Life Story of Howard Schultz

8/12/2019 Life Story of Howard Schultz

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Howard Schultz took a small coffee shop chain and infused it with an Italian flair for fun andrelaxation to create a unique American cultural phenomenon. There may be dozens of imitators,yet none has matched the popularity of Starbucks. The success of Starbucks is due mostly toSchultz, who is praised by analysts and competitors alike. In 1995, Tricia Reebs, an analyst forDain Bosworth, discussed the Starbucks owner with Jeanne Sather ofBusiness Journal-Portland,"He's a very, very strong idea person. He has a vision of what he wants to create, and he has thefollow-through. It's something in his characterpassion, belief, confidence."

Schultz, however, is the best person to discuss his own business philosophy. In an interview withEntrepreneur magazine in May 1998, he modestly explained: "You need the self-esteem to hirepeople who are smarter than you and give them theautonomyto manage their own areas.Surroundyourself with great people and get out of the way."

"There are a lot of similarities between rearing a family, where the parentsimprintvalues ontheir children, and starting a new business, where the founder sets the ground rules very early. If
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you do it right and maintain those values, growth will be managed so you don't lose the soul ofthe company."

An Uneasy Childhood

Howard Schultz was born in Brooklyn, New York, in 1953. With little money, both parentsworked long hours to support the family. To escape being "poor" young Howard turned to sportsand played football, baseball, and basketball. He did so well in high school that he was awardedan athletic scholarship toNorthern MichiganUniversity.

When he left New York to go to college, Shultz's father was a broken man. He had never gottenahead in any of his low-paying jobs and was rarely shown any respect by his employers. "Iwatched my dad's self-esteem fracture," Schultz commented to Sather in 1995. Because of hisfamily's financial troubles, Schultz made the most of his college days, both athletically andacademically. He received a bachelor's degree in business and marketing in 1975, proud to be thefirst member of his family to attend college.

On the Right Track

Schultz returned to New York after graduation and worked for theXeroxCorporation beforejoining a Swedish housewares company called Hammerplast. On a business trip to Seattle,Washington, in 1981 Schultz walked into a Starbucks and fell in love with the flavorful coffee.He met with one of the owners, Gerry Baldwin, to sell Hammerplast coffeemakers and expressedan interest in working there. By the following year, Schultz was hired as marketing director forthe Seattle business.

When he started at Starbucks, the company had about a dozen locations and sold coffee beansand related products, not coffee by the cup. Yet after a trip to Milan, Italy, in 1983, Schultzbecame convinced thatespressoor coffee "bars"which served thesteamingbeverages by thecup and offered customers chairs to sit and chat awhilewere the wave of the future. "I believedthe relationship I saw between people and coffee in Italy was transferable to America in a bigway," Schultz explained to Jennifer Reese ofForbes magazine in December 1996.

The owners of Starbucks disagreed, however, so Schultz decided to venture out on his own.Rounding up money from investors (including the Starbucks partners who were willing toinvest), he opened the first II Giornale coffee bar in 1984. The small, friendly cafe was a hit withSeattle's sophisticated coffee drinkers who, thanks to Schultz, could get Starbucks coffee by thecup and a bag of beans from the real Starbucks down the street.

As Schultz planned additional Il Giornalecoffee bars,he heard that one of the Starbucks partnersintended to leave the business. Schultz offered to buy out all the partners and did so in 1987. Hethen merged II Giornale and Starbucks to form the Starbucks Corporation. From the start,Schultz wanted to make Starbucks a nationally recognized brand, to take the premium coffeefrom the West Coast to the East Coast and everywhere in between. He succeeded, and Starbuckscoffee bars blossomed almost overnight, creating devoted customers with every new opening.
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generated for Schultz and others, he said back in 1995 toBusiness Journal-Portland, "This hasnever been about money, never. It's about our passion for coffee."

Read more:http://www.referenceforbusiness.com/businesses/M-Z/Schultz-

Howard.html#ixzz36t0OjFFt

I wanted to be in charge of my own destiny, says Howard Schultz. It may be a weakness in me: I'm

always wondering what I'll do next. Enough is never enough. Schultz used this weakness to his

advantage, taking the U.S. by storm with his vision of a coffee shop the likes of which the country had

never seen before. Today, as a so-called third home, Starbucks has revolutionized not only the coffee

industry but also society at large.

Howard Schultz was born on July 19, 1953, in Brooklyn, New York as the oldest of three children. He
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grew up in Bayview Project, a government-subsidized housing unit. Hisfamilyhad little money and both

parents worked long hours to try and support the family. Growing up, Schultz spent most of his time

playing sports, taking a particular liking to football, baseball and basketball. He found that he quickly

excelled in each of these in high school and used it to his advantage, receiving a football scholarship to

Northern Michigan University.

Schultz was determined to escape poverty and become the first member of his family to graduate from

college. In 1975, he realized his dream and earned his bachelors degree inbusinessand marketing. But,

while Schultzs academic career was soaring, his family life was taking a turn for the worse. His father

was starting to suffer from the never-ending stream of low-paying, dead-end jobs he was forced to

work. I watched my dads self-esteem fracture, Schultz would later recall.

Nevertheless, Schultz was determined to make more of his own life. After graduating, Schultz moved

back to New York and got a job working for Xerox Corporation. He then switched to working as a

salesman for Hammerplast, a Swedish housewares company. When he noticed that he was selling many

coffee percolators to a little Seattle-based company, Schultz flew out to see why.

In 1981, Schultz met with Gerry Baldwin, one of the owners of Starbucks, and he immediately fell in love

with the company and the concept. In less than one year, Schultz had left Hammerplast and had become

Director of Retail Sales for Starbucks. But, Schultzs vision for the company soon took a different turn

from its original owners.

When Schultz first joined Starbucks, it had 12 retail outlets and was dedicated to selling coffee beans

and coffee-related products. In 1983, Schultz went on vacation to Milan, Italy, and became infatuated

with the idea of coffee bars, places where gourmet coffee was served not in beans, but by the cup, and

where people could come to meet and relax. I believed the relationship I saw between people and

coffee in Italy was transferable to America in abigway, he said.

Great companies recognize who they are and who they are not, said Schultz. But they must hav e the

courage to examine transformational opportunities. The owners of Starbucks disagreed with Schultzs

vision. They had little desire to expand their company in the way Schultz was proposing. But, confident

in his idea and the untapped possibilities, Schultz left Starbucks and started out on his own.

Seize the day and accept

responsibility for

your future.
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Life Story of Howard Schultz

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