Coffee Visionary, Howard Schultz
Before Starbucks, coffee was primarily of the over-brewed drip variety, in a non-descript mug, and a morning afterthought. Schultz – a sales rep for Xerox – saw the potential to make coffee an “event” that takes a more central role in the daily lives of the world’s population. His vision? To offer a higher-quality coffee experience in atmosphere-rich stores.
Schultz grew up in Brooklyn where his blue-collar family struggled financially. He won a football scholarship to Northern Michigan University and earned a business degree in 1975.
In 1982, Schultz who had been working for Xerox, left to join Starbucks (which was only a bean wholesaler at that time). He then left to start a chain of coffee bars only to buy Starbucks in 1987 for $3.8m. Schultz took the company public in 1992 and in 2014 there was just over 21,000 stores worldwide.
As part of his daily routine, Schultz will grab a coffee from one of several Starbucks near him as a way to keep in touch with how the business is being run.
How Howard Schultz reinvented the coffee experience
Starbucks represents something beyond a cup of coffee. ~ Howard Schultz
- Sell the romance. Starbucks sells an escapist experience. For a few minutes a day, a customer can be transported to an exotic part of the world – Sumatra, Kenya, Verona, Milan or Costa Rica – through the aromas of its blends and the taste of its coffees.
- Sell an affordable luxury. No snobbery. Go into any Starbucks and you will see workmen besides CEOs; doctors alongside students. They may drive different cars but they can experience the same coffee. All have one thing in common – a break in their day to reward themselves.
- Sell an oasis. Starbucks is a sanctuary for those who want to step out of the world for a while. It’s a place to meet friends, to gather your thoughts, to work on a project. You can take stock of your life, have meaningful conversations and plan your next move. Starbucks train their staff to welcome customers, know their name and to serve them quickly. There’s no rushing customers. You can step out of your hectic day and gather your thoughts.
- Sell social. Some people need that sense of life going on around them; to be around other human beings – even if they may not have direct interaction with them.
- “When you’re surrounded by people who share a passionate commitment around a common purpose, anything is possible.”
- “Cutting prices or putting things on sale is not sustainable business strategy.”
- “I think if you’re an entrepreneur, you’ve got to dream big and then dream bigger.”
- “In life, you can blame a lot of people and you can wallow in self-pity, or you can pick yourself up and say, ‘Listen, I have to be responsible for myself.'”
- “I’m not as interested in what you make as I am in what you’re passionate about. What business are you really in?”