How 110 Shareholders Launched Hangzhou’s First Many-People Cafe

What happens when over 100 strangers pool small investments to open a single coffee shop? In 2012, that question gripped Hangzhou after a media report about a proposed 50-person-owned cafe sparked both excitement and deep skepticism. Within just two days, more than 370 people wanted in. But could such a model—where dozens or even hundreds of shareholders each contribute as little as 2,000 yuan—actually result in a functioning, let alone enduring, coffee business?

The answer came nine months later: On May 26, 2013, Ju Coffee—the first many-people coffee shop in Hangzhou, backed by 110 shareholders—opened its doors. But surviving in a saturated market full of skepticism was only the beginning.

How the Many-People Cafe Model Began

The idea took off after a 2012 media report titled "Is It Reliable for 50 People to Run a Shop Together?" ignited widespread discussion. That article attracted over 370 potential investors within 48 hours. The concept was simple: allow dozens or even hundreds of people to become shareholders by contributing a minimum of 2,000 yuan each. But would that model translate into a viable café?

By the time the cafe actually launched, the number of shareholders had grown to 110. The project faced early hurdles, including the departure of two of its original founders, including Lu Qien, who received the most votes in the initial board election. Early meetings with over 100 attendees proved chaotic, lacking clear leadership or structure. "We weren’t prepared with a mature team or plan, so the meetings were very inefficient," Lu later recalled.

Debates Over Artistic Vision vs. Commercial Viability

After regrouping, shareholders held a second general meeting on September 23, 2012. Under Lu Qien’s suggestion, they tentatively settled on creating Hangzhou’s first movie-themed literary café. They formed a board of directors and supervisory board, and approved articles of association. But soon after, internal divisions emerged.

Two shareholders with prior café management experience argued that while artistic expression mattered, survival required a commercial approach. Disagreements intensified. "Shareholders often debated, but we’d still go out for late-night snacks afterward. But at our worst, I flipped the table during an argument," said Lai Jianyi. One camp favored artistic integrity—even at the cost of short-term income—while others insisted on prioritizing steady revenue.

Lu Qien illustrated his stance with an example: "If a company offers 2,300 yuan to rent the space for an annual meeting, but a band only offers 1,700 yuan, an artistic cafe would choose the band. I believe that builds goodwill." In contrast, Li Xiang, the first elected chairperson, warned: "If early operations struggle and cash flow dips, another round of fundraising could shake shareholder confidence. Business doesn’t mean rejecting artistry—but you must adapt to market competition. If both the company and band want to book the space and both bids exceed operating costs, I’d pick the band. But if one is above cost and the other below, I’d take the profitable one every time." These clashing philosophies eventually led to a breaking point.

Launch and the Road Ahead

On January 2, 2013, another emergency shareholders’ meeting was called, resulting in the departure of around 15 members, including Lu Qien. By January 13, the company had officially registered. After four months of renovation and preparation, Ju Coffee finally opened on May 26 in Huanglong Yayuan.

Initial reports suggest the first two days of operation went decently, but the real test was long-term viability. Industry insiders remained skeptical. Xu, an experienced café manager with seven to eight years in Hangzhou’s coffee scene, noted, "Many-people cafes might draw attention briefly, but customers ultimately care about taste, price, ambiance, and service. Running a cafe isn’t typically a highly profitable venture. Breaking even within three years is considered good, and seeing a return on investment is uncertain." He also pointed out the high operational costs: "Rent, salaries, and raw materials are all high. It’s very hard to turn a profit. We’ve been open for four years and have only had short periods of profitability. Some cafes change their signs multiple times a year." Lily, a manager at a chain café in Wulin business district, echoed those concerns: "In the ‘three highs’ environment—high rent, high salaries, and high ingredient costs—making money is extremely difficult. We’ve only had brief profitable phases and are still operating at a loss. Some cafes change their branding every year." She also warned that unlike chain stores, which can use profits from successful locations to cover losses elsewhere, Ju Coffee would rely solely on shareholder contributions if losses persisted.

Still, not everyone was pessimistic. Hao Yang, who has co-founded several cafes with six or seven friends, remained optimistic: "How many shareholders doesn’t matter. What’s important is that everyone works together, has clear roles, and does their part well." Meanwhile, the 15 or so shareholders who left are reportedly planning another many-people coffee shop. Given the ideological splits, Hangzhou may soon see more than one “many-people” café—each reflecting different visions of what such a venture should be.

Frequently Asked Questions

How many shareholders contributed to Ju Coffee?

Ju Coffee was funded by 110 shareholders, each contributing a minimum of 2,000 yuan. The initial idea attracted over 370 potential investors within 48 hours of a media report in 2012, but the final group numbered 110 by launch day.

What challenges did Ju Coffee face before opening?

Ju Coffee faced multiple challenges, including disorganized early meetings with over 100 participants, the departure of two original founders, and deep disagreements among shareholders about whether to prioritize an artistic vision or a commercially viable business model. These tensions led to heated arguments and even the temporary flipping of a table during discussions.

Why did some shareholders leave the project?

Some shareholders, including two of the original founders like Lu Qien, left due to frustrations with inefficiency, lack of preparation, and philosophical differences over the cafe’s direction. Around 15 shareholders exited just before the company’s official registration in January 2013, citing disagreements over business strategy.

What is the general outlook for crowd-funded coffee shops in Hangzhou?

Industry veterans in Hangzhou remain skeptical about the long-term viability of crowd-funded coffee shops. They cite high operating costs—especially rent, labor, and ingredients—and note that most cafes in the city struggle to break even or turn a profit. Customer loyalty is also seen as more tied to taste, price, and service rather than the novelty of a shared-ownership model.

How did the shareholder debates influence Ju Coffee’s opening?

The debates between those favoring an artistic, community-driven approach versus a commercially sustainable model shaped Ju Coffee’s early identity and nearly caused the project to collapse. Ultimately, a compromise allowed the cafe to open, but differing philosophies led to the departure of key members and raised questions about the model’s cohesion.

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