Within a few weeks of arriving at Tuck School of Business, Matthew Grady Tu'13 was surprised to learn that the closest place to buy espresso was 15 minutes away in downtown Hanover. While the walk from Tuck into town was pleasant in the summer, it became increasingly difficult during the winter, especially with students' busy class schedules.
After discovering there was strong interest in a more accessible coffee shop, Grady and his friends decided to found Project Coffee, a shop in Tuck's Stell Hall, that will serve espresso-based drinks, he said.
The company, set to open on Jan. 28, is headed by a student management board that shares its profits with Tuck. Project Coffee gives students the opportunity to gain entrepreneurial experience while pursuing a degree in business, he said.
"It's a dual mission of providing a service that students want and creating additional real-world learning experiences," Grady said.
Tuck administrators approved Grady and his partners' business plan in December. Project Coffee was launched as a two-week pilot, and it had consistent sales of roughly 100 cups of coffee per day. This success came when half of Tuck students were on vacation, and the financial results from the experiment were enough to convince Tuck administrators that the shop should officially open to all of campus.
Tuck assistant dean of administration and chief operations officer Steven Lubrano said that student enthusiasm for the project and the company's business model helped convince the administration to grant funding.
Tuck is glad to have a "student-led and managed enterprise" that will benefit students directly, he said. When Project Coffee first opened its doors in December, it transformed Spell Hall from a quiet study space into a more vibrant environment.
Because the coffee shop aims to provide students with business experience, Tuck will absorb any losses incurred as the company gets off the ground, Lubrano said.
Project Coffee is Tuck's second student-run and Tuck-funded business. The first, Tuck Stuff, was founded in 1986 and sells Tuck-branded clothing and accessories in Byrne Hall.
Project Coffee serves espresso-based coffee beverages, including lattes, macchiatos and cappuccinos. At eight ounces, Project Coffee's cups are smaller than the smallest size a 12-ounce cup at Starbucks Coffee.
"We are emphasizing quality over quantity," Grady said.
Project Coffee has a contract with Counter Culture Coffee, a supplier that acts as an intermediary between coffee vendors and coffee producers around the world. The company trained Grady and his colleagues to brew the high-quality espresso.
Grady and his partners based their business model off of concepts they learned through Tuck classes.
They have applied the "minimum viable footprint" concept, which holds that the best way to introduce an innovation into a market is to begin with the smallest possible investment and product.
Once the product is established and perfected, companies can build on the existing model, according to Grady, who learned the concept through an innovation strategy course.
"Our goal has been and was successful during the pilot to start with a very simple menu that meets the need of Tuck students and anybody in the Dartmouth community looking for a really quality cup of coffee," Grady said. "And then once that's been solidified and the model is working, we will start to add something."
Grady said that the coffee shop will likely add hot chocolate and chai as the menu expands, followed by pastries and other food items.
Walker Fullerton Tu'13, who will manage the shop this winter, said he decided to become involved so that he could to apply business principles he learned in class.
"Studying general management at Tuck, I sought to gain hands-on experience creating, building and managing a business," he said. "That, and the coffee is simply amazing."
Although the opening of Hanover's Starbucks Coffee may pose a threat to other coffee shops, Grady said he does not expect this competition to impact Project Coffee.
"Part of our value proposition is convenience for people who live and spend a lot of their day at the end of Tuck Drive," he said. "We have a captive market so we are not really concerned about competition."
