Consumers are perfectly happy to accept trade-offs so long as those trade-offs are made explicit in advance — you can underdo the competition and win, but only if you are transparent about what you are not offering, because expectation minus reality is the formula that matters.

Rory explains that Flat White or Off succeeds because the name itself forces the trade-off — you get a great flat white fast or nothing. Moxy Hotels strip away room service, laundry, and concierge but tell you upfront, creating 90% raving fans who opt into the deal. The Slate Truck does the same: no heated seats, no screens, manual windows, at $25,000 — and the explicit honesty creates a cult following. ✦ AI generated

Rory Sutherland · My First Million · 2026-07-27 · original ↗

It struck me that there were places where you wanted a high quality cover coffee, but you didn't want a queue behind people who are all customizing their own bloody drinks. And the technology with contactless payment now allows you to basically tap pick up a coffee which has been made in advance and walk off. And my argument is that the flat white, which is a New Zealand/ Australian invention with which is I think the right ratio of coffee to milk and with microfoam as well. I think I think it's basically the you know it's the happy medium of sensible coffee drinking. And this is quite interesting because my assumption was that the place to put this is they only have two versions for the vegans. There's an oat flat white and there's a regular milk flat white. You walk up, you tap your card, you pay £4, you pick up a pre-made coffee and you walk off. And my logic was at the time train stations and um airports were the natural home for this thing. Uh they're expensive real estate. So the fact that you could sell more coffees in a given time, it's Henry Ford applied to coffee basically. Okay. The argument is that Starbucks and the customization and the time is absolutely wonderful if you're in downtown Santa Fe and you're meeting a friend for 2 hours, but it's not suited to airports and railway stations. So anyway, this thing launches. It's only it's only at the trial stage at the moment. But something really interesting happened which is shortly after we launched and got some publicity. Someone came to us and said actually the natural market for this isn't even train stations and railway stations. It's conferences. Quite often the coffee at a business conference is rubbish because it's it's badly made filter coffee because you have to serve a lot of people simultaneously or you have a customizable coffee thing, right? Where there's a massive queue cuz everybody comes out of the plenary session, they all want a coffee so they've got something to hold in their hand and not look like an idiot, which is one of the reasons we buy coffee, by the way. Nothing to do with drinking it. It's effectively accessorizing ourselves. Okay. And the point about flat white or off is it's highquality coffee, not crappy filter coffee that you can produce at scale by simply reducing the customization level. Now, here's where it gets interesting. Henry Ford was a brilliant marketer. Why did he say you could have every any color as long as it's black? Because at the time, paint dried at differing speeds depending on the color. And therefore, if you had a variety of paint colors on the Ford production line, it completely messed up the flow of the production line because some cars would take longer to dry than others. And it turned out that black was the fastest drying color. So, they basically imposed black on the whole Ford fleet. So, it's absolutely fine not to give people something to ask people to make a tradeoff so long as you make them aware of the trade-off in advance. Okay, that's why it's called flat white or off. It doesn't you if you turned up at a branch of Starbucks and they said we we only serve flat whites, right? You go, 'What the hell are you talking about?' No, no, I want a Frappuccino with, you know, almond milk and blah blah blah. No, no. Okay. No, you can't have that. It's, you know, now the reason it's called flat white or off is it makes explicit the tradeoff before someone turns up. So you said if anybody the joke is if anybody turns up and asks for a cappuccino, you point at the logo and you say the answer's in the name. Right now there's an example of this which always fascinates me. Are you a fan of the Moxy hotel chain? The rooms are tiny. There's no room service. There's no laundry. Okay. But the ground floor is kind of a bit like a well a solvent we work, right? Okay. And there's a 24-hour barista. There's a you there's a um uh usually there's someone making really quite good cocktails. You check in at the bar. You don't check in at the check-in desk. There isn't a concage. None of that bollocks. Okay? Don't go stay there on your honeymoon. Don't go stay there for a week. But if you've got one or two nights to stay in a place, it's exactly what you want. Okay? It's small room, very good TV, very good Wi-Fi. The other great advantage is after you've checked out in the morning and had breakfast, to be honest, you can hang out there for another 5 hours if you want to, you know, whereas if you tried doing that in a conventional hotel, you'd you'd feel a bit unwanted. It's a it's it's basically a brilliant brilliant explicit trade-off.

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