The Success Story of Starbucks
The Success Story of Starbucks
Raised in a poor working-class family - Howard D. Schultz, the CEO of Starbucks, transformed his life by establishing his company to be the World's best coffeehouse. Born on July 19, 1953, in a poor family. His father was an Army trooper and then a truck driver.
He spent his childhood in poverty, raising with the low-income families in his neighbourhood. He witnessed his father struggling for money. He left with the terrible childhood memories, when his father got injured to his legs at work without any medical insurance, the family faced financial strains.
He says, "I saw my father losing his dignity and self-respect. I am sure it was because he was being treated as an ordinary working man."
He earned an athletic scholarship to Northern Michigan University by playing football during his High School. While starting college, he realized playing football was not what he wanted to and chose to major in communication. To pay his college fee, he worked as a bartender and sold his blood a couple of times for money.
After his graduation, he worked three years as a sales manager at Xerox and then switched to Hamamaplast, a Swedish company. The company sold appliances including, coffee machines to Starbucks.
Starbucks caught the attention of Howard- when they ordered a large number of coffee machines. He flew to Seattle to meet the owners, Gerald Baldwin, and Gordon Bowker. After a year of constant persuasion, Starbucks hired Howard as the director of retail operations and marketing. The time when there were only three Starbucks stores.
The trip that changed Starbucks and Howard's career was his trip to Milan to attend an International Housewares Show. While exploring the place, he came across small coffee shops. The owners of the shops build a personal relationship with their customers, even calling them by their names to serve them cappuccinos and cafe lattes.
Howard quit Starbucks in 1985 when the two founders rejected his Italian-based coffee experience idea. He then created his own coffee company named "IL Giornale," Italian for 'The daily.'
He says, "Those who work on unexplored roads, creating new products, and industries, can build long-lasting & strong company to inspire others to achieve great results."
He describes his struggle as, " In the course of the year I spent trying raising the money, spoke to almost 242 people, and 217 said no. Try to imagine how disheartening it can be to hear your idea is not worth investing in... It was a very humbling time."
He spends two years replicating the culture- he experienced in Italy at Il Giornale. Later, in August 1987, Starbucks purchased IL Giornale for $3.8 million. In 1992, Starbucks became a public company, and in the same year in June, it sold its shares on the New York Exchange for $14/ share, and the price rose to $33 in a day.
To retain the quality and customer's perfect coffee, in 2008, Howard closed over 7,100 Starbucks stores. He trained those baristas on how to make a perfect espresso. In 2010, the next two years, the company's profit tripled from $315 million to $945 million.
Howard's net worth also rose to $3 billion and Starbucks annual sales to over $16 billion. He says, "I don't have a perfect formula to reach success in the business. But my experience says that starting from scratch and achieving more than you dreamed is possible."