensive real estate, buildings, and employees.

If you don’t like reading from an ereader, there are new on-demand printing options like the Espresso Book Machine that can print a book within minutes.

Between ebooks and print-on-demand, Barnes and Nobel sized stores shrink down to just their coffee shops – or maybe Starbucks takes over their business. Either way, custormers keep the experience of reading with coffee and those big comfortable chairs.

The Coffee Shop Will Displace Most Retail Shops

My Christmas shopping this year was 90% through Amazon Prime. Not having to fight the crowds and having it delivered free of charge to my home is a big plus, but as with the Kindle store, the online retail selection is much better that even the largest retail outlet.

Which is more enjoyable: Starbucks or Walmart?  For the sane: Starbucks.  So if you can accomplish your Walmart shopping at Starbucks, why do it any other way?

Also, imagine the 3D print shop of the future. You put in your order, probably from your smart phone, and then go pick it up. What does the lobby of such a business look like?  Again: a coffee shop.

Offices Become Coffee Shops… Again

We’re going back to the future: the modern office was birthed in 17th century coffee shops. Steven Johnson has argued that coffee fueled the enlightenment. It was certainly a more enlightening beverage than the previous choice of alcohol.

The need for offices grew as the equipment for mental work was developed starting in the late 19th centuries. That need appears to have peaked about 1980. It was a rare person who could afford the computers, printers, fax machines, and mailing/shipping equipment of that time.

Now a single person with $500 can duplicate most of those functions with a single laptop computer.  So the remaining function of the office is to be that place that clients know to find you… and that kids and the other distractions of home can’t.

Going forward the workplace will need the same sort of flexibility that I described for education. Groups for one project will form and then disband and then reform with new members for the next project. What will that workplace look like? Probably closer to Starbucks than Bob Par’s cubicle.

What Doesn’t Become a Coffee Shop?

I’d say the last holdout will be houses of worship, except that the church I grew up in now has a coffee shop. They buy Land of a Thousand Hills coffee to aid war ravished Rwanda, and the profits go to missions. Just as important, I suspect, is their desire to be a community hub: a place where people – most especially those who don’t normally go to church – are comfortable.

“The Well” at my home church.

What will remain other than coffee shops? Upscale retail will remain – people paying as much for the experience as for the goods purchased. Restaurants remain. Grocery stores remain.

Brick and mortar retail stores will be converted to public spaces. Multi-use space will be in increasing demand as connectivity tools allow easy coordination of impromptu events. Some large retail stores will be converted to industrial 3D printer factories. These heavy-duty fab labs will fabricate products that are too big or complicated to fabricate at home.

  • Pingback: Instapundit » Blog Archive » THE SPECULIST: The Coffee Shop Is Taking Over Education. “Let’s say all other things between the…

  • Pingback: Transterrestrial Musings - What Will Become A Coffee Shop?

  • y81

    That is a strange economic theory, in which the costs faced by a particular supplier determine the price he receives. Wages for people in a particular specialty are set by the market, not by the costs that a particular individual may have incurred.

    My parents paid for my college, and I went to law school at Berkeley, which was very cheap in those days. That didn’t mean that I got paid less than someone with big student loans, because that isn’t how salaries are determined.

  • Sissy Willis

    My only concern: If they be public places, how to just say no to clueless anarchists OCCUPYING them?

  • Russ

    Penny per page is actually relatively expensive as a cost. Not going to conquer the mass market with that.

    BUT… I think you guys are dead on the money, because with the proliferation of e-readers, etcetera, nobody will need to do so — if a single “mass-market” still exists at all.

    I foresee a future in which kids play “live role-playing games” about being in the dark and gloomy confines of a 20th-century office building, vying for promotions and the political and economic power that comes with them….

  • Stephen Gordon

    A penny a page is too expensive? That means that a 300 page book could be printed for $3.00. Throw a buck of profit to the author/epublisher, and a buck to the coffee house and you’ve got a $5.00 trade paperback.

    I’m seeing these books priced above $10 at traditional retailers.

  • Stephen Gordon

    y81: It seems strange? If a supplier can’t afford to provide a good at the going rate, he simply won’t sell that good. Likewise, the potential employee who has to have a starting salary of x+1 to cover his student loan will tell a potential employer that in an interview. He then will lose out to the candidate that’s fine working for x.

  • Christopher Sessums

    I applaud they simplicity of the coffeeshop u. model.

    However, working in higher ed, I can tell you that it’s not as simple as you’re making it appear. MITx has not figured out yet how they can support such a model as well as accredit student work anytime, anyplace. But they or another uni will. And soon.

    Another important piece to note: perception blindness. How can you expect to learn the skills you need when you don’t know what they are? Secondary education needs to do a better job of preparing learners to ask good questions instead of passing entrance exams.

    The change you are hoping to see can be a reality. But I think there are some major shifts that need to happen socially before the coffeeshop metaphor will be most effective.I suggest you (re)read Deschooling Society by Illich. The man’s thinking on this topic is still light years ahead.

    Beautifully simple ideas like coffeeshop unis will work once the social costs of a learning come to the fore.

  • James C.

    Had a giggle: one of my favorite Berkeley style lunch places (that serves coffee) used to be… A Church!

    The Church either quit or moved and Monkey Business Cafe was born.

    Great atmosphere and food, close to the college and home.

  • JC

    WRT shopping: oddly (for a guy at any rate) I rather enjoy shopping. But then I buy my books at used bookshops, and my clothes at resale, ’cause I’m (a) poor, (b) cheap, and (c) rather enjoy the hunt. Plus I have friends who are pro pickers, and I sometimes get a bit of a rake-off.

    But serious high-end retail outlet have known this for a long time. I spent many an hour following the woman who grew up to become my ex-wife in a cheerful haze. The designer shops all offered free wine. And art galleries are just as…perceptive.

    So, part coffeehouse, part winebar.

    BTW, I seem to recall Samuel Johnson making an observation much like that of Steven Johnson, but rather less recently.

  • Pingback: Mo’ Coffee, Mo’ Progress | Norman Coffee Company

  • Pingback: Best of the Blogs- December 30, 2011 – Preparing Foresight Professionals...