Quick update on the launch for our first ever app: quicker.chat 💬

Can’t quite believe it tbh.

I built the first prototype around 1yr ago, found my cofounders 6mo ago, started building seriously 3mo ago, now we have around 30 people inside the app each day (including early pilot users, my team etc).

If you use multiple messaging platforms for work (e.g. LinkedIn, Slack, WhatsApp, X, iMessage) and you’re sick of DMs/channels/groups scattered everywhere, and no global search/shortcuts/folders/AI-magic to keep you focussed, today’s the day to become a Quicker-Chatter 🤓

→ → quicker.chat

— Tom

P.S. Lots of folks are asking, so here’s tldr on how the waitlist works:

Lots of fun stuff happening behind the scenes too! But that’s the short version :D

P.P.S Thoughts on “Quicker Chat - Chat Quicker” as a slogan? 🤓

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It never forgets a request, and it brings a personality of its own to the team. 60,000+ teams already work alongside one.

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The what: A TLDR explanation of the strategy

Starbucks looks like a coffee company, and it is.

But under the hood, part of it works like a bank.

A bank that pays 0% interest and almost never has to hand your money back as cash.

Here's how:

Then there's the money nobody ever comes back for (also known as “breakage”) of which Starbucks booked $222.4m in FY25.

That’s straight revenue, and pure margin for coffee it never has to pour.

So why isn’t it regulated like a bank, 25 years in?

Because customers can't withdraw that balance as cash, it doesn’t count as a deposit, so Starbucks isn't regulated like a deposit-taker. That means:

→ No deposit insurance or bank examiners

→ No capital rules to satisfy

→ Free use of the float to fund growth (Starbucks opened 1,200+ new stores of its own in FY25)

A coffee business bolted onto a ~bank (without the complications of running an ~actual bank).

The how: The strategic playbook boiled down to 3x key takeaways

The whole machine starts with rewards.

Load $50 into the app and Starbucks hands you 25 bonus Stars before you’ve ordered anything ($30 gets you 10). So the reward structure pushes cash onto the float.

In bank terms, those bonus Stars are like interest. Starbucks just pays it in coffee.

Starbucks has 34.2m US members, ~10% of the entire US population.

These members generate ~57% of US Starbucks sales.

Rewards gets them preloading balances before they buy anything.

That balance is like a float: 0%-interest working capital that Starbucks can put to work.

Loyalty’s pretence may be discounts and free birthday drinks, but it’s really a financing engine.

Let’s talk (a tiny bit of) accounting.

Every dollar loaded onto a Starbucks card or into the app is deferred revenue, a liability, until it's redeemed. By end of FY25 that stored-value plus loyalty balance sat at $1.75bn.

This is classic negative working capital:

Starbucks gets paid today and delivers the coffee later. In effect, customers are lending Starbucks money at 0% interest, while other money Starbucks borrows (its corporate bonds) costs real money at market interest rates.

→ Customers pre-fund the business, interest-free

→ Starbucks can spend that cash on whatever it likes before fulfilling any orders

The bigger the balance, the cheaper Starbucks' effective cost of capital (averaged across all of its ‘borrowing’)

What takes this further is something called “breakage”:

A predictable slice of that prepaid money is never spent at all.

US cards never expire, so Starbucks can’t just wait for balances to lapse. Instead, it uses years of redemption data to estimate how much will never come back, and books that slice as revenue over time.

In FY25, $222.4m of that never-redeemed money got booked straight into revenue as "breakage," no COGS attached.

Economist JP Koning ran the numbers on this in 2019 and landed on a striking conclusion: add breakage in, and customers are effectively lending to Starbucks at roughly -10%. On FY25’s figures ($222.4m of breakage on a $1.75bn balance) it’s closer to -13%.

Customers aren’t just lending Starbucks money for free. They’re paying for the privilege.

None of that $1.75bn carries the same regulatory disadvantages an actual bank deposit has.

A bank deposit is money you can demand back in cash on any given day, which is exactly why banks come with deposit insurance, capital requirements and examiners watching over them.

Starbucks' stored-value balance fails that test on purpose.

You can spend it on coffee.

You cannot walk into a Starbucks and ask for your money back in cash.

(Unless you’re in California with under $10 left on the card. State law makes them pay that out.)

→ No cash redemption, so it doesn't meet the legal definition of a deposit

→ No deposit, so no deposit insurance, no capital rules, no banking regulator looking over the float

→ And unlike PayPal, no rule forcing it to ring-fence customer balances in a segregated account

The closest thing Starbucks answers to is state gift-card and unclaimed-property law, which mostly polices fees and expiration dates, not what a company does with the cash while it sits there.

Plenty of retailers sell gift cards. Starbucks is the loyalty-programme final boss because of scale and habit: people don’t load it once as a gift, they top it up again and again.

The where: 3x high-signal resources to learn more

A product teardown on why the Starbucks app works, not just as a payment tool, but as the brains behind the rewards loop.

→ The app nudges you to top up your card balance the moment it runs low, incentivised by earning more Stars

→ Order-ahead removes the biggest friction in the lifecycle: standing in line

→ Menu items ship with photos in the ordering flow, because "Venti Iced Caramel Macchiato with oat milk" means nothing to a first-time user

(This one's a must-read for anyone building a loyalty programme of their own.)

JP Koning has spent years as a monetary economist picking apart exactly this kind of stored-value mechanic.

Dropped this in 2019 but still holds up 7 years later.

Starbucks’ breakage accounting mechanic is so OP that the SEC was asked to investigate it.

For those curious about the legal grey area this whole strategy sits in → check this one out.

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