Starbucks (with Howard Schultz)

**Ben Gilbert** (0:00)
All right.

**David Rosenthal** (0:01)
We're rolling?

**Ben Gilbert** (0:02)
We're rolling.

**Howard Schultz** (0:02)
We get to see how you guys do this. It's kind of interesting.

**David Rosenthal** (0:05)
Usually a pump up music. I feel pumped up. We can do that.

**Ben Gilbert** (0:09)
We got a turntable here.

**David Rosenthal** (0:10)
Ooh, I saw your turntable. That's beautiful.

**Howard Schultz** (0:13)
What do you want to hear?

**Ben Gilbert** (0:15)
Now we're starting.

**David Rosenthal** (0:17)
Ben's keeping us on track.
Is it you, is it you, is it you?
Is it you, is it you, is it you?

**Ben Gilbert** (0:35)
Welcome to season 14, episode 5 of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

**David Rosenthal** (0:43)
I'm David Rosenthal.

**Ben Gilbert** (0:44)
And we are your hosts. Seven years ago, David and I did an episode on the Starbucks IPO, just the IPO. That episode was a mere one hour and 24 minutes, and Starbucks is a $90 billion institution in our world that deserves the full acquired treatment.

**David Rosenthal** (1:02)
What were we thinking?

**Ben Gilbert** (1:04)
Well, it actually was amateur hour back then, David.

**David Rosenthal** (1:07)
Got to start somewhere.

**Ben Gilbert** (1:08)
Well, today we have a very special third co-host to discuss this third place, Howard Schultz. Howard started working at the small chain of three Starbucks stores in 1982, eventually buying it and becoming CEO.
As you probably know, he is effectively the founder of the Starbucks we know today that exists on every corner of the earth. I come to you, David, and listeners, as an unabashed Starbucks fan. In this tumultuous time for the company, I am absolutely pulling for them in every way possible, and that is going to come through in our conversation. You may have seen the news recently that they had a very rough last quarter, with a key metric that you may remember from previous episodes as same store sales. These dropped, and their stock price plummeted as a result. This is on top of a tumultuous pandemic era, and some of their stores unionizing, and a change in leadership. We thought that this would be the perfect time to sit down with Howard and unpack, why did Starbucks work in the first place, and how did it work at such grand scale? What can other founders and business leaders learn from what got them here, and although he is no longer CEO, where do they go now?

**David Rosenthal** (2:19)
It really is incredible. One of the very, very small number of food and beverage establishments that has scaled to the entire world.

**Ben Gilbert** (2:29)
Yeah, most of those types of concepts do not work in different countries and continents, but Starbucks is different. Today, they're in over 80 countries with 39,000 stores across the world. They're even huge in China, a country that didn't consume very much coffee until Starbucks arrived. They are a bank scale financial institution as well. At any given time, Starbucks holds $1.7 billion that customers have loaded onto gift cards but not yet spent. So how did they go from one store selling beans, not even drinks and cups, just beans, to the default meeting place in communities everywhere? Today, we tell that story. And listeners, this episode has video. We recorded it in person in Seattle at the Schultz Family Foundation, and you can watch it on YouTube.

**David Rosenthal** (3:14)
All right.

**Ben Gilbert** (3:14)
Well, listeners, we have a gigantic announcement for you.

**David Rosenthal** (3:18)
Yes. Save the date. If you love Acquired, you are going to want to be physically in the city of San Francisco on Tuesday, September 10th, 2024

**Ben Gilbert** (3:30)
And we can't say much about every detail of it just yet, but it will be the biggest thing that Acquired has ever done. It'll be in partnership with our good friends at JP. Morgan Payments. So mark your calendars now. Save the date. And if you want to be first to know details, you can sign up at acquired.fm slash SF or click the links in the show notes.

**David Rosenthal** (3:52)
Speaking of JP. Morgan Payments, just like how we say every company has a story, every company's story is powered by payments. And JP. Morgan Payments is a part of so many companies' journeys from seed to IPO and beyond.

**Ben Gilbert** (4:05)
And if you want more from David and I, you should check out our second show, ACQ2, where we interview founders, investors, and experts, often as deeper dives into topics that we covered on the main show. Recent episodes have been awesome with the CEO and the founder of Synopsys, of Starfish Space, further exploring the space industry, and we've got some great stuff in payments coming up next too.