ZDNet Education

Christopher Dawson

Now I know we're in a recession

By | July 2, 2008, 4:28am PDT

OK, this has nothing to do with Ed Tech. Not a thing. There’s no tie-in, no hidden message for us Ed Techers, just a feeling of impending doom. Fortune is reporting that Starbucks is closing 600 stores.

I’ll let that sink in.

I’m from Seattle and I’m old enough to remember when Starbucks exploded, taking the Seattle coffee scene mainstream. Starbucks was never my favorite coffeeshop, although I won’t pass up a venti iced Americano with an extra shot. During my high school years, I tended to frequent little holes in the wall with lots of books, too much smoke, and heavily-pierced baristas. However, as the Fortune article points out,

The Seattle coffee chain has been feeling the pinch of a tightening economy. In February, the company fired 600 employees and conducted a in-store retraining program to try and revive the Starbuck Experience, as CEO Howard Schultz has called it…“The current economic environment is the weakest in our company’s history, marked by lower home values, and rising costs for energy, food and other products that are directly impacting our customers,” Shultz said.

When the economy starts to hurt Starbucks, I know we’re in trouble. Fortunately, Dean’s Beans is still going strong, so there is some hope. For those of you who don’t know, Dean’s Beans started the fair trade movement in coffee and makes a variety of fair trade and organic roasts that put Starbucks to shame (both in terms of taste and corporate policy).

No wait! There is an Ed Tech tie-in! Most of us are massively sleep deprived…if the local Starbucks closes, what are we to do? As my Dean’s Beans bumper sticker tells the world, “Make your own damn coffee!”

Make Coffee

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Chris Dawson is a freelance writer and consultant with years of experience in educational technology and web-based systems. In 2011, he became the Vice President of Marketing for WizIQ, Inc., a virtual classroom and learning network SaaS provider.

Disclosure

Christopher Dawson

Christopher Dawson is the Vice President of Marketing for WizIQ, Inc., by day and a freelance writer and educational technology consultant by night. Well, most of his colleagues at WizIQ are based in India, so really he's working with them whenever he can stay awake. He has worked for his local school district as a teacher and technology director, for the Johns Hopkins University School of Public Health, and for Biogen, Inc. (now Biogen-IDEC, Inc.). He has also consulted with STATNet and Cytyc Corporation and retains close ties with X2 Development Corporation (now owned by Follett Software, the supplier of the student information system he administered for several years). Follett is paying him a monthly honorarium to act as a presenter for their "SIS Voices for Student Achievement" community (he produces occasional blog posts and hosts a monthly webinar on the use of student information systems to inform data-driven instruction and school-wide change. He regularly purchases and/or recommends Dell hardware. This is because Dell makes good hardware and has truly committed itself to education in innovative ways, particularly with their "Connected Classroom" initiative. It isn't because he has dealings with the company through his role at WizIQ (which he does) or because they have provided him with long-term loans of a variety of equipment for in-depth testing (which they have). Intel (reference designer for the Classmate PCs he has implemented in his local schools) has provided him with long-term loans of Classmate PCs for testing, as have Dell and Lenovo with their educational offerings. He may report on any of these companies as his experiences with them have direct bearing on educational technology; positive reports are not necessarily an endorsement and he receives no direct financial compensation from these companies or any others. Intel paid all expenses for his attendance at the 2009 Intel Classmate PC Ecosystem Summit which he attended as the sole representative of the technology press. He was invited to attend in 2010 but his wife would have killed him if he spent 3 days in Vegas geeking out and left her home alone with a new baby. Acer provided him with a 50% discount on an Aspire One netbook in early 2009 after he tested it for 30 days through their educational seed program. He liked the netbook at the time but it has since broken and sits unused in his office. Canonical sent him Ubuntu lanyards, t-shirts, and mousepads for his kids. He stole one of the lanyards and proudly hangs his keys from it and occasionally features his 8-year old wearing an oversized Ubuntu t-shirt on his Facebook profile. Gunnar Optiks sent him a pair of computer glasses to evaluate for a holiday gift guide. He is wearing them now as he types this because they never asked for them back and they rock out loud. Seriously - they work brilliantly and make it much easier to spend 20 hours a day staring at an LCD. If they ever asked for them back, he would fork over the $99 and buy a pair. Microsoft gave him 2 free copies of Office 2010 professional, a desktop clock, and a useless book on Office 2010 when he attended the launch of Office/Sharepoint 2010. He occasionally uses the SharePoint lanyard they gave him instead of the Ubuntu lanyard for his keys, but feels dirty afterwards. Adobe provided him with a pre-release version of the CS5 Master Collection for evaluation and ultimately provided a full, licensed copy for ongoing testing of educational applications of this admittedly expensive software. Like the Gunnars, if the license expires or they come out with CS6, he'd actually go out and buy it himself. Which is saying something, because he's actually pretty cheap. Any other companies wishing to send him cool things to evaluate, wear, or otherwise adorn his kids are more than welcome to; he promises to disclose it here if he keeps any of the stuff. Finally, because WizIQ is a virtual classroom and learning network provider, Chris, as VP of Marketing, frequently interacts with, seeks out deals with, and directly or indirectly competes with a whole lot of LMS, SIS, and other Education 2.0 companies. In general, he'll limit his reporting about these companies to news that does not impact his relationship with them or with WizIQ. If he reports on them, it's because what they are doing is newsworthy or worth the attention of his readers and not because he's trying to broker some deal, damage competition, or otherwise advance his position in his day job. LMS and SIS companies, along with other online learning communities, are a pretty important part of Ed Tech. If he stops reporting on them completely, there won't be a whole lot left. He'll be sure to call out any overt conflicts of interest if they are unavoidable. Finally, Follett Software Company pays him a little tiny honorarium every month to present on their SIS Voices webinars and to write the occasional blog or discussion thread for them. Since Follett recently bought X2 (maker of an awesome web-based SIS that Chris just happened to have used, served in advisory groups for, and frequently reported on), this is probably also worth disclosing.

Biography

Christopher Dawson

Christopher Dawson grew up in Seattle, back in the days of pre-antitrust Microsoft, coffeeshops owned by something other than Starbucks, and really loud, inarticulate music. He escaped to the right coast in the early 90's and received a degree in Information Systems from Johns Hopkins University. While there, he began a career in health and educational information systems, with a focus on clinical trials and related statistical programming and database modeling. This focus led him to several positions at Johns Hopkins, a couple-year stint in private industry, teaching high school math and technology, and 2 years as the technology director for his local school district. Most recently, he started his own consulting business and is now the Vice President of Marketing for WizIQ, Inc., a virtual classroom and learning network provider. He lives with his wife, five kids (yes, 5), 2 dogs, and a hateful cat in a small town in north-central Massachusetts. Although he is no longer teaching, his roles with WizIQ and ZDNet allow him to continue helping students and teachers add value to education with technology rather than merely adding to the bottom line.

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exactly!
alqin 6th Jul 2008
thank you for the post!
0 Votes
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Pricing
kitko 2nd Jul 2008
You can't sell coffee at those prices in a mainstrean coffee chain on a long term basis. Certainly not when it's either a coffe or a gallon of regular unleaded happy A Sophie's choice indeed.

Well, Starbucks in Vienna, Austria, EU, does (Starbucks is more expensive there than in the UK or Germany), but it's still a kind of novelty "foreign" coffee shop there.
0 Votes
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it was bound to happen anyway
russguill 2nd Jul 2008
In some cities you can't turnaround with seeing yet another
Starbucks. They were oversaturated.
0 Votes
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What recession.
b.bob 2nd Jul 2008
Recession has a definition:

"A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters."

This has not happened, therefore we are NOT in a recession.
0 Votes
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Crock
Jim888 2nd Jul 2008
Ha - what a hoot! The government reports the numbers with great fan fare and adjusts them a month or so later - downward. They stopped measuring the M3 money supply as the numbers were pointing to higher inflation... but wait - there is no inflation if you subract out food and energy - without that we only have a 1-2% increase for those who do not eat or use energy.

But the question was economic decline - e.g. recession... With inflation a GDP that does not grow at a rate to exceed inflation is one that is missing the mark. The number of GDP growth the government (oops there they are again) is under 4%... so there is no recession as long as they publish a positive number.

Wow what a cost savings - we can have computer auto generate a positive number and do not need all the government analysts to come up with a number - wait a minute - they do that now and keep the jobs full to not further reduce the consumer economy.
0 Votes
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Sliding definition of GDP..
jasonp@... 2nd Jul 2008
Here's what they aren't telling you about GDP. When a sector starts negatively impacting GDP, the government takes it out of the eqation. Energy, food, education and healthcare are among the sectors that just don't count when measuring GDP, an amazing thing since that's where the VAST majority of our money goes. But defense spending counts, so I guess it's all good. Why look at things that really affect the economy when you can paint such a rosey picture by excluding them? The stock market is firmly in bear territory, the American dollar is in the crapper, wages have stagnated, energy costs have exploded, healthcare and education costs have followed suit and now food prices have started a quick creep in a upwardly direction. But hey, the government has decided it knows best how to calculate GDP, even though that definition changes every year...who are we to question?
0 Votes
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Let them sink!
LucasKorso 2nd Jul 2008
Living in a country where coffee is served as it should be (in small cups like cafeine bombs, wich smell and taste like REAL coffee) i tried a starbucks in london and i'm still thinking how they call that coffee... it tastes , and looks, like the water used in the dishwasher.

Just for the cardinal sin of saying that some horrendous beverage is coffee they deserve to crash, burn, and close doors worldwide.
0 Votes
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Is it the recession?
steeldestroyer 2nd Jul 2008
I'm not so sure the recession is the primary cause of this set of store changes. Over the past few years there has been a general mismanagement of Starbucks and its products.

With the Starbucks founder returning, he has started a broad set of sweeping changes to ensure the company can grow in the future. This is part of that consolidation.
0 Votes
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Might be
John L. Ries 2nd Jul 2008
There are a lot of things you can get away with when times are good that you can't otherwise. Recessions do have a way of curing mismanagement problems.
0 Votes
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Shame on you
frgough 2nd Jul 2008
actually citing economic fact.

Don't you know that we are ALWAYS in a recession when a
Democrat is running for office when the sitting President is a
Republican?

Sheesh.
0 Votes
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Remember 1980
John L. Ries 2nd Jul 2008
There was a recession and the sitting president was a Democrat (he lost). There have only been two Democratic presidents since 1969, so the sample size is rather small.
0 Votes
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Whole beans and happiness
pjotr123 2nd Jul 2008
I always buy whole beans. And grind them myself, each time only just as much as I need for my shot of coffee. Then I pour boiling water on it from the water cooker.

Ah, there's nothing like the smell of coffee made from freshly ground beans in the morning. With a glass of freshly pressed orange juice next to the coffee mug...

Always reminds me of spring in Paris. Caf?? au lait, jus d'orange, un croissant et un journal de sports. Life as it should be. happy
0 Votes
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High petrol prices land Detroit???s Big Three in even deeper trouble.
At times those plastic cup holders in the cars become obsessions , at times they go too with the cars.
Starbucks closing 600 stores in the US
SEATTLE
For a decade it appeared there was no such thing as too many Starbucks for U.S. coffee drinkers, whose willingness to buy its $4 lattes and dark drip brews rationalized a second green-and-white mermaid awning just down the street -- and sometimes even a third.
But in a sign that those days are over, Starbucks Corp. announced Tuesday it will close 600 company-operated stores in the next year, as the faltering U.S. economy hastened the pain caused by the company's own rapid expansion.
Starbucks did not say which stores will be closed, only that they are spread throughout the country. But it did say 70 percent of those slated for closure had opened after the start of 2006.
The Auto Industry's Second-Biggest Fear
What bothers carmakers most after the threat of recession? How to adhere to CAFE fuel rules without losing customers
Ask auto executives what keeps them up at night, and right after the 50-50 chance that the U.S. economy will slide into a recession is the new set of fuel-economy rules handed down by Uncle Sam in December. They all say that they will meet the new rules, but the question is how? What scares them is that to meet the new rules, they will have to make automobiles either more expensive or smaller and less powerful, two types of cars that have traditionally been about as popular as a Greenpeace delegation at a National Rifle Assn. convention.
The source of their discomfort is the new energy bill that Congress passed in December mandating that carmakers achieve a corporate fleet average fuel economy (CAFE) rating of 35 miles per gallon by 2020, up from 22.2 for trucks and 27.5 for passenger cars.
Passing Costs to Consumers
The federal government has long preferred regulations that force carmakers to improve fuel economy, instead of gasoline taxes that would give consumers incentive to buy more efficient vehicles. The conventional wisdom behind this stance is that consumers won't vote for public officials who levy taxes at the pump.
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa
0 Votes
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We may well be but starbucks is all about the experience and the experience should have been that of a coffee house. Some good coffee and a few snacks where you can use the net for free and converse with friends. I think they got lost.
0 Votes
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Obviously, once again, a blogger didn't bother to do any
research before posting.

I actually read some of the articles about Starbucks, and
many of the stores, if not most, that are closing were built
extremely close to, if not in sight of, existing stores and
had a negative effect on their sales. It's called over-
saturation, and really doesn't have much to do with the
economy.

One of the other reasons is competition. Many large
chains, including McDonalds, have started offering
premium coffees at much lower prices.

Basic research and critical thinking should be the first
thing taught by any teacher, regardless of subject.
0 Votes
+ -
exactly!
alqin 6th Jul 2008
thank you for the post!

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