Starbucks

Where Schulz and I differ

I just listened to one of my favorite podcasts (Acquired, the hosts are goobers but man do they put out really good content) and Howard Schulz was interviewed about the journey of building Starbucks. Obviously, Schulz came up with the right idea at the right time and crafted a business concept that wove itself into the daily existence of millions of people, myself included. He created a utility out of a commodity and has been able to charge a premium for the product that I consume frequently.

During the interview he shared some juicy tidbits like how Bill Gates’ Dad saved the day when a greedy billionaire was going to steal the company, and how they almost lost the China business because there wasn’t an Asian working on the team and they were making all the wrong choices, or how not focusing on succession plans meant that he has to come back and right the ship every 8 years or so. At one point, though, he shared the real secret of Starbucks success and it was, at once, the most familiar and alien thing I’ve ever heard.

Have you ever been in a conversation with several people and then you hear someone recount their takeaways and it was like you were in two different conversations? That’s what this was like to me.

Schulz said that the Starbucks success story starts and ends with its relentless focus on the customer experience. Now, this sounds like corporate speak, but Schulz was the first guy I ever heard saying this, way back in the 1980s before I’d ever set foot in a Starbucks. He’s genuine enough to believe it to be the case, but I kept pausing the podcast to relive my own experiences in the stores and couldn’t find a single example in my history with the brand where that’s been the case.

To me, Starbucks is a cultural utility, something that’s in between something I need and want. It’s high on the list of “nice-to-haves” because of the product it delivers, the consistency of that delivery, and its ubiquity. A Grande Cafe Latte with 1 pump of sugar-free vanilla is the same at LAX as it is at the Empire State Building or my home store on North Valdosta Road. When it is different, it is bad. I don’t want different, I want consistent.

Never once have I had an interaction with a barista that I felt like formed a relationship between us — something that Schulz mentions over and over during his interview. To be charitable, most of the baristas are sort of slightly grumpy, a bit stressed, and retail-friendly at best. They’ve never given my kid a cookie, my dog a treat, or me anything more than a “how’s your day going?” type of conversation. That’s cool with me, that’s not what I’m there for and it would probably catch me off-guard if it happened … but the Founder of Starbucks is convinced that this is the heart of its success.

It started me thinking on what other ways we might differ on the company.

• I bet he thinks the food is good. It isn’t.

• I bet he thinks the stores are clean. They aren’t.

• I bet he thinks they are comfortable and make for a good third space. They really don’t.

• I think he thinks of them as a part of the fabric of the community and I just don’t see a single piece of evidence that supports that.

• I bet he thinks that the loyalty program is good. It’s AWFUL and if he ever reads this he ought to call Keith Ferrazi and get this fixed ASAP.

Now, to be really clear, I’m not saying that Starbucks is bad. It isn’t bad. If it was, I wouldn’t go there. I don’t eat at McDonald’s. It’s bad, we all know it and so I don’t go there. Starbucks to me is like this really aggressive mediocrity where it feels like we are checking boxes to claim that we have the real thing. It fully and completely lacks authenticity, and I thought we all knew that and just sort of look past that because we wanted the positives it does bring.

I don’t know a single person who loves it, like “Oooooooh, I LOVE Starbucks, let me show you MY Starbucks,” or anything like that. I don’t know people who wear its apparel, carry its logo, or brings it up in conversation except in an off-handed assumption that “it is there, it is open, it has coffee, we can go there,” type of way.

So between Howard and I, what has been your experience with Starbucks?

"When you're surrounded by people who share a passionate commitment around a common purpose, anything is possible."

—Howard Schultz

Super Interesting Facts about Starbucks

1. Global Reach: Starbucks operates in over 80 countries, with more than 34,000 stores worldwide, making it the largest coffeehouse chain in the world.

2. Humane Hiring: Starbucks was one of the first companies to offer part-time employees stock options and health insurance, which significantly changed the way corporations approach employee benefits. Schulz is on record saying that the company spends more for health insurance than it does for coffee beans!

3. Ethical Sourcing: Starbucks is a major advocate for ethically sourced coffee. As of recent years, 99% of their coffee is ethically sourced through their Coffee and Farmer Equity (C.A.F.E.) Practices.

4. The Siren Logo: The original Starbucks logo featured a twin-tailed mermaid, or Siren, inspired by Greek mythology. The logo has evolved over the years but remains one of the most recognizable brand symbols globally.

5. Reserve Roasteries: Starbucks has introduced Reserve Roasteries in major cities around the world, offering rare and exotic coffee blends in an upscale, immersive environment.

6. Cultural Influence: Starbucks has influenced coffee culture worldwide, popularizing the concept of “third place” – a space between work and home where people can relax, work, or socialize.

7. Mobile Dominance: Starbucks has one of the most successful mobile payment systems. Over 25% of its transactions in the U.S. are made through its mobile app, demonstrating its technological integration into daily life.

8. Annual Revenue: Starbucks generates over $29 billion in revenue annually, making it one of the most profitable coffee companies in the world.

9. Environmental Commitment: Starbucks has set ambitious sustainability goals, including becoming "resource-positive" by 2030. This includes reducing carbon emissions, conserving water, and reducing waste.

10. Customization: Starbucks offers an almost limitless array of drink customizations. It's estimated that there are over 170,000 possible drink combinations that a customer can create.

11. Starbucks in China: China is Starbucks’ second-largest market after the U.S., with over 7,000 stores and growing. The company opens a new store in China approximately every 15 hours.