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Seated in a coffee shop, basking in the comfort of free WiFi, alongside the scents of freshly ground beans, a flat white (or perhaps a mocha) to your right and a laptop in front of you. This scene of a “startup office” is one that is all too familiar in today’s society, yet how did this all manage to materialise into what we accept as common place today? Well, let’s travel back 50 years to 1971 and start our story from there…

Writer for Seattle magazine and lover of dark, delicious, Italian coffee, Gordon Bowker found himself commonly treading to Vancouver, British Colombia to purchase the best beans he could find. Given the deteriorating standard of coffee quality in Seattle, Bowker was making the commute for friends also! Eventually 2 of Bowker’s university friends teamed up with him (English teacher – Jerry Baldwin and History teacher – Zev Siegl) to begin a new venture: Starbucks!

Each put $1,350 into the business, along with another $5,000 that was borrowed. The name of the company stems from unexpected roots: words beginning with “st” were thought to be rather powerful by Terry Heckler (whom Bowker shared ownership of an ad agency with), so the team began going through names beginning with the aforementioned prefix. After some deliberation they managed to decide on Starbucks, the name of the coffee-loving character in the novel Moby Dick. The logo, often mistaken as a mermaid, was designed to be a two-tailed siren, again in ode to the origins of the company’s name.

Zev Siegl ventured to Berkeley, California with the aim to learn from Alfred Peet (owner of Peet’s Coffee) a maven to local coffee consumers since 1966. The way in which Peet dealt with coffee beans was quickly adopted by Starbucks, roasting high-grade arabica beans to a dark tone, done so by a trained roaster, perfect in their application. For the first 9 months, Starbucks bought their coffee from Peet, but by 1972 they opened a second store, whilst also ushering in the investment of their own roaster.

By 1982 Starbucks had established itself through the business of 5 stores, a toasting facility and a wholesale offering. Also, this year introduced a manager for the company’s retail sales and marketing: Howard Schultz. After meeting the Starbucks entrepreneurs and being truly enamoured by their coffee, Schultz left his previous job to join the Starbucks team.

1983 brought about further insight when Schultz went on a buying trip to Italy. He yet again experienced another revelation when witnessing the Italian coffee culture via the means of coffee bars. He was truly excited to bring the experience to the States, however his bosses weren’t on the same page and were more dedicated to selling the product. With that being said, Schultz decided to part ways with Starbucks and work on his own business plan. Surprisingly, his departure wasn’t one looked upon in distain. He still had good relations with the founders, so much so they invested in his idea. He journeyed back to Italy for more research.

During 1986 Howard Schultz launched his first coffee bar in Chicago. Fashioning a stately expresso machine as a centrepiece, clearly illustrating the true muse of the bar, Il Giornale served Starbucks coffee and was immediately popular from its opening. Schultz soon opened 2 others in Seattle and Vancouver.

A year later Starbucks was encountering issues and open to selling. With Schultz doing so well, he made the owners an offer they couldn’t refuse: $4 million dollars. Schultz acquired the coffee company along with its six-units. With all the previous creators of the company gone to pursue other endeavours, he now had the ability to make his dream (of Starbucks embracing an Italian coffee bar culture) a reality.

In 1987 all Il Giornale stores changed their name to Starbucks with the company becoming Starbucks Corporation. The company went on to grow ambitiously, securing more stores and even more deals. Schultz was known to not have a problem hiring people that were smarter than him, allowing things to be done well and efficiently. Starbucks aimed to stay up to date, installing state of the art computer systems to track sales information, allowing easy identification of buying trends. Known for treating its employees well, Starbucks became the first privately owned company (in 1991) to create an employee stock option program for both full-time and part-time workers. With other benefits such as health,  dental and intensive staff training, Starbucks clearly stood out from the average company.

Eventually securing deals with the likes of Pepsi-Cola (for the bottled version of their ever popular, Frappuccino), United Airlines, Nordstrom’s, Barnes & Noble and even Dreyer’s Grand Ice Cream (placing them in the number one position for coffee ice cream in the United States), Starbucks continued its impressive growth with its number of stores north of 22,000.

This is a small glimpse into the extensive business journey of Starbucks, it’s original 3 founders and an enthusiastic innovator. A coffee idea concocted by 3 lovers of this liquid gold, turned a problem into a $26.5 billion dollar solution. Not bad for a $9,050 investment, right?

What are your thoughts regarding this business tale?

Stay purposeful.

Sources

https://www.starbucks.com/about-us/company-information/starbucks-company-timeline
https://www.britannica.com/topic/Starbucks
https://www.wonderopolis.org/wonder/how-did-starbucks-start

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