Howard Schultz
speaker
633 appearances
1 recordings
1 series
first heard Jun 2024
last heard Jun 2024
Howard Schultz’s voice in public audio — every appearance, attributed to the second.
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Appearances
Yeah, he was building the operating system for us to be able to open the store, design the stores, which more or less I had done, build them, operate them, train them, and create the system to handle the flow of customers. So his job was much harder than mine.
Don't embarrass him. No, there was no technology.
Not at that time, no.
Yeah. I mean, eventually, when they did get point-of-sale terminals, they were DOS-based all the way through, like, 2008, right? Yes, yes. Like, the iPhone was out, and you guys had DOS-based point-of-sale systems. Sounds right. But, obviously, technology was not the secret sauce.
So let's take it forward from this 88, 89, 90. The first market after Chicago, after you sort of righted that ship, that you decide to enter on the West Coast is LA.
That's the big fight between Howard and I. I don't think I realized it was a big fight. I just felt in my bones we had to go to LA.
And he said, we're not ready for LA. We're going to San Diego. I said, San Diego?
Who's in San Diego? No, we're not going to San Diego. We're going to LA. And I've got the location. You wanted to play in the majors.
So we had a meeting about it, and it erupted. Erupted into a... Bad, a bad scene. And one thing led to another. We did go to LA. I'm shocked. We did go to LA and it was fine. And your conviction of we have to go to LA, was that for?
The equity of the brand, I could see, I could envision the warm weather and everyone walking around with our cups and the media and the celebrities and just the iconic way. And there was nothing in the market, nothing at all. that even appeared to be in the business that we were in. And anyone who was doing it was not doing it well. We had to go.
And even though we maybe were not ready, we just had to do it. And we did. And I think Howard would agree today that that ended up being the right decision. And LA, the halo on Starbucks from Seattle to Vancouver and Chicago was nothing. When we went to LA, it just exploded because celebrities embraced Starbucks.
Was there an intentional strategy to create sort of a luxury brand out of Starbucks that like the cool people were carrying the Starbucks cup? It might be a little bit expensive, but you can afford it.
No, there was no, I can never remember a discussion about segmentation of the brand. Because we wanted Starbucks to be accessible to all. You'd have a CEO of a company and the person behind them was a blue collar truck driver because everyone could afford the affordable luxury of Starbucks at the time. When you say affordable luxury, what about it was luxury?
The quality of the coffee, the experience, and what it felt like to walk around with that cup at the time. It was a badge. It was like you were in the know. Yeah. It wasn't a badge of luxury.
It was just like something new. So it became a trope for decades now that, oh, it's a $6 latte or an $8 latte. Where does that come from? In your mind, is Starbucks premium priced? Is there actually a Starbucks gets to charge a little bit more because the brand has more cachet? Or is that just completely a farce?
I think the pricing of Starbucks was directly linked to the economic model that I alluded to earlier and the rising costs of labor, rent, and the fiduciary responsibility that we all felt to achieving the promise we had to our shareholders. And now we're talking about as a public company. There certainly was a fair amount of discussion all the time about the sensitivity of the price points.
And I think in later years, maybe in the last couple of years, given the consumer inflationary time, I think it's become a bit of a problem. And certainly... I've always said, as Starbucks was growing, that the ubiquity of Starbucks was an enemy to the company. And the challenge was we have to figure out a way to ensure the fact that we are getting smaller as we're getting bigger.
and specifically how do we maintain intimacy and the currency of trust with our customers and our people that unto itself is kind of the capsule of making sure that the growth doesn't become so intoxicating and so seductive that we lose sight of the really secret of the company which was the internal culture and values which built the brand and built a relationship with the customer
Again, we started this conversation talking about childhood. I really want to build a different kind of company. And how do I do that in a way that provides respect and dignity because I was so imprinted with how my father felt disrespected, devalued, and kind of vilified as a uneducated,
blue-collar veteran working in a series of jobs that he just never made it and living through the dysfunction of a poor family always under pressure with money. And so I wanted to kind of crack the code on how do we create
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