Generic Hipster Store: The Business Model

The Article

Below you can read an article that has several ‘first’ factors – it is the first article in English for Cehs.lv blog, site that has so far dominated single Latvian language Internet space. It is also the first public acknowledgment of constructed nature of hipster culture. And of course, the first action of ‘giving back’ to the community some of the ideas behind wealth and prosperity that Cehs.lv has brought to its founders.

Executive summary:

Bike arduino reconfiguration shed on the back street? Food donations for the dotcom bust victims in exchange of  love letters? Guerrilla gardening via pirate radio as a service? Altered history book exchange shop, that doubles as a canary bird-food experimentation lab?

Yes all those are generic hipster store concepts available from large pool of ideas that our generic hipster store franchise can offer to entrepreneurial and trendy people, willing to be next big thing on local art-street.

Below you can read Business Model Canvas describing all the aspects of the idea in detail.

Customer Segments:

For our generic hipster store franchise we see at least three different franchise takers as customer segments

1) Genuine hipsters.

They really want to run their hipster store to make friends, be cool, be trendy, maybe for some missing love. Who knows why, but they are ‘in’ for a real deal. They really want to open their ‘dog love saloon and local brew’ or ‘hairdressing for bald – a communal library’, or even ‘table tennis racket exchange and grill for raw foodies’. Franchise distribution channels will obviously involve vinyl record stores, instagram feeds and posh magazines.  They will not be willing to pay much, as they will not earn much. Though they will be good candidates for ‘local grant application’ profit-management program.

2) Young people looking for quick cash

They will immediately see the benefit of running hipster style store. As a young entrepreneurs, they will most likely opt for concepts like ‘Vintage dog apparell’, ‘Emeralds, crayons and love letters’ and ‘Insure your plant, share a helping green hand.’ They will be reachable via magazines like ‘Forbes’, ‘Young Investors Monthly’ and ‘Financial Times’. Different relationship model will be needed, as they will actively try to avoid paying franchise fee of 40%. We might even apply some ‘talent management fee reduction’ there. It will be harder to make them pay for used kitchenware as an elements of store design, but they will be more likely to invest in cash registers and shelves.

3) Bored pensioners

Depending on pocket depth, they will be good candidates for ‘70% shared ownership program for senior upstars’ where we require 70% up front investment from them and keep 70% of profits. They will also be more likely be ok with paying consultancy fees for ‘trend analysis’ and ‘social network optimizing strategies’. Store concepts they will most likely choose will be: ‘from 70ties with love and dog food’, ‘cornerhouse butchery with beers server cold’ and ‘pub for your daughter (with free printer, if you donate for equality of rainforests)’. Reachable via daytime television infomercials and grocery store coupon booklets.

Value Proposition

There are some value proposition that is similar for all customer segments – we offer what they lack – creativity – out of the box. Or rather – pretense of creativity. Genuine hipsters will then additionaly get also some piece of ‘recognition’ and ‘paternal love’, young people looking to make money will get easy way how to cash in on thriving market for ‘different’ and ‘unique’ people who usualy frequent those stores. And senior citizens will have some extra fun and a way to spend their cash that does not involve house renovations, cats or grandchildren.

Value proposition will be in convenience, customization, design and newness areas.

Channels

Awareness raising will need to be done carefully, so general hipster market total value is not diluted too quick. It will need to be time coordinated with opening of new ‘creative streets’, ‘de-industralised art centers’ and ‘alternative lifestyle communes’. Also, different customer segments will have relatively separated communication channels, so different messages can be sent to different customers.

Customer Relationships

Customer acquisition might be via live bait system, via vintage looking sales booklets in all generic hipster stores. But that is more of a channel discussion, regarding relations, it is important to keep the ‘cool’ in franchise, so true beliebers would stick around. For senior participants, more important is ‘probably cool’ factor. For new and talented entrepreneurs, of course we should have system of ‘cool promises’. And all three approaches should keep retention percentage high as well as good acquisition trends, while upsell activities would be more focused on store expansions.

Revenue Streams

There will be three main revenue streams:

1) Initial store opening price – all interior, decorations, stock. For genuine hipsters this will be negligible, but for other customer categories we might make good profit here.

2) Recurring share of store profits – for all customer segments this will be significant part of our profits, but biggest will be from  young entrepreneurs, as they will actively make money off of franchised store.

3) Extra equipment for store and consultancy fees – pensioners are most likely source of this revenue stream, with a bit from young and talented entrepreneurs as well.

Key Resources

Key resources of a company would be wide range of various trendy store themes, each with its own sellable stock, store concept and interior design. All that coupled with the heartless and ruthless sales team to exploit shortcomings of human nature.

Key Activities

Trend analysis – to catch next “harlem shake” in time to turn it into concept of “Group dancing and group love” store that sells used motorcycle helmets and hugs.

Hipster spotting – try to find next ‘artist block’, ‘creative street’ or other place where they congregate, to start offering services there and do advertisements immediately.

Aggressive sales – when location and trends are known, then all the possible franchise takers in the vicinity have to be approached by sales people and much as possible of our services sold.

Key Partnerships

Key partners would be various independent artist types who would love to have laugh at actual trends by making them even more ridiculous for our store concepts, thus making them even more trendy.

Also, suppliers of usual store supplies – cash registers, shelves, chairs, paper, etc.

It would be good to have good relationships with real estate companies, so they would be willing to lease out unused property for short (most likely) periods of time for next to nothing.

Cost Structure

Sales team will need different asses to impress different customer segments. Young and talented will need to see expensive cars, old pensioners will need to see ‘longterm commitment’, whatever it might look like in each given case, while genuine hipsters will want to see salesperson to wear the most expensive clothing possible, that looks like old trash while keeping glimmer of poshness within.

Ads will be cheap, but not for free, so those costs need to be taken into account.

Other costs will be maintaining call-centre, sales team, advertising team, problem-solving team (with bigger guys).