Howard Schultz: Visionary Billionaire And Starbucks' Strategist


The startup industry has witnessed unbelievable transformations. The stories of Nike’s rise in the sporting goods segment and KFC’s dominance as a fast food behemoth have shown that nothing is predictable in this era of cut-throat competition. When we talk about the beverage industry, one name is synonymous with global influence. It’s none other than Starbucks. The evolution from a shop that sold coffee beans into a multi-billion company is inspirational. But as they say, achieving success is nigh impossible without struggle, pain, and hard work. Starbucks is where it is today because of Howard Schultz’s strategies and leadership.

Howard Schultz’s iconic image is due to Starbucks’ meteoric rise under his guidance and his tenure as a member of the board of directors of Square, Inc.

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Curating The Business Mindset

Schultz worked as a salesman for Xerox Corporation in the beginning. The turning point came in 1979 when he was appointed as the general manager for Hammarplast, a Swedish drip coffee maker. When he visited a client of Hammarplast in 1981, he observed a coffee bean shop named Starbucks order plastic cone filters. The company’s knowledge about coffee impressed him and he joined Starbucks. Howard Schultz joined as the director of marketing. His trip to Italy changed Starbucks’ operational approach. He noticed that coffee shops existed on every street of Italy which served a wide variety of coffee. These places acted as meeting points for people. Schultz proposed a new marketing strategy which wasn’t welcomed. Schultz left the company as a result.

Setting Up The First Store

After quitting Starbucks, Schultz needed around 400,000 USD which was difficult at that time. Jerry Baldwin and the co-founder of the company, Gordon Bowker offered to help him set up the first store. In 1986, Schultz opened ‘II Giornale’, which was named after the Milanese newspaper. The store had a vivid menu, ranging from coffee to ice cream. Schultz was determined to implement the inspiration received from his trip to Italy trip. The store had seating facilities and opera music.

Starbucks Revamped

After two years, Starbucks’ management committee sold its entire retail unit to Schultz. The net worth of the unit was around 3.8 million USD. Later on, Schultz renamed II Giornale to Starbucks. There was no return for Starbucks after this. Under Schultz, the company witnessed rapid growth and expanded throughout the United States. Schultz’s knowledge on real estate proved vital in Starbucks becoming a household name in the country. Schultz stepped down as the CEO of the company in 2000 and became the chief global strategist to help expand the company globally. A new era for Starbucks began.

Expansion Of The Coffee Chain

Although the company was successful in the food and beverage circuit, it was largely due to domestic profits. International sales weren’t satisfactory, and Schultz returned as the CEO of Starbucks after a hiatus of  8 years. He fired several executives and ordered a shutdown of non-performing stores across the globe. Howard also hired a Chief Technology Officer, and He introduced the Starbucks Reward Card.

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Salary And Presidential Aspirations

Schultz was earning around 9 million USD while radicalizing Starbucks. In 2016, he stepped down as the CEO of Starbucks and acquired the post of executive chairman. After two years, he announced he was quitting Starbucks to have a shot at the presidential campaign.

Schultz’s Tenure With Seattle SuperSonics

In 2001, Schultz and nine other investors purchased the National Basketball Association’s Seattle SuperSonics and the women’s team, Seattle Storm, for 200 million USD. But his tenure with the team wasn’t fruitful as the fans thought his idea to run the team as a business rather than a sports team was crass. Schultz was on bitter terms with the team captain as he criticized the captain for his absence in the team’s first practice session. Later on, he sold the team to Clay Bennet, the chairman of the Professional Basketball Club for 350 million USD. This move was taken in accordance with his inability to collect public funds for building a stadium. A series of lawsuits followed and Schultz is still disliked in some parts of Seattle.

The Author In Schultz

Apart from being a successful entrepreneur, Schultz has penned multiple books. ‘Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time’ was released in 1997. He co-authored ‘How Starbucks fought for Its Life Without Losing Its Soul’ with Joanne Gordon. His third book, ‘For Love of Country’, was co-written with Rajiv Chandrasekaran and published in the year 2014.

An Inspiration

Howard Schultz has seen crests and troughs; an unpleasant tenure with Seattle SuperSonics and a successful stint with Starbucks. He didn’t back off when it came to making the harshest of decisions. His marketing strategies transformed Starbucks from a coffee bean store to an 80 billion USD organization. It is a no brainer that Schultz is an inspiration for budding entrepreneurs.

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