Live Episode! Starbucks: Howard Schultz

The 'Live Episode! Starbucks: Howard Schultz' of 'How I Built This with Guy Raz' podcast delves into the inspiring journey of Howard Schultz, the man who transformed a small Seattle coffee bean shop into Starbucks, a global coffee empire. Guy Raz takes the audience through the narrative of Schultz's humble beginnings in the housing projects of Brooklyn, where his exposure to his father's financial struggles shaped his future business ethos. Schultz's early career at Xerox and then at a Swedish company provided him with the sales and managerial experience that would later prove invaluable. His epiphany came upon visiting Starbucks in Seattle, where he was struck by the quality of their coffee beans. After joining the company, a trip to Italy introduced him to the concept of the espresso bar, which laid the groundwork for his vision for Starbucks.

Schultz faced resistance from Starbucks' original owners when he suggested selling brewed coffee. Undeterred, he opened his own Italian-style coffeehouse, Il Giornale. Eventually, he acquired Starbucks for $3.8 million with the help of investors and began expanding the brand. Despite early challenges, such as a difficult entry into the Chicago market and skepticism from large coffee companies, Starbucks' commitment to quality coffee and creating a 'third place' between work and home for customers fueled its growth. Schultz's decision to provide health benefits and stock options to employees, whom he referred to as 'partners,' further solidified the company's reputation and decreased employee turnover.

The episode also covers Schultz's decision to step down as CEO in the late 90s, feeling disconnected from the creative aspects of the business. However, he returned in 2008 as Starbucks faced a severe downturn, with a share price at a record low and the company's culture and customer experience deteriorating. Schultz's bold moves, such as closing stores for retraining and hosting a $30 million event to realign store managers with the company's values, were pivotal in Starbucks' turnaround. He emphasizes the importance of vulnerability and trust in leadership, and how success is not an entitlement but must be earned.