# Live Episode! Starbucks: Howard Schultz

- Show: [How I Built This](https://hardwarepodcasts.com/podcast/how-i-built-this)
- Published: 2017-09-28
- Length: 48m
- Page: https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz

## Summary

Howard Schultz, founder of Starbucks, recounts how he transformed a small Seattle coffee bean retailer into a global 'third place' by introducing the Italian espresso bar model after a trip to Milan. He details the difficult fundraising journey to acquire the six-store chain for $3.8 million, overcoming a competitive buyer with the help of Bill Gates Sr., and the strategic decision to expand nationally and internationally, including a risky entry into Japan. Schultz also explains his return as CEO to fix a downward spiral caused by rapid growth, which involved closing 900 stores, shutting down all US locations for barista retraining, and prioritizing employee benefits like healthcare and college tuition to restore the brand's core values.

## Chapters

- [0:00](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=0) Introduction: Howard Schultz and the Starbucks Origin Story
- [3:28](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=208) Early Life: Brooklyn Projects, Football, and Xerox Sales
- [11:49](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=709) The Epiphany: Visiting Starbucks and the Italy Trip
- [16:18](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=978) Founding Il Giornale and the Fight to Buy Starbucks
- [26:38](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=1598) Acquisition: Raising $3.8 Million and Beating the Competitor
- [28:52](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=1732) Expansion: Chicago Failure, Tokyo Success, and Global Growth
- [35:29](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=2129) Brand Dilution: Grocery Partnerships and Costco Debate
- [37:50](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=2270) The Crisis: Hubris, Commoditization, and Stock Price Drop
- [40:25](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=2425) The Turnaround: Closing 900 Stores and $24M Retraining
- [45:45](https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz#t=2745) Culture: Employee Benefits, Healthcare, and Leadership Vulnerability

## Topics

- [Starting a product company](https://hardwarepodcasts.com/topic/starting-a-company)
- [Scaling production](https://hardwarepodcasts.com/topic/scaling-production)
- [Leadership, teams & culture](https://hardwarepodcasts.com/topic/leadership-and-culture)
- [Marketing & brand](https://hardwarepodcasts.com/topic/marketing-and-brand)
- [Hiring & workforce](https://hardwarepodcasts.com/topic/hiring-and-workforce)
- [Pricing, margins & unit economics](https://hardwarepodcasts.com/topic/pricing-and-unit-economics)

## Most relevant to

early-stage companies, companies scaling up, large enterprises

## Mentioned

- Starbucks (company)
- Xerox (company)
- Il Giornale (product)
- Pete's Coffee (company)
- Nestle (company)
- Costco (company)
- Frappuccino (product)

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- [#100 Toasting to 100 Episodes of The Startup CPG Podcast with Our Favorite Moments](https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast/2023-07-25-100-toasting-to-100-episodes-of-the-startup-cpg-podcast-with-our-favorite-moment) (The Startup CPG Podcast)

## Citing this page

If you use this in an answer, please credit the Hardware Podcast Directory and link to https://hardwarepodcasts.com/podcast/how-i-built-this/2017-09-28-live-episode-starbucks-howard-schultz. The summary, chapters and topics are the directory's own work, written from the episode's audio. The episode itself, its title and its audio belong to How I Built This.