How Coffee Shops Stir Up Community Entrepreneurship

For many people, coffee shops are where work gets done. Whether you're jamming away at a laptop or having a meeting, coffee shops are a hub for business. When a coffee shop opens its doors in a neighborhood that previously had none, it’s more than just a caffeine upgrade—it can kickstart a wave of small-business creation. Sociologists refer to cafés and similar hangouts as “third places”—social spaces outside the home and office that foster connection and idea-sharing. The NBER Working Paper “Third Places and Neighborhood Entrepreneurship: Evidence from Starbucks Cafés” (Choi, Guzman & Small, 2024) reveals that these gathering spots don’t just offer lattes—they fuel innovation.

By comparing census tracts that got a Starbucks to those that were about to but didn’t, the researchers found that neighborhoods with a new Starbucks experienced 9–18% more startups each year for the next seven years—equating to roughly 3 to 6 new firms annually.

Why does this happen? These cafés draw a diverse crowd—entrepreneurs, creatives, neighbors—who bump into each other, exchange ideas, and sometimes find collaborators. The effect was even stronger in under-invested areas, notably where Starbucks partnered with Magic Johnson to open stores in underserved communities. The increase in business creation is less about fancy tools and more about everyday connections—a classic third-place effect.

For us at Soul Caffeine, this research confirms what we’ve long believed: coffee shops aren’t just businesses—they’re sparks. A thoughtfully designed café can become the hub where freelancers, founders, and creatives collide. Curating an inviting atmosphere, with comfortable seating and open vibes, encourages conversations that can blossom into ventures. And when we invest in accessible, welcoming spaces—especially in underserved communities—we don’t just do good, we help fuel economic vitality.

We believe in the power of community and conversation—and here's some hard evidence to back it up. A single café can become the heartbeat of local entrepreneurship, not just by serving coffee, but by serving as where dreams take shape over shared tables. Next time sip some espresso, imagine the ripple effect: new ideas, partnerships, businesses—all born in a café’s cozy corners. That’s true impact.