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Business origin stories that'll make you want to run through a brick wall. Released every Monday, Wednesday, and Friday. Enjoy.

Starbucks And Schultz: Building a Coffee Empire

6/21/2021

 
Three friends—Jerry, Gordon, and Zev—are inspired to get into the coffee business. In Seattle, Washington circa 1971, they open up a coffee shop. All three founders come from academia. So it’s only natural they name their company after the first mate from Moby Dick: “Starbuck”. They sell high-quality coffee beans and equipment, but there’s no barista—you have to take the beans home and make a latte yourself...
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Cut to Howard Schultz. He’s working in sales at a kitchen equipment and housewares supplier. Starbucks is a customer. He sees Starbucks is making big orders, visits Seattle, falls in love with the coffee shop, befriends the founders, and gets hired as the head of Marketing in 1982. Schultz and the boys grow the company to 6 locations.

On a business trip to Italy (must be nice), Schultz discovers cafés. He loves the sense of community. He loves the convenience. He’s convinced Starbucks should have cafés in their stores. But when he rushes back to tell his bosses about the idea, they don’t like it.

After a year to sleep on it, Schultz still believes cafés are the way to go. He leaves the company on good terms and starts his own chain, inspired by his experiences in Italy. He calls it “Il Giornale” (sorry Howard, but it doesn’t roll off the tongue unless you’re fluent in Italian).

Fast forward. The founders of Starbucks are involved in other businesses. They decide to sell the company. The price tag is $3.8 milly. Schultz buys it (with some help—check out this wild story). Now, he can finally realize his dream. He rebrands all of his stores as Starbucks, starts brewing and serving coffee at all locations, and executes a plan to expand.

Which brings us to today (after some ups and downs). As of 2020, Starbucks has achieved worldwide domination. It has nearly 33,000 locations and counting. Plus, it employs 350,000 people.

**Read more using these resources: this article and this pod.

**Read more FS Stories here.

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