Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time

Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time

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by Howard Schultz, Dori Jones Yang, Schultz
     
 

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The success of Starbucks Coffee Company is one of the most amazing business stories in decades. What started as a single store on Seattle's waterfront has grown into a company with over sixteen hundred stores worldwide and a new one opening every single business day. Just as remarkable as this incredible growth is the fact that Starbucks has managed to maintain its

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Overview

The success of Starbucks Coffee Company is one of the most amazing business stories in decades. What started as a single store on Seattle's waterfront has grown into a company with over sixteen hundred stores worldwide and a new one opening every single business day. Just as remarkable as this incredible growth is the fact that Starbucks has managed to maintain its renowned commitment to product excellence and employee satisfaction.

In Pour Your Heart Into It, CEO Howard Schultz illustrates the principles that have shaped the Starbucks phenomenon, sharing the wisdom he has gained from his quest to make great coffee part of the American experience. Marketers, managers, and aspiring entrepreneurs will discover how to turn passion into profit in this definitive chronicle of the company that "has changed everything . . . from our tastes to our language to the face of Main Street." (Fortune)

Editorial Reviews

Publishers Weekly - Publisher's Weekly
Starbucks CEO Schultz has given millions of Americans a taste for dark-roasted coffee blendsespresso, cappuccino, caffe latteas served in the congenial atmosphere of pseudo-Italian coffee bars. With Business Week writer Yang, he recalls here rounding up often reluctant investors, opening his first store in Seattle, fending off a takeover, providing stock options and health care coverage to employees while doggedly raising new capital despite early lossesand eventually delivering a 100-to-1 return on investment. As the company grew, with a new store opening daily nationwide, Schultz hired away executives from 7-11 and Burger King, took on Wall Street with an initial public stock offering, all the while developing additional products (Frappucino) and customizing the music tapes played in the shops. As instruction in plain English on how to build a billion-dollar retail specialty chain, it is hard to imagine a more satisfying brew than this memoir. $300,000 ad/promo. (Sept.)
Library Journal
Schultz, chairman and CEO of Starbucks, and writer-researcher Yang trace the growth and development of Starbucks from a single store in Seattle, which in 1973 sold only dark-roasted coffee beans, to the international business it has become today. Schultz does not conceal his passion for good coffee or for his company. His initial goals were to introduce Americans to really fine coffee, provide people with a "third place" to gather, and treat his employees with dignity. The extent to which he succeeded and the obstacles encountered along the way are the subjects he tackles here. This is not, in the strictest sense, a how-to book despite its considerable detail but more a motivational title. Recommended for large public libraries.Joseph C. Toschik, Half Moon Bay P.L., Cal.
Kirkus Reviews
A chatty history of Starbucks by its CEO, who announces that he considers the company to be only in its third chapter (which is nowhere near the eleventh).

Schultz first heard of Starbucks in 1981 when he sold to the fledgling business a number of expensive coffeemakers, and he fell in love with the company immediately. He calls the meeting bashert (Yiddish for destiny), and while the Seattle-based group may have had another word for it, Brooklyn-bred Schultz does seem particularly suited to Starbucks. He repeatedly swoons over the coffee and details at length the process that turns a small green bean into a dark brown drink in a green cup. His enthusiasm for his product is palpable when he writes of "the romance of the coffee experience" at Starbucks, though his tips about how to run a company are less valuable. Schultz does offer some useful war stories—especially his dinner with the Seattle partners, who found him "too New York"—and his idea of putting even part-time workers on the company's health-care plan is both admirable and cost-effective, saving money on employee turnover. Schultz, who bought the company for under $4 million, should have more specific points to convey about how he made Starbucks worth over $270 million in a half a decade. And much of the Starbucks story is overly familiar, while elsewhere, the narrative would be better served if the events were discussed chronologically: It's jarring to jump from the 1996 success of Frappuccinos and ice cream to the devastating Brazilian frost of 1994.

Though this is unsatisfying as a skim-milk latte in places, Schultz is less a braggart and more a true believer than many CEOs, and (with Business Week staffer Yang) he provides a pleasing read.

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Product Details

ISBN-13:
9780786883561
Publisher:
Hyperion
Publication date:
01/13/1999
Pages:
368
Sales rank:
98,542
Product dimensions:
6.12(w) x 9.37(h) x 1.00(d)
Age Range:
18 Years

Read an Excerpt



CHAPTER ONE

IMAGINATION, DREAMS, AND HUMBLE ORIGINS It is only with the heart that one can see rightly.
What is essential is invisible to the eye.

—Antoine de Saint-Exupery,
The Little Prince

Starbucks, as it is today, is actually the child of two parents.

One is the original Starbucks, founded in 1971, a company passionately committed to world-class coffee and dedicated to educating its customers, one on one, about what great coffee can be.

The other is the vision and values I brought to the company: the combination of competitive drive and a profound desire to make sure everyone in the organization could win together. I wanted to blend coffee with romance, to dare to achieve what others said was impossible, to defy the odds with innovative ideas, and to do all this with elegance and style.

In truth, Starbucks needed the influence of both parents to become what it is today.

Starbucks prospered for ten years before I discovered it. I learned of its early history from its founders, and I'll retell that story in Chapter Two. In this book, I will relate the story the way I experienced it, starting with my early life, because many of the values that shaped the growth of the enterprise trace their roots back to a crowded apartment in Brooklyn, New York.

HUMBLE ORIGINS CAN INSTILL
BOTH DRIVE AND COMPASSION

One thing I've noticed about romantics They try to create a new and better world far from the drabness of everyday life. That is Starbucks' aim, too. We try to create, inour stores, an oasis, a little neighborhood spot where you can take a break, listen to some jazz, and ponder universal or personal or even whimsical questions over a cup of coffee.

What kind of person dreams up such a place?

From my personal experience, I'd say that the more uninspiring your origins, the more likely you are to use your imagination and invent worlds where everything seems possible.

That's certainly true of me.

I was three when my family moved out of my grandmother's apartment into the Bayview Projects in 1956. They were in the heart of Canarsie, on Jamaica Bay, fifteen minutes from the airport, fifteen minutes from Coney Island. Back then, the Projects were not a frightening place but a friendly, large, leafy compound with a dozen eight-story brick buildings, all brand-new. The elementary school, P.S. 272, was right on the grounds of the Projects, complete with playground, basketball courts, and paved school yard. Still, no one was proud of living in the Projects; our parents were all what we now call "the working poor."

Still, I had many happy moments during my childhood. Growing up in the Projects made for a well-balanced value system, as it forced me to get along with many different kinds of people. Our building alone housed about 150 families, and we allshared one tiny elevator. Each apartment was very small, and our family started off in a cramped two-bedroom unit.

Both my parents came from working-class families, residents of the East New York section of Brooklyn for two generations. My grandfather died young, so my dad had to quit school and start working as a teenager. During World War II, he was a medic in the Army in the South Pacific, in New Caledonia and Saipan, where he contracted yellow fever and malaria. As a result, his lungs were always weak, and he often got colds. After the war, he got a series of blue-collar jobs but never found himself, never had a plan for his life.

My mother was a strong-willed and powerful woman. Her name is Elaine, but she goes by the nickname Bobbie. Later, she worked as a receptionist, but when we were growing up, she took care of us three kids full time.

My sister, Ronnie, close to me in age, shared many of the same hard childhood experiences. But, to an extent, I was able to insulate my brother, Michael, from the economic hardship I felt and give him the kind of guidance my parents couldn't offer. He tagged along with me wherever I went. I used to call him "The Shadow." Despite the eight-year age gap, I developed an extremely close relationship with Michael, acting like a father to him when I could. I watched with pride as he became a good athlete, a strong student, and ultimately a success in his own business career.

I played sports with the neighborhood kids from dawn to dusk every day of my childhood. My dad joined us whenever he could, after work and on weekends. Each Saturday and Sunday morning, starting at 8 A.M., hundreds of us kids would gather in the schoolyard. You had to be good there, because if you didn't win, you'd be out of the game, forced to watch for hours before you could get back in. So I played to win.

Luckily for me, I was a natural athlete. Whether it was baseball, basketball, or football, I jumped right in and played hard till I got good at it. I used to organize pickup games of baseball and basketball with whatever kids lived in the neighborhood—Jewish kids, Italian kids, black kids. Nobody ever had to lecture us about diversity; we lived it.

It's always been a part of my personality to develop an unbridled passion about things that interest me. My first passion was for baseball. At that time in the boroughs of New York, every conversation started and ended with baseball. Connections and barriers with other people were made not by race or religion but by the team you rooted for. The Dodgers had just left for Los Angeles (they broke my father's heart, and he never forgave them), but we still had many of the baseball greats. I remember walking home and hearing play-by-play radio reports blaring out of open windows on every side of the courtyard.

I was a die-hard Yankees fan, and my dad took my brother and me to countless games. We never had good seats, but that didn't matter. It was the thrill of just being there. Mickey Mantle was my idol. I had his number, 7, on my shirts, sneakers, everything I owned. When I played baseball, I mimicked Mickey Mantle's stance and gestures.

When The Mick retired, the finality of it was hard to believe. How could he stop playing? My father took me to both Mickey Mantle Days at Yankee Stadium, September 18, 1968, and June 8,8, 1969. As I watched the tributes to him, and listened to the other players say good-bye, and heard him speak, I felt deeply sad. Baseball was never the same for me after that. The Mick was such an intense presence in our lives that years later, when he died, I got phone calls of consolation from childhood friends I hadn't heard from in decades.

Coffee was not a big part of my childhood. My mother drank instant coffee. When company came over, she'd buy some canned coffee and take out her old percolator. I remember listening to it grumble and watching that little glass cap until finally the coffee popped up into it like a jumping bean.

It was only as I grew older that I began to realize how tight the family finances were. On rare occasions we'd go to a Chineserestaurant, and my parents would discuss what dishes to order, based solely on how much cash my dad had in his wallet that day. I felt angry and ashamed when I realized that the sleepaway camp I attended in the summer was a subsidized program for underprivileged kids. After that, I refused to go back.

By the time I got to high school, I understood the stigma of living in the Projects. Canarsie High School was less than a mile away, but to get there I had to walk down streets lined with small single-family homes and duplexes. The people who lived there, I knew, looked down on us.

Once I asked out a girl from a different part of New York. I remember how her father's face dropped in stages as he asked:

"Where do you live?"

"We live in Brooklyn," I answered.

"Where?"

"Canarsie."

"Where?"

"Bayview Projects."

"Oh."

There was an unspoken judgment about me in his reaction, and it irked me to see it.

As the oldest of three children, I had to grow up quickly. I started earning money at an early age. At twelve, I had a paper route; later I worked behind the counter at the local luncheonette. At sixteen, I got an after-school job in the garment district of Manhattan, at a furrier, stretching animal skins. It was horrendous work, and left thick callouses on my thumbs. I spent one hot summer in a sweatshop, steaming yarn at a knitting factory. I always gave part of my earnings to my mother—not because she insisted but because I felt bad for the position my parents were in.

Still, in the 1950s and early 1960s, the American dream was vibrant, and we all felt entitled to a piece of it. My mother drummed that into us. She herself had never finished high school, and her biggest dream was a college education for all three of her kids. Wise and pragmatic in her blunt, opinionated way, she gave me tremendous confidence. Over and over, she would put powerful models in front of me, pointing out individuals who had made something of their lives and insisting that I, too, could achieve anything I set my heart on. She encouraged me to challenge myself, to place myself in situations that weren't comfortable, so that I could learn to overcome adversity. I don't know how she came to that knowledge, because she didn't live by those rules. But she willed us to succeed.

Years later, during one of her visits to Seattle, I showed my mother our new offices at Starbucks Center. As we walked around, passing departments and workstations, seeing people talking on the phone and typing on computers, I could tell her head was just spinning at the size and scope of the operation. Finally, she edged closer to me and whispered into my ear "Who pays all these people?" It was beyond her imagination.

During my childhood, I never dreamed of working in business. The only entrepreneur I knew was my uncle, Bill Farber. He had a small paper factory in the Bronx, where he later hired my father as a foreman. I didn't know what work I would eventually do, but I knew I had to escape the struggle my parents lived with every day. I had to get out of the Projects, out of Brooklyn. I remember lying in bed at night and thinking What if I had a crystal ball and could see the future? But I quickly shut out the thought, for I realized I would be too frightened to look into it.

I was aware of only one escape route: sports. Like the kids in the movie Hoop Dreams, my friends and I thought they were the ticket to a great life. In high school, I applied myself to schoolwork only when I had to, because what I learned in the classroom seemed irrelevant. Instead I spent hours and days playing football.

I'll never forget the day I made the team. As a symbol of that honor, I got my letter, the big blue C that identified me as an accomplished athlete. But my mother couldn't afford to pay $29 for the letter jacket, and asked me to wait a week or so till Dad got hispaycheck. I was devastated. Everybody at school had been planning to wear those jackets on one agreed-upon day. I couldn't show up without a jacket, but I also didn't want to make my mother feel any worse. So I borrowed money from a friend to buy the jacket and wore it on the appointed day, but I hid it from my parents until they were able to afford it.

My biggest triumph in high school was becoming quarterback, which made me a Big Man on Campus among the 5,700 students of Canarsie High. The school was so poor that we didn't even have a football field, and all our games were away games. Our team was pretty bad, but I was one of the better players on it.

One day, a recruiter came to scout an opposing player at one of our games. I didn't know he was there. A few days later, though, I received a letter from what, in my frame of reference, sounded like another planet, Northern Michigan University. They were recruiting for the football team. Was I interested? I whooped and hollered. It felt as good as an invitation to the NFL draft.

Northern Michigan eventually offered me a football scholarship, the only offer I got. Without it, I don't know how I could have realized my mother's dream of going to college.

During spring break of my last year in high school, my parents drove me to see this unimaginable place. We drove nearly a thousand miles to Marquette, in the Upper Peninsula of Michigan. We had never been outside New York, and my parents were caught up in the adventure of it. We drove across wooded mountains, through vast stretches of flat fields, past huge lakes that looked like oceans. When we finally arrived, the campus looked like an America I had seen only in the movies, with budding trees, laughing students, flying frisbees.

I was out of Brooklyn at last.

By coincidence, Starbucks was founded that same year in Seattle, a city even farther beyond my imagination at that time.

I loved the freedom and the open space of college, although I felt lonely and out of place at first. I made some close friends my freshman year and ended up rooming with them for four years, on and off campus. Twice I sent for my brother and he flew out to visit. One year, for Mother's Day, I hitchhiked back to New York, surprising her.

It turned out I wasn't as good a football player as I thought, and I ended up not playing after all. To stay in school I took out loans and worked part-time and summer jobs to pay for my expenses. I had a night job as a bartender, and I even sold my blood sometimes. Still, those were mostly fun years, a time with little responsibility. With a draft number of 332, I didn't have to worry about going to Vietnam.

I majored in communications and took courses in public speaking and interpersonal communications. During senior year, I also picked up a few business classes, because I was starting to worry about what I would do after graduation. I maintained a B average, applying myself only when I had to take a test or make a presentation.

After four years, I became the first college graduate in my family. To my parents, I had attained the big prize: a diploma. But I had no direction. No one ever helped me see the value in the knowledge I was gaining. I've often joked since then: If someone had provided me with direction and guidance, I really could have been somebody.

It took years before I found my passion in life. Each step after that discovery was a quantum leap into something unknown, each move riskier than the last. But getting out of Brooklyn and earning a college degree gave me the courage to keep on dreaming.

For years I hid the fact that I grew up in the Projects. I didn't lie about it, but I just didn't bring it up, for it wasn't much of a credential. But however much I tried to deny them, those memories of my early experiences were imprinted indelibly in my mind I could never forget what it's like to be on the other side, afraid to look into the crystal ball.

In December 1994, a New York Times article about Starbucks' success mentioned that I had grown up in the Projects of Canarsie. After it appeared, I received letters from Bayview and other blighted neighborhoods. Most came from mothers, trying to guide their kids, who said that my story gave them hope.

The odds on my coming out of the environment in which I was raised and getting to where I am today are impossible to gauge. How did it happen?

The sun shone on me, it's true, as my brother, Michael, always tells me. But my story is as much one of perseverance and drive as it is of talent and luck. I willed it to happen I took my life in my hands, learned from anyone I could, grabbed what opportunity I could, and molded my success step by step.

Fear of failure drove me at first, but as I tackled each challenge, my anxiety was replaced by a growing sense of optimism. Once you overcome seemingly insurmountable obstacles, other hurdles become less daunting. Most people can achieve beyond their dreams if they insist upon it. I'd encourage everyone to dream big, lay your foundations well, absorb information like a sponge, and not be afraid to defy conventional wisdom. Just because it hasn't been done before doesn't mean you shouldn't try.

I can't give you any secret recipe for success, any foolproof plan for making it in the world of business. But my own experience suggests that it is possible to start from nothing and achieve even beyond your dreams.

On a recent trip to New York I went back to Canarsie, to look around Bayview for the first time in nearly twenty years. It's not bad, really, except for the bullet hole in the entry door and the burn marks on the buzzer sheet. When I lived there, we didn't have iron gates on the windows, but then we didn't have air-conditioners either. I saw a group of kids playing basketball, just as I used to, and watched a young mother pushing a stroller. A tiny boy looked up at me, and I wondered: Which of these kids will break out and achieve their dreams?

I stopped by Canarsie High School, where the football team was practicing. In the warm autumn air, the blue uniforms and play calls brought the old exhilaration flooding back over me. I asked where the coach was. From the midst of the hefty backs and shoulder pads a small red-hooded figure emerged. To my surprise, I found myself face to face with Mike Camardese, a guy who had played on the team with me. He brought me up to date on the team, telling me how the school finally got its own football field. By coincidence, they were planning a ceremony that Saturday to name the field in honor of my old coach, Frank Morogiello. For the occasion, I decided to make a five-year commitment to help support the team. Without the support of Coach Morogiello, where would I be today? Maybe my gift will allow some Canarsie athlete, driven as I was, to rise above his roots and achieve something no one could ever imagine.

I've heard that some coaches face a curious dilemma. The world-class athletes on their teams—the players with the best skills and experience—sometimes falter when it comes to crunch time. Occasionally, though, there's a player on the team, a blue-collar guy whose skills and training are not quite world-class. Yet at crunch time, he's the one the coach sends out to the field. He's so driven and so hungry to win that he can outperform the top athletes when it really matters.

I can identify with that blue-collar athlete. I've always been driven and hungry, so at crunch time I get a spurt of adrenaline. Long after others have stopped to rest and recover, I'm still running, chasing after something nobody else could ever see.

ENOUGH IS NOT ENOUGH

Every experience prepares you for the next one. You just don't ever know what the next one is going to be.

After graduating from college in 1975, like a lot of kids, I didn'tknow what to do next. I wasn't ready to go back to New York, so I stayed in Michigan, working at a nearby ski lodge. I had no mentor, no role model, no special teacher to help me sort out my options. So I took some time to think, but still no inspiration came.

After a year, I went back to New York and got a job with Xerox, in the sales training program. It was a lucky break, since I was able to attend the best sales school in the country, Xerox's $100 million center in Leesburg, Virginia. I learned more there than in college about the worlds of work and business. They trained me in sales, marketing, and presentation skills, and I walked out with a healthy sense of self-esteem. Xerox was a blue-chip pedigree company, and I got a lot of respect when I told others who my employer was.

After completing the course, I spent six months making fifty cold calls a day. I knocked on doors of offices in midtown Manhattan, in a territory that ran from 42nd Street to 48th Street, from the East River to Fifth Avenue. It was a fantastic area, but I wasn't allowed to close sales, just drum up good prospects.

Cold-calling was great training for business. It taught me to think on my feet. So many doors slammed on me that I had to develop a thick skin and a concise sales pitch for a then-newfangled machine called a word processor. But the work fascinated me, and I kept my sense of humor and adventure. I thrived on the competition, trying to be the best, to be noticed, to provide the most leads to my salesmen. I wanted to win.

Finally, I succeeded: I became a full salesman in the same territory. I got to be pretty good at it, wearing a suit, closing sales, and earning good commissions for three years. I sold a lot of machines and outperformed many of my peers. As I proved myself, my confidence grew. Selling, I discovered, has a lot to do with self-esteem. But I can't say I ever developed a passion for word processors.

I paid off my college loans and rented an apartment in Greenwich Village with another guy. We were rolling, and having a great time. During one summer, eight of us rented a cottage in the Hamptons for weekends, and it was there, on the beach, July Fourth weekend, 1978, that I met Sheri Kersch.

With her flash of long wavy blonde hair and unflagging energy, Sheri attracted me with her impeccable style and class. She was in graduate school studying interior design and also spent summer weekends with a group of friends at the beach. She was not only beautiful but well-grounded, with solid midwestern values, from a close and loving family. We were both starting our careers, without a care in the world. We began dating, and the more I got to know her, the more I realized what a fine human being she was.

By 1979, though, I was restless in my job. I wanted something more challenging. A friend told me that a Swedish company, Perstorp, was planning to set up a U.S. division for its Hammarplast housewares subsidiary. It seemed like an exciting opportunity to get in on the ground floor of a growing company. Perstorp hired me and sent me to Sweden for three months of training. I stayed in the charming little cobblestone town of Perstorp, near Malmo, and explored Copenhagen and Stockholm on weekends. Europe overwhelmed me, with its sense of history and joy of life.

The company initially placed me in a different division, one selling building supplies. They moved me to North Carolina and had me sell components for kitchens and furniture. I hated the product. Who could relate to plastic extruded parts; After ten months of misery, I couldn't take it anymore. I was ready to give up and go to acting school, anything to get back to New York and be with Sheri.

When I threatened to quit, Perstorp not only transferred me back to New York but also promoted me to vice president and general manager of Hammarplast. I was in charge of the U.S. operations, managing about twenty independent sales reps. They gave me not only a salary of $75,000 but also a company car, an expense account, and unlimited travel, which included trips to Sweden four times a year. Finally I was selling products I liked: a line of stylish Swedish-designed kitchen equipment and housewares. As a salesman myself, I knew how to motivate my team of salespeople. Iquickly placed the products in high-end retail stores and built up sales volume.

I did that for three years and loved it. By age twenty-eight, I had it made. Sheri and I moved to Manhattan's Upper East Side, where we bought our apartment. Sheri was on the rise in her career, working for an Italian furniture maker as a designer and marketer. She painted our walls light salmon and began to use her professional skills to create a home in our loft-style space. We had a great life, going to the theater, dining at restaurants, inviting friends to dinner parties. We even rented a summer house in the Hamptons.

My parents couldn't believe I had come so far so fast. In only six years out of college I had achieved a successful career, a high salary, an apartment I owned. The life I was leading was beyond my parents' best dreams for me. Most people would be satisfied with it.

So no one—especially my parents—could understand why I was getting antsy. But I sensed that something was missing. I wanted to be in charge of my own destiny. It may be a weakness in me: I'm always wondering what I'll do next. Enough is never enough.

It wasn't until I discovered Starbucks that I realized what it means when your work truly captures your heart and your imagination.

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