Free coffee

I read an article today (by way of the Freakonomics blog) about a coffee shop that doesn’t put prices on any of their food or drinks — payment is strictly voluntary.

I can usually form a firm opinion about a business model within a few minutes (and there are a lot of times when I’m wrong), but I just can’t make up my mind about this one. I think this could either be a doomed experiment from someone who has money to burn, or a genius idea (no in between).

Here’s why I think it’s genius:

Here’s how it could fail:

Of course, if the owners do have the money to burn, then there’s no fault in running the experiment. And they’re pledging to donate profits to charities, so that would be a win-win if successful.

What do you think? Doomed experiment or genius business model?

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