Howard Schultz

And everyone shows up and all of a sudden we got a mosh pit and that's not Starbucks. And so the company did not do a good job of anticipating the technological refinements that needed to be put in place to avoid what was happening. And I want to be fair to everyone who's managed the company. For about a five-year period, remember, I wasn't involved in the company from basically 2018 to 2022.

And everyone shows up and all of a sudden we got a mosh pit and that's not Starbucks. And so the company did not do a good job of anticipating the technological refinements that needed to be put in place to avoid what was happening. And I want to be fair to everyone who's managed the company. For about a five-year period, remember, I wasn't involved in the company from basically 2018 to 2022.

I was not involved. You stayed CEO from 2008 until 2017. Then I left. And... There were no bad people and no one had bad intentions. But the heritage and tradition of what I've described, which is so vital to the nurturance, was lost.

I was not involved. You stayed CEO from 2008 until 2017. Then I left. And... There were no bad people and no one had bad intentions. But the heritage and tradition of what I've described, which is so vital to the nurturance, was lost.

Yeah, the stock was at record high. And the company was not investing ahead of the curve and not paying attention to the velocity of the mobile app and what it was becoming until it was too late. And the company has that problem today, which they will solve. But it's late. And also, everyone has caught up to, we were the only game in town.

Yeah, the stock was at record high. And the company was not investing ahead of the curve and not paying attention to the velocity of the mobile app and what it was becoming until it was too late. And the company has that problem today, which they will solve. But it's late. And also, everyone has caught up to, we were the only game in town.

And the novelty of that and the uniqueness of it, especially for our product. And everyone pretty much copied it.

And the novelty of that and the uniqueness of it, especially for our product. And everyone pretty much copied it.

It is interesting to, David keeps saying it's so seductive, to put some numbers for listeners wondering, why is the mobile app such an interesting thing? David pointed out the float.

It is interesting to, David keeps saying it's so seductive, to put some numbers for listeners wondering, why is the mobile app such an interesting thing? David pointed out the float.

So, of course, if you look at Starbucks' financial statements, right now, at any given time, there's about $1.8 billion of cash that Starbucks has gotten in the form, effectively, as an advance from customers that Starbucks can use to operate. It's like this amazing...

So, of course, if you look at Starbucks' financial statements, right now, at any given time, there's about $1.8 billion of cash that Starbucks has gotten in the form, effectively, as an advance from customers that Starbucks can use to operate. It's like this amazing...

We're not the only one.

We're not the only one.

Amazon has this. Apple has this. Berkshire has this, the insurance business. But it's effectively interest-free loan from customers and a loan that's not all going to get called at once. Some of it will never get called. Right, the breakage. And so there's this benefit of it's a reasonably predictable amount of cash that comes in that you get to use for your advantage.

Amazon has this. Apple has this. Berkshire has this, the insurance business. But it's effectively interest-free loan from customers and a loan that's not all going to get called at once. Some of it will never get called. Right, the breakage. And so there's this benefit of it's a reasonably predictable amount of cash that comes in that you get to use for your advantage.

In terms of velocity, about $14 billion a year gets loaded onto gift cards. That's unbelievable. I mean, if you actually look at all of the banks in America, if Starbucks were a bank and you treated the gift cards as deposits, it would be in the top 10% by deposits of banks in the United States.

In terms of velocity, about $14 billion a year gets loaded onto gift cards. That's unbelievable. I mean, if you actually look at all of the banks in America, if Starbucks were a bank and you treated the gift cards as deposits, it would be in the top 10% by deposits of banks in the United States.

It's this unbelievable business model that happens to exist inside of this experiential business that powers this experiential business. But to your point, you have to keep it from eating the core.

It's this unbelievable business model that happens to exist inside of this experiential business that powers this experiential business. But to your point, you have to keep it from eating the core.